AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as
of the 31st of December, 1996, by and between CORESTATES BANK, N.A (formerly
Meridian Bank) ("Bank"), and IBAH, Inc., a Delaware corporation ("Debtor").
W I T N E S E T H:
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WHEREAS, on July 8, 1994, Bank and Debtor entered into a Loan and
Security Agreement (the "Agreement") providing for (i) a revolving line of
credit loan in a maximum principal amount of $2,000,000.00, (ii) a non-revolving
equipment loan (the "Non-Revolving Equipment Loan") in the original principal
amount of $2,500,000.00, and (iii) a term loan (the "Term Loan") in the original
principal amount of $281,965.41;
WHEREAS, said Agreement was amended on December 21, 1995, by a First
Amendment (the "First Amendment") to the Agreement; and
WHEREAS, the parties wish to further amend and restate the Agreement
in full (which amendment and restatement of the Agreement, First Amendment and
further amendments are hereinafter referred to as the "Loan Agreement"),
including providing for an increase in the revolving line of credit from
$2,000,000 to $5,000,000 (the "Revolving Line of Credit Loan").
NOW, THEREFORE, in consideration of the benefits, conditions and
covenants contained or referred to herein, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and INTENDING TO BE
LEGALLY BOUND HEREBY, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
1.01 Certain Defined Terms: As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Accounts", "Chattel Paper", "Documents", "Equipment",
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"General Intangibles", "Goods", "Instruments", "Inventory" and "Money" have the
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same respective meanings as are given to those terms in the Pennsylvania Uniform
Commercial Code. "Accounts" shall include "contracts" and "contract rights"
without respect to the definition of the latter terms under applicable laws, and
shall also include any rights to receive payment which may also be evidenced by
Instruments, Documents or Chattel Paper.
"Advance" shall include any sums advanced by Bank or
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credited by Bank to the account of Debtor, or for the account of Debtor to third
parties, including without limitation, advances of principal or to pay interest
or fees, or the incurring of expenses reimbursable by Debtor.
"Affiliate" includes any corporation, partnership,
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association, joint venture, company, trust, individual or entity, which now or
hereafter at any time controls, is controlled
by, or is under common control with, Debtor, and each shareholder, officer and
director of Debtor.
"Availability" shall mean, as to the Revolving Line of
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Credit Loan, an amount, varying from time to time, equal to the result of (1)
$5,000,000 less all amounts due Bank by Debtor under the Non-Revolving Equipment
Loan and the Term Loan minus (2) the sum of all Line of Credit Advances
outstanding and unpaid, minus (3) the sum of all amounts committed under the
Subline provided for in Section 2.07 hereof.
"Bio-Pharm GmbH" means Euro Bio-Pharm Clinical Services
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GmbH, a corporation organized under the laws of Germany and a Subsidiary of
Debtor, of which Debtor owns, through a subsidiary of Debtor, one hundred
percent (100%) of the ownership interests.
"Bio-Pharm GmbH Note" means a revolving line of credit
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note, dated December 31, 1996, in the amount of Seven Million Dollars
($7,000,000.00) made by Bio-Pharm GmbH in favor of Debtor.
"Capital Expenditure" means any payment made directly or
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indirectly for the purpose of acquiring or constructing fixed assets, real
property or equipment which has been reported as a capital expenditure on any
financial statements of Debtor prepared in accordance with GAAP by Xxxxxx
Xxxxxxxx & Co. or any other public accounting firm with a national reputation,
including, without limitation, payment obligations under all Capital Leases.
"Capital Lease" means any lease of property (real, personal
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or mixed) which, in accordance with GAAP, should be capitalized on the lessee's
balance sheet or for which the amount of the asset and liability thereunder as
if so capitalized should be disclosed in a note to such balance sheet.
"Cash Collateral" means cash, cash equivalents,
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certificates of deposit or other investments of Debtor maintained with Meridian
Asset Management or any other financial institution or investment firm, which
has been pledged by Debtor to Bank as security for the Non-Revolving Equipment
Loan pursuant to the Cash Collateral Pledge Agreement. The amount of Cash
Collateral may be counted toward the minimum cash level requirement set forth in
Section 7.14(c) hereof.
"Cash Level" means cash or cash equivalents level of Debtor
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held at CoreStates Bank, N.A. The minimum cash level requirement is set forth in
Section 7.14(c) hereof.
"Chief Executive Office" shall have the meaning ascribed to
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it under the Pennsylvania Uniform Commercial Code, 13 Pa. C.S. Section
9103(c)(4).
"Code" means the Internal Revenue Code of 1986, as the same
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may be amended or supplemented from time to time, and any successor statute of
similar import, and the rules and regulations thereunder, as from time to time
in effect.
"Collateral" shall mean all real and personal property in
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which Debtor grants Bank a lien or security interest to secure the Obligations,
pursuant to this Agreement or any security agreement or other undertaking or
instrument related to the Loans or this Agreement.
"Collateral Assignment and Security Agreements" means each
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of the two (2) Collateral Assignment and Security Agreements to be executed by
and between Debtor and Bank, pursuant to which Debtor shall assign its rights in
and to each of the the Euro Bio-Pharm GmbH Note and the Euro Bio-Pharm, Ltd.
Note.
"Controlled Group Member" means each trade or business
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(whether or not incorporated) which together with the Debtor is treated as a
single employer under Section 4001(b)(1) of ERISA or Sections 414(b) or 414(c)
of the Code.
"Credit" or "Credits" shall mean an irrevocable commercial
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or standby letter of credit or letters of credit to be issued by Bank, as
provided in Section 2.07 hereof, for the account of Debtor.
"Current Assets" means, at any time, all assets which, in
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accordance with GAAP, should be classified as current assets on the balance
sheet of Debtor, except that for purposes of this definition, total deferred
taxes (if any) shall be netted from the amount of such assets.
"Current Liabilities" means, at any time, all Liabilities
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which, in accordance with GAAP, should be classified as current liabilities on
the balance sheet of Debtor, except for purposes of this definition, total
deferred taxes (if any) shall be netted from the amount of such liabilities.
"Default Rate" means two percent (2.0%) (200 basis points)
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per annum in excess of the Loan Rate (calculated without references to any
maximum or minimum limitations on the Loan Rate) which would otherwise be in
effect from time to time for each Loan, but not in excess of the amount
permitted under applicable law. Each time the Loan Rate would change, the
Default Rate shall change contemporaneously without further notice to the
Debtor. The Default Rate shall also be payable upon any money judgment entered
against the Debtor with respect to any of the Loans, from and after the date of
entry of the judgment until satisfied in full.
"Designated Officer" means any person holding the office of
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President, Chief Financial Officer, Chief Operating Officer or Controller for
Debtor, or any officer of Debtor designated in writing by any one or more of
them. Debtor hereby authorizes any Designated Officer of Debtor to act on behalf
of Debtor.
"Effective Date" means the later of the date on which this
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Agreement is signed or the date this Agreement becomes effective after
satisfaction of the conditions set forth in Article 6 hereof. Unless otherwise
agreed, the date of Bank's first Advance shall be deemed the Effective Date.
"Environmental Laws" mean any Law relating to product
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safety, occupational and health or safety, environmental protection or hazardous
waste or toxic substances management, handling or disposal, including, without
limitation, any restrictions, specifications or requirements pertaining to
products Debtor manufactures, processes or sells or pertaining to the services
it performs, the conduct of business and the use, maintenance or operation of
the real and personal properties owned or possessed by it.
"ERISA" means the Employee Retirement Income Security Act
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of 1974, as amended, and the regulations thereunder as in effect from time to
time.
"Euro Bio-Pharm, Ltd." means Euro Bio-Pharm, Ltd., a
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corporation organized under the laws of the United Kingdom and a wholly-owned
Subsidiary of Debtor.
"Euro Bio-Pharm, Ltd. Note" means a revolving line of
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credit note dated December 31, 1996, in the amount of Seven Million Dollars
($7,000,000.00) made by Euro Bio-Pharm, Ltd. in favor of Debtor.
"Event of Default" means an event specified in Section 10
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hereof following any required notice and/or expiration of any applicable grace
or cure period.
"GAAP" shall mean generally accepted accounting principles
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as in effect from time to time consistently applied from period to period
throughout the term of this Agreement, both as to classification of items and
amounts. Opinions of the Financial Accounting Standards Board, or its
predecessors or successors, shall presumptively evidence generally accepted
accounting principles.
"Hazardous Materials" means (i) friable asbestos or
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asbestos-containing material, (ii) transformers or other equipment with contain
dialectic fluid containing levels of polychlorinated biphenyls in excess of 50
parts per million, (ii) any flammable explosives, radioactive materials,
hazardous material, hazardous waste, hazardous or toxic substances or related
materials, (iv) any petroleum or petroleum byproducts, (v) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any Environmental Law, or similar substances now or hereafter subject to
environmental or occupational safety regulation.
"Indebtedness" means, as the context shall require, all
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items of indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, including,
but without limitation:
(1) All indebtedness guaranteed, directly
or indirectly, in any manner, or endorsed (other than for collection or deposit
in the ordinary course of business) or discounted with recourse;
(2) All indebtedness in effect guaranteed,
directly or indirectly, through agreements, contingent or otherwise: (i) to
purchase such indebtedness; or (ii) to purchase, sell or lease (as lessee or
lessor) property, products, materials or supplies or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such indebtedness or to assure the owner of the indebtedness against loss; or
(iii) to supply funds to or in any manner invest in Debtor;
(3) All indebtedness secured by (or for which
the holder of such indebtedness has a right, contingent or otherwise, to be
secured by) any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance upon property owned or acquired subject thereto,
whether or not the liabilities secured thereby have been assumed; and
(4) All indebtedness incurred as the lessee of
goods or services under Capital Leases or operating leases.
"International Facilities Agreement" means the agreement
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substantially in the form of Exhibit A attached hereto which may be entered into
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between Debtor and Bank, in the
event that Debtor desires to open one or more Credits or enter into foreign
exchange contracts pursuant to the Subline provided for in Section 2.07 hereof.
"Laws" means all ordinances, statutes, rules, regulations,
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orders, injunctions, writs or decrees of any government or political subdivision
or agency thereof, or any court or similar entity.
"Letter of Credit" means the Credit or Credits.
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"Letter of Credit Documents" means the documents between
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Bank and Debtor relating to a Letter of Credit, including without limitation,
the International Facilities Agreement attached hereto as Exhibit A and
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evidencing, inter alia, the agreement of Bank to issue such Letter of Credit and
Debtor's reimbursement obligation with respect thereto, all of which Letter of
Credit Documents shall be in form and substance satisfactory to Bank.
"Liabilities" means, at any time, all short-term and long-
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term liabilities, as determined in accordance with GAAP, except that in
connection with Debtor's calculation of the leverage covenant set forth in
Section 7.14 hereof, "Liabilities" shall exclude deferred revenue.
"Lien" means any lien or encumbrance and includes, without
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limitation, all mortgages, security interests, liens, chattel mortgages, capital
leases, trusts, charges, pledges, claims or other interests in property, legal
or equitable, whether consensual or nonconsensual, fixed, or contingent, xxxxxx
or inchoate, and whether given or implied by statute or common law or by
agreement or grant.
"Loans" means the Revolving Line of Credit Loan, the Non-
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Revolving Equipment Loan, the Term Loan, and the Advances made pursuant thereto.
"Loan Account" means the account or accounts on the books
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of Bank in which Bank may record Loans, Advances, payments made on the Loans,
and other appropriate debits and credits as provided by this Agreement.
"Loan Documents" means, individually and collectively, this
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Agreement, the Notes, the Pledge Agreements, the Collateral Assignment and
Security Agreements and all other existing and future agreements, instruments,
documents, assignments, guaranties and undertakings (including amendments to any
of the foregoing) delivered by the Debtor or any other person or entity in
connection with any of the Loans.
"Loan Rate" shall mean, for each Loan, the rates for the
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respective Loans as specified in Articles 2, 3 or 4, per annum in excess of the
National Commercial Rate in effect from time to time. Each time the National
Commercial Rate changes the Loan Rate shall change automatically and
contemporaneously without further notice to Debtor.
"Locations" means any one or more of the places defined as
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such in Section 9.03(q).
"Maturity Date" shall mean, for each Loan, the earliest of
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(i) the maturity dates for the respective Loans as specified in Articles 2, 3 or
4, or elsewhere herein or in any Note, or (ii) the date of acceleration of such
Loan upon an Event of Default.
"Maximum Net Loss" means net loss as reported on any
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financial statements of Debtor prepared in accordance with GAAP by Xxxxxx
Xxxxxxxx & Co. or any other public accounting firm with a national reputation,
during any one (1) fiscal year period.
"National Commercial Rate" means the floating annual rate
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of interest that is designated from time to time by the Bank as the "National
Commercial Rate" or any other base rate of interest rate index hereafter
established by Bank in lieu of its National Commercial Rate. Debtor acknowledges
that the National Commercial Rate may not be based on any external index or
interest rate, that Bank may lend to other borrowers, or classes of borrowers,
at rates above or below the National Commercial Rate or at rates based on other
indices, and that Bank may change the index from to time.
"Net Working Capital" means, at any time, the amount by
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which Current Assets exceed Current Liabilities.
"Non-Revolving Equipment Loan" means the Non-Revolving
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Equipment Loan provided for in Article 3 hereof.
"Non-Revolving Equipment Note" means the Non-Revolving
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Equipment Note dated July 8, 1994 in the face amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00), as amended and restated in full by that
certain Amended and Restated Non-Revolving Equipment Note dated as of December
31, 1996.
"Notes" means the Revolving Line of Credit Note, the Non-
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Revolving Equipment Note and the Term Loan Note.
"Obligations" means the obligations (whether contingent or
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fixed, or otherwise) of Debtor:
(1) To pay the principal of and interest
on and other fees, charges and expenses accruing with respect to the Advances,
the Loans or any of the Loan Documents, and to satisfy all other Indebtedness to
Bank, whether hereunder or otherwise, whether now existing or hereafter
incurred, including any extensions, modifications, renewals thereof and
substitutions therefor;
(2) To repay to Bank all amounts advanced
by Bank in connection herewith, to any person or entity whatever, including
without limitation interest, fees or other charges or expenses, payments to
prior secured parties, mortgagees, or lienors, or for taxes, levies, insurance,
rent, repairs to or maintenance of any of the Collateral; and
(3) To reimburse Bank, on demand, for all
of Bank's expenses and costs, before or after closing hereon, including the
reasonable fees and expenses of its counsel, in connection with the preparation,
administration, amendment, modification, or enforcement of this Agreement and
the documents required hereunder, including, without limitation, prosecution or
defense of any proceeding brought, contemplated or threatened with respect to
the obligations referred to in the foregoing paragraphs (1) and (2) or any of
the transactions relating thereto.
"Patents" means any patents, all applications,
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registrations and recordings related to such patents in the United States Patent
and Trademark Office or in any similar office or
agency of the United States, any state thereof, any political subdivision
thereof or in any other countries and all reissues, continuations-in-part,
extensions and renewals and licenses thereof.
"Permitted Liens" means:
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(1) Liens for taxes, assessments, or
similar charges incurred in the ordinary course of business that are not yet due
and payable;
(2) Pledges or segregated deposits made in
the ordinary course of business to secure payment of workmen's compensation, or
to participate in any fund in connection with workmen's compensation,
unemployment insurance, old-age pension or other social security programs;
(3) Liens in favor of Bank;
(4) Purchase money security interests and
Capital Leases for acquisition of equipment or vehicles in the ordinary course
of business but only if the equipment or vehicle in question is not financed in
part with monies loaned hereunder and is trade fixtures or is not affixed to the
realty;
(5) The following, if incurred in the
ordinary course of business and the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings, to the extent (i)
levy and execution thereon have been stayed and continue to be stayed, (ii)
adequate reserves are set aside therefor, (iii) they do not, singly or in the
aggregate, materially detract from the value of any property of Debtor or
materially impair the operation of its business and (iv) they do not exceed the
respective amounts (if any) defining Events of Default provided in Section
10.01:
(a) Claims or liens for taxes or
assessments,
(b) Claims or liens of
mechanics, materialmen, warehousemen, carriers or other like liens, and
(c) Adverse judgments; and
(6) Any Lien existing on the date of this
Agreement and described on Exhibit B hereof.
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*
"Person" means, any individual, corporation, partnership,
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association, joint-stock company, trust, incorporated organization, joint
venture, court or government or political subdivision or agency thereof.
"Plan" means any employee pension benefit plan, as such
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term is defined in Section 3(2) of ERISA to which Section 4021(a) of ERISA
applies and (i) which is maintained for employees of Debtor or any Controlled
Group Member with respect to the Debtor, or (ii) to which Debtor or Controlled
Group Member with respect to the Debtor made, or was required to make,
contributions at any time within the preceding five (5) years. "Multiemployer
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Plan" means any Plan which is a "multiemployer plan" within the meaning of
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Section 4001(a)(3) of ERISA.
"Pledge Agreements" means (i) the Pledge Agreement to be
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executed and delivered by Debtor to Bank, pledging certain stock and ownership
interests of Debtor in Affinity, EuroBioPharm and EPIC, Ltd., including all
schedules and exhibits thereto, and (ii) the Pledge Agreement to be executed by
and between Debtor and Bank, pledging certain ownership interests of Debtor in
BioPharm GmbH, and authenticated by a German Notar.
"Potential Default" means an event, circumstance, act,
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omission or state of affairs which would (with the passing of time or of any
grace period, or the giving of notice by the Bank or any third party, or any
combination of the foregoing) become an Event of Default.
"Profit" means, at any time, net income as reported on any
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financial statements of Debtor prepared in accordance with GAAP, by Xxxxxx
Xxxxxxxx & Co. or any other public accounting firm with a national reputation.
"Rate" shall mean the Loan Rate or the Default Rate, as the
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case may be, applicable hereunder to any Loans.
"Records" means correspondence, memoranda, tapes, data
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processing cards, discs, papers, tabulating runs, programs, books and other
documents, or manually or electronically recorded information (whether or not
transcribed) of any type, whether expressed in ordinary or machine or other
language.
"Revolving Line of Credit Loan" means the revolving line of
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credit provided for in Article 2 hereof (including the Subline provided
thereunder), and the Advances made pursuant thereto.
"Revolving Line of Credit Note" means the Revolving Line of
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Credit Note dated as of December 31, 1996, in the face amount of Five Million
Dollars ($5,000,000.00), as referred to in Article 2 hereof.
"Subline" means the Letter of Credit and foreign exchange
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subline provided for in Section 2.07 hereof.
"Subsidiary" of any Person at any time shall mean (i) any
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corporation or trust of which fifty percent (50%) or more (by number of shares
of number of votes) of the outstanding capital stock or shares of beneficial
interest normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly of indirectly by such Person or
one or more of such Person's Subsidiaries, or any partnership of which such
Person is a general partner or of which fifty percent (50%) or more of the
partnership interests is at the time directly or indirectly owned by such Person
or one or more of such Person's Subsidiaries, and (ii) any corporation, trust,
partnership or other entity which is controlled or capable of being controlled
by such Person or one or more of such Person's Subsidiaries.
"Tangible Net Worth" means as of any date of determination
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total stockholders' equity, less intangible assets of Debtor as of such date
determined in accordance with GAAP.
"Term Loan" means the term loan provided for in Article 4
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hereof.
"Term Loan Note" means the Term Loan Note referred to in
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Section 4.01(a) hereof.
"Trademarks" means all trademarks, trade names, trade
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styles and service marks, all prints and labels on which such trademarks, trade
names, trade styles and service marks appear, have appeared or will appear, and
all designs and general intangibles of a like nature, now existing or hereafter
adopted or acquired; all applications, registrations and recordings relating to
the foregoing in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof, any political
subdivision thereof or in any other countries, and all reissues, extensions and
renewals and licenses thereof.
1.02 Accounting Terms: All accounting terms not specifically
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defined herein shall be construed, and all financial data submitted pursuant to
this Agreement shall be prepared, in accordance with GAAP.
ARTICLE 2 - THE REVOLVING LINE OF CREDIT LOAN
2.01 General Terms:
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(a) Subject to the terms hereof, on the Effective
Date the Bank will establish the Revolving Line of Credit Loan in favor of
Debtor under which the Bank may thereafter make Advances from time to time up to
an aggregate principal amount at any one time outstanding not to exceed Five
Million Dollars ($5,000,000.00), all subject to the further terms and conditions
referred to herein, including without limitation the provisions of Section 2.07
hereof providing for the Subline. Advances under the Revolving Line of Credit
Loan will be used only to fund short-term borrowings and working capital needs
of the Debtor, with a foreign exchange and Letter of Credit Subline as provided
in Section 2.07 hereof. Until the Maturity Date, and except as otherwise
provided herein, any principal amount previously advanced or committed
hereunder, and repaid or otherwise extinguished, may be made available again by
the Bank on a revolving basis. Notwithstanding anything to the contrary herein
or in any Loan Document, the entire outstanding balance of principal, and any
accrued and unpaid interest thereon, shall be due and payable, and the Bank's
commitment and obligation to make Advances hereunder shall terminate, on the
earliest of (i) June 30, 1997 (unless extended in a writing signed by the Bank,
and if so extended then on such extended termination date; however, the
foregoing shall not create any obligation on the Bank to grant such extension),
or (ii) acceleration upon an Event of Default (the "Revolving Loan Commitment
Period").
(b) All advances shall bear interest at a variable
rate of one quarter percent (.25%) per annum (25 basis points) in excess of the
National Commercial Rate, in effect from time to time (except that interest
shall accrue at the Default Rate, so long as an Event of Default shall have
occurred and be continuing uncured).
2.02 Borrowing Procedures:
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(a) As of the date hereof, Debtor shall execute and
deliver to Bank a Revolving Line of Credit Note in the face amount of Five
Million Dollars ($5,000,000.00), on terms and in form and substance satisfactory
to Bank, which shall evidence the aggregate of all Advances outstanding from
time to time pursuant to the Revolving Line of Credit Loan. Debtor hereby agrees
to pay to Bank the full amount of all Advances (including without limitation
overadvances), whether made, accepted or issued for the benefit of Debtor,
together with all
interest, fees and other charges which may accrue hereunder from time to time,
as provided in the Revolving Line of Credit Note. Debtor agrees and acknowledges
that its liability is a material and fundamental inducement to Bank's continuing
willingness to make Advances.
(b) Advances may be available, subject to the
conditions of this Agreement, up to the amount of the Availability and subject
to the limitations of Sections 2.01 and 2.06, upon the request of any Designated
Officer of Debtor. If a request (which otherwise satisfies the conditions
hereof) is received by Bank by 2:00 p.m. on any business day, Bank will make an
Advance on the same business day; otherwise, the Advance will be made on the
next business day. Bank may make each Advance by crediting the amount of the
Advance to the Loan Account, or by depositing the amount of the Advance to the
demand deposit bank account of Debtor held at Bank according to instructions
given Bank by Debtor, or by otherwise disbursing to a third party upon terms and
conditions mutually agreeable to Bank and Debtor. No matter how or when an
Advance is made, or into what account or to or for the benefit of Debtor, or at
Debtor's request, Debtor shall immediately and automatically thereupon be
obligated to Bank on account of such Advance. Debtor may not disavow its
obligations hereunder, whether for Advances previously made or for Advances
which may be made after any request therefor and attempted disavowal.
2.03 Interest and Payments; Charging Debtor's Accounts:
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(a) Interest shall be accrued, paid and calculated as
follows:
(1) Interest will accrue and be payable on
principal amounts advanced by the Bank at the Loan Rate applicable to such Loan
(except that interest shall accrue at the Default Rate so long as an Event of
Default shall have occurred and be continuing uncured, and at all times after
acceleration and entry of any judgment), and shall be payable as accrued on the
last day of each calendar month, commencing immediately hereafter.
(2) Interest shall be calculated on the
basis of a 360-day year, counting the actual number of days elapsed. All accrued
and then unpaid interest shall nevertheless be payable upon the Maturity Date.
(b) If, at any time, the Rate shall be deemed by any
competent court of law, governmental agency or tribunal to exceed the maximum
rate of interest permitted by any applicable Laws, then, for such periods as the
Rate would be deemed excessive, its application shall be suspended and there
shall be charged instead the maximum rate of interest permissible under such
Laws. Any payments received by Bank during any such periods shall be
recalculated first as payments of interest at the maximum rate, and the balance
of each payment, if any, shall be deemed a payment (i) of any fees, charges,
reimbursements of expenses, or other items not treated as interest for purposes
of determining compliance with the maximum rate, and then (ii) of principal.
(c) All sums payable to Bank hereunder including
repayments of Advances, and payments of interest, fees and other charges shall
be paid directly to Bank on or before the date due. Bank is authorized to charge
the Loan Account, or any deposit account of Debtor, for interest, fees or
charges as they come due, or at Bank's option make an Advance to pay any of the
same, provided Bank bills Debtor for interest, fees or charges, and such xxxx
remains unpaid five (5) business days after billing. In any case, Bank shall
send to Debtor statements of all amounts due hereunder.
(d) Bank is authorized to charge the Loan Account, or any deposit
account of Debtor, at any time, without prior notice but with subsequent advice,
for any or all principal, interest, fees, charges and expense reimbursements
payable hereunder which is not otherwise paid when due.
(e) The Revolving Line of Credit is subject to an unused commitment
fee in the amount of .25% of the unused portion of the line on a quarterly
basis, as determined by the Bank's ledgers. The Bank will automatically charge
Debtor's checking account within seven days of sending a xxxx to Debtor.
2.04 Prepayment; Facility Fees:
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(a) Debtor may, without penalty or premium, pay the principal of
the Revolving Line of Credit Loan in whole or in part at any time.
(b) So long as an Event of Default shall not have occurred and be
continuing uncured, Bank shall have the right to perform or have performed an
audit of Debtor once during any one (1) fiscal year period, and Debtor shall, on
demand, pay Bank for audits performed by Bank or its agents at a rate (if
performed by Bank's salaried personnel) to be determined, but in any event not
less than $750 per audit or the actual fees charged to Bank therefor (if
performed by others), plus Bank's out-of-pocket expenses, such rates and fees
subject to adjustment by Bank. After an Event of Default, Bank shall be
permitted to perform such audits at any time upon reasonable notice.
(c) Debtor shall be required to pay standard issuance charges for
any Letter of Credit and all other routine transaction charges in connection
therewith, including for amendments, if any, and reasonable fees and expenses
provided for in the International Facilities Agreement, all subject to periodic
adjustments by the Bank.
2.05 Loan Account: Bank may, in its discretion, establish a Loan Account
------------
and enter therein Advances, interest, fees, other charges, expenses and other
items properly chargeable to Debtor under this Agreement; all payments made by
Debtor on account of Indebtedness relating to any Loans; all proceeds of
collateral which are finally paid to Bank at its offices in cash or solvent
credits; and any other appropriate debits and credits. Notwithstanding the
foregoing, the Bank shall xxxx for the items referred to in the foregoing
sentence unless and until an Event of Default occurs. Subaccounts may be
established for each Loan established hereunder. The aggregate of the debit
balances in the Loan Account shall reflect Debtor's aggregate Indebtedness to
Bank from time to time by reason of the Loans or otherwise with respect hereto.
2.06 Limits on Obligation of Bank to Make Advances Under Line of Credit
------------------------------------------------------------------
Loan: Notwithstanding any other provision hereof, the aggregate unpaid balance
----
of Debtor's Obligations, including without limitation all letters of credit
outstanding and all principal, interest, fees and other charges, under the
Revolving Line of Credit Loan at any time shall not exceed Five Million Dollars
($5,000,000.00) without Bank's consent; but if Bank consents, such consent shall
not bind Bank to continue to make any overadvance available thereafter. Debtor
agrees that it shall, immediately upon Bank's demand, pay or cause to be paid to
Bank the amount of any such excess, or, at Bank's option, deposit with Bank
liquid investment securities or money market instruments satisfactory to Bank
which have at deposit, and continue thereafter to have, a forced liquidation
value at least equal to such excess.
2.07 Credits and Foreign Exchange Subline:
------------------------------------
(a) Subject to the terms and conditions of this Agreement, and
provided that no Default or Event of Default has occurred and is continuing,
Bank will, upon Debtor's request, open one or more Credits during the Revolving
Loan Commitment Period for the account of Debtor. During the Revolving Loan
Commitment Period, Debtor shall give Bank written notice executed on behalf of
Debtor by any Designated Officer of Debtor (the "Notice of Credit Issuance") of
any proposed issuance of a Credit. Each Notice of Credit Issuance, except with
respect to Credits to be opened on the Effective Date, shall be delivered to
Bank not less than five (5) business days before the requested issuance thereof.
Additionally, each Notice of Credit Issuance shall be accompanied by the Letter
of Credit Documents executed by Debtor relating to the subject Credit. Each
Credit shall be on substantially such terms as Debtor may specify in such Letter
of Credit Documents and must be in form and substance satisfactory to Bank and
shall have a fixed expiration date not later than the expiration of the
Revolving Loan Commitment Period.
(b) Subject to the terms and conditions of this Agreement, and
provided that no Default or Event of Default has occurred and is continuing,
Debtor may enter into foreign exchange contracts. The maximum amount of any
foreign exchange contract shall be equal to $1,000,000.00 minus any amounts
-----
committed under any Credits. Bank shall establish a reserve account equal to
twenty percent (20%) of the exposure in U.S. Dollars pursuant to such foreign
exchange contract so long as Debtor shall be indebted to Bank under such foreign
exchange contract. Bank shall not be required to deliver any foreign exchange
contract which has a delivery date exceeding twelve (12) months. Further, Bank
reserves the right in its sole discretion, not to honor certain foreign exchange
contract requests.
(c) In no event shall the aggregate maximum amount of the Letter of
Credit and foreign exchange Subline exceed the lesser of (i) $1,000,000.00 or
(ii) the Availability under the Revolving Line of Credit Loan.
(d) Debtor shall pay an annual commission, on or before June 30th
of each year, commencing June 30, 1996, in the amount of 1.25% per annum on all
outstanding Letters of Credit during the year ending on June 30th.
2.08. Borrowings under the Line of Credit shall not be used to maintain the
Minimum Cash Level.
ARTICLE 3 - THE NON-REVOLVING EQUIPMENT LOAN
3.01 General Terms:
-------------
(a) Subject to the terms hereof, on and after the Effective Date,
until the close of business twelve (12) months after such date, but not
thereafter (the "Takedown Period"), Bank will advance Debtor the sum of up to
Two Million Five Hundred Thousand Dollars ($2,500,000.00), which shall be used
to finance the purchase price for certain items of equipment. During the period
from the making of each Advance of the Non-Revolving Equipment Loan, throughout
the term of the Takedown Period, Debtor will pay interest as it accrues on the
Non-Revolving Equipment Loan, on the first day of each calendar month, but
shall not be obligated to make principal repayments. Commencing on the first day
of the month immediately following the expiration of the Takedown Period, and on
the first day of each calendar month thereafter, Debtor shall pay to Bank forty-
eight (48) equal monthly installments of principal together with all unpaid
interest as it shall have accrued on the Non-Revolving Equipment Loan amortized
over such forty-eight (48) months. The entire outstanding balance of principal,
and any accrued and unpaid interest thereon, shall be due and payable in any
event on the earliest of (1) the sixtieth (60th) month following the Effective
Date (July 1, 1999) or (2) the date of acceleration of the Non-Revolving
Equipment Note upon an Event of Default.
(b) Advances under the Non-Revolving Equipment Loan shall be
advanced by Bank from time to time to pay bona fide expenses for acquiring and
installing equipment, net of costs for delivery, maintenance and taxes, not
exceeding amounts shown on invoices for such purchases which shall be submitted
to Bank along with a completed Request for Non-Revolving Equipment Loan
substantially in the form as Exhibit C attached hereto, along with such other
---------
information as the Bank may request, and approved by Bank, prior to payment. The
borrowings on account of the Non-Revolving Equipment Loan shall be evidenced by
the Non-Revolving Equipment Note.
(c) The outstanding principal balance under the Non-Revolving
Equipment Loan shall bear interest at a variable rate of three quarters percent
(0.75%) per annum (75 basis points) in excess of the National Commercial Rate in
effect from time to time. In any event, Debtor shall be required to maintain a
minimum amount of Five Million Dollars ($5,000,000.00) of Cash at all times as
long as Debtor has any outstanding obligations under the Non-Revolving Equipment
Loan.
(d) As of the date hereof, Debtor shall execute and deliver to Bank
an Amended and Restated Non-Revolving Equipment Note in the face amount of Two
Million Five Hundred Thousand Dollars ($2,500,000.00), amending and restating
that certain Non-Revolving Equipment Note dated July 8, 1994 in the face amount
of Two Million Five Hundred Thousand Dollars ($2,500,000.00), as amended and
restated on December 21, 1995, on terms and in form and substance satisfactory
to Bank, which shall evidence the indebtedness under the Non-Revolving Equipment
Loan.
3.02 Interest Rate and Payments, Etc.: The provisions of Section 2.03
--------------------------------
shall also apply to the Non-Revolving Equipment Loan.
3.03 Prepayment: Debtor may, without penalty or premium, pay the
----------
principal of the Term Loan in whole or in part at any time.
ARTICLE 4 - INTENTIONALLY DELETED
ARTICLE 5 - CONDITIONS PRECEDENT AND SUBSEQUENT
The obligation of Bank to enter into this Agreement and to make any Advance
hereunder is subject to the following conditions:
5.01 Documents Required for the Closing: Debtor shall have delivered or
----------------------------------
caused to be delivered to Bank, at the signing hereof, the following, in form
and substance satisfactory to Bank, executed by the applicable parties and
otherwise subject as follows:
(a) The Notes;
(b) All necessary releases, satisfactions, assignments,
subordinations and termination statements to cause the security interests
granted therein to be first priority security interests in the Collateral
(subject only to Permitted Liens);
(c) The Pledge Agreement required by Section 8.08 hereof, pursuant
to which Debtor shall pledge (i) one hundred percent (100%) of the capital stock
of its wholly-owned Subsidiary, Affinity, (ii) one hundred percent (100%) of the
capital stock of its wholly-owned Subsidiary, EuroBioPharm, and (iii) sixty-six
percent (66%) of the capital stock of its wholly-owned Subsidiary, EPIC, Ltd.,
together with all appropriate stock powers and certificates required to be
delivered in connection therewith;
(d) The financing statements required by Section 6.07 hereof,
necessary to perfect the security interests in the Collateral;
(e) Copies of the resolutions of the board of directors and
shareholders of Debtor (certified as of the Effective Date by the corporate
secretary or assistant secretary of Debtor) authorizing the execution, delivery
and performance of this Agreement, the Notes and each other Loan Document to be
delivered to Bank pursuant hereto;
(f) Copies (certified by the Secretary of State of the state of
incorporation and by authorized officers of Debtor) of the articles of
incorporation or constituent documents, Articles of Merger evidencing the merger
of Bio-Pharm Clinical Services, Inc. with and into Affinity Biotech, Inc. and
the subsequent name change from Affinity Biotech, Inc. to IBAH, Inc., and any
fictitious name registrations, for Debtor, together with a copy (certified by
the secretary or assistant secretary of Debtor) of the by-laws for Debtor and a
certificate (dated as of the date of the Closing) of each of such officer to the
effect that the foregoing documents have not been amended since the date of the
aforesaid certifications;
(g) A certificate (dated the Effective Date) of the secretary or
assistant secretary of Debtor as to the incumbency and signatures of the
officers thereof who are executing this Agreement on the behalf of Debtor and as
to the Designated Officers of Debtor;
(h) Certificates of good standing and subsistence with respect to
Debtor as of the most recent date practicable prior to the Effective Date, from
each state in which it is organized or qualified (or to be qualified) to
transact business;
(i) Evidence of the insurance coverages required by this Agreement
together with evidence of payment of all premiums which are due and payable as
of the Effective Date;
(j) Uniform Commercial Code, Judgment, Suits and Tax Lien Searches
satisfactory to Bank regarding Debtor;
(k) Written opinions of Debtor's legal counsel dated the Effective
Date and addressed to Bank, in form and substance satisfactory to Bank regarding
such legal matters as Bank shall request relating to the subject matter hereof;
(l) Certification by the chief financial officer of the Debtor that
at the Effective Date, Debtor's Net Working Capital shall not be less than
$5,000,000.00;
(m) Certification by the chief financial officer of the Debtor that
at the Effective Date, Debtor's minimum cash level shall not be less than
$5,000,000.00;
(n) Certification by the chief financial officer of the Debtor that
at the Effective Date, Debtor's maximum liabilities to Tangible Net Worth shall
not be less than 1.75:1;
(o) The Collateral Assignment and Security Agreements, assigning
the rights of Debtor in and to the Bio-Pharm Clincial Services, GmbH Note and
Euro Bio-Pharm, Ltd. Note;
(p) The originally executed Bio-Pharm Clinical Services, GmbH Note
and Euro Bio-Pharm Ltd. Note; and
(q) Such other undertakings, instruments and documents as Bank
shall require.
5.02 Other Conditions Precedent: The following additional conditions shall
--------------------------
have been satisfied:
(a) Payment of all expenses and legal fees and disbursements of
Bank and its counsel relating hereto (including without limitation lien search
fees, filings fees and appraisal costs), and other items provided in the
Commitment, shall have occurred no later than the Effective Date. If any such
expenses and fees are incurred post-closing, Debtor shall pay or reimburse them
promptly upon Bank's submission of a statement to Debtor.
(b) There shall have occurred no changes in the financial condition
or business of Debtor which are, in Lender's sole judgment, singly or
collectively materially adverse when compared with the financial condition and
business of Debtor since the date of its financial statements dated June 30,
1996
(c) Debtor shall have opened an account or accounts with the Bank
to facilitate disbursement of Advances and so long as Debtor shall be indebted
to Bank hereunder or under any of the Notes, Debtor shall maintain the minimum
cash level required by Section 7.14(c) hereof.
5.03 Condition Subsequent to Signing and Effective Date: The "Post-Closing
--------------------------------------------------
Items", if any, described on Exhibit D attached hereto and made part hereof,
---------
shall be delivered or completed within fifteen (15) days after the execution of
this Agreement, or else Bank shall not be obligated to make any further
Advances, and Bank shall have the option, at any time thereafter, to declare
that an Event of Default has occurred.
ARTICLE 6 - COLLATERAL SECURITY
6.01 The Collateral: The Collateral, together with all of the Debtor's
--------------
other property of any kind held by Bank or any of Bank's corporate affiliates
from time to time, in any capacity whatsoever, shall stand as one general,
continuing collateral security for the Obligations of Debtor.
6.02 Rights in Property Held by Bank: As security for the prompt
-------------------------------
satisfaction of all Obligations, including payment of the Indebtedness evidenced
by the Notes, Debtor hereby assigns, transfers, and sets over to Bank all of its
right, title, and interest in and to, and grants Bank a lien upon and security
interest in, all amounts that may be owing from time to time to Debtor by Bank
or any of Bank's corporate affiliates from time to time in any capacity,
including, but without limitation, any balance or share belonging to it of any
deposit or other account with Bank, which lien and security interest shall be
independent of any right of set-off which Bank may have.
6.03 Rights in Property Held by Debtor: As further security for the prompt
---------------------------------
satisfaction of all Obligations, including without limitation payment of the
Indebtedness evidenced by the Notes and any future Advances by Bank, Debtor
hereby assigns, transfers, and sets over to Bank all of its right, title, and
interest in and to, and grants Bank a lien upon and continuing security interest
in, all of the following owned by Debtor now or hereafter, wherever located,
whether now owned or existing or hereafter acquired, together with all
replacements therefor and additions and accessions thereto, and all proceeds
(including, but without limitation, insurance proceeds) and products thereof:
(a) All Inventory including existing Inventory and all Inventory
hereafter coming into existence;
(b) All Accounts, both existing and hereafter coming into
existence, together with all documents, contracts, lien and security instruments
and guarantees relating thereto;
(c) All Goods, including Debtor's interests as lessee or lessor in
any leased Equipment;
(d) All Equipment, including without limitation vehicles,
furniture, tools and supplies, now owned or hereafter acquired, wherever
located, including Debtor's interests as lessee or lessor in any leased
Equipment;
(e) All General Intangibles now existing or hereafter in existence;
(f) All notes, drafts, acceptances, Chattel Paper, Documents,
Instruments, policies and certificates of insurance (including, without
limitation, credit insurance), guaranties and securities (domestic and foreign)
now or hereafter received by Debtor or in which Debtor now or hereafter has or
acquires an interest;
(g) All other rights to the payment of money, including without
limitation, shareholder assessments, partner capital contributions and tax
refunds;
(h) All cash and non-cash proceeds, products and insurance proceeds
of the foregoing;
(i) All Records pertaining to the foregoing; and
(j) All other assets of Debtor.
6.04 Security for Intercompany Loans. As security for any intercompany
-------------------------------
loan or advance by Debtor to any Subsidiary of Debtor, Debtor shall be required
to do each of the following:
(a) Execute, deliver and perform the Pledge Agreements and do any
and all other actions required to be performed or have performed by Debtor in
order to record and perfect the lien of Bank upon such collateral pledged
therein;
(b) Execute and deliver to Bank each of the Collateral Assignment
and Security Agreements; and
(c) Deliver to Bank the originally executed Euro Bio-Pharm GmbH
Note and Euro Bio-Pharm, Ltd. Note.
6.05 Additional Security: To further secure the Loans made hereunder and
-------------------
all other Obligations of Debtor to Bank, whether now in existence or hereinafter
incurred, Debtor shall cause to be delivered at or after closing hereon such
additional undertakings, collateral, instruments and documents as Bank may
reasonably request consistent with the general intent of this Agreement.
6.06 Priority of Liens: The foregoing liens shall be first priority
-----------------
perfected liens, subject only to Permitted Liens or as specified in
Paragraph 6.10.
6.07 Financing Statements:
--------------------
(a) Debtor on Bank's request will:
(1) Execute and deliver to the Bank such financing statements
(including amendments thereto and continuation statements thereof), assignments,
certificates of title and applications and powers of attorney for transfer
thereof, conveyances, notices, instruments and other documents in form
satisfactory to Bank as Bank may specify to perfect or continue the perfection
of any security interest granted to Bank hereunder;
(2) Pay or reimburse Bank for all costs of filing or
recording the same in such public offices as Bank may designate; and
(3) Take such other steps as Bank may direct, to perfect
Bank's interest in the Collateral.
(b) In addition to the foregoing, and not in limitation thereof:
(1) A carbon, photographic, or other reproduction of this
Agreement shall be sufficient as a financing statement and may be filed in any
appropriate office in lieu thereof, and Bank is authorized to add such
information to the filing copy of this Agreement to qualify it for filing as a
financing statement under applicable law, and to sign Debtor's name hereto to
the extent original signatures are required for filing; and
(2) To the extent lawful, Debtor hereby appoints Bank and
Bank's attorneys and agents as its attorney-in-fact (without requiring Bank or
any of them to act as such) with full power of substitution, to execute and file
any financing statement (including
amendments and continuation statements thereto), and assignments and
confirmatory mortgages, deeds of trust or other conveyances for security
purposes relating to real estate, in the name of Debtor, or its successors or
assigns, and to perform all other acts that Bank deems appropriate to perfect
and continue its security interest in, and to protect and preserve, the
Collateral. This power of attorney is irrevocable as coupled with an interest.
6.08 Collecting on Accounts:
----------------------
(a) Upon the occurrence of an Event of Default, Bank shall have the
right to notify any and all obligors to make payment on Accounts or General
Intangibles directly to Bank, and to take control of the cash and non-cash
proceeds thereof, with full power to settle or compromise disputed claims
thereon. All such proceeds shall be applied in satisfaction of the Obligations,
including payment of the Indebtedness evidenced by the Notes, in such order as
Bank shall determine.
(b) Unless and until such time as Bank elects to notify obligors
pursuant to Section 6.08(a), Debtor is authorized to collect and enforce
Accounts in the ordinary course of business. The cost of such collection and
enforcement, including attorney's fees and out-of-pocket expenses, shall be
borne solely by Debtor whether the same is incurred by Bank or Debtor.
(c) The following provisions shall apply upon the occurrence of an
Event of Default. Debtor shall turn over to Bank all checks, drafts, cash and
other remittances in payment or on account of payment of the Accounts, and
whenever expressly required by Bank, the cash proceeds of any returned goods
from the sale of which any Account arose. Debtor shall deposit such collections
and cash proceeds with Bank within two (2) banking days of the receipt thereof,
and in precisely the form received, except for the appropriate endorsements
where necessary to permit the collection of the items, which endorsement Debtor
hereby agrees to make. If Debtor receives any such cash or collections directly,
it will not commingle any such checks, drafts, cash and other remittances
(including repayments) with any of its other funds or property, but will hold
them separate and apart therefrom expressly in trust for Bank. Debtor will
forward to Bank such statements and reports of collection and adjustments as
Bank may from time to time specify. Bank will apply the whole or any part of the
collected funds received by it against the then outstanding Loans and any other
of Debtor's Obligations, the order and method of such application to be in the
discretion of Bank or Bank may, if it so elects, release the whole or any part
of such funds to Debtor for use in the operation of such Debtor's business. In
the event that Bank elects to give Debtor immediate credit for such funds as are
yet uncollected, Debtor agrees that Bank may make a charge for the float equal
to two (2) days' collection time at the Rate, payable monthly at the end of each
month. Debtor hereby authorizes Bank to charge to any deposit account of Debtor
any item of payment credited against any Obligations which is dishonored by the
drawee or maker thereof or, if funds are not available in a deposit account,
then to make an Advance therefor and charge the Loan Account accordingly.
(d) In addition to the foregoing, upon the occurrence of an Event
of Default, Bank may, in its sole discretion, require Debtor, at its own expense
and in the manner requested by Bank, to direct that remittances and all other
proceeds of Accounts and other Collateral shall be (i) sent to the post office
box designated by and/or in the name of Bank, or in the name of Debtor, but as
to which access is limited to Bank, (ii) deposited into a locked box at Bank,
and/or (iii) deposited into a bank account maintained in the name of Bank and/or
a blocked bank account under arrangements with the depository bank under which
all funds deposited to such
blocked bank account are required to be transferred solely to Bank. In
connection therewith, Debtor shall execute such post office box, locked box
and/or blocked bank account agreements as Bank shall specify.
6.09 Verification of Accounts: Bank shall at all times have the right to
------------------------
confirm orders, and to verify all Accounts or Accounts Receivable or other
Collateral in which it has a security interest and to do so in any fictitious
accounting firm name used by Bank for verifications or through any public
accountants.
6.10 Collateral Sharing. Upon at least thirty (30) days prior written
------------------
notice by Debtor to Bank of a request by a new lender to Debtor ("new lender")
for a security interest in the Collateral, and provided that there has been no
Event of Default hereunder and further provided that, in the reasonable opinion
of Bank, Debtor has not experienced an adverse material change in its financial
condition, Bank shall enter into an agreement, on terms and in form acceptable
to Bank, with such new lender whereby Bank shall share with such new lender, in
pari pasu, its security interest in the Collateral in excess of the amount of
all Loans and any other amounts due Bank by Debtor.
ARTICLE 7 - DEBTOR'S AFFIRMATIVE COVENANTS
Debtor covenants and agrees that, from and after the date of this Agreement
and so long as Debtor shall be indebted to Bank hereunder or under any of the
Notes, unless Bank shall otherwise consent in writing, Debtor will comply with
the following covenants:
7.01 Reports: As long as no Event of Default has occurred and is
-------
continuing uncured, Bank shall have the right to request from Debtor once during
any one (1) fiscal year period, and Debtor will make available to Bank a copy of
the invoice for each Account and a copy of any written contract or order from
which an Account arose. After an Event of Default, Bank shall have the right to
request at any time and Debtor shall make available the foregoing information.
7.02 Equipment Reports and Landlord's Waivers: At execution of this
----------------------------------------
Agreement and, thereafter, at the request of Bank, Debtor will provide Bank with
a listing of the types, and respective values of Equipment for each type, of all
Equipment, indicating to the extent applicable, and according to the Debtor's
method of accounting, the nature and type of the Equipment together with
documentation showing the location of the Equipment, whether the premises where
the Equipment is located is owned or leased by Debtor, or is owned by a third
party and if so, the name and address of the third party and, if owned by a
third party, will promptly furnish Bank with landlords' and mortgagees' waivers
of lien in form and content satisfactory to Bank; and in the case of Equipment
located at third party locations, take such steps as Bank may require to protect
Inventory against claims of third parties.
7.03 Customer Disputes: Debtor will promptly advise Bank of any dispute
-----------------
with a customer in any case where the dispute involves (i) an account or
accounts receivable aggregating $250,000.00 or more, or (ii) one of Debtor's ten
(10) largest customers by average monthly revenue and the customer has
threatened to terminate Debtor's services.
7.04 Service Agreements: Debtor will (without need of a prior request by
------------------
Bank) identify for Bank, and if requested provide copies to the Bank of, any
service contract or agreement for services provided to any Debtor's customer
which is not entered into, or the terms of which do not reflect terms granted,
in the ordinary course of business.
7.05 Account Receivables and Payable Agings: Debtor will furnish Bank
--------------------------------------
quarterly within forty-five (45) days after the end of each quarter (and more
frequently, as required by Bank, when a Potential Default or an Event of Default
has occurred and is continuing) listings and agings of its Accounts Receivable
and its Accounts Payable.
7.06 Account Assignments: Debtor will give Bank upon request specific
-------------------
assignments of Accounts after they come into existence, and schedules of
Accounts, the form and content of such assignments and schedules to be
satisfactory to Bank, and will execute and deliver to Bank any instrument,
document, financing statement, assignment or other writing to carry out the
terms of this Agreement, to perfect Bank's security interest in the Accounts and
any other Collateral, or to enable Bank to enforce conveniently its security
interest in any of the foregoing.
7.07 Maintenance of Books and Records: Debtor will maintain, in accordance
--------------------------------
with GAAP, accurate records and books of account showing, among other things,
all Equipment and Accounts, the proceeds of the sale or other disposition
thereof and the collections therefrom; and hereby grants Bank the right to call
at Debtor's places of business during regular business hours, at intervals to be
determined by Bank, and, without hindrance or delay, to inspect, audit, check
and make extracts and copies from the books, records, journals, orders,
receipts, correspondence and other data relating to Equipment, Accounts, or any
other Collateral.
7.08 Notation of Security Interest: If requested by Bank, Debtor will xxxx
-----------------------------
its records concerning Equipment, Accounts, General Intangibles and other
Collateral in a manner satisfactory to Bank to show the latter's security
interest therein; and, if a Potential Default or an Event of Default shall have
occurred and be continuing uncured and unwaived, shall, at Bank's request notify
all purchasers, warehouses, warehousemen, agents, landlords, processors, or
others in possession of Equipment, of Bank's security interest in the
Collateral, and instruct them to hold Collateral for Bank's account and subject
to Bank's instructions.
7.09 Financial Statements, Reports:
-----------------------------
(a) Debtor will furnish Bank, within ninety (90) days after the
close of its fiscal year, annual consolidating financial statements, and the 10-
K report of Debtor. The financial statements will be audited by a certified
public accountant acceptable to the Bank and shall be prepared in accordance
with GAAP. In addition, together with such annual financial statements, a
Designated Officer of Debtor, on behalf of Debtor shall deliver to Bank a
Covenant Compliance Certificate substantially in form of Exhibit "E" attached
-----------
hereto.
(b) Debtor will deliver to Bank copies of all reports, returns and
other documents filed with any federal, state or local regulatory agencies,
including without limitation quarterly 10-Q reports as filed with the Securities
and Exchange Commission, within forty-five (45) days after the end of each
quarter. Debtor shall also provide such further information regarding the
operations, business, affairs, financial condition, commitments and
contingencies of Debtor as Bank may reasonably request, including without
limitation, contract status reports and backlog reports.
(c) Debtor will furnish Bank, within thirty (30) days after the
close of its fiscal year, an annual budget and projected cash flow for the
succeeding year.
(d) Debtor shall each provide Bank, from time to time upon
Bank's request, such additional financial information as Bank may request from
time to time.
7.10 Existence, Properties, Etc.: Debtor will do or cause to be done
---------------------------
all things necessary to obtain, preserve, renew and keep in full force and
effect its existence and its qualification to do business and good standing in
each jurisdiction in which such qualification is necessary for the proper
conduct of its business, and conduct and operate its business in substantially
the manner in which same is presently conducted and operated; at all times
maintain, preserve and protect all material Patents, franchises, Trademarks,
copyrights and other General Intangibles; preserve the condition of all property
useful in the conduct of its business and keep the same in good repair, working
order and condition (reasonable wear and tear excepted) and from time to time
make, or cause to be made, all repairs, renewals, replacements, betterments and
improvements thereto, to the extent that the same are necessary for the proper
and advantageous conduct of its business; and comply with all present and future
regulatory and other Laws applicable to it in the operation of its businesses,
and with all material agreements to which it is subject.
7.11 Insurance: Debtor will keep its insurable properties adequately
---------
insured at all times, by financially sound and reputable insurers, with Bank
named as first lienholder and as a loss payee on all such policies, and maintain
such other insurance, to such extent and against such risks, including fire,
theft, vandalism, earthquake, storm and flood, and other risks insured against
by extended coverage, as is acceptable to Bank from time to time (the amount of
such insurance shall not be less than the greater of (1) eighty percent (80%) of
the insurable value of Debtor's assets or (2) the lesser of one hundred percent
(100%) of the insurable value of Debtor's assets or the outstanding principal
balance of the Loans), and maintain in full force and effect public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any Location or other
real or personal property belonging to it, and contractual liability insurance,
in such amounts as are satisfactory to Bank, and maintain workers compensation
insurance, employers liability insurance and such other insurance as may be
required by law. Debtor authorizes Bank to pay for Debtor's account any of the
foregoing which Debtor fails to pay, and any such payment by Bank shall
constitute an item of Debtor's Obligations. Debtor agrees to notify Bank in
writing prior to any change in insurance coverage which would cause such
insurance to not meet the requirements of this Agreement; to provide Bank upon
demand copies of all insurance policies; to assign to Bank all right to receive
proceeds of any property casualty insurance as to property owned by Debtor; to
direct all property casualty insurers to pay all proceeds directly to Bank; and
Debtor hereby authorizes Bank to endorse any draft for such proceeds.
Notwithstanding the foregoing, the property casualty insurance policies of
Debtor shall contain a provision which requires the insured to give Bank thirty
(30) days prior written notice of cancellation of any such policy.
7.12 Taxes and Assessments: Debtor will pay or cause to be paid, when
---------------------
due, all taxes, assessments and charges or levies imposed upon any of its
property, or which it is required to withhold and pay over, except where
contested in good faith by appropriate proceedings, promptly commenced and
diligently conducted, with adequate reserves therefor having been set aside on
its books (but it shall, in any event, pay or cause to be paid all such taxes,
assessments, charges or levies forthwith whenever a Lien against the property of
Debtor would arise, or when foreclosure on any Lien that attaches appears
imminent).
7.13 Financial Covenants: Debtor shall comply with the following at
-------------------
the respective times indicated:
(a) Debtor's Net Working Capital shall not be less than
$5,000,000 at the end of each fiscal quarter thereafter.
(b) Debtor's minimum Cash Level shall not be less than
$5,000,000.00 at all times.
(c) Debtor's maximum Liabilities (excluding deferred revenues)
to Tangible Net Worth shall not exceed 1.75:1.0 at the end of each calendar
quarter.
(d) Debtor's Cash Flow Ratio calculated on a rolling full
quarter basis shall be not less than 1.5:1.0.
7.14 Collection and Records of Accounts: Debtor will collect its
----------------------------------
Accounts only in the ordinary course of business, and will keep accurate and
complete Records of its Accounts, consistent with sound business practices.
7.15 Notice of Material Proceedings or Litigation: Debtor will give
--------------------------------------------
Bank immediate written notice of the commencement, existence or threat of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency against or affecting Debtor or any Affiliate
which, if adversely determined, would impair either the Debtor's right or
ability to carry on its business substantially as now conducted or would
materially affect its business, operations, properties, assets or condition
(financial or otherwise) or would materially affect its ability to perform its
Obligations to the Bank under this Agreement or any of the Loan Documents, and,
if requested by Bank, deliver copies of all non-privileged documents relating
thereto. In addition, Debtor will give Bank prompt written notice of any
judgment obtained against it and will advise Bank of Debtor's action with
respect to responding to such judgment.
7.16 Notice of Default: If the chief executive officer, chief
-----------------
operating officer or chief financial officer of Debtor knows of any Potential
Default or Event of Default which shall have occurred, or knows of the
occurrence of any event which is an event of default or, upon notice or lapse of
time or both, would constitute an event of default under any other material
agreement, instrument or document, order, or decree, to which Debtor is a party
or under which it is bound, breach of which would have a material adverse effect
on the business, operations, properties or financial condition of Debtor or the
ability of Debtor to perform its Obligations under the Loan Documents, Debtor
will promptly furnish to Bank a written statement as to such event or
occurrence, specifying the nature and extent thereof.
7.17 Changes: Debtor will promptly notify Bank of any and all
-------
proposed material changes in its business practices or properties and of any
changes in the Designated Officers of Debtor.
7.18 Further Assurances: From time to time, upon the written
------------------
reasonable request of Bank, Debtor will do, execute, acknowledge and deliver or
cause to be done, executed, acknowledged, and delivered, all such further acts,
deeds, instruments, transfers, powers of attorney or assurances as may be
required in connection with the transactions contemplated by this Agreement or
any other Loan Documents.
7.19 Authorization To Accountants: Debtor hereby irrevocably
----------------------------
authorizes all accountants and auditors employed by Debtor at any time while
there are any sums owed to Bank
during the term of this Agreement, and until all of the Obligations have been
fully paid and discharged, to cooperate with Bank and to exhibit and deliver to
Bank copies of Debtor's financial statements, tax returns, trial balances, or
other accounting or tax records or other information of any sort which may be in
their possession, all at Debtor's expense.
7.20 Depreciation of Equipment: Debtor will promptly notify Bank of
-------------------------
any event causing material loss or depreciation in the value of any Equipment
and the amount of such loss or depreciation.
7.21 Computer Reports: Debtor hereby irrevocably authorizes all of
----------------
Debtor's computer service bureaus or companies (if any) to give Bank full access
to and to deliver to Bank, at Debtor's expense, printouts and all information
respecting any and all financial records now or hereafter maintained by the same
for Debtor.
7.22 Places of Business; Location of Collateral and Records: Debtor
------------------------------------------------------
will notify Bank in writing thirty (30) days in advance of each change in its
Chief Executive Office, and of each change in any Location at which Inventory,
Equipment, any Records of Accounts, General Intangibles or other Collateral, is
or will be kept. However, at Bank's request from time to time, Debtor shall
provide Bank with a complete schedule of all Locations.
7.23 Visitation: Debtor shall permit such person as the Bank may
----------
designate to visit and inspect any of the properties of the Debtor and any
Subsidiaries, to examine their respective books and records and take copies and
extracts therefrom and to discuss their respective affairs with their respective
officers, at such times and as often as the Bank may reasonably request. Debtor
hereby authorizes such officers to discuss with the Bank the affairs of Debtor
and any Subsidiaries.
7.24 Notice of Pension-Related Events. Promptly after any Debtor, or
--------------------------------
any Controlled Group Member with respect to any Debtor, or any administrator of
a Plan:
(a) receives any notification referred to in subsections (i),
(iv) or (vii) of Section 10.01(m) hereof;
(b) has knowledge of (1) the occurrence of a Reportable Event
as defined in Section 4043 of ERISA with respect to a Plan; (2) any event which
has occurred or any action which has been taken to amend or terminate a Plan as
referred to in subsections (ii) and (vi) of Section 10.01(m) hereof; (3) any
event which has occurred or any action which has been taken which could result
in complete withdrawal, partial withdrawal, or secondary liability for
withdrawal liability payments with respect to a Multiemployer Plan as referred
to in subsection (vii) of Section 10.01(m) hereof; or (4) any action which has
been taken in furtherance of, any agreement which has been entered into for, or
any petition which has been filed with a United States district court for, the
appointment of a trustee for a Plan as referred to in subsection (iii) of
Section 10.01(m) hereof; or
(c) files a notice of intent to terminate a Plan with the
Internal Revenue Service or the PBGC; or files with the Internal Revenue Service
a request pursuant to Section 412(d) of the Code for a variance from the minimum
funding standard for a Plan; or files a return with the Internal Revenue Service
with respect to the tax imposed under Section 4971 of the Code for failure to
meet the minimum funding standards established under Section 412 of the Code for
a Plan; then, Debtor will furnish to the Bank a copy of any notice received,
request or
petition filed, and agreement entered into; the most recent Annual Report (Form
5500 Series) and attachments thereto for the Plan; the most recent actuarial
report for the Plan; any notice, return, or materials required to be filed with
the Internal Revenue Service in connection with the event, action, or filing;
and a written statement of the Chairman, President, or chief financial officer
of Debtor, as the case may be, describing the event or the action taken and the
reasons therefor.
7.25 Debtor will maintain Bank as its primary bank of account and
CoreStates Asset Management as its primary investment manager for the term of
the Agreement.
7.26 Compliance with Environmental and Other Laws:
--------------------------------------------
(d) Debtor shall comply in all material respects with all
Environmental Laws applicable to it.
(e) Debtor shall furnish to Bank, immediately upon receipt or
dispatch, a copy of any notice, summons, citation, directive, letter or other
written communication from or to any federal, state or local environmental
agency or department, which may evidence or result in a liability under any
Environmental Law such that the costs of correcting, or of paying penalties
assessed in connection with, such liability would have a material adverse effect
upon the business of Debtor as now conducted or upon Debtor's business,
operations, properties or condition, financial or otherwise. In such event,
Debtor shall use diligent efforts to complete all remediation which may be
required by such communication from any federal, state, county, municipal or
other administrative, investigative, prosecutorial or enforcement agency or
environmental or occupational safety regulatory agency ("Environmental
Regulator") and to obtain from all such Environmental Regulators having
jurisdiction thereof, and deliver to Bank as received, such approvals and
certifications as can be obtained from such agencies from time to time to
confirm the Debtor's completion of all remediation and Debtor's compliance with
all governmental requirements applicable thereto.
7.27 Information Regarding Environmental Matters: Debtor will
-------------------------------------------
provide Bank the following:
(a) Immediately upon receipt, with complete copies of all
notices from any Environmental Regulator notifying Debtor, or alleging, that
there exists or may exist a material violation or potential material violation
by Debtor of any federal or state law, now or hereafter in force, regulating the
handling labeling, custody, storing, transportation, discharge, disposal,
release, treatment, processing or other disposition of any Hazardous Material;
and
(b) Upon Bank's request from time to time, with complete copies
of (i) any or all documents required to be filed or in fact filed, by Debtor
with any Environmental Regulator, (ii) any or all material safety data sheets or
other documents or data which applicable law or any Environmental Regulator now
or hereafter requires Debtor to prepare, compile or maintain, and (iii) any and
all documents and other information which applicable law or any Environmental
Regulator requires to be made available to employees, contractors, transferees,
the local community, local government agencies or the public; (iv) any reports
of Debtor's employees, consultants, advisors, engineers or others relating to
Debtor's compliance with applicable environmental or occupational safety laws,
or to the status or manner of disposal, discharge or release of any petroleum
product or hazardous substance.
7.28 Maintenance of Patents, Etc. and Information Regarding Patents:
--------------------------------------------------------------
Debtor shall maintain in full force and effect all Patents, franchises,
licenses, permits and qualification necessary to own, lease and/or operate its
properties and business. Debtor will provide Bank immediately upon its receipt
complete copies of all notices from the United States Patent and Trademark
Office ("PTO") awarding any Patents to Debtor or the discontinuance of any
Patent filing or any communication or information in connection therewith.
Further, Debtor shall provide Bank copies of all correspondence and other
documentation delivered by Debtor to the PTO. In the event that Debtor is
awarded a Patent after the date hereof which is material to the operations and
business of Debtor, Debtor shall execute a patent assignment and any and all
other documents necessary to preserve and protect Bank's security interest in
such Patent.
ARTICLE 8 - NEGATIVE COVENANTS OF DEBTOR
Debtor hereby covenants and agrees that, from the date of this
Agreement and so long as Debtor shall be indebted to Bank hereunder or under any
of the Notes, it will comply with the following covenants, unless Bank shall
consent otherwise in writing, which consent shall not be unreasonably withheld:
8.01 Amendments, Mergers, etc.: Debtor shall not change its name,
-------------------------
enter into any merger, consolidation, reorganization or recapitalization or
reclassify its capital stock.
8.02 Sale of Assets: Debtor shall not sell, transfer, lease or
--------------
otherwise dispose of all or (except in the ordinary course of business) any
material part of its assets.
8.03 Liens: Except pursuant to Xxxxxxxxx 0.00, Xxxxxx shall not
-----
mortgage, pledge, grant or permit to exist any Lien or Liens upon, any of its
assets, of any kind, now owned or hereafter acquired, except for Permitted
Liens, nor hypothecate or xxxxx x Xxxx on its capital, net worth, equity
accounts, or any capital stock, as the case may be. Debtor shall not mortgage,
pledge, grant or permit to exist any Lien or Liens upon any of the remaining
thirty-four percent (34%) of the capital stock or ownership interests of Debtor
in any of Euro Bio-Pharm, Ltd. or Bio-Pharm Clinical Service, GmbH which has not
been pledged to Bank pursuant to the Pledge Agreements, unless prior consent has
been received from the Bank.
8.04 Disposition of Right to Income: Debtor shall not mortgage or
------------------------------
grant or permit to exist any Lien or Liens in, any of the Collateral,
(including, without limitation, the Accounts), other than to Bank, except for
Permitted Liens. Further, Debtor shall not sell, discount, transfer, assign,
factor or otherwise dispose of its Collateral except in the ordinary course of
business.
8.05 Guarantor: Debtor shall not become liable, directly or
---------
indirectly, as guarantor or otherwise, for any obligation of any other Person,
except for the endorsement of negotiable instruments, including company checks
of Debtor, for deposit or collection in the ordinary course of business, or
pursuant hereto.
8.06 Indebtedness: Debtor shall not incur, create, or assume any
------------
Indebtedness, except: (1) the Loans; (2) Indebtedness secured only by Permitted
Liens (including Capital Leases to the extent permitted in Section 7.14(c)
hereof); (3) trade Indebtedness or operating lease indebtedness (to the extent
approved) incurred in the ordinary course of business; (4) unsecured purchase
money Indebtedness for equipment acquired hereafter in the ordinary course of
business, and (5) any other Indebtedness existing as the date hereof and set
forth on Exhibit I.
---------
8.07 Dividends and Distributions: Debtor shall not declare or pay any
---------------------------
dividends, or make any capital or equity distributions to any shareholder which
would result in the occurrence of a Potential Default or Event of Default. Any
dividend or distribution made in violation of this covenant shall be deemed
subject to a resulting or constructive trust in favor of Bank.
8.08 Loans: Debtor shall not make any loan or advance to any officer,
-----
shareholder, director, partner, or other affiliated Person or Persons, or any
Person related to or affiliated with such Persons in excess of an aggregate
amount outstanding at any time of Two Hundred Fifty Thousand Dollars
($250,000.00). In addition, Debtor shall not make any intercompany loan or
advance to the Subsidiaries of Debtor in excess of an aggregate amount
outstanding at any time of Seven Million Dollars ($7,000,000.00). As security
for any intercompany loan, Debtor shall be required to do any and all actions
set forth in Section 6.04 hereof.
8.09 Statements Not Misleading, etc.: Debtor shall not knowingly,
-------------------------------
after reasonable inquiry, furnish Bank any certificate or other document that
will contain any untrue statement of material fact or that will omit to state a
material fact necessary to make it not misleading in light of the circumstances
under which it is furnished.
8.10 No Release of Hazardous Materials: Debtor shall not cause or
---------------------------------
permit to exist, as a result of an intentional or unintentional action or
omission on its part, or on the part of any third party, any disposal,
releasing, spilling, leaking, pumping, emitting, pouring, emptying or dumping of
any Hazardous Material in or onto any of the Locations except in compliance with
Environmental Laws.
8.11 Transactions with Affiliates, Etc.: Debtor shall not permit any
---------------------------------
transfers of property or payments to any present or former Affiliate,
shareholder, officer or employee of Debtor, or the successors, assigns or
transferees of such individuals or entities, except for: (i) normal salary and
compensation reasonable in amount under the circumstances in accordance with
past practices; (ii) purchases or sales of Inventory in the ordinary course of
business and on terms not less favorable to Debtor than arms-length market
terms; and (iii) payments required under bona fide written rental, franchise or
other operating agreements entered into in the ordinary course of business on
arms-length terms.
8.12 Regulation U: Debtor shall not use the proceeds of any Loans
------------
hereunder directly or indirectly to purchase or carry any "margin stock" (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing or carrying,
directly or indirectly, any such margin stock.
8.13 Acquisitions. Debtor will not acquire all or any portion of
------------
another business, including but not limited to a Subsidiary, for a purchase
price in excess of $3,000,000 or a cash payment of over $1,000,000, without the
prior written consent of the Bank, which consent shall not be unreasonably
withheld.
ARTICLE 9 - REPRESENTATIONS AND WARRANTIES
To induce Bank to enter into this Agreement, Debtor makes the
following continuing representations and warranties to Bank, which
representations and warranties shall be deemed renewed as of the date of each
request for an Advance and deemed incorporated in each such request:
9.01 Representations and Warranties as to Accounts Receivable: As to
--------------------------------------------------------
each Account Receivable carried on Debtor's financial statements or otherwise
reported to Bank as an Account: (a) the Account arose from a bona fide outright
sale of goods by Debtor or for services performed by Debtor and such services
have been performed for the respective obligors or their designees; (b) the
Account is based on an enforceable order or contract for services performed and
that the same were performed in accordance with such order or contract; (c) the
title of Debtor to the Account is absolute and is not subject to any prior
assignment, claim, lien or security interest, except a Permitted Lien; (d) the
amount shown on Debtor's books and on any invoice or statement delivered to Bank
is owing to Debtor and no partial payment has been made thereon by anyone; (e)
the Account, in the amount reported, is not subject to any contra, credit, claim
of reduction, counterclaim, set-off, recoupment, or any claim for credit,
allowances or adjustments by the obligor known to Debtor because of returned,
inferior or unsatisfactory services, or for any other reason, except for
customary discounts allowed for prompt payment; (f) the Account does not
represent progress or contract xxxxxxxx except for services actually performed;
(g) to the best knowledge of Debtor, the obligor is not bankrupt or insolvent or
the subject of receivership proceedings, nor has made an assignment for benefit
of creditors or a composition with creditors; and (h) at least 75% of the
account balances for all Accounts for the same obligor comply with these
representations and warranties.
9.02 Representations and Warranties as to Equipment: As to each item
----------------------------------------------
of Equipment shown on Debtor's financial statements:
(a) Such Equipment has been purchased and received by the
Debtor, and is held by the Debtor free and clear of all Liens and claims
whatever except a Permitted Lien;
(b) Such Equipment is in merchantable condition, not obsolete,
not defective, usable for the purposes for which purchased, held and processed;
(c) The value at which the Equipment is carried is the cost of
such Equipment on an item by item basis.
9.03 Other Representations and Warranties:
------------------------------------
(a) Debtor is a business corporation, duly organized, validly
existing and in good standing under the state of its respective organization
first recited above, and in each other jurisdiction that requires such
qualification wherein it owns or leases any property or conducts any business,
except where the failure to qualify would have a material adverse effect on the
business, operations, properties and financial condition of Debtor;
(b) The making, delivery and performance of this Agreement, the
Notes, the Pledge Agreements, the Collateral Assignment and Security Agreements
and the other Loan Documents will not immediately, or with the passage of time,
the giving of notice, or both:
(1) Violate the charter or by-law provisions of Debtor or
violate any Laws or result in a default under any material contract, agreement,
or instrument to which Debtor is a party or by which it or its property is
bound; or
(2) Terminate or give any party the right to terminate any
material contract, agreement or instrument to which Debtor is a party or by
which its properties may be bound or affected; or
(3) Result in the creation or imposition of any Lien upon,
any of the assets of Debtor except in favor of the Bank;
(c) Debtor has the corporate power and authority to enter into
and perform this Agreement, the Notes, the Pledge Agreements, the Collateral
Assignment and Security Agreements and the other Loan Documents, and to incur
the Obligations herein and therein provided for, and has taken all action
necessary to authorize the execution, delivery, and performance of the same;
(d) This Agreement, the Notes, the Pledge Agreements, the
Collateral Assignment and Security Agreements and the other Loan Documents are
and continue to be valid, binding, and enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency and
reorganization laws and general equitable principles;
(e) Except as described on Exhibit F attached hereto, Debtor is
---------
not a party to or, to its best knowledge, threatened with, any litigation, suit,
action, investigation, proceedings or controversy before any Court,
administrative agency or other governmental authority which, if adversely
determined, would result in any material adverse change in its business
operations, properties or assets or in its condition, financial or otherwise, or
in any way affect this Agreement or the transactions contemplated hereby, and
Debtor is not in violation of or in default with respect to any judgment, order,
writ, injunction, decree or rule of any court, administrative agency or
governmental instrumentality or in any material respect under any regulation of
any administrative agency or governmental instrumentality.
(f) Debtor has good and marketable title to all of its assets,
subject to no Lien or other claim of any third person except for Permitted
Liens;
(g) The financial statements, including any schedules and notes
pertaining thereto, of Debtor which have been provided to Bank prior to or on
the Effective Date have been prepared in accordance with GAAP, and fully and
fairly present the financial condition of Debtor at the dates thereof and the
results of operations for the periods covered thereby. There have been no
material adverse changes in the financial condition of Debtor since the date of
its financial statements dated December 31, 1993 which were delivered to Bank
prior to the date of the Commitment;
(h) Except as may be disclosed on Exhibit F or Exhibit G,
--------- ---------
Debtor has filed all federal, state, and local tax returns, and other reports
which it is required by Law to file prior to the date hereof and which are
material to the conduct of its business, has paid or caused to be paid all
taxes, assessments and other governmental charges that are due and payable prior
to the date hereof, has complied with all applicable Federal and State tax laws,
and has made adequate provision for the payment of such taxes, assessments or
other charges accruing but not yet payable, and Debtor has no knowledge of any
deficiency or additional assessment in a materially important amount in
connection with any taxes, assessments or charges not provided for on its books;
(i) Except as described on Exhibit G, Debtor is in compliance
---------
in all material respects with ERISA, Debtor does not sponsor, maintain or
contribute to or plan to sponsor, maintain or contribute to, or has not
sponsored, maintained or contributed to at any previous date, any "Defined
Benefit Plans", as defined in Section 3(35) of ERISA, and no Reportable
Event, as defined in Section 4043 of ERISA, or Prohibited Transaction, as
defined in Section 406 of ERISA, has occurred with respect to any Plan; and
(j) Debtor is not in material violation of or subject to any
contingent liability on account of any Law (including but not limited to any
Environmental Law). No Lien arising under or in connection with any
Environmental Law has attached to any revenues or any real or personal property
owned, leased, occupied or operated by Debtor, nor does Debtor have any reason
to believe that any governmental agency has incurred any costs which may give
rise to any such lien hereafter.
(k) To the best of Debtor's knowledge, after reasonable
inquiry, no representation or warranty furnished pursuant hereto contains any
untrue statement of material fact or omits to state a material fact necessary to
make such representation or warranty not misleading in light of the
circumstances under which it was made.
(l) Each consent, approval or authorization of, or filing,
registration or qualification with, any Person which is required to be obtained
or effected by Debtor in connection with the execution and delivery of this
Agreement, the Notes, the Pledge Agreements, the Collateral Assignment and
Security Agreements and the other Loan Documents, or the undertaking or
performance of any obligation hereunder or thereunder, has been duly obtained or
effected;
(m) Except as specifically disclosed in Exhibit I attached
---------
hereto, Debtor has no other material real property leases, employment
agreements, insurance and welfare agreements. Except for commitments to purchase
equipment to be financed by the Non-Revolving Equipment Loan and except as
otherwise disclosed on the financial statements for the period ended May 31,
1994, which are attached as an annex to Exhibit I, Debtor has no other
---------
contingent or noncontingent liability, which is or are material in amount. To
the best of Debtor's knowledge, all parties to all such leases, contracts and
other commitments to which Debtor is or was party have complied with the
provisions of such leases, contracts and other commitments, no party is in
default under any thereof and no event has occurred which, but for the giving of
notice or the passage of time, or both, would constitute a default with respect
thereto;
(n) Debtor has not made any agreement or has taken any action
which may cause anyone to become entitled to a commission or finder's fee as a
result of the making of the Loans;
(o) Debtor will take all necessary steps to preserve Debtor's
corporate existence, and all of its franchises and licenses, and will comply
with all present and future regulatory and other Laws applicable to it in the
operation of its business, and with all material agreements to which it is
subject;
(p) Debtor shall not make any borrowing hereunder for the
purpose of buying or carrying any "margin stock," as such term is used in
Regulation U of the Board of Governors of the Federal Reserve System, as amended
from time to time. Neither Debtor nor any Subsidiary owns any "margin stock".
Debtor is not engaged in the business of extending credit to others for such
purpose, and no part of the proceeds of any borrowing hereunder 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".
(q) For purposes of this Agreement, each of the following shall
be defined as a "Location": (i) Debtor's Chief Executive Office, (ii) the
locations of all Equipment and other Collateral, and (iii) the locations of each
office at which Debtor maintains Records concerning Accounts, General
Intangibles and other financial matters. All of Debtor's Locations are
identified on Exhibit H hereto.
---------
(r) Attached hereto as Exhibit I is a schedule setting forth
---------
all Indebtedness of Debtor (other than outstanding and unfilled orders to
purchase property, products, materials or supplies) where the principal amount
of the Indebtedness (in the case of Indebtedness classifiable as liabilities
under GAAP) or the present value of all future payments with respect to the
Indebtedness (in the case of all other Indebtedness) exceeds $100,000.00.
(s) No Debtor has Indebtedness to any Affiliate, or is owed
anything on account of indebtedness of an Affiliate to it, except subordinated
indebtedness and such Indebtedness (if any) shown on Exhibit J.
---------
(t) The only Subsidiaries of Debtor are outlined on Exhibit K
attached hereto.
(u) The authorized and issued capital stock or ownership
interests of each Subsidiary of Debtor is as indicated on Exhibit K attached
---------
hereto. Exhibit K attached hereto also sets forth the ownership of the issued
---------
and outstanding shares of capital stock or ownership interests of each
Subsidiary of Debtor. All of the issued and outstanding shares of capital stock
or ownership interests of each Subsidiary of Debtor have been validly issued and
are fully paid and nonassessable. There are no options, warrants or other rights
outstanding to purchase any such shares or ownership interests except as
indicated on Exhibit K attached hereto. Debtor has good and marketable title to
---------
all of the issued and outstanding shares of capital stock or ownership interests
of each Subsidiary of Debtor that it purports to own, free and clear in each
case of any Lien except for Liens created under the Pledge Agreements.
ARTICLE 10 - DEFAULT
10.01 Events of Default: The occurrence of any one or more of the
-----------------
following shall constitute an Event of Default hereunder:
(a) Debtor shall fail to pay, when due, any installment of
principal or any installment of interest payable hereunder or under any of the
Notes or other Loan Documents; or Debtor shall fail to pay any fee, charge or
expense, payable hereunder or under any of the Notes or other Loan Documents
within ten (10) days after notice from Bank; or
(b) Debtor shall fail to pay any Indebtedness exceeding in the
aggregate amount outstanding at any one time the sum of One Hundred Thousand
Dollars ($100,000.00), when due, to any Person and such failure shall continue
beyond any applicable grace period, or any other event of default shall arise
under any agreement evidencing any Indebtedness; and with respect to any
defaults as are not reasonably capable of cure within the applicable grace
period, no Event of Default shall be deemed to have occurred so long as Debtor
shall have, in good faith, commenced said cure within said initial grace period
and thereafter shall diligently pursue said cure to completion within such
additional period of time as shall be reasonably required, not to exceed thirty
(30) days in any event.
(c) Any financial statement, representation or warranty made or
furnished by Debtor or its agents to Bank in connection with this Agreement, or
as an inducement to Bank to enter into this Agreement, or in any separate
statement or document to be delivered hereunder to Bank, shall be false,
incorrect, or incomplete when made as to any material fact or facts;
(d) Debtor shall generally not or shall be unable to or shall admit or
have admitted its inability to pay, or shall fail to pay, its debts as they
mature, or shall make an assignment for the benefit of its creditors;
(e) Proceedings in bankruptcy, or for reorganization of Debtor or for
the readjustment of debts, under the Bankruptcy Code, as amended, or any part
thereof, or under any other Laws, whether state or federal, for the relief of
debtors, now or hereafter existing, shall be commenced or shall have been
commenced by or against Debtor and if commenced against Debtor shall not be
stayed or discharged within sixty (60) days of commencement;
(f) A receiver or trustee shall be appointed or shall have been
appointed for Debtor or any substantial part of its assets, or any proceedings
shall be instituted for the dissolution or the full or partial liquidation of
Debtor and such receiver or trustee shall not be discharged within sixty (60)
days of initial appointment, or such proceedings shall not be stayed or
discharged within thirty (30) days of their commencement, or Debtor shall
discontinue business or materially change the nature of its business;
(g) Debtor shall suffer a final judgment for the payment of money in
excess of One Hundred Thousand Dollars ($100,000.00), and shall not discharge
the same within a period of thirty (30) days unless execution thereon is
effectively stayed or bonded pending further proceedings;
(h) A judgment creditor of Debtor shall obtain possession of or any
attachment or other judicial process shall issue against, any of the Collateral
by any means, including, but without limitation, levy, distraint, replevin or
self-help or on a consensual basis, if such possession, attachment, process,
levy or distraint is, in Bank's reasonable opinion, material or if such
possession, attachment, process, levy or distraint shall not have been finally
stayed, enjoined or terminated within thirty (30) days after it was first
obtained;
(i) The validity or enforceability of this Agreement, the Notes, the
Pledge Agreements, the Collateral Assignment and Security Agreements or any of
the other Loan Documents shall be contested in any judicial forum by Debtor or
any Affiliate, or Debtor shall deny that it has any liability or obligation
hereunder or thereunder;
(j) Any default by Debtor with respect to any other Obligation to Bank
as to which any required notice has been given, any applicable grace period has
expired, and such default remains uncured and unwaived;
(k) Any event of default (or any event or condition which, with notice
or lapse of time or both, would become an event of default) shall arise under
any document relating to the Letter of Credit, including, without limitation,
the failure of Debtor to pay its obligations to Bank thereunder;
(l) Any financial statement, representation or warranty made or
furnished by Debtor under any of the Letter of Credit Documents to Bank in
connection with the Letter of
Credit, or as an inducement to Bank to enter into the Letter of Credit, or in
any separate statement or document to be delivered thereunder to Bank, shall be
false, incorrect, or incomplete when made as to any material fact or facts;
(m) Any one or more of the following events occurs which, in Bank's
reasonable opinion, when taken individually or collectively, have, or is or are
likely to have, a material, adverse effect on the financial condition or
business operations of Debtor and such event or circumstance continues for a
period of sixty (60) days after written notice to cure is given by Bank:
(i) The PBGC notifies a Plan pursuant to Section 4042 of ERISA
by service of a complaint, threat of filing a lawsuit, or otherwise of its
determination that an event described in Section 4042(a) of ERISA has occurred,
a Plan should be terminated, or a trustee should be appointed for a Plan; or
(ii) Any action is taken to terminate a Plan pursuant to its
provisions or the Plan administrator files with the PBGC a notice of intent to
terminate a Plan in accordance with Section 4041 of ERISA; or
(iii) Any action is taken by a plan administrator to have a
trustee appointed for a Plan pursuant to Section 4042 of ERISA; or
(iv) A return is filed with the Internal Revenue Service, or a
Plan is notified by the Secretary of the Treasury that a notice of deficiency
has been mailed, with respect to the tax imposed under Section 4971(a) of the
Code for failure to meet the minimum funding standards established under Section
412 of the Code; or
(v) A Reportable Event occurs with respect to a Plan; or
(vi) Any action is taken to amend a Plan to become an employee
benefit plan described in Section 4021(b)(1) of ERISA, causing a Plan
termination under Section 4041(e) of ERISA; or
(vii) Either Debtor or any member of the same controlled group
receives a notice of liability or demand for payment on account of complete
withdrawal under Section 4203 of ERISA, partial withdrawal under Section 4205 of
ERISA or on account of becoming secondarily liable for withdrawal liability
payments under Section 4204 of ERISA (sale of assets);
(n) A material adverse change shall occur in the financial condition,
business or prospects of Debtor;
(o) Debtor shall fail to observe or perform any other obligation to be
observed or performed by it hereunder or under any of the Notes, Pledge
Agreements, Collateral Assignment and Security Agreements or the other Loan
Documents, which is not specifically enumerated in subsections (a)-(n) above,
and such failure shall continue uncured for a period of thirty (30) consecutive
days.
10.02 Acceleration: Immediately and without notice upon the occurrence of
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an Event of Default specified in subsection 10.01(e) or subsection 10.01(f), or
in other cases, at the option of
Bank, upon notice by Bank or its agent or attorney to Debtor of the occurrence
of an Event of Default, all Obligations, whether hereunder or otherwise,
including without limitation those evidenced by the Notes, shall immediately
become due and payable, without further action or notice of any kind.
10.03 Remedies: Upon the occurrence of an Event of Default, Bank shall
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have, in addition to the rights and remedies given it by this Agreement, the
Notes, the Pledge Agreements, the Collateral Assignment and Security Agreements
or any of the other Loan Documents and the remaining documents delivered
pursuant hereto, all those allowed by all applicable Laws, including, without
limitation, the Uniform Commercial Code.
Without limiting the generality of the foregoing, Bank may
immediately, without demand for performance and without other notice or demand
whatsoever to Debtor (except as specifically required by this Agreement or the
documents delivered pursuant hereto or as required by applicable laws), sell at
public or private sale or otherwise realize upon, at any place designated by
Bank in its sole discretion, including any place of business of Bank or any of
its affiliates, the whole or, from time to time, any part of the Collateral, or
any interest which Debtor may have therein. After deducting from the proceeds of
sale or other disposition of the Collateral all expenses (including all expenses
for legal services), Bank shall apply such proceeds toward the satisfaction of
the Obligations, in such order as it shall determine. Any remainder of the
proceeds after satisfaction in full of the Obligations shall be distributed as
required by applicable Laws. At any such sale or other disposition, Bank may, to
the extent permissible under applicable Laws, purchase the whole or any part of
the Collateral, free from any right of redemption on the part of Debtor, which
right is hereby waived and released. Notice of any sale or other disposition
shall be given to Debtor at the address hereinafter set forth or such other
address as may from time to time be shown on Bank's records at least ten (10)
days before the time of any intended public sale or of the time after which any
intended private sale or other disposition of the Collateral is to be made,
which Debtor hereby agree shall be reasonable notice of such sale or other
disposition. Debtor agrees to assemble, or to cause to be assembled, at Debtor's
own expense, the Collateral at such place or places as Bank shall designate.
Without limiting the generality of any of the rights and remedies conferred upon
Bank under this Section, Bank may, to the full extent permitted by applicable
Laws do any or all of the following:
(a) Enter upon any premises of Debtor, exclude Debtor therefrom, and
take immediate possession of the Collateral, either personally or by means of a
receiver appointed by a court of competent jurisdiction, or by other lawful
means;
(b) At Bank's option, use, operate, manage and control the Collateral
in any lawful manner;
(c) Collect and receive any or all rents, income, revenue, earnings,
issues, and profits (including the Accounts), and proceeds therefrom; and
(d) Maintain, repair, renovate, alter or remove the Collateral as Bank
may determine in its discretion.
10.04 Application of Proceeds. Upon the occurrence of an Event of Default,
-----------------------
and so long as the Event of Default continues uncured or unwaived, Debtor
irrevocably waives the right to direct the application of all payments,
including proceeds of Collateral, that may be received by Bank or for the
benefit of Debtor. The proceeds of any sale or other disposition of all or any
part
of the Collateral, or any interest which Debtor may have therein, shall be
applied by Bank in the following order:
(a) First, to payment of all costs and expenses incurred by Bank under
any of the Loan Documents including without limitation all costs and expenses
relating to disposition of Collateral or enforcement of the Debtor's
Obligations, and reasonable attorneys' fees,
(b) Second, to the payment in full of the unpaid principal balance of,
and all accrued and unpaid interest on, the Loans, the Notes, and other
Obligations all in accordance with the terms of the Notes, this Agreement, the
Pledge Agreements, the Collateral Assignment and Security Agreements and the
other Loan Documents, and
(c) Third, to the payment in full of all other Obligations of Debtor
to Bank, and
(d) Fourth, to the Debtor to the extent of any surplus. Debtor shall
remain liable to Bank for any deficiency in payment of the Obligations to Bank
after application of the proceeds in accordance with this Section 10.04.
10.05 Enforcement and Waiver by the Bank: Bank shall have the right at all
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times to enforce the provisions of this Agreement and the documents delivered
pursuant hereto in strict accordance with the terms hereof and thereof,
notwithstanding any conduct or custom on the part of Bank in refraining from so
doing at any time or times. The failure of Bank at any time or times to enforce
its rights under such provisions, strictly in accordance with the same, shall
not be construed as having created a custom in any way or manner contrary to
specific provisions of this Agreement or as having in any way or manner modified
or waived the same. All rights and remedies of Bank are cumulative and
concurrent and the exercise of one right or remedy shall not be deemed a waiver
or release of any other right or remedy.
ARTICLE 11 - MISCELLANEOUS
11.01 Interpretation: The provisions of this Agreement shall be in
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addition to those of any Letter of Credit Documents, security agreement, note or
other evidence of liability now or hereafter at any time held by Bank, all of
which shall be construed as complementary and supplementary to each other to the
extent possible. Nothing herein contained shall prevent Bank from enforcing any
or all other agreements in accordance with their respective terms.
11.02 Further Assurances: From time to time, Debtor will execute and
------------------
deliver to Bank such additional documents and will provide such additional
information as Bank may reasonably require, to carry out the terms of this
Agreement and be informed of the Debtor's status and affairs.
11.03 Power to Execute Documents: Upon and after the occurrence of an
--------------------------
Event of Default, and so long as any Obligations remain outstanding, Debtor
hereby irrevocably (this power being coupled with an interest) appoints,
constitutes and names Bank, or any of its attorneys or agents, the true and
lawful attorney for Debtor, with full power of substitution, to do any or all of
the following at any time (but this grant of authority shall not negate any
other grant of authority under this Agreement which may authorize other actions,
or similar actions under other circumstances, and Debtor shall not take any
actions to contest or reverse or negate Bank's actions hereunder):
(a) to receive mail at Bank's designated address and open the same,
endorse, sign and deliver, in the name of Debtor, or in Bank's name, all checks,
drafts, money orders and other instruments, for the payment of moneys which are
payable to Debtor;
(b) to sign the name of Debtor, and to receive for Debtor, on any
schedules, assignments, instruments, documents and Uniform Commercial Code
financing, amending or continuation statements which Debtor is obligated to give
Bank hereunder or any invoice, warehouse receipt, xxxx of lading or other
Document, Instrument or Chattel Paper, or any Accounts, statements therefor,
drafts against obligors or drawn or to be drawn under any letters of credit,
notices to obligors, certificates or other documents to be delivered or
presented under letters of credit or schedules or assignments of Accounts; and
(c) to take or bring at the Debtor's expense, in the name of Debtor,
or Bank, all steps, actions and suits that Bank considers necessary or desirable
to effect collections of Accounts, to enforce payment of any Account, to settle,
compromise, sell, assign, discharge or release, in whole or in part, any amounts
owing on Accounts, to extend the time of payment of any and all Accounts and to
make allowances and adjustments with regard to Accounts; and
(d) to do such other and further acts and deeds in the name of Debtor
that Bank may deem necessary or desirable to enforce the rights of Debtor
against third parties with respect to any Collateral.
11.04 Cost, Expenses, and Fees Paid and Payable to Bank:
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(a) All reasonable attorneys fees and other expenses incurred by Bank
as part of this transaction shall be a part of the Obligations hereunder and
shall be paid at the signing hereof or at such later time as the Bank may
specify.
(b) Debtor agrees that all costs, expenses, and reasonable attorneys'
fees of, or incidental to the custody, care, management, sale or collection of,
or realization upon, any of the Collateral or in any way relating to the care,
enforcement or protection of the Collateral or in the enforcement of any and all
rights of Bank either hereunder or under any applicable law or custom, shall
become part of the Obligations and entitled to the benefits of this Agreement as
if an Advance made hereunder upon the application of Debtor, and Bank may at any
time apply to the payment of all such costs and expenses all moneys of Debtor or
other proceeds arising from the possession or disposition of all or any portion
of the Collateral.
11.05 Notices: Any notices or consents required or permitted by this
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Agreement shall be in writing and shall be deemed delivered if personally
delivered or if sent by certified mail, postage prepaid, return receipt
requested or overnight courier service, as follows, unless such address is
changed by written notice hereunder:
If to Debtor: IBAH, Inc.
Four Valley Square
000 Xxxxxxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxxxx
Vice President and CFO
with a copy to: Xxxx X. Xxxxxxxxxxxxx, Esquire
IBAH, Inc.
Four Valley Square
000 Xxxxxxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
If to Bank: with a copy to: CoreStates Bank, N.A.
00 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
ATTN: Ash Lilani, Assistant Vice President
Xxxxx Xxx Xxxxxxx, Esquire
Stradley, Ronon, Xxxxxxx & Young, LLP
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Any notice hereunder shall be deemed to have been given three (3)
days after mailing thereof, or upon actual delivery to an agent of the recipient
party, to the other party at such party's then effective address hereunder.
Notices by Bank may be given on its behalf by its agent or attorney.
11.06 Waiver and Release by Debtor: To the maximum extent permitted
----------------------------
by applicable Laws, Debtor:
(a) Waives demand, protest, presentment, and notice of
dishonor of all commercial paper at any time held by Bank on which Debtor is in
any way liable;
(b) Releases Bank and its officers, attorneys, agents and
employees from all claims for loss or damage caused by any act or omission on
the part of any of them except negligence.
11.07 JURISDICTION: DEBTOR CONSENTS TO THE PERSONAL JURISDICTION OF
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THE FEDERAL OR STATE COURTS LOCATED IN THE COMMONWEALTH OF PENNSYLVANIA AND
AGREES THAT VENUE SHALL BE PROPER AND THE FORUM SHALL BE CONVENIENT IN THE CITY
OF PHILADELPHIA OR IN XXXXXXX COUNTY, PENNSYLVANIA, IF SUIT IS FILED BY ANY
PARTY TO ENFORCE, INTERPRET OR CONSTRUE THIS AGREEMENT. DEBTOR AND BANK HEREBY
MUTUALLY AND RECIPROCALLY WAIVE ALL RIGHT TO JURY TRIAL.
11.08 Applicable Law: The internal substantive laws of the
--------------
Commonwealth of Pennsylvania shall govern the construction of this Agreement and
the rights and remedies of the parties hereto without regard to any laws
relating to conflict of laws or choice of law.
11.09 Indemnity: To the maximum extent permitted by applicable law,
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Debtor, for itself and its successors (herein, "Indemnifying Parties"), shall
jointly and severally indemnify, hold harmless, and upon request defend Bank and
its shareholders, officers, directors, employees, attorneys and agents, and
their respective successors and assigns (collectively, the "Indemnified
Parties") from and against any and all claims and liabilities asserted against
any Indemnified Party by any Indemnifying Party or any third party (including
without limitation for negligence or gross negligence) (herein, "Claims"), and
will pay and reimburse to the Indemnified Parties all
losses, payments, reasonable costs and expenses associated therewith, or with
the defense of all Indemnified Parties (including without limitation reasonable
attorneys' fees) which any Indemnified Party may suffer, incur or be exposed to
by reason of or in connection with or rising out of the transport, release,
treatment, processing, manufacture, deposit, storage, disposal, burial, dumping,
injecting, spilling, leaking or placement at any time heretofore or hereafter,
by any person or entity, of any Hazardous Material (except in compliance with
all Environmental Laws), including but not limited to any of the following
whether incurred by an Indemnified Party, an Indemnifying Party or any third
party: (1) costs of or liability for investigation, monitoring, boring, testing
and evaluation; (2) costs or liabilities for abatement, correction, response,
cleanup, removal or remediation; (3) fines, damages, penalties and other
liabilities; (4) liability for personal injury or property damage.
11.10 Investigation and Cure of Environmental Matters: In the event
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of failure of Debtor to comply with any provision of this Agreement or any other
Loan Document relating to Hazardous Materials, Environmental Laws or
Environmental Regulators, or if Bank shall have reason to believe that any
Hazardous Material has been or is likely to be released on, in or under any
Location (except in compliance with all Environmental Laws), Bank may do any or
all of the following: (i) Bank shall have the right to investigate, or to demand
that Debtor investigate and report to Bank on (in which case Debtor shall
investigate and report to Bank on) investigation of such Location, and if Bank
requests through an independent reputable environmental consulting or
engineering firm acceptable to Bank; (ii) without obligation to do so, to cure
such default or to comply or cause compliance, or to demand that Debtor cure
such default or comply or cause compliance, with any or all Environmental Laws.
All of the foregoing shall be at the expense of Debtor, and any expense incurred
by Bank in connection with any of the foregoing (including without limitation
its expenses relating to attorneys fees and any environmental consultants or
engineers) shall be additional obligation of Debtor hereunder which shall be
payable to Bank upon demand, with interest computed at the Default Rate from the
date(s) upon which said costs and expenses were incurred by Bank.
11.11 Binding Effect, Assignment and Entire Agreement: This Agreement
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shall become effective upon delivery of the Notes, and acceptance of this
Agreement by execution in, to Bank's main office in Malvern, Pennsylvania and
shall inure to the benefit of, and shall be binding upon, the respective heirs,
executors, administrators, successors and permitted assigns of the parties
hereto. Debtor has no right to assign any of its rights or obligations hereunder
without the prior written consent of Bank. This Agreement, and the documents
executed and delivered pursuant hereto, constitute the entire agreement between
the parties, and may be amended only by a writing signed on behalf of each
party.
11.12 Severability: If any provision of this Agreement shall be held
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invalid under any applicable Laws, such invalidity shall not affect any other
provision of this Agreement which can be given effect without the invalid
provision. To this end, the provisions hereof are severable.
11.13 Counterparts: This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, under seal, as of the day and year first above written.
IBAH, INC.
Attest:_____________________________ By:______________________________
Name: Name:
Title: Title:
CORESTATES BANK, N.A.
Attest:_____________________________ By:______________________________
Name: Name: Ash Lilani
Title: Title: Assistant Vice President
