Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[x] Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number - 0-12321
ANUHCO, INC.
State of Incorporation - Delaware
IRS Employer Identification No. - 46-0278762
8245 Nieman Road, Suite 100, Lenexa, Kansas 66214
Telephone Number - (913) 859-0055
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x . No.___.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock.
Anuhco, Inc.
Common Stock, $0.01 par value
6,871,070 shares outstanding
as of May 10, 1996
Form 10-Q
Contains 18 pages
</PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Periods Ended March 31
(In Thousands, Except Per Share Data)
<CAPTION>
First Quarter
1996 1995
<S> <C> <C>
Operating Revenue........................... $25,216 $24,632
Operating Expense........................... 25,022 23,663
Operating Income............................ 194 969
Nonoperating Income (Expense)
Interest income........................... 391 612
Interest expense.......................... ( 3) ( 3)
Gain on sale of property and equipment,net 36 20
Other, net................................ 1 1
Total nonoperating income (expense)..... 425 630
Income from Continuing Operations
before Income Taxes....................... 619 1,599
Income Tax Provision........................ 266 688
Income from Continuing Operations........... 353 911
Income from Discontinued Operations (Note 6) -- 368
Net Income.................................. $ 353 $ 1,279
Average Common Shares Outstanding (Note 5).. 7,136 7,554
Net Income Per Share from Continuing
Operations................................ $0.05 $0.12
Net Income Per Share from Discontinued
Operations................................ $0.00 $0.05
Net Income Per Share........................ $0.05 $0.17
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31 Dec 31
1996 1995
ASSETS (In Thousands)
<S> <C> <C>
Current Assets
Cash and temporary cash investments........... $ 8,335 $ 6,617
Short term investments........................ 11,934 27,366
Freight accounts receivable, less allowance
for doubtful accounts of $426 and $409,
respectively................................ 8,845 7,952
Finance accounts receivable, less allowance
for doubtful accounts of $732 and $351,
respectively................................ 38,050 8,290
Current deferred tax asset.................... 401 177
Other current assets.......................... 2,196 1,291
AFS Net Assets (Note 6)....................... 16,840 16,840
Total current assets........................ 86,601 68,533
Operating Property, at Cost
Revenue equipment............................. 20,447 18,944
Land.......................................... 3,098 2,826
Structures and improvements................... 8,844 7,534
Other operating property...................... 4,653 4,643
37,042 33,947
Less accumulated depreciation............... (18,049) (17,724)
Net operating property.................... 18,993 16,223
Intangibles and Other Assets (Note 2)........... 10,096 3,670
$115,690 $ 88,426
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Secured notes payable (Note 4)................ $ 24,275 $ --
Accounts payable.............................. 3,018 1,041
Accrued payroll and fringes................... 5,233 5,203
Claims and insurance accruals................. 255 224
Accrued and current deferred income taxes..... 458 288
Other accrued expenses........................ 1,323 847
Total current liabilities................... 34,562 7,603
Deferred income taxes........................... 593 543
Shareholders' Equity (Note 5)
Preferred stock with $0.01 par value, author-
ized 1,000,000 shares, none outstanding..... -- --
Common stock with $0.01 par value, authorized
13,000,000 shares, outstanding 7,131,420 and
7,139,970 shares, respectively.............. 76 76
Paid-in capital............................... 5,408 5,357
Retained earnings............................. 78,743 78,390
Treasury stock, 435,800 and 417,100 shares,
respectively, at cost....................... (3,692) (3,543)
Total shareholders' equity................ 80,535 80,280
$115,690 $ 88,426
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
</PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31
<CAPTION>
1996 1995
(In Thousands)
<S> <C> <C>
Cash Flows From Operating Activities -
Net income...................................... $ 353 $ 1,279
Adjustments to reconcile net income to net
cash provided by operating activities -
Gain on sale of assets........................ (36) (20)
Depreciation and amortization................. 767 598
Provision for uncollectible accounts.......... 104 30
Deferred tax provision........................ 220 140
Net increase (decrease) from change in other
working capital items affecting operating
activities.................................. (547) (438)
Income from discontinued operations (Note 6).... -- (368)
Net Cash Provided by operating activities......... 861 1,221
Cash Flows from Investing Activities -
Purchase of finance subsidiary (Note 2)......... (11,979) --
Purchase of operating property.................. (3,301) (1,560)
Origination of finance accounts receivables..... (15,235) --
Sale of finance accounts receivables............ 9,395 --
Collection of owned finance accounts receivables 6,359 --
Collection of long-term receivable.............. -- 1,270
Purchases of short-term investments............. -- (24,746)
Maturities of short-term investments............ 15,432 14,395
671 (10,641)
Cash Flows from Financing Activities -
Payments to acquire treasury stock.............. (149) --
Borrowings on credit agreement.................. 500 --
Other........................................... (165) --
186 --
Net Increase (Decrease) In Cash...................
and Temporary Cash Investments.................. 1,718 (9,420)
Cash and Temporary Cash Investments at
beginning of period............................. 6,617 11,365
Cash and Temporary Cash Investments at
end of period................................... $ 8,335 $ 1,945
Cash Paid During the Period for:
Interest........................................ $ -- $ --
Income Tax...................................... 12 351
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<CAPTION>
Total
Share-
Common Paid-In Retained Treasury holders'
Stock Capital Earnings Stock Equity
<S> <C> <C> <C> <C> <C>
Balance at Dec. 31, 1994...... $ 76 $5,339 $72,004 $ -- $77,419
Income from continuing
operations.................. -- -- 2,810 -- 2,810
Income from discontinued
operations.................. -- -- 3,576 -- 3,576
Issuance of shares under
Incentive Stock Plan........ -- 18 -- -- 18
Purchase of 417,100 shares of
common stock................ -- -- -- (3,543) (3,543)
Balance at Dec. 31, 1995...... 76 5,357 78,390 (3,543) 80,280
Income from continuing
operations.................. -- -- 353 -- 353
Income from discontinued
operations.................. -- -- -- -- --
Issuance of shares under
Incentive Stock Plan........ -- 51 -- -- 51
Purchase of 18,700 shares of
common stock................ -- -- -- (149) (149)
Balance at March 31, 1996..... $ 76 $5,408 $78,743 $(3,692) $80,535
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</PAGE>
ANUHCO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Principles of Consolidation
The consolidated financial statements include Anuhco and all of
its subsidiary companies ("the Company"). All significant
intercompany accounts and transactions have been eliminated in
consolidation. The condensed financial statements included herein
have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC") and have not been
examined or reviewed by independent public accountants. In the
opinion of management, all adjustments necessary to present fairly
the results of operations have been made.
Pursuant to SEC rules and regulations, certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted from these statements
unless significant changes have taken place since the end of the
most recent fiscal year. Anuhco believes that the disclosures
contained herein, when read in conjunction with the financial
statements and notes included, or incorporated by reference, in
Anuhco's Form 10-K, filed with the SEC on March 11, 1996, are
adequate to make the information presented not misleading. It is
suggested, therefore, that these statements be read in conjunction
with the statements and notes included, or incorporated by
reference, in the aforementioned report on Form 10-K.
2. Acquisition of Premium Finance Subsidiaries
On May 31, 1995, Anuhco completed the acquisition of all of the
issued and outstanding stock of Agency Premium Resource, Inc. and
Subsidiary ("APR"). The purchase price, together with payments for
certain services to be rendered by the sellers after closing, was
approximately $11.3 million. In addition to the Stock Purchase
Agreement by which Anuhco acquired all of the APR stock, Anuhco
entered into a consulting agreement with the former shareholder of
APR, and an employment agreement with APR's president and chief
executive officer. Under the former, Anuhco is entitled to consult
with the former majority shareholder regarding APR for three years.
Under the latter, APR is entitled to the continuation of the
services of the president and chief executive officer for five
years. This transaction was accounted for as a purchase. Anuhco
utilized a portion of its available cash and investments to
consummate the purchase. The terms of the acquisition and the
purchase price resulted from negotiations between Anuhco and the
APR shareholders.
APR offers insurance premium financing and related services
through approved insurance agencies, primarily throughout the
midwestern United States. Its wholly owned subsidiary, Agency
Services, Inc., provides motor vehicle report services throughout
the same geographic area.
In connection with the purchase of APR, Anuhco recorded goodwill
of $2.4 million, which will be amortized on the straight-line basis
over 15 years, and a software and service agreement of $1.0
million, which will be amortized over 5 years.
On March 29, 1996, Anuhco completed the acquisition of all of the
issued and outstanding stock of Universal Premium Acceptance
Corporation and UPAC of California, Inc. (together referred to as
"UPAC"). UPAC offers short-term collateralized financing of
commercial and personal insurance premiums through approved
insurance agencies in over 30 states throughout the United States.
At March 31, 1996, UPAC had outstanding net finance receivables of
approximately $30 million. This transaction will be accounted for
as a purchase. Anuhco utilized a portion of its available cash and
short-term investments to consummate the purchase at a price of
approximately $12 million. The terms of the acquisition and the
purchase price resulted from negotiations between Anuhco and
William H. Kopman, the former sole shareholder of UPAC. In
connection with the purchase of UPAC, based on a preliminary
allocation of the purchase price, Anuhco has recorded goodwill of
$6.3 million, which will be amortized on the straight-line basis
over 25 years.
In addition to the Stock Purchase Agreement by which Anuhco
acquired all of the UPAC stock, Anuhco entered into a consulting
agreement with Mr. Kopman. Under the consulting agreement, Anuhco
is entitled to consult with Mr. Kopman on industry developments as
well as UPAC operations through December 31, 1998. In addition to
retaining the services of Mr. Kopman under a consulting agreement,
existing executive management personnel of UPAC have been retained
under multiyear employment agreements. Anuhco's acquisition of
UPAC, in combination with its earlier acquisition, gives the
Company a nationwide presence in this financial services industry.
The following reflects the operating results of Anuhco for the
first quarter ended March 31, 1996 and 1995, assuming the
acquisitions occurred as of the beginning of each of the respective
periods:
<TABLE>
Pro Forma Operating Results
(Unaudited)
(in thousands, except per share data)
<CAPTION>
First Quarter
1996 1995
<S> <C> <C>
Operating Revenue.................. $ 26,449 $ 26,715
Income from Continuing
Operations....................... 334 916
Income from Discontinued
Operations....................... -- 368
Net Income......................... $ 334 $ 1,284
Net Income Per Share:
Continuing Operations............ $0.05 $0.12
Discontinued Operations.......... 0.00 0.05
Total.......................... $0.05 $0.17
</TABLE>
The pro forma results of operations are not necessarily
indicative of the actual results that would have been obtained had
the acquisition been made at the beginning of the respective
periods, or of results which may occur in the future.
3. Profit Sharing
In September 1988, the employees of Crouse Cartage Company
("Crouse Cartage"); a wholly owned subsidiary of Anuhco, approved
the establishment of a profit sharing plan ("the Plan"). The Plan
is structured to allow all employees (union and non-union) to
ratably share 50% of Crouse Cartage's income before income taxes
(excluding extraordinary items and gains or losses on the sale of
assets) in return for a 15% reduction in their wages. Plan
distributions are made on a quarterly basis. The Plan was
recertified in 1991 and 1994, and shall continue in effect through
March 31, 1998, or until a replacement of the Collective Bargaining
Agreement is reached between the parties, whichever is the later.
The accompanying consolidated balance sheet for the period ended
March 31, 1996 includes an accrual for profit sharing costs of
$465,000. The accompanying consolidated statements of income
includes profit sharing costs of $465,000 and 1,165,000 for the
first quarter of 1996 and 1995, respectively.
4. Financing Agreements
In October, 1995, the Company, APR, and APR Funding Corporation,
a wholly owned subsidiary of APR, entered into an extendable three
year securitization agreement whereby it can sell undivided
interests in a designated pool of accounts receivable on an ongoing
basis. The maximum allowable amount of receivables to be sold
under the agreement is $30,000,000. This agreement replaced a
similar agreement with another financial institution that was
entered into in July, 1993. The purchaser permits principal
collections to be reinvested in new financing agreements. APR had
securitized receivables of $17.3 million at March 31, 1996. The
cash flows from the sale of receivables are reported as investing
activities in the accompanying consolidated statement of cash
flows. The securitized receivables are reflected as sold in the
accompanying balance sheet. The proceeds from the initial
securitization of the receivables were used to pay off the previous
securitized receivables under the prior agreement.
APR did not record a gain or loss on the sales as the costs of
receivables sold approximated the proceeds. The terms of the
securitization agreement require that APR maintain a default
reserve at specified levels which serves as collateral. At March
31, 1996, approximately $2.1 million of owned finance receivables
served as collateral under the default reserve provision. APR
continues to service the securitized receivables for which it
receives a servicing fee.
As of March 31, 1996, UPAC had outstanding secured notes payable
of $21.3 million under a restated secured credit agreement dated as
of July 29, 1994 with three banks, secured by the UPAC receivables,
whereby, as amended on August 14, 1995 and April 3, 1996, the
aggregate maximum principal amount outstanding shall not exceed the
lesser of $30,000,000 or 85% of the qualified notes assigned to the
banks and the sum of the outstanding principal of and the accrued
interest on, the additional obligations to insurance agents with
whom UPAC does business evidenced by promissory notes. This credit
agreement is scheduled to expire on August 31, 1996. Borrowings
under the credit agreement not subject to the LIBOR (London Inter
Bank EuroDollar Market) Pricing Option, $1.3 million at March 31,
1996, are at the bank's prime rate, which was 8.25% at March 31,
1996. Borrowings under the LIBOR Pricing Option, $20 million at
March 31, 1996, are at the LIBOR rate plus 2.00% for each
applicable interest period, an average effective rate of 7.3% at
March 31, 1996. The acquisition of UPAC by Anuhco resulted in
certain technical events of default of the secured credit agreement
which were waived by the lender. UPAC's domestic banking system
provides for the daily replenishment of major bank accounts for
check clearing requirements. Accordingly, outstanding checks of
$2,473,000 at March 31, 1996 are also included in secured notes
payable.
In September 1988, Crouse Cartage entered into a multi-year
credit agreement with a commercial bank which provided for maximum
borrowings equaling the lesser of $2,500,000 or the borrowing base,
as defined in such agreement. In September, 1995 the term of this
agreement was extended to June 30, 1997. The outstanding balance
on this revolving line of credit at March 31, 1996 was $500,000.
Borrowings under the revolving credit agreement bear interest at
the bank's prime rate which was 8.25% at March 31, 1996.
5. Shareholders' Equity
Income per share is based on the average number of common shares
outstanding during each period. The average number of common
shares so computed was 7,136,017 for the quarter ended March 31,
1996 and 7,553,561 for the quarter ended March 31, 1995.
On June 26, 1995, the Company adopted a program to repurchase up
to 10% of its outstanding shares of common stock. During the first
quarter of 1996, the Company repurchased an additional 18,700
shares of common stock, bringing the total shares repurchased to
435,800 shares, or 5.8% of outstanding shares before initiating the
program, at a total cost of $3,692,000.
6. AFS Net Assets
Under the provisions of a Joint Plan of Reorganization ("the
Joint Plan"), AFS is responsible for the administration of pre-July
12, 1991 creditor claims and conversion of assets owned before that
date. As claims are allowed and cash is available, distributions
to the creditors occur. The Joint Plan also provided for
distributions to Anuhco as unsecured creditor distributions
occurred in excess of 50% of allowed claims. Anuhco also will
receive the full benefit of any remaining assets of AFS through its
ownership of AFS stock, after unsecured creditors received
distributions, including interest, equivalent to 130% of their
claims.
AFS has made the full payment of all it's resolved claims and
liabilities. The remaining AFS net assets are estimated to have
net realizable value of $16.8 million. The primary assets include
approximately $14.3 million in cash and investments. Gross
unresolved claims, primarily related to workers' compensation
indemnification issues, are approximately $4 million.
AFS is in the process of resolving these claims, however until
this process is completed the amount of liabilities cannot be
ascertained. The ultimate resolution of the amounts, validity and
priority of recorded liabilities and other claims is uncertain at
this time. Accordingly, AFS net assets reflect estimated amounts
due on such liabilities and claims.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
First quarter ended March 31, 1996 compared to the first quarter
ended March 31, 1995
With the acquisition of APR on May 31, 1995, and UPAC on March
29, 1996 Anuhco now operates in two distinct industries;
transportation, through its subsidiary, Crouse Cartage; and
financial services, through its subsidiaries, APR and UPAC.
Transportation
Operating Revenue - The changes in transportation operating revenue
are summarized in the following table (in thousands):
<TABLE>
<CAPTION>
Quarter 1 1996
vs
Quarter 1 1995
<S> <C>
Increase (decrease) from:
Increase in LTL tonnage................... $ 510
Decrease in LTL revenue per hundredweight. (667)
Decrease in truckload revenues............ (187)
Net increase (decrease)................. $ (344)
</TABLE>
Less-than-truckload ("LTL") operating revenues fell by 0.8% in
the first quarter of 1996 as compared to the same period in 1995.
In spite of severe winter weather in the first quarter of 1996
which management estimates caused a loss of three revenue days in
the quarter, Crouse achieved a 2.6% increase in LTL tons over the
first quarter of 1995. The trucking industry, including Crouse
Cartage, was adversely impacted by the continued competitive market
pressures on freight rates during the first quarter of 1996, which
reduced Crouse Cartage's LTL revenue yield by approximately 3.4%.
Truckload operating revenue fell 3.6% in the first quarter as the
net result of a 6.4% decline in the number of shipments hauled and
a 2.8% increase in revenue per shipment.
Operating Expense - A comparative summary of transportation
operating expenses as a percent of transportation operating revenue
follows:
<TABLE>
<CAPTION>
Percent of Operating Revenue
First Quarter
1996 1995
<S> <C> <C>
Salaries, wages and employee benefits.. 55.8% 55.1%
Operating supplies and expenses........ 13.4 11.9
Operating taxes and licenses........... 2.9 2.8
Insurance and claims................... 2.0 2.2
Depreciation........................... 2.5 2.2
Purchased transportation............... 21.3 21.0
Total operating expenses............. 97.9% 95.2%
</TABLE>
Crouse Cartage's operating expenses as a percentage of operating
revenue, or operating ratio, rose from 95.1% to 97.9% for the first
quarter of 1995 and 1996, respectively. This increase in operating
ratio was primarily the result of increased linehaul, fuel and
maintenance costs caused by the severe winter storms which occurred
in Crouse's operating territory and the reduction in operating
revenue which serves as the denominator in the calculation of
operating ratio.
Management expects the difficult economic operating environment
in the transportation industry and the pressure on freight rates to
continue in the short term, although these conditions may improve
later in 1996*. In addition, a 3.7% contractual increase in union
salaries and benefits went into effect on April 1, 1996. *This is
a forward-looking statement which involves risks and uncertainties
that are detailed under caption "Forward-Looking Statements".
Financial Services
In the first quarter of 1996, APR financed $14.2 million in
insurance premiums on which it generated operating revenue of
$923,000 while operating at approximately a breakeven level.
Other
Primarily as a result of its utilization of cash and short-term
investments for the acquisitions of APR and UPAC since the first
quarter of 1995, Anuhco recorded a substantial decrease in interest
income for the first quarter ended March 31, 1996, from the
corresponding period of 1995. Anuhco's effective tax rate for the
first quarter of 1996 and 1995 was 43%. During the first quarter
of 1995, the Company recognized income from discontinued operations
relating to additional deferred tax benefits.
Outlook
The following statements are forward-looking statements, within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and as such involve risks and uncertainties which are
detailed below under the caption "Forward-Looking Statements".
The Company is currently developing a three-year strategic plan
with the goal of growing each of its business segments to be equal
contributors to the Company's earnings per share. In the
transportation segment the plan calls for the Company to continue
to provide and improve upon its already superior service to its
customers in its primary operating territory, while extending its
operations throughout the Midwest. As the Company makes the
strategic investments necessary to support this expansion, the
Company intends to continue to improve the efficiency and
effectiveness of its existing base of operations.
The first step for the financial services segment is the
successful integration of the operations of APR and UPAC. The
continued growth of this operation will involve the expansion of
its licensing and qualifications to include all 50 states. The
financial services segment will also focus on increasing its market
penetration in certain states with substantial population and
industrial base.
In addition to the expansion of its existing operations in each
of its business segments, the Company continues to consider
potential acquisitions which would complement these operations.
Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-
Q which are not statements of historical fact constitute forward-
looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, including, without
limitation, the statements specifically identified as forward-
looking statements in this Form 10-Q. In addition, certain
statements in future filings by the Company with the Securities and
Exchange Commission, in the Company's press releases, and in oral
statements made by or with the approval of an authorized executive
officer of the Company which are not statements of historical fact
constitute forward-looking statements within the meaning of the
Act. Examples of forward-looking statements include, but are not
limited to (i) projections of revenues, income or loss, earnings or
loss per share, capital expenditures, the payment or non-payment of
dividends, capital structure and other financial items, (ii)
statements of plans and objectives of the Registrant or its
management or Board of Directors, including plans or objectives
relating to the products or services of the Registrant, (iii)
statements of future economic performance, and (iv) statements of
assumptions underlying the statements described in (i), (ii) and
(iii). These forward-looking statements involve risks and
uncertainties which may cause actual results to differ materially
from those in such statements. The following discussion
identifies certain important factors that could affect the
Company's actual results and actions and could cause such results
or actions to differ materially from any forward-looking statements
made by or on behalf of the Company that related to such results or
actions. Other factors, which are not identified herein, could
also have such an effect.
Transportation
Certain specific factors which may affect the Company's
transportation operation include: increasing competition from other
regional and national carriers for freight in the Company's primary
operating territory; increasing price pressure; changes in fuel
prices; labor matters; including changes in labor costs, and other
labor contract issues; and, environmental matters.
Financial Services
Certain specific factors which may affect the Company's financial
services operation include: the performance of financial markets
and interest rates; the performance of the insurance industry;
increasing competition from other premium finance companies and
insurance carriers for finance business in the Company's key
operating states; failure to achieve the Company's anticipated
levels of expense savings from the integration of APR's and UPAC's
administrative functions; difficulty in integrating the computer
and operating systems; the loss of experienced, trained personnel
during the transition period; the loss of customer identification
with the Company as the businesses are combined; and, the inability
to obtain continued financing at a competitive cost of funds.
General Factors
Certain general factors which could affect both the Company's
transportation operation and the Company's financial services
operation include: changes in general business and economic
conditions; changes in governmental regulation, and; tax changes.
Expansion of these businesses into new states or markets is
substantially dependent on obtaining sufficient business volumes
from existing and new customers in these new markets at
compensatory rates.
The cautionary statements made pursuant to Section 21E of the
Securities Exchange Act of 1934, as amended, are made as of the
date of this Report and are subject to change. The cautionary
statements set forth in this Report are not intended to cover all
of the factors that may affect the Company's businesses in the
future. Forward-looking information disseminated publicly by the
Company following the date of this Report may be subject to
additional factors hereafter published by the Company.
FINANCIAL CONDITION
The Company's financial condition remained strong at March 31,
1996 with over $20 million in cash and investments at the Anuhco
level, as well as approximately $14 million in cash and investments
included in the net assets of AFS. During the first quarter of
1996 Anuhco completed the acquisition of UPAC using approximately
$12 million in available funds. In addition, during the first
three months of 1996, the Company has purchased $3.5 million of
operating property and equipment, without incurring any long term
indebtedness.
On October 20, 1995 APR entered into a three year agreement with
a receivable purchaser to sell an undivided interest in a
designated pool of receivables. The maximum allowable receivables
to be sold under this agreement is $30 million. Proceeds from the
initial funding of this agreement were utilized to eliminate all
outstanding balances under a prior agreement. As of March 31,
1996, APR had securitized receivables with an outstanding balance
of $17.3 million. Anuhco serves as guarantor in certain limited
circumstances under this agreement.
UPAC finances its outstanding receivables under a secured credit
agreement dated July 29, 1994, as amended on August 14, 1995 and
April 3, 1996, which provides for maximum borrowings of the lesser
of $30 million or 85% of qualified receivables. This agreement is
scheduled to expire on August 31, 1996. As of March 31, 1996, UPAC
had outstanding secured notes payable under the credit agreement of
$21.3 million.
On June 26, 1995, the Company adopted a program to repurchase up
to 10% of its outstanding shares of common stock. During the first
quarter of 1996, the Company repurchased an additional 18,700
shares of common stock bringing the total shares repurchased to
435,800, or 5.8% of outstanding shares before initiating the
program, at a total cost of $3,692,000. Through May 10, 1996, the
Company has repurchased an additional 262,100 shares of common
stock. This program is being funded from available cash and
investments.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings Reference is made to Item 3 of the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995.
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10(a)* Amendment No. 4 to and Restatement of Secured Credit
Agreement, dated July 29, 1994, by and among Universal
Premium Acceptance Corporation, The First National
Bank of Boston, Magna Bank of Missouri and The Daiwa
Bank, Limited.
10(b)* Amendment No. 1 to Restated Secured Credit Agreement,
dated August 14, 1995, by and among Universal Premium
Acceptance Corporation, The First National Bank of
Boston, Magna Bank of Missouri and The Daiwa Bank,
Limited.
10(c)* Amendment No. 2 to Restated Secured Credit Agreement,
dated April 3, 1996, by and among Universal Premium
Acceptance Corporation, The First National Bank of
Boston, Magna Bank of Missouri and The Sumitomo Bank,
Limited.
19(a)* Report to Shareholders for the First Quarter, 1996,
dated April 19, 1996.
27 * Financial Data Schedule
* - Filed herewith.
(b) Reports on Form 8-K
(1) A Current Report on Form 8-K, dated March 29, 1996, was
filed on April 12, 1996 to report the completion of the
acquisition of all of the outstanding stock of Universal
Premium Acceptance Corporation and UPAC of California,
Inc.
(2) Amendment Number 1 to Current Report on Form 8-K, dated
March 29, 1996, was filed on May 14, 1996 to report the
completion of the acquisition of all of the outstanding
stock of Universal Premium Acceptance Corporation and
UPAC of California, Inc.
(a) Historical Combined Financial Statements of
Universal Premium Acceptance Corporation and UPAC
of California, Inc. (business acquired).
Annual Financial Statements
Report of Independent Auditor
Combined Balance Sheets as of December 31,
1995 and 1994
Combined Statements of Income and Retained
Earnings for the years ended December 31, 1995
and 1994
Combined Statements of Cash Flows for the
years ended December 31, 1995 and 1994
Notes to Combined Financial Statements
(b) Condensed Pro Forma Financial Statements
(Unaudited)
Description of Pro Forma Financial Statements
Condensed Pro Forma Balance Sheet as of December
31, 1995
Condensed Pro Forma Statements of Income for the
years ended December 31, 1995 and 1994
Notes to Pro Forma Financial Statements
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Anuhco, Inc.
Registrant
By: /s/ Timothy P. O'Neil
Timothy P. O'Neil, President &
Chief Financial Officer
Date: May 15, 1996
EXHIBIT INDEX
<TABLE>
<CAPTION>
Assigned
Exhibit
Number Description of Exhibit
<S> <C>
10(a) Amendment No. 4 to and Restatement of Secured
Credit Agreement, dated July 29, 1994, by and among
Universal Premium Acceptance Corporation, The First
National Bank of Boston, Magna Bank of Missouri and
The Daiwa Bank, Limited.
10(b) Amendment No. 1 to Restated Secured Credit
Agreement, dated August 14, 1995, by and among
Universal Premium Acceptance Corporation, The First
National Bank of Boston, Magna Bank of Missouri and
The Daiwa Bank, Limited.
10(c) Amendment No. 2 to Restated Credit Agreement, dated
April 3, 1996, by and among Universal Premium
Acceptance Corporation, The First National Bank of
Boston, Magna Bank of Missouri and The Sumitomo
Bank, Limited.
19(a) Report to Shareholders for the First Quarter, 1996,
dated April 19, 1996.
27 Financial Data Schedule.
</TABLE>
Exhibit 10(a)
AMENDMENT NO. 4 TO AND RESTATEMENT OF
SECURED CREDIT AGREEMENT
among
UNIVERSAL PREMIUM ACCEPTANCE CORPORATION,
THE FIRST NATIONAL BANK OF BOSTON,
as Agent,
and
Certain Banks Listed Herein
</PAGE>
<TABLE>
CONTENTS
<CAPTION>
Section Page
<S> <C> <C> <C> <C>
1. DEFINITIONS 2
2. THE CREDITS 2
2.1. Revolving Credit 2
2.1.1. Revolving Loan Accounts 3
2.1.2. Maturity, etc 3
2.2. Application of Proceeds; Specifically
Prohibited Applications 3
2.3. Nature of Obligations of Banks to Make Loans 3
2.3.1. Revolving Loan 3
2.3.2. Loans Made as Principal 4
3. INTEREST; FEES; ETC 4
3.1. Interest 4
3.1.1. Certain Definitions 4
3.1.2. Computations of Interest 6
3.2. Interest on Overdue Amounts 6
3.3. Statements 6
3.4. Termination or Change of the Revolving Loan
Commitment; Maturity of the Bank Obligations 7
3.4.1. Revolving Loan Commitment 7
3.4.2. Maturity 7
3.5. Commitment Fees; Agent's Fee 7
3.6. Capital Adequacy 7
3.7. LIBOR Pricing Options 9
3.7.1. Certain Definitions 9
3.7.2. Election of LIBOR Pricing Options 9
3.7.3. Notices Relating to LIBOR Pricing Options 10
3.8. Additional Provisions Concerning Pricing Options 10
3.8.1. Certain Definitions 10
3.8.2. Selection of Interest Periods 11
3.8.3. Additional Interest Relating to LIBOR
Pricing Options 11
3.8.4. Change in Applicable Laws, Regulations,
etc. 11
3.8.5. Taxes 12
3.8.6. Funding Procedure 12
4. CONDITIONS TO MAKING LOANS 13
4.1. Legal Opinions 13
4.2. Company Officer's Certificate 13
4.3. Proper Proceedings 13
4.4. Legality, etc 14
4.5. General 14
5. PAYMENT 14
5.1. Payment at Maturity 14
5.3. Mandatory Prepayment of Indebtedness Evidenced
by the Revolving Loan Account 14
5.4. Insufficient Borrowing Base 15
5.5. Payment 15
6. REPRESENTATIONS AND WARRANTIES 15
6.1. Corporate Existence 15
6.2. Corporate Authority 15
6.3. Binding Effect 15
6.4. Financial Data 16
6.6. Loans 16
6.7. Subordinated Debt 16
6.8. Litigation and Proceedings 16
6.9. Other Agreements 16
6.10. Employee Controversies 17
6.11. Compliance with Laws and Regulations 17
6.12. Patents, Licenses 17
6.13. Pension Related Matters 17
6.14. Taxes 17
6.15. No Change in Business 18
6.16. Title to Properties 18
6.17. Regulations U and X 18
6.18. Investment Company Act 18
6.19. Securities Act 18
6.20. Accurate and Complete Disclosure 18
6.21. Guarantor Representations 19
7. AFFIRMATIVE COVENANTS 19
7.1. Corporate Existence; Conduct of Business 19
7.2. Financial Statements 19
7.3. Notices of Defaults 20
7.4. Inspection 21
7.5. Conduct of Business 21
7.6. Taxes; Claims 21
7.7. Insurance 21
7.8. Pension Plans 21
7.9. Notice of Suit or Adverse Change in Business 22
7.10. Maintenance of Properties 22
8. NEGATIVE COVENANTS 22
8.1. Encumbrances 22
8.2. Indebtedness 23
8.3. Consolidations, Mergers or Acquisitions 23
8.4. Investments or Loans 23
8.5. Guarantees 23
8.6. Disposal of Property 24
8.7. Dividends and Stock Redemptions 24
8.8. Transactions with Subsidiaries and Affiliates 24
8.9. Fiscal Year End 24
8.10. Subordinated Debt 24
8.11. Leverage Ratio 25
8.12. Interest Coverage Ratio 25
8.13. Allowance for Losses 25
9. EVENTS OF DEFAULT 25
9.1. Events of Default 25
9.2. Annulment of Defaults 30
9.3. Waivers 30
9.4. Course of Dealing 30
10. DEFINITIONS 31
10.1. Terms Defined Elsewhere 31
10.2. Accounting Terms 39
11.1. Fees and Expenses 39
11.2. Indemnification 40
12. NOTICES 40
13. OPERATIONS 41
13.1. Interest in Loans 41
13.2. Advances and Payments 41
13.3. Agent's Authority to Act 42
13.4. Agent's Resignation 42
13.5. Amendments, Consents, Waivers, etc 42
13.6. Payments 43
13.7. Concerning the Agent 43
13.7.1. Action in Good Faith, etc 43
13.7.2. No Implied Duties, etc 43
13.7.3. Validity, etc 44
13.7.4. Compliance 44
13.7.5. Employment of Agents and Counsel 44
13.7.6. Reliance on Documents and Counsel 44
13.7.7. Agent's Reimbursement 44
13.7.8. Rights as a Bank 45
13.8. Independent Credit Decision 45
13.9. Indemnification 46
13.10. Amendment to Section 13 46
13.11. Reporting and Advances by Agent 46
14. SHARING OF PAYMENTS, ETC 47
15. SUCCESSORS AND ASSIGNS; BANK PARTICIPANTS 48
15.1. Permitted Assignees 48
15.1.1. Assignments 48
15.1.2. Assignment Procedures 48
15.1.3. Federal Reserve Bank 48
15.1.4. Further Assurances 49
15.2. Participations 49
16. SURVIVAL OF COVENANTS 49
17. SERVICE OF PROCESS 49
18. MISCELLANEOUS 50
</TABLE>
AMENDMENT NO. 4 TO AND RESTATEMENT
OF
SECURED CREDIT AGREEMENT
This Amendment No. 4 to and Restatement of Secured Credit
Agreement (the "Amendment") is entered into this day of
July, 1994 by and among Universal Premium Acceptance Corporation
(the "Company"), a Missouri corporation, The First National Bank
of Boston ("FNBB"), in its capacity as agent for the Banks
hereinafter referred to (in such capacity, the "Agent") and in
its individual capacity as a Bank, Magna Bank of Missouri,
successor by merger to Landmark Bank and formerly known as Magna
Bank of St. Louis ("Magna"), and The Daiwa Bank, Limited.
("Daiwa"; Daiwa, Magna and FNBB in their individual capacities
are herein referred to as the "Banks").
Preliminary Statements
A. The Company, the Banks and the Agent are parties to that
certain Secured Credit Agreement dated as of August 1, 1990 (as
heretofore amended, the "Credit Agreement").
B. The Company, the Banks and the Agent desire to amend the
Credit Agreement to (i) revise the definition of Adjusted
Tangible Net Worth, (ii) extend the Maturity Date to July 31,
1996, (iii) revise the definition of the net outstanding amount
of Base Contracts, and (iv) amend Schedule 13.1 to reflect the
revised Percentage Interests of the Banks due to the purchase by
and assignment to Daiwa of a Percentage Interest under the Credit
Agreement.
Amendment and Restatement
The Credit Agreement is amended and restated in its entirety
by this Amendment. This Amendment, any Exhibits and Schedules
attached hereto, and the other Bank Agreements govern the present
relationship among the Company, the Banks and the Agent. All
Exhibits and Schedules, other than Schedule 13.1, which are
referenced herein, are unamended hereby and are incorporated and
made a part hereof by reference. This Amendment is in no way
intended, nor may it be construed, to affect, replace, impair, or
extinguish the creation, attachment, perfection or priority of
the security interests in, and other Liens on, the Collateral
granted to the Agent, which security interests and other Liens
the Company, by this Amendment, acknowledges and confirms to the
Agent and the Banks. All obligations and indebtedness created
under, pursuant to, or as a result of, the Credit Agreement will
continue in existence within the definition of Bank Obligations
under this Amendment. The existing Bank Agreements unamended by
this Amendment or pursuant to a separate agreement will remain in
full force and effect and are hereby ratified and confirmed.
The Company represents and warrants to the Agent and the
Banks that (i) the Company has the corporate power and all
necessary authority to execute and deliver this Amendment, and
(ii) the Credit Agreement, as amended and restated hereby, is the
legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
The Company hereby reaffirms all covenants, representations
and warranties made in the Credit Agreement, as amended and
restated hereby, and agrees that all such covenants,
representations and warranties shall be deemed to have been
remade as of the date of this Amendment.
Upon and after the effectiveness of this Amendment, each
reference to the Credit Agreement in all other Bank Agreements
and other related documents shall mean and be a reference to the
Credit Agreement, as amended and restated hereby.
This Amendment shall become effective as of the date first
above written when and only when each of the conditions precedent
set forth on Annex 1 hereto have been satisfied.
1. DEFINITIONS. Certain terms are used in this Agreement as
specifically defined herein. These definitions are contained or
referred to in Section 10.
2. THE CREDITS. Subject to all the terms and conditions
hereof, there is hereby established the revolving credit referred
to below:
2.1. Revolving Credit. Subject to all the terms and
conditions hereof, and so long as no Default exists, on such
Business Days prior to the Termination Date as the Company may
from time to time request by telephone notice made not later than
1:00 p.m. (Boston time) on the Business Day the same is to be
made to The First National Bank of Boston in its capacity as
agent hereunder (in such capacity, the "Agent"), which telephone
notice shall be promptly confirmed in writing, or such longer
notice period required by Section 3.7.2 if a LIBOR Pricing Option
is requested, the Banks will severally lend to the Company, in
accordance with their respective Percentage Interests, such
amounts (not less than $5,000,000 in the aggregate and in
integral multiples of $1,000,000 if a LIBOR Pricing Option is
requested) as the Company shall have so requested, by causing the
Agent to debit the amount of such loans to the Company's
Revolving Loan Accounts and to credit the amount thereof to the
general account of the Company with the Agent at the principal
banking office of the Agent in Boston, Massachusetts (the "Boston
Office"); provided, however, that the aggregate principal amount
of all loans outstanding evidenced by the Revolving Loan Accounts
shall not at any time exceed the Revolving Loan Commitment; and
further provided, however, that the aggregate principal amount of
the Revolving Loans shall not at any time exceed the Borrowing
Base. Each date on which any loan is made under this Section 2.1
is referred to herein as a "Revolving Loan Closing Date". In
connection with each request for a loan under this Section 2.1,
there shall be delivered to the Agent by the second business day
of each week, written confirmation of the daily borrowings
requested during the preceding week in the form of a certificate
dated the date of issuance thereof in substantially the form of
Exhibit 2.1 and signed by the President or any other corporate
officer of the Company, together with any other documents
required by Section 4. Agent shall, and hereby is, fully
authorized to act upon written or telephonic instructions or
other communications from a person it believes to be authorized
to act on behalf of the Company, and the Company shall be bound
thereby. Such telephonic notice shall be directed to such person
or persons as the Agent may from time to time specify to the
Company.
2.1.1. Revolving Loan Accounts. The Agent shall establish
on its books separate loan accounts on behalf of each Bank for
the Company (collectively, the "Revolving Loan Accounts"), each
of which shall reflect the loans made by such Bank pursuant to
this Section 2.1, and all of which shall be administered by the
Agent as follows: the Agent shall debit to each Revolving Loan
Account of the Company and each such Revolving Loan Account shall
evidence, the principal amount of loans from time to time made by
each Bank to the Company pursuant to this Section 2.1, and the
Agent shall credit each Revolving Loan Account with all payments
made on account of the principal amount of Indebtedness evidenced
by such Revolving Loan Account. The aggregate principal amount
of Indebtedness from time to time evidenced by the Revolving Loan
Accounts is referred to as the "Revolving Loan".
2.1.2. Maturity, etc. The Revolving Loan shall bear
interest as provided in Section 3.1, shall be payable and
prepayable as provided in Section 5 and shall mature on the
Termination Date.
2.2. Application of Proceeds; Specifically Prohibited
Applications. The Company covenants that the proceeds of the
loans made pursuant to this Agreement will be applied only to
lawful corporate purposes of the Company. In addition, the
Company will not directly or indirectly apply any part of the
proceeds of any loan made pursuant to this Agreement to the
purchasing or carrying of any "margin stock" within the meaning
of Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System, or any regulations, interpretations or
rulings thereunder, as from time to time in effect ("Margin
Stock").
2.3. Nature of Obligations of Banks to Make Loans.
2.3.1. Revolving Loan. The Banks' obligations under this
Agreement to make a Revolving Loan are several and are not joint
or joint and several. If on any Closing Date, one or more Banks
shall fail to perform such obligations, the aggregate amount of
the commitment to make the loans provided for in this Section 2
shall be reduced by the amount of the commitment hereunder of the
Banks so failing to perform, and the Percentage Interests of each
other Bank shall be appropriately adjusted, but such reduction
and adjustment shall not relieve such failing Banks from any of
their obligations to make such loans. The other Banks not so
failing may, if they so desire, assume in such proportions as
they may agree upon among themselves the obligations of any Bank
who fails to perform any such obligations.
2.3.2. Loans Made as Principal. Each Bank represents that
it is making the loans hereunder as principal (subject to Section
13.11 and Section 15) and, in particular, that it is not making
such loans as an agent or trustee for any pension plan or trust.
3. INTEREST; FEES; ETC.
3.1. Interest. The Revolving Loan shall accrue and bear
interest at a rate per annum which shall at all times equal the
Effective Rate. Prior to any stated or accelerated maturity of
the Revolving Loan, the Company will, on the first Business Day
of each calendar month (each a "Payment Date"), beginning
September 1, 1990, pay the accrued and unpaid interest on the
Indebtedness evidenced by its Revolving Loan Accounts which was
not subject to a LIBOR Pricing Option. On the last day of each
Interest Period or on any earlier termination of any LIBOR
Pricing Option, the Company will pay the accrued and unpaid
interest on the portion of the Revolving Loan which was subject
to the LIBOR Pricing Option which expired or terminated on such
date. On any stated or accelerated maturity of the Revolving
Loan, all accrued and unpaid interest thereon shall be forthwith
due and payable, including without limitation any accrued and
unpaid interest on any portion thereof which is subject to a
LIBOR Pricing Option. All payments of interest under this
Section 3.1 in respect of the Revolving Loan shall be made by the
Company to the Agent for the account of the Banks in accordance
with their respective Percentage Interests.
3.1.1. Certain Definitions.
(a) The term "Effective Rate" shall mean, with respect to
each portion of the Revolving Loan (i) not subject to a LIBOR
Pricing Option, a rate per annum equal to the from time to time
Base Rate plus one-quarter of one percent (.25%), which rate
shall change contemporaneously with any change in the Base Rate,
and (ii) subject to a LIBOR Pricing Option, a rate per annum
equal to the LIBOR Rate plus two and one-half percent (2.50%) for
each Interest Period applicable thereto.
(b) The term "LIBOR Rate" for any Interest Period shall
mean the rate, rounded upwards, if necessary, to the nearest
1/100% obtained by dividing (i) the Basic LIBOR Rate for such
Interest Period by (ii) an amount equal to 1 minus the Eurodollar
Reserve Rate, provided, however, that if at any time during such
Interest Period the Eurodollar Reserve Rate changes, the LIBOR
Rate for such Interest Period shall automatically be adjusted to
reflect such change, effective as of the date of such change.
(c) The term "Eurodollar Reserve Rate" shall mean the
stated maximum rate as changed from time to time (expressed as a
decimal) of all reserves (including any basic, supplemental,
marginal or emergency reserve or any reserve asset) required by
any Legal Requirement to be maintained by the Agent against
"Eurocurrency liabilities" as specified in Regulation D of the
Board of Governors of the Federal Reserve System, or against (i)
any other category of liabilities that includes deposits by
reference to which the interest rate on portions of the Revolving
Loan subject to LIBOR Pricing Options is determined, (ii) the
principal amount of or interest on any loan hereunder subject to
a LIBOR Pricing Option, or (iii) any other category of extensions
of credit, or other assets, that includes loans by a non-United
States office of any Bank to United States residents.
(d) The term "Basic LIBOR Rate" as applied to any
Interest Period shall mean the rate of interest at which
Eurodollar deposits in an amount equal to The First National Bank
of Boston's Percentage Interest in the portion of the Revolving
Loan as to which LIBOR Pricing Option has been elected and which
have a term corresponding to the Interest Period in question are
offered to such Bank by first class banks in the London inter-
bank Eurodollar market for delivery in immediately available
funds at The First National Bank of Boston's principal London
branch (the "Eurodollar Office") on the first day of such
Interest Period as determined by such Bank at approximately 10:00
a.m. (London time) two Business Days prior to the date upon which
the Interest Period in question is to commence. Each
determination by such Bank of any LIBOR Rate shall, in the
absence of manifest error, be conclusive and, at the request of
the Company or any Bank, The First National Bank of Boston shall
demonstrate the basis for such determination.
(e) The term "Base Rate" shall mean the greater of (i)
the rate of interest from time to time announced by the Agent at
the Boston Office as its Base Rate, and (ii) the sum of 1/4% plus
the from time to time Federal Funds Rate (rounded upwards, if
necessary, to the next 1/8 of 1% per annum).
(f) The term "Federal Funds Rate" shall mean for any day,
the rate equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as such weighted
average is published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so
published for such a Business Day, the average of the quoted
rates for such Business Day on such transactions received by the
Agent from three federal funds brokers of recognized standing
selected by the Agent.
3.1.2. Computations of Interest. Calculations of amounts
of interest and fees, and of amounts expressed as interest, for
all purposes of this Agreement shall be made on a daily basis and
on the basis of a 360-day year, except that Indebtedness
evidenced by its Revolving Loan Accounts not subject to LIBOR
Pricing Options shall be computed on a daily basis and on the
basis of a 365-day year.
3.2. Interest on Overdue Amounts. The Company will, on
demand, pay interest on any overdue installments of principal of
and, to the extent not prohibited by applicable law, interest on
the Revolving Loan and on any overdue fees or other amounts owing
to any Bank by the Company hereunder at a rate per annum which is
at all times equal to 3% plus the Effective Rate based on the
Base Rate. All payments of interest on overdue amounts under
this Section 3.2 shall be made by the Company to the Agent for
the account of each of the Banks entitled thereto.
3.3. Statements. The Revolving Loan, and all payments
therein, shall be evidenced by entries made by the Agent in its
internal data control systems showing the date, amount and reason
for each debit or credit. Until such time as the Agent shall
have rendered to the Company written statements of account as
provided herein, the balance in the Revolving Loan Accounts, as
set forth on the Agent's most recent printout shall be rebuttably
presumptive evidence of the amounts due and owing the Banks by
the Company. From time to time, or upon reasonable request by
the Company, the Agent shall render to the Company a statement
setting forth the balance of the Revolving Loan Accounts,
including principal and interest. Each such statement shall be
subject to subsequent adjustment by the Agent but shall, absent
manifest errors or omissions, be presumed correct and binding
upon the Company as of the date rendered, and shall be considered
correct and accepted by the Company, and conclusively binding
upon it, unless, within thirty (30) days after receipt of any
statement from the Agent the Company shall deliver to the Agent
written objection thereto specifying the error or errors, if any,
contained in such statement.
3.4. Termination or Change of the Revolving Loan
Commitment; Maturity of the Bank Obligations.
3.4.1. Revolving Loan Commitment. The Company shall have
the right, at any time, upon at least 5 days' prior written
notice to the Banks, to terminate the Revolving Loan Commitment
in full. The Company shall also have the right, at any time and
from time to time, upon at least 5 days' prior written notice to
the Banks to reduce the Revolving Loan Commitment in part. The
Banks shall have the right without demand or notice of any kind
to terminate the Revolving Loan Commitment at any time upon the
occurrence of an Event of Default. Once the Revolving Loan
Commitment shall have been terminated or reduced it may not be
reinstated. Any termination or reduction of the Revolving Loan
Commitment shall be accompanied by a payment of the accrued but
unpaid commitment fee provided for in Section 3.5 with respect to
the amount of the Revolving Loan Commitment that is terminated or
reduced.
3.4.2. Maturity. Notwithstanding anything herein to the
contrary, on the Termination Date all Bank Obligations, including
without limitation the unpaid principal amount of the Revolving
Loan, shall become immediately due and payable without
presentment, demand, protest, or notice of any kind (all of which
are hereby expressly waived).
3.5. Commitment Fees; Agent's Fee. The Company shall pay
to the Agent for the account of each Bank, pro rata based on its
respective Percentage Interest, a commitment fee for the period
from and after the date of this Agreement to and including the
Termination Date, payable quarterly in arrears on the first day
of each, January, April, July and October, commencing on October
1, 1990, and on the Termination Date, at a rate of .125% per
annum on the average daily unused amount of the Revolving Loan
Commitment. The Company shall pay to the Agent for its own
account an agent's fee of one-quarter of one percent (.25%) per
annum of the aggregate outstanding amount of the Bank
Obligations, commencing with the date hereof, payable monthly in
arrears on the first day of each calendar month.
3.6. Capital Adequacy. If, after the date hereof, any
Bank shall have determined that compliance with any applicable
law, governmental rule, regulation or order regarding capital
adequacy of banks or bank holding companies, or any change
therein (including without limitation any change according to a
prescribed schedule of increasing requirements, whether or not in
effect or known on the date hereof), or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank with any guideline, request or directive regarding capital
adequacy (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) of any such
authority, central bank or comparable agency (collectively,
"Capital Adequacy Rules"), has or would have the effect of
reducing the rate of return on such Bank's capital with respect
to, or as a consequence of its loans or commitments to extend
credit hereunder to a level below that which such Bank could have
achieved but for such change or compliance (taking into
consideration such Bank's policies with respect to capital
adequacy immediately before such change or compliance and
assuming that its capital was fully utilized prior to such change
or compliance) by an amount deemed by such Bank to be material,
then, within 30 days after demand, the Company shall pay to the
Agent for the account of such Bank as from time to time specified
by such Bank such additional amounts as shall be sufficient to
compensate such Bank for such reduced return relating to its
loans or commitments to make such loans hereunder, together with
interest on each such amount from the date demanded until payment
in full thereof at the Effective Rate based upon the Base Rate;
provided, however, the amounts payable under this Section 3.6
shall be reduced to the extent that such amounts would have been
less had such Bank been in compliance with all applicable Capital
Adequacy Rules on the date hereof. A certificate of an officer
of such Bank setting forth the amount to be paid to it hereunder
shall, in the absence of manifest error, be conclusive, and at
the request of the Company such Bank shall demonstrate the basis
for such determination. Notwithstanding the foregoing, no
amounts shall be payable under this Section 3.6 for periods prior
to the date on which the Company initially receives notice from a
Bank or the Agent of the application of this Section 3.6. Each
Bank agrees that if, after the payment by the Company of any such
additional amount for the account of such Bank, any part thereof
is subsequently recovered by such Bank, such Bank shall promptly
reimburse the Company to the extent of the amount so recovered.
A certificate of an officer of such Bank setting forth the amount
of such recovery and the basis therefor shall, in the absence of
manifest error, be conclusive. The Agent may include in the
charges to the account of the Company for interest under this
Agreement amounts owed under this Section 3.6 as a result of
events affecting capital adequacy to the extent that such events
are generally applicable, and to apply uniformly, to the Banks.
The payment by the Company of such amounts shall fulfill its
obligations under this Section 3.6, with respect to the amounts
so charged and paid. Each Bank's determination of the allocated
amount of such costs among the Company and other customers which
have arrangements with such Bank similar to the credit provided
hereunder, if done in good faith and if such allocation is made
on an equitable basis, shall, in the absence of manifest error,
be conclusive, and at the request of the Company the Bank shall
demonstrate the basis for such determination. Each Bank will use
its best efforts to inform the Company and the Agent of any
events affecting capital adequacy occurring after the date hereof
which will require payments to be made under this Section 3.6
promptly after it becomes aware of such event, but the failure of
any of the Banks to inform the Company shall not affect any of
the obligations of the Company hereunder.
3.7. LIBOR Pricing Options.
3.7.1. Certain Definitions.
(a) The term "Eurodollars" shall mean deposits of United
States Funds in a non-United States office or any international
banking facility of a Bank.
(b) The term "Interest Period" shall mean any period of
one, two or three months, all commencing on any Business Day,
which shall be selected as provided below in this Section 3.7 and
in Section 3.8.2 as the term of a LIBOR Pricing Option. Subject
to Section 3.8.2, (i) the number of days in any month shall be
determined by the Agent in accordance with the then current
banking practice in the London interbank market with respect to
Eurodollar deposits, and (ii) if any Interest Period so selected
would otherwise end on a date which is not a Business Day, such
Interest Period shall instead end on the immediately preceding or
succeeding Business Day as determined by the Agent in accordance
with the then current banking practice in the inter-bank
Eurodollar market with respect to Eurodollar deposits in London.
Each such determination by the Agent shall, in the absence of
manifest error, be conclusive.
(c) The term "LIBOR Pricing Options" shall mean the
options granted pursuant to this Section 3.7 to have the interest
on all or any portion of the Revolving Loan computed on the basis
of a LIBOR Rate.
(d) The term "United States Funds" shall mean such coin
or currency of the United States of America as at the time shall
be legal tender therein for the payment of public and private
debts.
3.7.2. Election of LIBOR Pricing Options. Subject to all
the terms and conditions hereof and so long as there exists no
Default on the date which is three Business Days prior to the
commencement of the Interest Period selected in such notice, the
Company may, by notice to the Agent received not less than three
Business Days prior to the commencement of the Interest Period
selected in such notice, elect to have all or such portion of the
Revolving Loan as the Company may specify in such notice accrue
and bear daily interest during the Interest Period so selected at
a per annum rate equal to the Effective Rate computed on the
basis of the LIBOR Rate for such Interest Period; provided,
however, that no such election shall become effective if, prior
to the commencement of such Interest Period, (i) the electing or
granting of such LIBOR Pricing Option would violate a Legal
Requirement or (ii) the Agent determines that Eurodollar deposits
in an amount equal to the portion of the Revolving Loan as to
which such LIBOR Pricing Option has been elected and which have a
term corresponding to the proposed Interest Period are not
readily available in the London inter-bank Eurodollar market or
that by reason of circumstances affecting such market adequate
and reasonable methods do not exist for ascertaining the interest
rate applicable to such deposits for the proposed Interest
Period; and provided, further, that no such election will be made
if it would result in there being more than three LIBOR Pricing
Options in the aggregate outstanding at any one time. Each
notice of election of a LIBOR Pricing Option shall be
irrevocable.
3.7.3. Notices Relating to LIBOR Pricing Options. The
Agent will promptly inform each Bank of each notice from the
Company received by it pursuant to Section 3.7.2 and the Interest
Period. Upon determination by the Agent of the LIBOR Rate for
any Interest Period selected by the Company, the Agent will
promptly inform each Bank of the LIBOR Rate so determined or, if
applicable, the reason why the Company's election will not become
effective.
3.8. Additional Provisions Concerning Pricing Options.
3.8.1. Certain Definitions.
(a) The term "Legal Requirement" shall mean any
requirement imposed upon any Bank by any law of the United States
of America or of any jurisdiction in which the Eurodollar Office
or the principal office of such Bank is located or by any
regulation, order, interpretation, ruling or official directive
of the Board of Governors of the Federal Reserve System or any
other board or governmental or administrative agency of the
United States of America, of any jurisdiction in which the
Eurodollar Office or the principal office of such Bank is located
or of any political subdivision of the United States of America
or any such jurisdiction. Any requirement imposed by any such
regulation, order, ruling or official directive not having the
force of law shall be deemed to be a Legal Requirement if any
Bank reasonably believes that compliance therewith is in the best
interest of such Bank.
(b) The term "Tax" shall mean any tax, levy, impost,
duty, deduction, withholding or other charges of whatever nature
at any time required by any Legal Requirement having the force of
law (i) to be paid by any Bank or (ii) to be withheld or deducted
from any payment otherwise required hereby to be made by the
Company to any Bank, other than taxes imposed upon or measured by
the net income of such Bank.
3.8.2. Selection of Interest Periods. Interest Periods
shall be selected so that no Interest Period shall expire later
than the Termination Date.
3.8.3. Additional Interest Relating to LIBOR Pricing
Options. If any portion of the Revolving Loan which is subject
to a LIBOR Pricing Option is repaid or any LIBOR Pricing Option
is terminated on a date which is prior to the last Business Day
of the Interest Period applicable to such LIBOR Pricing Option
for any reason, the Company will pay to the Agent for the account
of each Bank in accordance with its Percentage Interest therein,
for the period commencing on the date of such repayment or
termination and ending on such last Business Day, an amount equal
to daily interest on the principal amount of its portion of the
Revolving Loan so repaid or as to which a LIBOR Pricing Option
was so terminated at a per annum rate equal to the difference (if
positive) of (a) the Effective Rate calculated on the basis of
the LIBOR Rate applicable to such LIBOR Pricing Option minus (b)
the Redeployment Rate. The term "Redeployment Rate" shall mean
the effective interest rate at which such principal amount may be
invested in any readily marketable bond or other obligation of
the United States, selected at the Bank's sole discretion, on a
date approximating the date of payment of such principal amount
or termination of such LIBOR Pricing Option and having a maturity
date approximating the last Business Day of such Interest Period.
Amounts of interest due under this Section 3.8.3 shall be payable
in arrears on each Payment Date and on the last Business Day of
the Interest Period applicable to the LIBOR Pricing Option that
is terminated, notwithstanding the prior payment in full of the
Bank Obligations and the prior termination of this Agreement.
The determination by the Agent of amounts of additional interest
payable hereunder shall, in the absence of manifest error, be
conclusive. For purposes of this Section 3.8.3, if any portion
of the Revolving Loan which was to have been subject to a LIBOR
Pricing Option is not outstanding on the first day of the
Interest Period applicable to such LIBOR Pricing Option other
than by reason of a Bank failing to perform its obligations
hereunder, the Company shall be deemed to have terminated such
LIBOR Pricing Option with respect to such portion of the
Revolving Loan.
3.8.4. Change in Applicable Laws, Regulations, etc. If any
Legal Requirement shall restrict any Bank from maintaining any
portion of the Revolving Loan subject to a LIBOR Pricing Option
or otherwise from giving effect to its obligations as
contemplated hereby, (i) the Agent may by notice thereof to the
Company terminate all of the relevant portions of such LIBOR
Pricing Options as to which such Bank actually shall have funded
its Percentage Interest therein (without giving effect for the
purposes of this Section 3.8.4 to the second sentence of Section
3.8.6), (ii) the portion of LIBOR Pricing Options shall
immediately bear interest thereafter at the Effective Rate
computed on the basis of the Base Rate and (iii) if such Legal
Requirement shall have the force of law and shall have made it
unlawful for such Bank so to fund such portion of the Revolving
Loan or otherwise to give effect to its obligations as
contemplated hereby, the Company shall indemnify such Bank as
provided in Section 3.8.3.
3.8.5. Taxes.
(a) If (i) any Bank shall be subject to any Tax or (ii)
the Company shall be required to withhold or deduct any Tax, the
Company will, within 30 days after demand by the Agent, pay to
the Agent for the Bank's respective accounts such additional
amounts as is necessary to enable each Bank to receive on an
after-tax basis the full amount of all payments of principal of,
interest on and fees in respect of the Company's portion of the
Revolving Loan subject to a LIBOR Pricing Option, together with
interest on such amount from the date demanded until payment in
full thereof at the Effective Rate based upon the Base Rate. The
determination by each Bank of such additional amount owing to
such Bank shall, in the absence of manifest error, be conclusive,
and at the request of the Company such Bank shall demonstrate the
basis for such determination. Each Bank agrees that if, after
the payment by the Company of any such additional amount for the
account of such Bank, any part thereof is subsequently recovered
by such Bank, such Bank shall promptly reimburse the Company to
the extent of the amount so recovered. A certificate of an
officer of such Bank setting forth the amount of such recovery
and the basis therefor shall be conclusive.
(b) The Agent may include in the charges to the account
of the Company for interest under this Agreement amounts owed
under this Section 3.8.5 as a result of Legal Requirements. The
payment by the company of such amounts shall fulfill its
obligations under this Section 3.8.5 with respect to the amounts
so charged and paid. Any Bank's determination of the amount of
such costs shall, in the absence of manifest error, be
conclusive.
3.8.6. Funding Procedure. The Banks have indicated that,
if the Company elects a LIBOR Pricing Option, one or more Banks
may wish to purchase Eurodollar deposits in the inter-bank
Eurodollar market to fund their respective Percentage Interests
in such portions of the Revolving Loan which is subject to such
LIBOR Pricing Option; provided, however, that, the Banks may fund
all or any portion of its respective Percentage Interests in any
portion of the Revolving Loan which is subject to a LIBOR Pricing
Option in any manner they choose. The provisions of this
Agreement relating to the funding and pricing of such
Indebtedness are included only for the purpose of conducting
operations hereunder, and it is therefore understood that,
regardless of the manner selected by any Bank to fund any such
Indebtedness, all operations hereunder, including without
limitation the determination of the interest rate applicable to
any such Indebtedness and the amounts payable under Sections
3.8.3 and 3.8.5 (but excluding operations under Section 3.8.4),
shall be conducted as if all the Banks had actually funded their
respective Percentage Interests in all such Indebtedness through
the purchase of deposits in like amount having terms coterminous
with the applicable Interest Periods relating thereto through the
transfer of such deposits from the Eurodollar Office to one of
their offices in the United States. It shall be the
responsibility of each Bank to inquire of the Agent whether or
not a LIBOR Pricing Option which has been elected by the Company
will become effective prior to purchasing deposits in order to
fund loans under this Agreement. Any Bank may specify through
which office such Bank shall be funding or booking its Percentage
Interest in the portion of the Revolving Loan subject to LIBOR
Pricing Options by designating such office from time to time by
notice to the Company and the Agent.
4. CONDITIONS TO MAKING LOANS. The Banks' several obligations
to make the loans contemplated by Section 2.1 shall be subject to
the compliance by the Company with its agreements herein
contained and to the satisfaction at or before the closing of
each loan of the following further conditions:
4.1. Legal Opinions. On the initial Closing Date the
Banks will have received from counsel for the Company, such
opinions with respect to the transactions contemplated by this
Agreement as the Banks may have reasonably requested.
4.2. Company Officer's Certificate. The representations
and warranties contained in Section 6 shall be true and correct
on and as of each Closing Date with the same force and effect, as
though made on and as of such Closing Date; no Default shall have
occurred or shall exist after giving effect to the loan to be
made on such Closing Date; between December 31, 1989 and such
Closing Date, no material adverse change shall have occurred in
the business, prospects, operations, assets or the condition,
financial or otherwise, of the Company; and each request by the
Company for a loan shall be deemed to be a representation to the
Banks to the effect that as of the applicable Closing Date the
foregoing conditions have been satisfied and that there has been
no change in the Company's charter, by-laws or signing officers.
4.3. Proper Proceedings. All proper corporate proceedings
shall have been taken by the Company to authorize this Agreement
and each other Bank Agreement to which it is a party and the
transactions contemplated hereby and thereby. All necessary
consents, approvals and authorizations of any governmental or
administrative agency or any other Person to or of any of the
transactions contemplated hereby or by any other Bank Agreement
shall have been obtained and shall be in full force and effect.
4.4. Legality, etc. The making of the loans shall not
subject any Bank to any penalty or special tax and shall not be
prohibited by or violate any law or governmental order or
regulation applicable to any Bank or to the Company.
4.5. General. All instruments and legal and corporate
proceedings in connection with the loans and other transactions
contemplated by this Agreement shall be satisfactory in form and
substance to the Agent and the Agent shall have received in form
and substance satisfactory to the Agent, all certificates,
orders, authorities, consents, affidavits, schedules,
instruments, security agreements, financing statements, mortgages
and other documents which are provided for hereunder or under the
Security Agreement, or which Agent may at any time reasonably
request.
5. PAYMENT. The Company covenants with each of the Banks as
follows:
5.1. Payment at Maturity. On the Termination Date, the
Company shall pay to the Agent for credit to its Revolving Loan
Accounts the entire outstanding principal amount of Indebtedness
evidenced thereby, together with all accrued and unpaid interest
with respect thereto. On any accelerated maturity of the
Indebtedness evidenced by any Revolving Loan Accounts, the
Company shall pay to the Agent for credit to its Revolving Loan
Accounts the entire outstanding principal amount of Indebtedness
evidenced thereby, together with all accrued and unpaid interest
with respect thereto, and all other Bank Obligations owing by the
Company to any Bank, including without limitation, any amounts
due pursuant to Section 3.8.3.
5.2. Voluntary Prepayments of Indebtedness Evidenced by
the Revolving Loan Accounts. Subject to Section 3.8.3, at any
time or from time to time upon not less than one Business Day's
prior written notice to the Agent, the Company shall have the
right to prepay, without premium or penalty of any type (other
than as provided in Section 3.8.3), all or any part of the
outstanding principal amount of Indebtedness evidenced by its
Revolving Loan Accounts.
5.3. Mandatory Prepayment of Indebtedness Evidenced by the
Revolving Loan Account. The Company shall repay, without premium
or penalty of any type (other than as provided in Section 3.8.3),
all or any part of the outstanding principal amount of the
Revolving Loan by application of the proceeds of Collateral (as
defined in the Security Agreement) thereto and the Guarantor
Collateral (as defined herein), in accordance with the terms of
the Security Agreement and the Guarantor Security Agreement,
respectively.
5.4. Insufficient Borrowing Base. If at any time the
amount of the outstanding principal balance of the Revolving Loan
exceeds the Borrowing Base, the Company shall forthwith repay the
Revolving Loan in such amount as is necessary to eliminate such
excess.
5.5. Payment. Notice of prepayment having been given in
compliance with Section 5.2 (and whether or not notice is given
of payments required by Sections 5.1, 5.3 and 5.4), the amount
specified to be prepaid shall become due and payable on the date
specified for prepayment.
6. REPRESENTATIONS AND WARRANTIES. To induce each Bank to
enter into this Agreement, the Company represents and warrants
that:
6.1. Corporate Existence. The Company is a corporation
duly organized, existing and in good standing under the laws of
the State of Missouri and is duly qualified as a foreign
corporation and in good standing in all jurisdictions, where the
nature and extent of the business transacted, or to be
transacted, by it or the ownership of its assets makes, or will
make, such qualification necessary, except for those
jurisdictions in which the failure so to qualify would not, in
the aggregate, have a material adverse effect on the Company's
financial condition, results of operations or business. The
Company has no Subsidiaries.
6.2. Corporate Authority. The execution, delivery and
performance by the Company of this Agreement and all of the other
Bank Agreements to which the Company is a party and the
performance of the Company's obligations hereunder and
thereunder: (i) are within the Company's corporate powers; (ii)
are duly authorized by the Company's Board of Directors and, if
necessary, the Company's stockholders; (iii) are not in
contravention of the terms of the Company's articles or
certificate of incorporation, or by-laws, or of any indenture,
agreement or undertaking to which the Company is a party or by
which the Company or any of its property is bound; (iv) do not
require any governmental consent, registration or approval; (v)
do not contravene any contractual or governmental restriction
binding upon the Company; and (vi) will not result in the
imposition of any lien, charge, security interest or encumbrance
upon any property of the Company under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other
material agreement or instrument to which the Company is a party
or by which it or any of its property may be bound or affected.
6.3. Binding Effect. This Agreement and all of the other
Bank Agreements to which the Company is a party are the legal,
valid and binding obligations of the Company and are enforceable
against the Company in accordance with their terms, except as
limited by applicable bankruptcy, reorganization, insolvency or
similar laws affecting the enforcement of creditors' rights
generally and except as limited by general principles of equity,
whether such enforceability is considered in a proceeding in
equity or at law.
6.4. Financial Data. The financial statements previously
furnished by the Company to the Banks and those to be furnished
to the Banks in accordance with Section 7.2 below are and shall
be in accordance with the books and records of the Company and
will present fairly the financial condition of the Company at the
dates thereof and the results of operations for the periods
indicated (subject, in the case of unaudited financial
statements, to normal year-end adjustments), and such financial
statements have been and will be prepared in conformity with
GAAP. All information, reports and other papers and data
furnished or to be furnished to the Banks are or will be, at the
time the same are so furnished to the Banks, accurate and correct
in all material respects and complete insofar as completeness may
be necessary to give the Banks a true and accurate knowledge of
the subject matter thereof.
6.5. Solvency. The Company is solvent after giving effect
to the payments and transactions contemplated by this Agreement,
is able to pay its debts as they become due and has capital
sufficient to carry on its business and all businesses in which
it is about to engage, and now owns property having a value both
at fair valuation and at present fair saleable value greater than
the amount required to pay the Company's debts and the Bank
Obligations. The Company will not be rendered insolvent by the
execution and delivery of this Agreement or any of the other Bank
Agreements or by the transactions contemplated hereunder or
thereunder.
6.6. Loans. The Company has no loans or other
indebtedness for borrowed money, except Indebtedness permitted by
Section 8.2.
6.7. Subordinated Debt. The Company is not in default
under the terms of the Subordinated Notes or the Subordination
Agreements.
6.8. Litigation and Proceedings. No judgments are
outstanding against the Company nor is there now pending or, to
the best of the Company's knowledge after diligent inquiry,
threatened, any litigation, contested claim, or governmental
proceeding by or against the Company except judgments and pending
or threatened litigation, contested claims and governmental
proceedings which are not, in the aggregate, material to the
Company's financial condition, results of operations or business.
6.9. Other Agreements. The Company is not in default
under any material contract, lease, or commitment to which it is
a party or by which it is bound. The Company knows of no dispute
regarding any contract, lease, or commitment which is material to
the continued financial success and well-being of the Company.
6.10. Employee Controversies. There are no controversies
pending or, to the best of the Company's knowledge after diligent
inquiry, threatened or anticipated between the Company and any of
its employees, other than employee grievances arising in the
ordinary course of business which are not, in the aggregate,
material to the continued financial success and well-being of the
Company.
6.11. Compliance with Laws and Regulations. The execution
and delivery by the Company of this Agreement and all of the
other Bank Agreements to which it is a party and the performance
of the Company's obligations hereunder and thereunder are not in
contravention of any Laws. The Company is in compliance with all
Laws relating to the business, operations and the assets of the
Company except for Laws which would not, in the aggregate, have a
material adverse effect on the Company's financial condition,
results of operations or business.
6.12. Patents, Licenses. The Company possesses assets,
licenses, patents, patent applications, copyrights, service
marks, trademarks and trade names necessary to conduct its
business as heretofore conducted by it.
6.13. Pension Related Matters. Each Plan maintained by the
Company and each Multiemployer Plan complies with all material
applicable requirements of ERISA and of the Tax Code and with all
material applicable rulings and regulations issued under the
provisions of ERISA and the Tax Code setting forth those
requirements. No Reportable Event has occurred with respect to
any Plan or Multiemployer Plan which is subject to Title IV of
ERISA, which, as to events arising after the date hereof, could
have a material adverse effect on the Company's financial
condition. The Company has not engaged in any prohibited
transaction (as defined in Section 406 of ERISA or Section 4975
of the Tax Code) (i) which has not been corrected within the
correction period applicable to it under Section 502(i) of ERISA
or Section 4975(f) of the Tax Code or (ii) for which an exemption
is not applicable or has not been obtained under Section 408 of
ERISA or Section 2975 of the Tax Code. The Company has satisfied
all of the funding standards applicable to such Plans and
Multiemployer Plans under Section 302 of ERISA and Section 412 of
the Tax Code and PBGC has not instituted any proceedings, and
there exists no event or condition which would constitute grounds
for the institution of proceedings by PBGC, to terminate any Plan
or Multiemployer Plan under Section 4042 of ERISA. The Company
has not taken any steps to terminate any Plan or its
participation in any Multiemployer Plan that would result in the
imposition of any liability on the Company.
6.14. Taxes. All tax returns required to be filed by the
Company have been properly prepared, executed and filed. All
taxes, assessments, fees and other governmental charges upon the
Company or upon any of its properties, income, or sales which are
due and payable have been paid. The reserves and provisions for
taxes on the books of the Company are adequate for all open years
and for its current fiscal period. The Company does not know of
any proposed additional assessment or basis for any material
assessment for additional taxes (whether or not reserved
against).
6.15. No Change in Business. Since December 31, 1993 there
has been no material adverse change in the business, prospects,
operations or condition (financial or otherwise) of the Company.
6.16. Title to Properties. The Company has good and
sufficient title to its properties and assets, including all
properties and assets referred to as owned by it in the financial
statements furnished by the Company to the Banks on the date of
such financial statement. None of such properties or assets is
subject to any Lien except Liens expressly permitted under this
Agreement.
6.17. Regulations U and X. The Company is not engaged
principally, or as one of its important activities, in the
business of extending credit for the purposes of purchasing or
carrying any Margin Stock. The Company does not own any Margin
Stock. If requested by either Bank, the Company will furnish the
Banks with a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in said Regulation. The
Company also warrants that no part of the proceeds of the loans
to be made hereunder will be used by it for any purpose which
violates, or which is inconsistent with, the provisions of
Regulation X of the Board of Governors of the Federal Reserve
System.
6.18. Investment Company Act. The Company is not an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended.
6.19. Securities Act. The Company has not issued any
unregistered securities in violation of the registration
requirements of Section 5 of the Securities Act of 1933, as
amended, or any other Law, and the Company is not violating any
rule, regulation or requirement under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended.
6.20. Accurate and Complete Disclosure. No representation
or warranty made hereunder or in any of the other Bank Agreements
and no statement made in any financial statement, certificate,
report, exhibit or document furnished pursuant to or in
connection with any of the Bank Agreements is false or misleading
in any material respect (including by omission of material
information necessary to make such representation, warranty or
statement not misleading). The Company has disclosed to each
Bank in writing every fact of which it is aware which materially
and adversely affects the business, prospects, operations or
condition (financial or otherwise) of the Company or the ability
of the Company to perform its obligations under any Bank
Agreement.
6.21. Guarantor Representations. Each representation and
warranty set forth in the Guaranty and each Assigned Agreement is
true and correct in all material respects and shall continue to
be true and correct on the date of each loan and advance
hereunder as if repeated and made to speak as of such date. The
Assigned Agreements, true and complete copies of which have been
furnished to each Bank, have been duly authorized, executed and
delivered by all parties thereto, have not been amended or
otherwise modified are in full force and effect and are binding
upon and enforceable against all parties thereto in accordance
with their respective terms. There exists no default under any
Assigned Agreement by any party thereto.
7. AFFIRMATIVE COVENANTS. The Company covenants that it will
comply with the following provisions:
7.1. Corporate Existence; Conduct of Business. The
Company will take the necessary steps to preserve its corporate
existence and will engage only in the business that it is engaged
in on the date hereof.
7.2. Financial Statements. Except as otherwise expressly
provided for herein, the Company shall keep proper books of
record and account in which full and true entries will be made of
all dealings or transactions of or in relation to the business
and affairs of the Company, in accordance with GAAP, and the
Company shall cause to be furnished to each of the Banks: (i) as
soon as practicable and in any event within fifteen (15) days
after the end of each month, statements of income and retained
earnings of the Company for the period from the beginning of the
then current fiscal year to the end of such month and a balance
sheet of the Company as of the end of such month, setting forth
in each case, in comparative form, figures for the corresponding
period in the preceding fiscal year and as of a date one year
earlier, all in reasonable detail and certified as accurate by
the chief financial officer or treasurer of the Company, subject
to changes resulting from normal year-end adjustments and
substantially in the form of Exhibit 7.2 hereto; (ii) as soon as
practicable and in any event within seventy-five (75) days after
the end of each fiscal year, statements of income, retained
earnings and cash flow of the Company, for such year, and a
balance sheet as of the end of such year, setting forth in each
case, in comparative form, corresponding figures for the period
covered by the preceding annual audit and as of the end of the
preceding fiscal year, all in reasonable detail and satisfactory
in scope to each of the Banks and, examined by independent public
accountants selected by the Company and reasonably satisfactory
to each of the Banks, whose opinion shall be in scope and
substance satisfactory to each of the Banks, (iii) as soon as
practicable and in any event within ten (10) days of delivery to
the Company, a copy of any letter issued by the Company's
independent public accountants or other management consultants
with respect to the Company's financial or accounting systems or
controls; (iv) as soon as practicable (but in any event not more
than ten (10) days after the President or chief financial officer
of the Company obtains knowledge of the occurrence of an event or
the existence of a circumstance giving rise to a Default), notice
of any and all Defaults hereunder; and (v) with reasonable
promptness, such other business or financial data as any Bank may
reasonably request.
All financial statements and financial information delivered
to any Bank pursuant to the requirements hereof (except where
otherwise expressly indicated) shall be prepared in accordance
with GAAP. Together with each delivery of financial statements
required by Sections 7.2(i) and (ii) above, the Company shall
deliver to each Bank an officer's certificate stating that there
exists no Default, or, if any Default exists, specifying the
nature thereof, the period of existence thereof and what action
the Company proposes to take with respect thereto, together with
a calculation of the Company's compliance with the financial
covenants set forth in Sections 8.7, 8.11 and 8.12 hereof.
Together with each delivery of financial statements required by
Section 7.2(ii) above, the Company shall deliver to each Bank a
certificate of the accountants who performed the audit in
connection with such statements stating that in making the audit
necessary to the issuance of a report on such financial
statements, they have obtained no knowledge of any Default, or,
if such accountants have obtained knowledge of a Default,
specifying the nature and period of existence thereof. Such
accountants shall not be liable by reason of any failure to
obtain knowledge of any Default which would not be disclosed in
the ordinary course of an audit. Each Bank shall exercise
reasonable efforts to keep such information, and all information
acquired as a result of any inspection conducted in accordance
with Section 7.4 below, confidential, provided that each Bank may
communicate such information (a) to any other Person in
accordance with its customary practices relating to routine trade
inquiries, (b) to any regulatory authority having jurisdiction
over such Bank and to its auditors and attorneys, (c) to any
other Person in connection with such Bank's sale of any
participations in the Bank Obligations, (d) to any other Person
in connection with the exercise of such Bank's rights hereunder
or under any of the other Bank Agreements, or (e) to any other
Person in response to a subpoena issued to such Bank or as
otherwise required by law or pursuant to legal process. The
Company authorizes each Bank to discuss the financial condition
of the Company with the Company's independent public accountants
and agrees that such discussion or communication shall be without
liability to such Bank or the Company's independent public
accountants.
7.3. Notices of Defaults. Immediately upon becoming aware
that the holder of any evidence of Indebtedness or other security
of the Company has given notice or taken any other action with
respect to a claimed default, the Company shall deliver to the
Banks a written notice specifying the notice given or action
taken by such holder and the nature of the claimed default and
what action the Company has taken, is taking or proposes to take
with respect thereto.
7.4. Inspection. The Agent or any Person designated by
the Agent (and any Bank or Participant when accompanied by the
Agent or a Person designated by the Agent) shall have the right,
from time to time hereafter, to call at the Company's place or
places of business during reasonable business hours, and, without
hindrance or delay, (i) to inspect, audit, check and make copies
of and extracts from the Company's books, records, journals,
orders, receipts and any correspondence and other data relating
to the Company's business or to any transactions between the
parties hereto, and (ii) to discuss the affairs, finances and
business of the Company with any officers, employees or directors
of the Company.
7.5. Conduct of Business. Except as contemplated herein,
the Company shall maintain its corporate existence, shall
maintain in full force and effect all licenses, bonds,
franchises, leases, patents, contracts and other rights necessary
or desirable to the profitable conduct of its business, shall
continue in, and limit its operations to, the same general line
of business as that presently conducted by it and shall comply
with all applicable laws and regulations of any federal, state or
local governmental authority, except for such laws and
regulations the violation of which would not, in the aggregate,
have a material adverse effect on the Company's financial
condition, results of operations or business or its obligations
hereunder.
7.6. Taxes; Claims. The Company will pay or make
provision for all taxes, assessments and other governmental
charges validly imposed upon it or any of its properties or
assets or in respect of any of its business, income or profits
before any substantial penalty or interest accrues thereon, and
all claims (including without limitation, claims for labor,
services, materials and supplies) for sums which have become due
and payable and which by law have or might become a lien or
charge upon any of its properties or assets; provided, however,
no such tax, assessment, charge or claim need be paid if it is
then being contested in good faith by appropriate proceedings and
the Company shall have created adequate reserves on its books
with respect thereto.
7.7. Insurance. The Company will maintain or cause to be
maintained, with financially sound and reputable insurers,
insurance with respect to the properties and business of the
Company against loss or damage of the kinds customarily insured
against by corporations of established reputation engaged in the
same or a similar business and similarly situated of such types
and in such amounts as is customarily carried under similar
circumstances by such other corporations.
7.8. Pension Plans. The Company shall (i) keep in full
force and effect any Plans which are presently in existence or
may, from time to time, come into existence under ERISA, unless
such Plans can be terminated without material liability to the
Company in connection with such termination (as distinguished
from any continuing funding obligation); (ii) make contributions
to all of the Company's Plans in a timely manner and in a
sufficient amount to comply with the requirements of ERISA; (iii)
comply with all material requirements of ERISA which relate to
such Plans; and (iv) notify each of the Banks immediately upon
receipt by the Company of any notice of the institution of any
proceeding or other action which may result in the termination of
any Plan.
7.9. Notice of Suit or Adverse Change in Business. The
Company shall, as soon as possible, and in any event within
fifteen (15) days after the Company learns of the following, give
written notice to each of the Banks of (i) any material
proceeding(s) being instituted or threatened to be instituted by
or against the Company in any federal, state, local or foreign
court or before any commission or other regulatory body (federal,
state, local or foreign), and (ii) any material adverse change in
the business, prospects, operations or condition (financial or
otherwise) of the Company.
7.10. Maintenance of Properties. The Company shall
maintain or cause to be maintained in good repair, working order
and condition, ordinary wear and tear excepted, the properties
now or hereafter owned, leased or otherwise possessed by it and
shall make or cause to be made all needful and proper repairs,
renewals, replacements and improvements thereto.
8. NEGATIVE COVENANTS. The Company further covenants and
agrees that it will comply with the following provisions:
8.1. Encumbrances. The Company shall not create, incur,
assume or suffer to exist any security interest, mortgage,
pledge, Lien or other encumbrance of any nature whatsoever on any
of its assets, other than: (i) liens securing the payment of
taxes, either not yet due or the validity of which is being
contested in good faith by appropriate proceedings, and as to
which the Company shall, if appropriate under generally accepted
accounting principles, have set aside on its books and records
adequate reserves; (ii) deposits under workmen's compensation,
unemployment insurance, social security and other similar laws,
or to secure the performance of bids, tenders or contracts (other
than for the repayment of borrowed money) or to secure indemnity,
performance or other similar bonds for the performance of bids,
tenders or contracts (other than for the repayment of borrowed
money) or to secure statutory obligations or surety or appeal
bonds, or to secure indemnity, performance or other similar bonds
in the ordinary course of business; (iii) Liens in favor of the
Agent; (iv) liens which arise by operation of law; (v) zoning
restrictions, easements, licenses, covenants and other
restrictions affecting the use of real property; and (vi) other
liens and encumbrances on property, which do not, in the
determination of the Majority Banks, (a) materially impair the
use of such property, or (b) materially lessen the value of such
property for the purposes for which the same is held by the
Company.
8.2. Indebtedness. The Company shall not incur, create,
assume, become or be liable in any manner with respect to, or
permit to exist, any obligations or Indebtedness of the Company
(including without limitation Capitalized Lease Obligations),
except (i) the Bank Obligations, (ii) Subordinated Debt, (iii)
trade obligations and normal accruals in the ordinary course of
business not yet due and payable, or with respect to which the
Company is contesting in good faith the amount or validity
thereof by appropriate proceedings, and then only to the extent
that the Company has set aside on its books adequate reserves
therefor, if appropriate under generally accepted accounting
principles, and (iv) unsecured demand notes payable evidenced by
promissory notes and additional obligations to insurance agents
with whom the Company does business evidenced by promissory
notes, provided that the aggregate outstanding principal amount
of such demand notes and obligations shall not exceed $600,000 at
any time.
8.3. Consolidations, Mergers or Acquisitions. The Company
shall not, without the prior written consent of the Majority
Banks, recapitalize or consolidate with, merge with, or otherwise
acquire all or substantially all of the assets or properties of
any other Person.
8.4. Investments or Loans. The Company shall not make or
permit to exist investments or loans in or to any other Person,
except (i) investments in short-term direct obligations of the
United States Government, (ii) investments in negotiable
certificates of deposit issued by any of the Banks or by any
other bank satisfactory to the Agent, in its reasonable
discretion, payable to the order of the Company or to bearer,
(iii) investments in commercial paper rated A1 or P1, (iv)
investments in money market funds, acceptable to the Majority
Banks in their sole discretion, (v) travel advances in the
ordinary course of business to officers and employees, (vi) loans
made in the ordinary course of the Company's business to
purchasers of insurance or automobile warranties represented by
Contracts substantially secured by unearned service contract
charges or unearned insurance premiums, (vii) loans to the
Guarantor outstanding ("Guarantor Loans") under the Loan
Agreement between Guarantor and the Company dated as of April 1,
1993, as amended, modified or supplemented from time to time (the
"Assigned Loan Agreement") not to at any time exceed in an
aggregate amount $6,000,000 (the "Maximum Affiliate Loan"), and
(viii) loans to employees of Company which in aggregate do not at
any time exceed $40,000.
8.5. Guarantees. The Company shall not guarantee, endorse
or otherwise in any way become or be responsible for obligations
of any other Person, whether by agreement to purchase the
indebtedness of any other Person or through the purchase of
goods, supplies or services, or maintenance of working capital or
other balance sheet covenants or conditions, or by way of stock
purchase, capital contribution, advance or loan for the purpose
of paying or discharging any Indebtedness or obligation of such
other Person or otherwise, except endorsements of negotiable
instruments for collection in the ordinary course of business.
8.6. Disposal of Property. Except for the sale of
equipment in the ordinary course of the Company's business, the
Company shall not without the prior written consent of the
Majority Banks sell, lease, transfer or otherwise dispose of or
encumber (except as permitted in Section 8.1) any of its
properties, assets and rights to any Person.
8.7. Dividends and Stock Redemptions. The Company shall
not directly or indirectly, (i) redeem or purchase any of its
shares of capital stock or (ii) declare or pay any dividends in
any fiscal year on any class or classes of stock (except
dividends payable solely in capital stock of the Company); except
that, after the date hereof, the Company may, so long as it is a
"Subchapter S" corporation, pay dividends on its capital stock in
an amount not to exceed 40% of net income of the Company after
taxes payable by the Company accruing after March 1, 1990.
8.8. Transactions with Subsidiaries and Affiliates.
Except for the payment of dividends permitted by Section 8.7
hereof and loans to the Guarantor permitted by Section 8.4
hereof, the Company shall not, without the prior written consent
of the Majority Banks, enter into any transaction, including
without limitation the purchase, sale or exchange of property or
the rendering of any service to any Subsidiary or Affiliate
except in the ordinary course of business and pursuant to
reasonable terms no less favorable to the Company than would be
obtained in a comparable arm's length transaction with an
unaffiliated person or corporation. The Company shall not form,
or acquire, any Subsidiary.
8.9. Fiscal Year End. The Company shall not change its
fiscal year end from December 31.
8.10. Subordinated Debt. The Company shall not make any
prepayment of principal on any Subordinated Debt; purchase any
Subordinated Debt or take any other action with respect to any
Subordinated Debt in contravention of any of the subordination
provisions thereof; amend or cancel the subordination provisions
of any Subordinated Debt; take or omit to take any action whereby
the subordination of such Indebtedness or any part thereof to the
Bank Obligations might be terminated, impaired or adversely
affected; omit to give the Banks prompt written notice of any
notice received from any holder of Subordinated Debt, including,
without limitation, any notice of any default under any agreement
or instrument relating to any Subordinated Debt by reason whereof
such Indebtedness might become or be declared to be due or
payable; or amend the Subordinated Notes or any other document
relating to any Subordinated Debt. The Company shall not pay any
principal of, or premium, if any, or interest on, the
Subordinated Notes after the occurrence and during the
continuance of any Default, or if any Default would occur as a
result thereof and shall not pay any principal of, or premium, if
any, or interest on, any other Subordinated Debt in contravention
of the terms of the Subordination Agreement to which such
Subordinated Debt is subject. The Company shall not make any
payment of the principal of the Subordinated Notes unless it
gives the Agent 5 days prior written notice thereof.
8.11. Leverage Ratio. The Company shall not permit its
Leverage Ratio to, at the end of each month for two consecutive
months, be more than 6.0 to 1.0.
8.12. Interest Coverage Ratio. The Company shall not
permit its Interest Coverage Ratio, for any quarter, commencing
with the quarter ending September 30, 1990, to be less than 1.5
to 1.0.
8.13. Allowance for Losses. The Company shall not permit
the "Allowance for Losses" account on its balance sheet to, at
the end of each month for two consecutive months, be less than
2.0% of the aggregate amount of finance receivables (net of
unearned finance charges) on such balance sheet for such months.
9. EVENTS OF DEFAULT.
9.1. Events of Default. Upon the occurrence of any of the
following events (each of which is referred to herein as an
"Event of Default"):
9.1.1. The Company fails to pay any of the Bank Obligations
when such Bank Obligations are due or are declared due or, if the
same are stated to be due upon demand herein, when demanded;
9.1.2. The Company fails or neglects to perform, keep or
observe any of the covenants, conditions, promises, or agreements
contained in this Agreement or in any of the other Bank
Agreements to which the Company is a party or in any other
agreement between any one or more of the Agent and the Banks, and
the Company or an Affiliate of the Company;
9.1.3. Any warranty or representation now or hereafter made
by the Company or any guarantor of the Bank Obligations in
connection with this Agreement or any of the other Bank
Agreements is untrue or incorrect in any material respect, or any
schedule, certificate, statement, report, financial data, notice,
or writing furnished at any time by the Company to the Agent or
any of the Banks is untrue or incorrect in any material respect,
on the date as of which the facts set forth therein are stated or
certified;
9.1.4. A judgment or order requiring payment in excess of
$25,000 shall be rendered against the Company and such judgment
or order shall remain unsatisfied or undischarged and in effect
for thirty (30) days without a stay of enforcement or execution,
provided that this Section 9.1.4 shall not apply to any judgment
for which the Company is fully insured (except for any deductible
applicable to such insurance), and with respect to which the
insurer has admitted in writing its liability for the full amount
thereof;
9.1.5. A notice of lien, levy, or assessment is filed or
recorded with respect to all or a substantial part of the assets
of the Company by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipality or
other governmental agency or any taxes or debts owing at any time
or times hereafter to any one or more of them become a lien, upon
all or a substantial part of the assets of the Company provided
that this Section 9.1.5 shall not apply to any liens, levies, or
assessments which the Company is contesting in good faith or
which relate to current taxes not yet due and payable (or, with
respect to real estate taxes, not yet delinquent) or if the
aggregate amount of taxes or debts secured or covered by such
liens, levies and assessments shall not exceed $100,000 in the
aggregate at any one time outstanding;
9.1.6. All or any substantial part of the assets of the
Company is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes within the possession of any
receiver, trustee, custodian or assignee for the benefit of
creditors and on or before the sixtieth (60th) day thereafter
such assets are not returned to the Company or such writ,
distress warrant or levy is not dismissed, stayed or lifted;
9.1.7. A proceeding under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt or
receivership law or statute is filed against the Company or any
guarantor of the Bank Obligations and such proceeding is not
dismissed within sixty (60) days after the date of its filing, or
a proceeding under any bankruptcy, reorganization, arrangement of
debt, insolvency, readjustment of debt or receivership law or
statute is filed by the Company or any guarantor of the Bank
Obligations, or the Company or any guarantor of the Bank
Obligations makes an assignment for the benefit of creditors or
the Company takes any corporate action to authorize any of the
foregoing;
9.1.8. The Company voluntarily or involuntarily dissolves or
is dissolved, terminates or is terminated;
9.1.9. The Company becomes insolvent or fails generally to
pay its debts as they become due;
9.1.10. The Company is enjoined, restrained, or in any way
prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its
business affairs for more than 30 days;
9.1.11. A material breach by the Company shall occur under
any material agreement, document or instrument (other than an
agreement, document or instrument evidencing the lending of
money), whether heretofore, now or hereafter existing between the
Company and any other Person, and such breach continues for more
than thirty (30) days after such breach first occurs, provided
that such grace period shall not apply, and an Event of Default
shall occur promptly upon such breach, if such breach may not in
the reasonable determination of the Majority Banks, be cured by
the Company during such thirty (30) day grace period;
9.1.12. Any event of default with respect to any
Indebtedness of the Company which permits the acceleration of the
maturity thereof; or any acceleration of the maturity of any
Indebtedness of the Company or the failure of the Company to make
any payment of any such Indebtedness for borrowed money when due
and payable and such failure shall continue beyond the period of
grace, if any, therein specified (provided, that this Section
9.1.12 shall not apply to breaches to the extent the aggregate
amount of obligations of the Company affected thereby shall at
any one time not exceed $100,000);
9.1.13. William H. Kopman shall cease to own all of the
issued and outstanding capital stock of the Company or shall
cease to act as President and Chief Executive Officer of the
Company and, in the case of the death of William H. Kopman,
successor ownership and management of the Company acceptable to
the Banks does not exist before the expiration of 180 days after
such death;
9.1.14. Any Subordinated Debt shall have become due or
payable prior to its stated maturity for any reason whatsoever,
or the Company shall make a payment with respect to any
Subordinated Debt that is not permitted hereunder or under the
Subordination Agreements;
9.1.15. A material and adverse change shall occur in the
Company's business, operations, prospects or condition (financial
or otherwise);
9.1.16. Any guarantor of any of the Bank Obligations, (i)
defaults in the payment or performance, when due or payable, of
any such obligation; or (ii) shall terminate or seek to terminate
any such obligations;
9.1.17. The Guarantor fails or neglects to perform, keep or
observe any of the covenants, conditions, promises, or agreements
contained in any of the Guarantor Agreements or in any other
agreement between any one or more of the Agent and the Banks, and
the Guarantor or an Affiliate of the Guarantor;
9.1.18. A judgment or order requiring payment in excess of
$25,000 shall be rendered against the Guarantor and such judgment
or order shall remain unsatisfied or undischarged and in effect
for thirty (30) days without a stay of enforcement or execution,
provided that this Section 9.1.18 shall not apply to any judgment
for which the Guarantor is fully insured (except for any
deductible applicable to such insurance), and with respect to
which the insurer has admitted in writing its liability for the
full amount thereof;
9.1.19. A notice of lien, levy, or assessment is filed or
recorded with respect to all or a substantial part of the assets
of the Guarantor by the United States, or any department, agency
or instrumentality thereof, or by any state, county, municipality
or other governmental agency, or any taxes or debts owing at any
time or times hereafter to any one or more of them become a lien,
upon all or a substantial part of the assets of the Guarantor
provided that this Section 9.1.19 shall not apply to any liens,
levies, or assessments which the Guarantor is contesting in good
faith or which relate to current taxes not yet due and payable
(or, with respect to real estate taxes, not yet delinquent) or if
the aggregate amount of taxes or debts secured or covered by such
liens, levies and assessments shall not exceed $100,000 in the
aggregate at any one time outstanding;
9.1.20. All or any substantial part of the assets of the
Guarantor is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes within the possession of any
receiver, trustee, custodian or assignee for the benefit of
creditors and on or before the sixtieth (60th) day thereafter
such assets are not returned to the Guarantor or such writ,
distress warrant or levy is not dismissed, stayed or lifted;
9.1.21. The Guarantor voluntarily or involuntarily
dissolves or is dissolved, terminates or is terminated;
9.1.22. The Guarantor becomes insolvent or fails generally
to pay its debts as they become due;
9.1.23. The Guarantor is enjoined, restrained, or in any
way prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its
business affairs for more than 30 days;
9.1.24. A material breach by the Guarantor shall occur
under any material agreement, document or instrument (other than
an agreement, document or instrument evidencing the lending of
money), whether heretofore, now or hereafter existing between the
Guarantor and any other Person, and such breach continues for
more than thirty (30) days after such breach first occurs,
provided that such grace period shall not apply, and an Event of
Default shall occur promptly upon such breach, if such breach may
not in the reasonable determination of the Majority Banks, be
cured by the Guarantor during such thirty (30) day grace period;
9.1.25. Any event of default with respect to any
Indebtedness of the Guarantor which permits the acceleration of
the maturity thereof; or any acceleration of the maturity of any
Indebtedness of the Guarantor or the failure of the Guarantor to
make any payment of such Indebtedness for borrowed money when due
and payable and such failure shall continue beyond the period of
grace, if any, therein specified (provided, that this Section
9.1.25 shall not apply to breaches to the extent the aggregate
amount of obligations of the Guarantor affected thereby shall at
any one time not exceed $100,000);
9.1.26. William H. Kopman shall cease to own all of the
issued and outstanding capital stock of the Guarantor or shall
cease to act as President and Chief Executive Officer of the
Guarantor and, in the case of the death of William H. Kopman,
successor ownership and management of the Guarantor acceptable to
the Banks does not exist before the expiration of the 180 days
after such death; or
9.1.27. A material and adverse change shall occur in the
Guarantor's business, operations, prospects or condition
(financial or otherwise).
then, in each and every such case, the Agent may (and, upon the
request of the Majority Banks, shall) proceed to protect and
enforce the Banks' and its rights by suit in equity, action at
law and/or other appropriate proceeding either for specific
performance of any covenant or condition contained in this
Agreement or any other Bank Agreement or in any instrument or
assignment delivered to the Agent pursuant to this Agreement or
any other Bank Agreement or in aid of the exercise of any power
granted in this Agreement or any other Bank Agreement or any such
instrument or assignment, and (unless there have shall occurred
an Event of Default under Section 9.1.7, in which case the unpaid
balance of the Bank Obligations shall automatically become due
and payable) may (and, upon the request of the Majority Banks,
shall) by notice in writing to the Company declare all or any
part of the unpaid balance of the Bank Obligations then
outstanding to be forthwith due and payable, and thereupon such
unpaid balance or part thereof shall become so due and payable
without presentation, protest or further demand or notice of any
kind, all of which are hereby expressly waived, the Banks'
obligation to make further loans hereunder shall terminate and
the Agent may proceed to enforce payment of such balance or part
thereof in such manner as it may elect, and each Bank may offset
and apply toward the payment of such balance or part thereof any
Indebtedness from such Bank to the Company or any other obligor
on the Bank Obligations, including any Indebtedness represented
by deposits in any general or special account maintained with
such Bank, regardless of the adequacy of any security for the
Bank Obligations, and the Banks shall have no duty to determine
the adequacy of such security in connection with any such offset.
9.2. Annulment of Defaults. A Default or an Event of
Default shall not be deemed to have occurred or to be in
existence for any purpose of this Agreement if the Agent, with
the consent of such Banks as shall hold the amount of Percentage
Interest required by Section 13.5, shall have waived such Default
or Event of Default in writing or stated in writing that the same
has been cured to its reasonable satisfaction, but no such waiver
shall extend to or affect any subsequent Default or Event of
Default or impair any of the Banks' rights or any rights of the
Agent upon the occurrence thereof.
9.3. Waivers. The Company hereby waives to the extent
permitted by applicable law (i) all presentments, demands for
performance, notices of nonperformance (except to the extent
required by the provisions hereof), protests, notices of protest
and notices of dishonor in connection with the Indebtedness
evidenced by the Revolving Loan Accounts, (ii) any requirement of
diligence or promptness on the Banks' or the Agent's part in the
enforcement of their or its rights under this Agreement or any
other Bank Agreement, (iii) any and all notices of every kind and
description, which may be required to be given by any statute or
rule of law and (iv) any defense of any kind which it may now
have with respect to its liability under this Agreement (but not
any defense that it may hereafter have, including without
limitation indefeasible payment in full of any of the Bank
Obligations), under any other Bank Agreement or with respect to
any of the Bank Obligations.
9.4. Course of Dealing. No course of dealing between the
Company and the Agent or any Bank shall operate as a waiver of
any of the Banks' or the Agent's rights under this Agreement or
any other Bank Agreement or with respect to any of the Bank
Obligations. No delay or omission on the Banks' or the Agent's
part in exercising any right under this Agreement or any other
Bank Agreement or with respect to any of the Bank Obligations
shall operate as a waiver of such right or any other right
hereunder. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future
occasion. No waiver or consent shall be binding upon the Banks
unless it is in writing and signed by the Agent or such Banks as
may be required by Section 13.5. The making of a loan hereunder
during the existence of a Default shall not constitute a waiver
thereof.
10. DEFINITIONS.
10.1. Terms Defined Elsewhere. The following terms defined
elsewhere in this Agreement in the Sections set forth below shall
have the respective meanings therein defined:
Term Section
"Agent" 2.1, 13.4
"Applicable Rate Reference Period 3.1.1
"Assigned Loan Agreement" 8.4
"Bank Participants" 15.2
"Base Rate" 3.1.1
"Basic LIBOR Rate 3.1.1
"Boston Office" 2.1
"Capital Adequacy Rules" 3.6
"Collateral" 5.3
"Company" Preamble
"Effective Rate" 3.1.1
"Eurodollar Office" 3.1.1
"Eurodollar Reserve Rate" 3.1.1
"Eurodollars" 3.7.1
"Event of Default" 9.1
"GAAP" 10.2
"Guarantor Loans" 8.4
"Interest Period" 3.7.1
"Legal Requirement" 3.8.1
"LIBOR Pricing Options" 3.7.1
"LIBOR Rate" 3.1.1
"Margin Stock" 2.2
" Maximum Affiliate Loan" 8.4
"Payment Date" 3.1
"Percentage Interests" 13.1
"Permitted Assignee" 15.1.1
"Redeployment Rate" 3.8.3
"Request Date" 2.2.1
"Revolving Loan" 2.1.1
"Revolving Loan Accounts" 2.1.1
"Revolving Loan Closing Date" 2.1
"Tax" 3.8.1
"United States Funds" 3.7.1
The term "Adjusted Operating Income" shall mean Operating
Income plus the provision for losses and the provision for
depreciation deducted in determining Operating Income.
The term "Adjusted Tangible Net Worth" shall mean Net Worth
minus goodwill, patents, trademarks, trade names, copyrights,
franchises and deferred charges (including without limitation,
unamortized debt discount and expense, organization costs and
deferred research and development expense) and such other assets
as are properly classified as "intangible assets" on the balance
sheet of the Company, plus Fifty Percent (50%) of the Company's
"allowance for losses".
The term "Affiliate" shall mean, as to any Person, any other
Person (a) that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common
control with, such Person, (b) that directly or beneficially owns
or holds 5% or more of any class of the voting stock of such
Person or (c) 5% or more of whose voting stock (or in the case of
a Person which is not a corporation, 5% or more of the equity
interest) is owned directly or beneficially or held by such
Person, and shall include, as to the Company, the Guarantor.
The term "Agreement" shall mean this Credit Agreement as
amended, modified or supplemented from time to time.
The term "Assigned Agreements" shall mean the Assigned Loan
Agreement, the Assigned Note and the Assigned Security Agreement.
The term "Assigned Note" shall mean that certain Revolving
Promissory Note from Guarantor to the Company dated as of April
1, 1993 in the original principal amount of $6,000,000, as the
same may be amended, modified or supplemented from time to time.
The term "Assigned Security Agreement" shall mean that
certain Security Agreement dated as of April 1, 1993 from the
Guarantor to the Company, as the same may be amended, modified or
supplemented from time to time.
The term "Bank" shall mean each bank or other financial
institution listed in Schedule 13.1 and any other bank or
financial institution which becomes a party hereto as a Bank, and
their respective successors.
The term "Bank Agreement" shall include this Agreement, the
Guarantor Agreements, the Security Agreement, and any other
present or future agreement from time to time entered into
between the Company and the Agent in its capacity as agent under
this Agreement for all of the Banks or between the Company and
all of the Banks so long as such agreement either relates to any
of the above or is stated to be a Bank Agreement, each as from
time to time amended or modified, and all statements, reports,
certificates or instruments delivered by the Company to the Agent
or the Banks in connection herewith or therewith.
The term "Bank Obligations" shall mean all present and
future obligations and Indebtedness of the Company owing to any
Bank or the Agent under this Agreement or under any other Bank
Agreement, as from time to time amended or modified, including
without limitation the obligation to pay the Indebtedness from
time to time evidenced by the Revolving Loan Accounts and the
obligation of the Company to pay interest, commitment fees, Bank
fees, Agent's fees and other indemnities, charges and amounts
from time to time owed hereunder or under any other Bank
Agreement.
The term "Base Contracts" shall mean Contracts of the
Company which are acceptable to the Agent in its sole discretion
and as to which the Agent has a first priority perfected security
interest, the Agent or its agent has possession of the original
Contract, and the Company has furnished to the Agent information
required by this Agreement and the Security Agreement.
The term "Borrowing Base" shall mean an amount equal to
(a) the Revolving Loan Commitment or (b) the sum of (i) 85% of
the net outstanding amount of Base Contracts and (ii) the lesser
of the net outstanding amount of Guarantor Loans as last reported
to the Agent by the Guarantor pursuant to a notice to the Agent
in the form of Exhibit I to the Guaranty, the Maximum Affiliate
Loan or 85% of the net outstanding amount of Guarantor Base
Contracts, less the sum of the outstanding principal of, and
accrued interest on, the Indebtedness described in clause (iv) of
Section 8.2 hereof, whichever is less. Whenever the Borrowing
Base is used as a measure of loans it shall be computed as of and
the loans referred to shall be those reflected in the Revolving
Loan Accounts at the time in question.
The term "Business Day" shall mean (i) for all purposes
other than as covered by clause (ii) below, any day other than a
Saturday, Sunday or legal holiday on which banks in Boston,
Massachusetts or New York, New York are open for the conduct of a
substantial part of their commercial banking business; and (ii)
with respect to all notices and determinations in connection
with, and payments of interest on, LIBOR Pricing Options and
Interest Periods, any day that is a Business Day described in
clause (i) and that is also a day for trading by and between
banks in Eurodollar deposits in the London inter-bank Eurodollar
market.
The term "Capitalized Lease" shall mean at any time any
lease which, in accordance with generally accepted accounting
principles, is required to be capitalized on the balance sheet of
the lessee at such time, and "Capitalized Lease Obligation" of
any Person at any time shall mean the aggregate amount which, in
accordance with generally accepted accounting principles, is
required to be reported as a liability on the balance sheet of
such Person at such time as lessee under a Capitalized Lease.
The term "Closing Date" shall mean each Revolving Loan
Closing Date.
The term "Contract" shall mean the agreement, promissory
note or other document executed by a Person or on such Person's
behalf and evidencing insurance premiums paid by the Company on
such Person's behalf or amounts lent by the Company to such
Person to finance amounts owing by such Person to an insurance
company as part of the premium on an insurance policy purchased
by such Person from such insurance company or the charges on a
service contract purchased by such Person from an automobile
service warranty company.
The term "Default" shall mean an Event of Default or an
event or condition which with the passage of time or giving of
notice, or both, would become such an Event of Default and in any
event shall include the filing against the Company or any of its
Subsidiaries of an involuntary case under Title 11 of the United
States Code.
The term "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute of
similar import, and regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA shall
be construed to refer to any successor sections.
The term "Guarantor" shall mean UPAC of California, Inc., a
California corporation.
The term "Guarantor Agreements" shall have the meaning given
such term in the Guaranty, and shall also include the Assigned
Agreements.
The term "Guarantor Base Contracts" shall mean Guarantor
Contracts of the Guarantor which are acceptable to the Agent in
its sole discretion and as to which the Agent has a first
priority perfected security interest, the Agent or its agents has
possession of the original Contract, and the Guarantor or the
Company has furnished to the Agent information required by the
Guaranty and the Guarantor Security Agreement.
The term "Guarantor Collateral" shall mean the "Collateral"
as such term is defined in the Guarantor Security Agreement.
The term "Guarantor Contract" shall mean the agreement,
promissory note or other document executed by a Person or on such
Person's behalf and evidencing insurance premiums paid by the
Guarantor on such Person's behalf or amounts lent by the
Guarantor to such Person to finance amounts owing by such Person
to an insurance company as part of the premium on an insurance
policy purchased by such Person from such insurance company or
the charges on a service contract purchased by such Person from
an automobile service warranty company.
The term "Guarantor Security Agreement" shall mean that
certain Guarantor Security Agreement between Guarantor and the
Agent dated as of April 1, 1993, as the same may be amended,
modified or supplemented from time to time.
The term "Guaranty" shall mean that certain Guaranty from
Guarantor to the Agent dated as of April 1, 1993, as the same may
be amended, modified or supplemented from time to time.
The term "Indebtedness" shall mean as to a Person, without
duplication:
(a) all of the items except common stock, preferred
stock, additional paid in capital and retained earnings which, in
accordance with GAAP, are or should be liabilities upon the
balance sheet of such Person;
(b) all indebtedness, obligations and liabilities secured
by any Lien on property owned by such Person, whether or not such
indebtedness, obligations or liabilities have been assumed by
such Person;
(c) all Capitalized Lease Obligations of such Person;
(d) all guaranties made by such Person of the
Indebtedness of any other Person; and
(e) the contingent liability of such Person on all
outstanding letters of credit issued for the account of any
Person and, without duplication, all outstanding drafts and
acceptances presented under any letter of credit issued for the
account of any Person.
The term "Interest Coverage Ratio" shall mean the Company's
ratio of Adjusted Operating Income to interest expense.
The term "Law" shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance,
order, injunction, writ, decree or award of any official body.
The term "Leverage Ratio" shall mean the ratio of (a) the
amount the Company's Indebtedness (excluding the Subordinated
Debt) to (b) the sum of the amount of the Company's Adjusted
Tangible Net Worth and the amount of the Subordinated Debt.
The term "Lien" shall mean any mortgage, deed of trust,
pledge, lien, security interest, charge or other encumbrance or
security arrangement of any nature whatsoever, whether arising by
agreement or operation of law, including but not limited to any
conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having
the effect of, security.
The term "Majority Banks" shall mean such Banks as hold at
least 66 2/3% of the Percentage Interests.
The term "Maturity Date" shall initially mean August 31,
1996, provided, however, if the Company does not receive notice
at least 120 days before such date from any Bank of the
occurrence of such Maturity Date then the Maturity Date shall
thereafter extend from year to year unless any Bank gives the
Company notice at least 120 days before the anniversary date of
the occurrence of the Maturity Date.
The term "Multiemployer Plan" shall mean any employee
benefit plan which is a "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA and to which the Company has or
had any obligation to contribute.
The term "net outstanding amount of Base Contracts" shall
mean the net amount of Base Contracts outstanding after
eliminating from the aggregate amount of outstanding Base
Contracts unearned interest (as determined in accordance with
generally accepted accounting principles), and over-aged
Contracts, and deducting from the aggregate net amount of the
remaining Base Contracts all payments, adjustments and credits
applicable thereto and all amounts due thereon considered by the
Agent difficult to collect or uncollectible by reason of
insolvency of the debtor thereon, or the insurance company or
automobile service warranty company issuing the policy or service
contract with respect thereto, or any other reason, all as
determined by the Agent in its discretion, which determination
shall be final and binding upon the Company. Base Contracts on
which any payment thereon is more than 60 days contractually past
due (according to the terms of the contract) shall be considered
to be "over-aged", subject to the sole discretion of the Agent to
exclude such other Base Contracts as it reasonably wishes to
exclude from the net outstanding amount of Base Contracts.
Without limiting the generality of the foregoing, the net
outstanding amount of Base Contracts (i) relating to insurance
policies issued by any insurance company that is not rated "B" or
better by AM Best Company, Inc. (provided that a change in such
rating to less than B shall not be given effect for 30 days
thereafter; further provided the Agent's sole discretion set
forth in the preceding sentence shall not be limited hereby)
shall exclude amounts otherwise includable therein to the extent
that they would exceed 50% of Adjusted Tangible Net Worth at the
time of determination thereof, (ii) relating to warranty service
contracts issued by any Person shall exclude amounts otherwise
includable therein to the extent that they would exceed 50% of
Adjusted Tangible Net Worth at the time of determination thereof,
(iii) shall exclude all amounts due to insurance companies by the
Borrower which in the aggregate are in excess of $1,750,000 at
the time of determination thereof, and (iv) shall exclude all
amounts commonly referred to as "the book over-draft" which in
the aggregate are in excess of $500,000 at the time of
determination thereof.
The term "net outstanding amount of Guarantor Base
Contracts" shall mean the net amount of Guarantor Base Contracts
outstanding after eliminating from the aggregate amount of
outstanding Guarantor Base Contracts unearned interest (as
determined in accordance with generally accepted accounting
principles), and over-aged Guarantor Contracts, and deducting
from the aggregate net amount of the remaining Guarantor Base
Contracts all payments, adjustments and credits applicable
thereto and all amounts due thereon considered by the Agent
difficult to collect or uncollectible by reason of insolvency of
the debtor thereon or the insurance company or automobile service
warranty company issuing the policy or service contract with
respect thereto, or any other reason, all as determined by the
Agent in its discretion, which determination shall be final and
binding upon the Company. Guarantor Base Contracts on which any
payment thereon is more than 60 days contractually past due
(according to the terms of the contract) shall be considered to
be "over-aged", subject to the sole discretion of the Agent to
exclude such other Guarantor Base Contracts as it reasonably
wishes to exclude from the net outstanding amount of Guarantor
Base Contracts. Without limiting the generality of the
foregoing, the net outstanding amount of Guarantor Base Contracts
relating to (i) insurance policies issued by any insurance
company that is not rated "B" or better by AM Best Company, Inc.
(provided that a change in such rating to less than B shall not
be given effect for 30 days thereafter; further provided the
Agent's sole discretion set forth in the preceding sentence shall
not be limited hereby) shall exclude amounts otherwise includable
therein to the extent that they would exceed the greater of 100%
of "Adjusted Tangible Net Worth" of Guarantor (such term as used
in this definition but not elsewhere in this Agreement shall have
the meaning given such term in the Guaranty) at the time of
determination thereof or $500,000, and (ii) warranty service
contracts issued by any Person shall exclude amounts otherwise
includable therein to the extent that they would exceed the
greater of 100% of Adjusted Tangible Net Worth at the time of
determination thereof or $500,000.
The term "Net Worth" shall mean the amount of capital stock
accounts (less the amount of any treasury stock) plus (or minus
in the case of a deficit) the amount of surplus and retained
earnings accounts of the Company.
The term "Operating Income" of a Person shall mean, as to
any given period, the Company's income from operations (which
shall include income from service charges, cancellation fees and
late charges but shall be determined before deduction of interest
expense) for such period, and shall be determined in accordance
with GAAP.
The term "PBGC" shall mean the Pension Benefit Guaranty
Corporation established under Title IV of ERISA or any other
governmental agency, department or instrumentality succeeding to
the functions of said corporation.
The term "Plan" shall mean any employee benefit plan as
defined in Section 3(3) of ERISA (other than a Multiemployer
Plan) and (i) which is maintained for employees of the Company,
or (ii) to which the Company made, or was required to make,
contributions at any time.
The term "Person" shall mean any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, entity,
party, or government (whether national, federal, state,
provincial, county, city, municipal or otherwise, including,
without limitations any instrumentality, division, agency, body
or department thereof).
The term "Reportable Event" shall mean (i) a reportable
event described in Section 4043 of ERISA and regulations
thereunder, (ii) a withdrawal by a substantial employer from a
plan to which more than one employer contributes, as referred to
in Section 4063(b) of ERISA, or (iii) a cessation of operations
at a facility causing more than twenty percent (20%) of plan
participants to be separated from employment, as referred to in
Section 4062(e) of ERISA.
The term "Revolving Loan Commitment" shall mean, as of the
time the same is to be determined, $37,500,000 less the amount at
or prior to such time of any reductions thereto pursuant to
Section 3.4.1 hereof.
The term "Security Agreement" shall mean that certain
Security Agreement dated as of August 1, 1990 between the Company
and the Agent, as from time to time amended or modified.
The term "Subordinated Debt" shall mean the aggregate of
$240,000 in unpaid principal amount of indebtedness evidenced by
the Subordinated Notes which are issued and outstanding on the
date hereof plus such additional Indebtedness as may be incurred
by the Company from time to time upon the prior written consent
of the Majority Banks which is subordinated by its terms or by
means of separate agreement to be Bank Obligations upon such
terms and conditions as are acceptable to the Majority Banks in
their sole discretion.
The term "Subordinated Notes" shall mean the promissory
notes of Company annexed hereto as Exhibit 10.
The term "Subordination Agreements" shall mean the
subordination provisions of the Subordinated Notes and the
subordination provisions embodied in the instruments or in
separate agreements which relate to additional Subordinated Debt.
The term "Subsidiary" shall mean, as to any Person, any
corporation of which more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation
(irrespective of whether at the time stock of any other class or
classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time,
directly or indirectly, owned by such Person.
The term "Tax Code" shall mean the Internal Revenue Code of
1986, as amended, and any successor statute of similar import,
and regulations thereunder, in each case as in effect from time
to time. References to sections of the Tax Code shall be
construed to refer to any successor sections.
The term "Termination Date" shall mean the date on which the
Revolving Loan Commitment shall have been terminated, whether by
the Company or the Banks or by operation of this Agreement, or
reduced to less than $5,000,000, or the Maturity Date, whichever
is earlier.
The term "United States Funds" shall mean such coin or
currency of the United States of America as at the time shall be
legal tender therein for the payment of public and private debts.
10.2. Accounting Terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have
the meanings customarily given them in accordance with generally
accepted accounting principles, consistently applied with those
used in preparation of the most recent audited financial
statements provided by the Company to the Banks prior to the date
hereof ("GAAP"). All financial statements furnished to the Agent
or the Banks under this Agreement and all computations and
determinations required to be made pursuant to this Agreement
shall be made in accordance with GAAP.
11. EXPENSES; INDEMNITY, AGENT'S FEE.
11.1. Fees and Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Company will bear
and shall pay on demand (A) all reasonable out-of-pocket costs
and expenses of the Agent (including the reasonable fees and
disbursements of counsel to the Agent) (i) arising in connection
with the preparation, execution, delivery and performance of this
Agreement and the Bank Agreements and the transactions
contemplated hereby and thereby and enforcement of the Banks'
rights and remedies hereunder or thereunder or in any way related
to the Agent's relationship with the Company, whether hereunder
or otherwise, and (ii) relating to any amendments, waivers or
consents to this Agreement and the Bank Agreements, and (B) all
reasonable out-of-pocket costs and expenses incurred by the Banks
or any holder of any Bank Obligation in connection with the
enforcement of any rights hereunder or under any Bank Agreement,
including without limitation costs of collection and reasonable
attorneys' fees and disbursements, and (C) any and all charges
customarily made by the Agent, including without limitation
charges for checking account services, wire transfers, depository
transfer checks and lock box services. Notwithstanding the
foregoing, as to such fees and expenses incurred prior to August
1, 1990, the sum shall be borne one-third by the Agent, and two-
thirds by the Company.
11.2. Indemnification. The Company will jointly and
severally indemnify the Agent, each Bank, such Bank's directors,
officers, employees and agents of each of the Agent and each of
the Banks and each other Person, if any, who controls the Agent
or any Bank, and hold the Agent, each Bank and such other Persons
harmless from and against any and all claims, damages, losses,
liabilities, judgments and expenses (including without limitation
all reasonable fees and expenses of counsel and all expenses of
litigation or preparation therefor) which the Agent, any Bank or
such other Persons may incur or which may be asserted against the
Agent, any Bank or such other Persons in connection with or
arising out of any investigation, litigation or proceeding
involving the Company, any of its Affiliates or any officer,
director or employee thereof or this Agreement or the other Bank
Agreements (including compliance with or contesting of any
subpoenas or other process issued against the Agent, any Bank or
any director, officer or employee of the Agent, any Bank or any
Person, if any, who controls the Agent or any Bank in any
proceeding involving the Company or any of its Affiliates or any
Bank Agreement), whether or not the Agent or any Bank are party
thereto, other than claims, damages, losses, liabilities or
judgments (i) asserted by one or more Banks against another Bank
in connection with operations hereunder governed by Sections 13
or 14, or (ii) with respect to any matter as to which the Agent,
any Bank or such other Person seeking indemnity shall have been
finally adjudicated to have acted with gross negligence or
willful misconduct. The Company will also jointly and severally
indemnify the Banks against and hold them harmless from any
liability, loss or damage resulting from the violation by the
Company of Section 2.2. Promptly upon receipt by any indemnified
party hereunder of notice of the commencement of any action
against such indemnified party for which a claim is to be made
against the Company hereunder, such indemnified party shall
notify the Company in writing of the commencement thereof,
although the failure to provide such notice shall not affect the
indemnification rights of any such indemnified party hereunder.
All obligations provided for in Sections 11.1 and 11.2 shall
survive any termination hereof.
12. NOTICES. Any notice or other communication in connection
with this Agreement or any Bank Agreement shall be deemed to be
delivered if in writing (or in the form of a telegram) addressed
as provided below and if either actually delivered at such
address or in the case of a letter, five business days shall have
elapsed after the same shall have been deposited in the United
States mails, first-class postage prepaid and certified, return
receipt requested:
If to the Company, to the Company, to the attention of its
President at 1848 Lackland Hill Parkway, St. Louis, Missouri
63146 or at such other address as the Company shall have
specified by notice actually received by the addressor.
If to any Bank, to such Bank at its address set forth in
Schedule 13.1 hereto, with a copy to the Agent, or at such other
address as the addressee shall have specified by notice actually
received by the addressor.
If to the Agent, to it at its address set forth in Schedule
13.1 hereto, or at such other address as the Agent shall have
specified by notice actually reserved by the addressor.
13. OPERATIONS. The making of loans and operations under this
Agreement shall be governed by the following provisions:
13.1. Interest in Loans. The percentage interest of each
Bank in the Revolving Loan (subject to the provisions of Section
13.11 hereof), and the Revolving Loan Commitment under this
Agreement shall be calculated based on the respective amounts set
forth in Schedule 13.1, as from time to time modified by the
Agent upon receipt of notices of assignments to Permitted
Assignees contemplated by Section 15.1, and as adjusted as the
Banks may from time to time agree among themselves (the
"Percentage Interests"). References in any Bank Agreement to the
respective Percentage Interests are to such interests in the
Revolving Loan Commitment as from time to time in effect.
13.2. Advances and Payments. Subject to the provisions of
Section 13.11 hereof, each advance under this Agreement shall be
made by the Agent and shall be (i) for its own account to the
extent of its Percentage Interest in the Revolving Loan and (ii)
for the account of the other Banks to the extent of their
respective Percentage Interests in the Revolving Loan. The
obligations of each Bank to make any loan hereunder shall be
several in accordance with its respective interests. Subject to
the provisions of Section 13.11 hereof each Bank hereby
authorizes and requests the Agent to advance for such Bank's
account, pursuant to the terms hereof its Percentage Interest in
each Revolving Loan, and each Bank agrees forthwith to reimburse
the Agent in immediately available funds for the amount of such
Percentage Interest. Overdue amounts due to the Agent from any
Bank shall bear interest, payable on demand, at a per annum rate
equal to (A) the Federal Funds Rate for the first four days
overdue and (B) the sum of 2% plus the Federal Funds Rate for any
longer period. All payments of principal, interest and
commitment fees in respect of the loans made pursuant to Section
2, including prepayments, shall, as a matter of convenience, be
made to the Agent at the Boston Office and the shares thereof of
the other Banks shall be credited to the Banks by the Agent in
immediately available funds in proportion to their respective
interests in such loans, subject to the provisions of Section
13.11.
13.3. Agent's Authority to Act. Each Bank hereby appoints
and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the
other Bank Agreements as are delegated to the Agent by the terms
hereof and thereof, together with such powers as are reasonably
incidental hereto and thereto. In acting hereunder and
thereunder, the Agent is acting for its own account to the extent
of its Percentage Interest in the Revolving Loan and for the
account of the other Banks to the extent of their Percentage
Interests in the Revolving Loan. All action in connection with
the enforcement or exercise of any remedies (other than the
Banks' rights of set-off as provided in Section 9.1) in respect
of the Bank Obligations and the Bank Agreements shall be taken by
the Agent, and each Bank hereby authorizes the Agent to take such
actions on its behalf.
13.4. Agent's Resignation. The Agent may resign at any
time by giving at least 60 days' prior written notice of its
intention to do so and upon the appointment by the Majority Banks
of a successor Agent. If no successor Agent shall have been so
appointed and shall have accepted such appointment within 45 days
after the retiring Agent's giving of such notice of resignation,
then the retiring Agent may appoint a successor Agent which shall
be a bank or a trust company organized under the laws of the
United States of America or any state thereof and having a
combined capital surplus and undivided profit of at least
$100,000,000, provided, however, that any successor Agent
appointed under this sentence may be removed upon the written
request of the Majority Banks, which request shall also appoint a
successor Agent satisfactory to the Company. Upon the
appointment of a new Agent under this Section 13.4, the term
"Agent" shall for all purposes of this Agreement and the other
Bank Agreements thereafter mean such successor. After any
retiring Agent's resignation under this Section 13.4 as Agent, or
the removal under this Section 13.4 of any successor Agent, the
provisions of this Agreement and the other Bank Agreements shall
continue to inure to the benefit of such Agent as to any actions
taken or omitted to be taken by it while it was Agent under this
Agreement and the other Bank Agreements.
13.5. Amendments, Consents, Waivers, etc. Except as
hereinafter set forth, the Agent may (and upon the request of the
Majority Banks shall) take or refrain from taking any action
under this Agreement or any other Bank Agreement, including
without limitation taking any action under Section 9.1, giving
its written consent to any modification of or amendment to and
waiving in writing compliance with any covenant or condition in
this Agreement or any other Bank Agreement or any Default
hereunder or thereunder, all of which actions shall be binding
upon all Banks; provided, however, that: (a) without the written
consent of the Majority Banks, no written modification of or
amendment to or waiver of compliance with or waiver of any
provision of this Agreement or any other Bank Agreement shall be
made, except as provided below in this Section 13.5 and in
Section 13.10; and (b) without the written consent of such Banks
as hold 100% of the Percentage Interests, the Agent shall not
give its written consent to: (i) any reduction in the interest
rate on, or any fee relating to, the Bank Obligations; (ii) any
extension or postponement of the stated time of payment of the
principal amount of, interest on, or any fee relating to, the
Bank Obligations; (iii) any increase in the amount, or extension
of the term, of the Banks' commitments hereunder beyond those
provided for under Section 2; (iv) any alteration of the Banks'
rights of set-off contained in Section 9.1; (v) any release by
the Agent of any material portion of the Collateral or change in
the definition of Borrowing Base (not including the exercise of
the Agent's discretion in determining the Borrowing Base); (vi)
change the definition of the term "Maturity Date"; or (vii)
modify or amend the provisions of this Agreement (including
definitions) which (A) provide for the pari passu sharing of the
benefits of the Collateral among the Banks or (B) provide
benefits or obligations for all Banks equally as a single class,
so as to adversely affect the interests of any Bank relative to
the interests of the other Banks as a single class.
13.6. Payments. The Company shall be fully protected in
making all payments in respect of the Bank Obligations to the
Agent notwithstanding any notice to the contrary from any Bank
other than the Agent.
13.7. Concerning the Agent. The following provisions shall
apply to the Agent and the conduct of the Agent's duties
hereunder and the other Bank Agreements:
13.7.1. Action in Good Faith, etc. The Agent and its
officers, directors, employees and agents shall be under no
liability to any Bank, to any future holder of any interest in
the Bank Obligations or to the Company for any action or failure
to act taken or suffered in good faith and without gross
negligence, and any action or failure to act in accordance with
an opinion of its counsel shall conclusively be deemed to be in
good faith. The Agent shall in all cases be entitled to rely,
and shall be fully protected in relying, on instructions given to
the Agent by the required holders of Percentage Interests as
provided in this Agreement.
13.7.2. No Implied Duties, etc. The Agent shall have and
may exercise such powers as are specifically delegated to the
Agent under this Agreement or any other Bank Agreement, together
with all other powers as may be incidental thereto. The Agent
shall have no implied duties to any Person or any obligation to
take any action under this Agreement or any other Bank Agreement
except for any action specifically provided for in this Agreement
or any other Bank Agreement to be taken by the Agent. Before
taking any action under this Agreement or any other Bank
Agreement, the Agent may request an appropriate specific
indemnity satisfactory to it from each Bank in addition to the
general indemnity provided for in Section 13.9, and until the
Agent has received such specific indemnity, the Agent shall not
be obligated to take (although it may in its sole discretion
take) any such action under this Agreement or any other Bank
Agreement.
13.7.3. Validity, etc. The Agent shall not be responsible
to any Bank or any future holder of any interest in the Bank
Obligations (i) for the legality, validity, enforceability or
effectiveness of this Agreement or any other Bank Agreement, (ii)
for any recitals, reports, representations, warranties or
statements contained in or made in connection with this Agreement
or any other Bank Agreement, (iii) for the existence or value of
any assets included in the Collateral or any other security for
the Bank Obligations, (iv) for the effectiveness of any Lien
purported to exist or purported to be on or included in the
Collateral, or (v) for the specification or failure to specify
any particular assets to be included in the Collateral or any
other security for the Bank Obligations.
13.7.4. Compliance. The Agent shall not be obligated to
ascertain or inquire as to the performance or observance of any
of the terms of this Agreement or any other Bank Agreement; and
in connection with any extension of credit under this Agreement
or any other Bank Agreement, the Agent shall be fully protected
in relying on a certificate of the Company as to the fulfillment
by the Company of any conditions to such extension of credit.
13.7.5. Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent under this Agreement or any
other Bank Agreement by or through, agents and attorneys-in-fact
and shall not be answerable to any Bank or the Company (except as
to money or securities received by the Agent or the Agent's
authorized agents) for the default or misconduct of any such
agents or attorneys-in-fact, selected by the Agent with
reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby
created and its duties hereunder.
13.7.6. Reliance on Documents and Counsel. The Agent shall
be entitled to rely, and shall be fully protected in relying,
upon any affidavit, certificate, cablegram, consent, instrument,
letter, notice, order, document, statement, telecopy, telegram,
telex or teletype message or writing believed in good faith by
the Agent to be genuine and correct and to have been signed, sent
or made by the Person in question, including without limitation
any telephonic or oral statement made by such Person and, with
respect to legal matters, upon the opinion of counsel selected by
the Agent.
13.7.7. Agent's Reimbursement. Each Bank severally agrees
to reimburse the Agent in the amount of its Percentage Interest
thereof for any expenses not reimbursed by the Company (without
limiting their obligation to make such reimbursement): (i) for
which the Agent is entitled to reimbursement by the Company under
this Agreement or any other Bank Agreement, and (ii) after the
occurrence of a Default, for any other reasonable expenses
incurred by the Agent on the Banks' behalf in connection with the
enforcement of their rights under this Agreement or any other
Bank Agreement.
13.7.8. Rights as a Bank. With respect to any credit
extended by it hereunder, The First National Bank of Boston shall
have the same rights and powers hereunder as any other Bank and
may exercise such rights and powers as though it were not the
Agent, and unless the context otherwise specifies, The First
National Bank of Boston shall be treated in its capacity as
though it were not the Agent hereunder. Without limiting the
generality of the foregoing, the Percentage Interest of The First
National Bank of Boston shall be included in any computations of
Percentage Interests hereunder. The First National Bank of
Boston and its affiliates may accept deposits from, lend money
to, act as trustee for and generally engage in any kind of
banking or trust business with the Company and any of its
Affiliates and any Person who may do business with or own an
equity interest in the Company or any of its Affiliates, all as
if such bank were not the Agent and without any duty to account
therefor to the other Banks.
13.8. Independent Credit Decision. Each Bank acknowledges
that it has independently and without reliance upon the Agent,
based on the financial statements and other documents referred to
in Section 7.2, on the other representations and warranties
contained herein and on such other information with respect to
the Company as such Bank has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and to
make the loans provided for hereunder. Each Bank represents to
the Agent that such Bank will continue to make its own
independent credit and other decisions in taking or not taking
action under this Agreement or any other Bank Agreement. Each
Bank expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to such
Bank, and no act by the Agent taken under this Agreement or any
other Bank Agreement, including without limitation any review of
the affairs of the Company, shall be deemed to constitute any
representation or warranty by the Agent. Except for notices,
reports and other documents expressly required to be furnished to
each Bank by the Agent under this Agreement or any other Bank
Agreement, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning
the business, operations, property, condition, financial or
otherwise, or creditworthiness of the Company or any of its
Affiliates which may come into the possession of the Agent or any
of its officers, directors, employees, agents, attorneys-in-fact
or affiliates.
13.9. Indemnification. The holders of the Bank Obligations
hereby agree to indemnify the Agent (to the extent not reimbursed
by the Company and without limiting its obligation to do so),
ratably according to their Percentage Interests, from and against
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments and suits, and any and all reasonable costs,
expenses or disbursements, of any kind whatsoever which may at
any time be imposed on, incurred by or asserted against the Agent
relating to or arising out of this Agreement, any other Bank
Agreement, the transactions contemplated hereby or thereby, or
any action taken or omitted by the Agent in connection with any
of the foregoing; provided, however, that the foregoing shall not
extend to actions or omissions which were not taken in good faith
or which were taken with gross negligence by the Agent.
13.10. Amendment to Section 13. Any of the provisions of
this Section 13 (other than Sections 13.5, 13.6, 13.10 and 13.11)
may be amended or waived by the agreement of the Majority Banks
and without prior notice to the Company, provided, however, that
notice of any such amendment that has been made shall be given to
the Company. Sections 13.5, 13.6, 13.10 and 13.11 may be amended
only with the consent of all the Banks and the Company.
13.11. Reporting and Advances by Agent. For the purposes of
administrative convenience of the Banks and to avoid the need for
daily settlement of loans and payments, prior to the occurrence
of an Event of Default and the election by any Bank to require
daily settlement of loans evidenced by the Revolving Loan Account
(the "Triggering Event"), the Agent may, but need not, (i) make
any loan or advance provided for hereunder to be made by the
other Banks and need not give the other Banks notice thereof and
(ii) apply all payments made by the Company to it pursuant to the
application of proceeds of Collateral as required pursuant to the
Security Agreement to outstanding loans evidenced by its
Revolving Loan Account without application of the same to loans
of the other Banks (so that the loans made by the Agent hereunder
may not be equal to its Percentage Interest of the Revolving
Loan); provided, however, that at least once each month, the
Agent shall distribute to each Bank, at its address for notices
hereunder, a statement ("Agent's Report") disclosing as of the
preceding Business Day, the aggregate principal balance of the
Revolving Loan outstanding as of such date, repayments and
prepayments of principal received from the Company with respect
to the Revolving Loan since the immediately preceding Agent's
Report, additional loans made hereunder to the Company since the
date of the immediately preceding Agent's Report, interest and
fees on the Revolving Loan received from the Company since the
date of the immediately preceding Agent's Report, the amount of
the Borrowing Base as of the Agent's most recent determination,
the amount of any expenses of the Agent paid by the Agent since
the immediately preceding Agent's Report for which the Agent has
not been reimbursed by the Company and the amount received by the
Agent from the Company since the immediately preceding Agent's
Report in payment of outstanding expenses of the Agent. Such
Agent's Reports shall also disclose the net amount due to or due
from the Banks. If the Agent's Report discloses a net amount due
from the Agent to the Banks, the Agent shall concurrently with
the delivery of the Agent's Report to the Banks transfer, by wire
or otherwise, such amount to the Banks in funds immediately
available to the Banks in accordance with each Banks
instructions. If such report discloses a net amount due to the
Agent from each Bank, then such Bank shall on the date of such
report transfer by wire or otherwise, such amount, in funds
immediately available to the Agent as instructed by the Agent.
The Agent shall, no later than once every seven days (the
"Settlement Time"), distribute to each Bank the net amount (the
"Settlement Amount") due to such Bank (if any) pursuant to the
terms of this Agreement by wire transfer or otherwise in
immediately available funds in accordance with such Bank's
instructions to the Agent; provided, however, that if at the
Settlement Time any Bank shall owe funds to the Agent pursuant to
the terms of this Agreement (net of any amount taken into account
in determining the Settlement Amount) such Bank shall distribute
at the Settlement Time such amount owing to the Agent by wire
transfer or otherwise in immediately available funds in
accordance with the Agent's instructions to such Bank. For
purposes in apportioning interest due on the Revolving Loan and
the commitment fee, the same shall be apportioned based on actual
amounts outstanding. Immediately after the occurrence of the
Triggering Event, the Agent and the Banks shall make such
payments between themselves as shall be necessary so that the
allocation of the Revolving Loan is in accordance with their
respective Percentage Interests, and thereafter unless the Agent
and each of the Banks shall otherwise agree the Banks and the
Agent shall make daily settlements of all amounts due among them,
pursuant hereto.
14. SHARING OF PAYMENTS, ETC. If any Bank shall obtain, at a
time when an Event of Default has occurred and is continuing, any
payment (whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise) on account of the principal of
or interest on Indebtedness of the Company to such Bank evidenced
by a Revolving Loan Account in excess of the Percentage Interest
of such Bank in all payments on account of the Revolving Loan
Accounts that have been made since the occurrence of such Event
of Default, then such Banks shall purchase from the rest of the
Banks such participation in the Revolving Loan Accounts
applicable to each other Bank, as the case may be, as shall be
necessary to cause such purchaser to share the excess payment
ratably with each other Bank; provided, however, that if all or
any portion of such excess payment is thereafter recovered from
such purchaser, then such purchases shall be rescinded and the
purchase prices restored to the extent of such recovery, but
without interest. The Company agrees, to the fullest extent
permitted by applicable law, that any Bank Participant and any
Bank purchasing a participation from another Bank pursuant to
this Section 14 may exercise all rights of payment (including the
right of set-off), and shall be obligated to share payments under
this Section 14, with respect to its participation as fully as if
such Bank Participant or such Bank were the direct creditor of
the Company and a Bank hereunder in the amount of such
participation.
15. SUCCESSORS AND ASSIGNS; BANK PARTICIPANTS. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns,
including as such successors and assigns all holders of any Bank
Obligation, except that (i) the Company may not assign its rights
or obligations under this Agreement, and (ii) none of the Banks
shall be entitled to assign its Percentage Interests in this
Agreement or the loans made hereunder except as set forth below
in this Section 15.
15.1. Permitted Assignees.
15.1.1. Assignments. Any Bank may, with the prior written
consent of the Company and the Agent (provided that in the case
of the Company, its consent shall not be required if a Default or
Event of Default has occurred and is continuing), which consent
will not be unreasonably withheld by the Agent or the Company,
assign to one or more banks that are reasonably acceptable to the
Agent and the Company (each, a "Permitted Assignee") a
proportionate part of its rights and obligations under this
Agreement and the other Bank Agreements, including its interest
in the Revolving Loan Accounts, and such Permitted Assignee shall
assume such rights and obligations pursuant to an assignment
executed by such Permitted Assignee and such Bank.
15.1.2. Assignment Procedures. In the event of an
assignment to a Permitted Assignee under Section 15.1.1, upon the
prior written consent of the Company (if required pursuant to
Section 15.1.1) and the Agent, execution and delivery of such an
assignment, payment by such Permitted Assignee to the Bank making
such assignment of an amount equal to the purchase price, agreed
between such Permitted Assignee and such Bank, delivery to the
Agent and the Company of an executed copy of such assignment and
payment by such Permitted Assignee to the Agent of a processing
fee of $5,000, such Permitted Assignee shall become party to this
Agreement as a signatory hereto and shall have all the rights and
obligations of a Bank under this Agreement and the other Bank
Agreements with a Percentage Interest as set forth in such
assignment, and such Bank making such assignment shall be
released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be
required. Upon the consummation of any such assignment, the
Agent shall modify Schedule 13.1 to reflect the revised
Percentage Interests.
15.1.3. Federal Reserve Bank. Notwithstanding the
foregoing provisions of this Section 15.1, any Bank may at any
time pledge or assign all or any portion of its rights under this
Agreement and the other Bank Agreements to a Federal Reserve
Bank; provided, however, that no such pledge or assignment shall
release such Bank from its obligations hereunder or under any
other Bank Agreement.
15.1.4. Further Assurances. The Company shall sign such
documents and take such other actions from time to time
reasonably requested by a Permitted Assignee to enable it to
share in the benefits of the rights created by the Bank
Agreements.
15.2 Participations. Any Bank may grant to one or more
banks or other financial institutions ("Bank Participants")
participating interests in its rights and obligations in the
Revolving Loan, including the Indebtedness evidenced by the
Revolving Loan Accounts. The Company agrees that each Bank
Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of the Bank's rights
hereunder, including the setoff rights in Section 9.1 with
respect to its participating interest; provided, however, that no
Bank Participant shall be entitled to receive any greater payment
under this Agreement than such Bank granting such participation
would have been entitled to receive with respect to the interests
transferred. No participation shall be granted hereunder unless
the Bank Participant shall enter into an agreement in form and
substance reasonably satisfactory to the Agent and the Company
agreeing to be bound by the terms hereof stated to be applicable
to the Bank Participant. Each Bank shall furnish the Agent and
the Company with a list of its Bank Participants and the
outstanding amounts of its participations hereunder and shall
notify the Company and the Agent in writing of any change in its
Bank Participants or the outstanding amounts of its
participations hereunder within 30 days after such change occurs.
16. SURVIVAL OF COVENANTS. All covenants, agreements,
representations and warranties made herein or in any other Bank
Agreement and in certificates delivered pursuant hereto or
thereto shall be deemed to have been material and relied on by
the Banks, notwithstanding any investigation made by the Bank or
on their behalf, and shall survive the execution and delivery to
them hereof and thereof. The covenants contained in Sections
3.6, 11, 13.7.7 and 13.9 hereof shall survive the termination of
this Agreement.
17. SERVICE OF PROCESS. The Company by its execution hereof (i)
hereby irrevocably submits to the nonexclusive jurisdiction of
the state courts of the Commonwealth of Massachusetts and to the
nonexclusive jurisdiction of the United States District Court for
the District of Massachusetts for the purpose of any suit, action
or other proceeding arising out of or based upon this Agreement
or any other Bank Agreement or the subject matter hereof or
thereof, and (ii) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such proceeding, any claim that it
is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or
execution, that any such proceeding brought in one of the above-
named courts is brought in an inconvenient forum, that the venue
of any such proceeding brought in one of the above-named courts
is improper, or that this Agreement or any other Bank Agreement,
or the subject matter hereof or thereof may not be enforced in or
by such court. The Company hereby consents to service of process
in any such proceeding in any manner permitted by Chapter 223A of
the General Laws of the Commonwealth of Massachusetts, and agrees
that service of process by registered or certified mail, return
receipt requested, at its address specified in or pursuant to
Section 12 is reasonably calculated to give actual notice.
18. MISCELLANEOUS. The invalidity or unenforceability of any
term or provision hereof shall not affect the validity or
enforceability against any party hereto of any other term or
provision hereof. The headings in this Agreement are for
convenience of reference only and shall not alter or otherwise
affect the meaning hereof. References to Sections, Schedules and
to Exhibits are to the corresponding provisions of and schedules
and exhibits to this Agreement unless otherwise expressly stated.
This Agreement and the other Bank Agreements referred to herein
constitute the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior
and current understandings and agreements, whether written or
oral. This Agreement may be executed in any number of
counterparts, which together shall constitute one instrument and
shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts (without giving effect to the
conflict of laws rules of any jurisdiction). Delivery of a copy
of an executed counterpart of a signature page hereto by
telecopier to the other parties hereto shall constitute execution
and delivery by such executing party hereof.
IN WITNESS WHEREOF, this Amendment No. 4 to and Restatement
of Secured Credit Agreement has been duly executed as of the day
and year first above written.
UNIVERSAL PREMIUM ACCEPTANCE CORPORATION
/s/ William H. Kopman
By: William H. Kopman
Title:
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
/s/ William J. Sherald, Jr.
By: William J. Sherald, Jr.
Title: Vice President
MAGNA BANK OF MISSOURI
/s/ Anne D. Silvestri
By: Anne D. Silvestri
Title: Vice President
THE DAIWA BANK, LIMITED
/s/ Kirby M. Law
By: Kirby M. Law
Title: Vice President & Manager
/s/ Jayleen R. P. Hague
By: Jayleen R. P. Hague
Title: Vice President
</PAGE>
SCHEDULE 13.1
<TABLE>
LIST OF BANKS AND THEIR RESPECTIVE
PERCENTAGE INTERESTS
<CAPTION>
Bank Revolving Loan Percentage
Commitment Interest
<S> <C> <C>
The First National Bank of Boston $19,500,000 52%
100 Federal Street
Boston, MA 02110
Attn: William J. Sherald, Jr.
Vice President
Magna Bank of Missouri $ 9,000,000 24%
1401 South Brentwood Boulevard
St. Louis, MO 63144-1435
Attn: Anne D. Silvestri
Vice President
The Daiwa Bank, Limited $ 9,000,000 24%
200 N. Broadway, Suite 1625
St. Louis, MO 63102
Attn: Jayleen R. P. Hague
Vice President $37,500,000 100%
</TABLE>
</PAGE>
ANNEX I TO AMENDMENT NO. 4
TO AND RESTATEMENT OF SECURED CREDIT AGREEMENT
The Banks shall have received each of the following, in form and
substance satisfactory to the Agent and their special counsel:
A. A consent and agreement duly executed by William H. Kopman in
the form of Exhibit A hereto;
B. A consent and agreement from the Guarantor in the form of
Exhibit B hereto duly executed by the Guarantor;
C. A Secretarial Certificate from the Secretary of the Company
in the form of Exhibit C hereto;
D. A Subordination Agreement duly executed by William H. Kopman
in the form of Exhibit D hereto together with the originals of
the debt instruments referenced therein duly endorsed by William
H. Kopman.
E. An opinion of counsel in the form of Exhibit E hereto from
Blumenfeld, Kaplan, Sandweiss, Marx, Ponfil & Kaskowitz, P.C. or
in such other form as Agent may accept;
F. UCC search reports against the Company, and the Guarantor in
all appropriate locations;
G. Charter documents and amendments thereto of the Guarantor on
file with the Secretary of State of California certified by said
Secretary of State as true and correct;
H. Certificate of legal existence and good standing of Guarantor
from the Secretary of State of California;
I. Certificate of legal existence and good standing of the
Company from the Secretary of State of Missouri;
J. Such UCC financing statements, duly executed by Company and
Guarantor, as appropriate, as the Agent may require; and
K. Reimbursement to the Agent of the fees and expenses of its
counsel incurred in connection with this Amendment.
Exhibit 10(b)
AMENDMENT NO. 1 TO
RESTATED SECURED CREDIT AGREEMENT
This Amendment No. 1 to Restated Secured Credit Agreement (the
"Amendment") is entered into as of the 14th day of August, 1995 by
and among Universal Premium Acceptance Corporation (the "Company"),
a Missouri corporation, The First National Bank of Boston ("FNBB"),
in its capacity as agent for the Banks hereinafter referred to (in
such capacity, the "Agent") and in its individual capacity as a
Bank, Magna Bank of Missouri, successor by merger to Landmark Bank
and formerly known as Magna Bank of St. Louis ("Magna"), and The
Daiwa Bank, Limited ("Daiwa"; Daiwa, Magna and FNBB in its
individual capacity are herein referred to as the "Banks").
WITNESSETH:
WHEREAS, the Company, the Banks and the Agent are parties to
that certain Restated Secured Credit Agreement, dated as of July
29, 1994 (as heretofore amended, the "Credit Agreement"); and
WHEREAS, the Company has requested that the Agent and the
Banks amend certain definitions of the Restated Secured Credit
Agreement and the Agent and the Banks are willing to do so on the
terms and subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. Terms defined in the Restated Secured
Credit Agreement which are used herein shall have the same meanings
as set forth in the Restated Secured Credit Agreement unless
otherwise defined herein.
2. Amendment to Restated Secured Credit Agreement.
Effective as of the date first above written and subject to the
satisfaction of the conditions precedent set forth in Section 3
below, the Restated Secured Credit Agreement is hereby amended as
follows:
Section 3.1.1 (a) of the Restated Secured Credit Agreement is
amended and restated in its entirety as follows:
"(a) The term "Effective Rate" shall mean with respect to
each portion of the Revolving Loan (i) not subject to a LIBOR
Pricing Option, a rate per annum equal to the Base Rate, and (ii)
subject to a LIBOR Pricing Option, a rate per annum equal to the
LIBOR Rate plus two percent (2.00%) for each Interest Period
applicable thereto."
3. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when and only when the
Agent has received at least one copy (or counterparts) of this
Amendment duly executed and delivered by each of the parties
hereto.
4. Representations and Warranties, Etc.
(a) The Company represents and warrants to the Agent and the
Banks that (i) the Company has the corporate power and all
necessary authority to execute and deliver this Amendment, and (ii)
each of this Amendment and the Restated Secured Credit Agreement
(as amended hereby) is the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its
respective terms.
(b) The Company hereby reaffirms all covenants,
representations and warranties made in the Restated Secured Credit
Agreement to the extent not amended hereby and agrees that all such
covenants, representations and warranties shall be deemed to have
been remade as of the date of this Amendment.
5. References, Etc.
(a) Upon and after the effectiveness of this Amendment, (i)
each reference in the Restated Secured Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import
shall mean and be a reference to the Restated Secured Credit
Agreement as amended hereby, and (ii) each reference to the
Restated Secured Credit Agreement in all other Bank Agreements and
other related documents shall mean and be a reference to the
Restated Secured Credit Agreement, as amended hereby.
(b) Except as specifically amended or waived above, the terms
of the Restated Secured Credit Agreement, the Notes, the Security
Agreement and all other Bank Agreements shall remain in full force
and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as an amendment to, or a waiver of, any provisions of the Restated
Secured Credit Agreement or any right, power or remedy of the Agent
of the Banks.
6. Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws (as opposed to the
conflicts of law provisions) of The Commonwealth of Massachusetts.
7. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
8. Counterparts, Etc. This Amendment may be executed by one
or more of the parties to the Amendment on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of this
Amendment may be made by telecopy of a duly signed counterpart
hereof.
IN WITNESS WHEREOF, this Amendment has been duly executed as
of the day and year first above written.
UNIVERSAL PREMIUM ACCEPTANCE
CORPORATION
/s/ William H. Kopman
By: William H. Kopman
Title:
THE FIRST NATIONAL BANK OF
BOSTON, individually and as Agent
/s/ William J. Sherald, Jr.
By: William J. Sherald, Jr.
Title: Vice President
MAGNA BANK OF MISSOURI
/s/ Anne D. Silvestri
By: Anne D. Silvestri
Title: Vice President
Assignee:
THE DAIWA BANK, LIMITED
/s/ Kirby M. Law
By: Kirby M. Law
Title: Vice President & Manager
/s/ Jayleen R. P. Hague
By: Jayleen R. P. Hague
Title: Vice President
Exhibit 10(c)
AMENDMENT NO. 2 AND WAIVER TO
RESTATED SECURED CREDIT AGREEMENT
This Amendment No. 2 and Waiver to Restated Secured Credit
Agreement (the "Amendment") is entered into as of the 3rd day of
April, 1996 by and among Universal Premium Acceptance Corporation
(the "Company"), a Missouri corporation, The First National Bank of
Boston ("FNBB"), in its capacity as agent for the Banks hereinafter
referred to (in such capacity, the "Agent") and in its individual
capacity as a Bank, Magna Bank of Missouri, successor by merger to
Landmark Bank and formerly known as Magna Bank of St. Louis
("Magna"), and The Sumitomo Bank, Limited, as successor to The
Daiwa Bank, Limited ("Sumitomo"; Sumitomo, Magna and FNBB in its
individual capacity are herein referred to as the "Banks").
WITNESSETH:
WHEREAS, the Company, the Banks and the Agent are parties to
that certain Restated Secured Credit Agreement, dated as of July
29, 1994, as amended by Amendment No. 1 to Restated Secured Credit
Agreement dated as of August 14, 1995 (as so amended, the "Restated
Secured Credit Agreement"); and
WHEREAS, the Company has advised the Agent of the sale by
William H. Kopman of all of the outstanding stock of the Company
and of the Guarantor (the "Stock Transfer") to Anuhco, Inc., a
Delaware corporation ("Anuhco") and in connection with such sale,
the Company has advised the Agent of its desire to reduce the
Revolving Loan Commitment, prepay certain Subordinated Debt to
Kopman, replace Kopman's Limited Guaranty with the Limited Guaranty
of Anuhco and enter into a tax sharing agreement with Anuhco, Inc.;
and
WHEREAS, the Agent and the Banks are willing to modify the
Restated Secured Credit Agreement to reflect such actions on the
terms and subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. Terms defined in the Restated Secured
Credit Agreement which are used herein shall have the same meanings
as set forth in the Restated Secured Credit Agreement unless
otherwise defined herein.
2. Amendments to Restated Secured Credit Agreement.
Effective as of the date first above written and subject to the
satisfaction of the conditions precedent set forth in Section 4
below, the Restated Secured Credit Agreement is hereby amended as
follows:
(a) Section 8.8 of the Restated Secured Credit Agreement is
hereby amended and restated in its entirety as follows:
8.8. Transactions with Subsidiaries and Affiliates. Except
for (i) the payment of dividends permitted by Section 8.7 hereof,
(ii) loans to the Guarantor permitted by Section 8.4 hereof and
(iii) payments to Anuhco pursuant to a certain Tax Sharing
Agreement dated as of April 1, 1996 between the Company and Anuhco,
the Company shall not, without the prior written consent of the
Majority Banks, enter into any transaction, including without
limitation the purchase, sale or exchange of property or the
rendering of any service to any Subsidiary or Affiliate, except in
the ordinary course of business and pursuant to reasonable terms no
less favorable to the Company than would be obtained in a
comparable arm's length transaction with an unaffiliated person or
corporation. The Company shall not form, or acquire, any
Subsidiary.".
(b) The definition of "Revolving Loan Commitment" set forth
in Section 10.1 of the Restated Secured Credit Agreement is hereby
amended and restated in its entirety as follows:
"The term 'Revolving Loan Commitment' shall mean, as of the
time the same is to be determined, $30,000,000 less the amount at
or prior to such time of any reductions thereto pursuant to Section
3.4.1 hereof.".
(c) Section 10.1 of the Restated Secured Credit Agreement is
hereby further amended by adding the following definition thereto,
in the appropriate alphabetical order:
"The term 'Anuhco' shall mean Anuhco, Inc. a Delaware
corporation and, effective March 29, 1996, the holder of all of the
issued and outstanding shares of the Company and the Guarantor.".
(d) Schedule 13.1 to the Restated Secured Credit Agreement is
amended by deleting said schedule in its entirety and substituting
therefor a new Schedule 13.1 in the form attached to this
Amendment.
3. Waivers of the Restated Secured Credit Agreement. The
Company has advised the Banks that in connection with the Stock
Transfer William H. Kopman sold all of the issued and outstanding
capital stock of the Company and ceased to act as President and
Chief Executive Officer of the Company. In addition, the Company
plans to prepay in full the 3.62% Subordinated Debenture dated
December 31, 1993 in the original principal amount of $1,000,000,
payable to the order of William H. Kopman, together with all
interest accrued thereon. These actions caused Defaults and Events
of Default under Section 8.10 and 9.1.14 of the Restated Secured
Credit Agreement, which sections prohibit the Company from, among
other things, making any voluntary prepayments of principal on any
Subordinated Debt, or taking any action whereby the subordination
of such Indebtedness or any part thereof to the Bank Obligations
might be terminated, impaired or adversely affected; and under
Section 9.1.13 and 9.1.26, which sections prohibit the ceasing to
own all of the issued and outstanding capital stock of the Company
and the Guarantor by William H. Kopman and the ceasing to act as
President and Chief Executive Officer of either of such companies
by William H. Kopman. The Banks are willing to waive such defaults
on the terms and conditions set forth herein. The waivers
contained in this Amendment shall be effective solely for the
matters described above and shall not be deemed to be a waiver of
any other term or condition of the Restated Secured Credit
Agreement, or a waiver of any rights or remedies that the Banks may
now or hereafter exercise under the Restated Secured Credit
Agreement, including the right to enforce compliance by the Company
of said Sections 8.10 and 9.1.14 of the Restated Secured Credit
Agreement at all times after the date hereof. From and after the
date hereof, Sections 9.1.13 and 9.1.26 shall have no further force
or effect.
4. Release of Kopman Guaranties. The Company has requested,
and the Banks have agreed, to release William H. Kopman from his
obligations under the Limited Guaranty and the Fidelity Guaranty,
each dated as of April 1, 1993 and executed on April 27, 1993
(collectively, the "Kopman Guaranties"), and the Banks have agreed
to do so, provided that the Agent receive a replacement Limited
Guaranty executed by Anuhco in substantially the form of Exhibit A
hereto and a replacement Fidelity Guaranty in substantially the
form of Exhibit B hereto (collectively, the "Anuhco Guaranties").
From and after the delivery of the Anuhco Guaranties and upon the
effectiveness of this Amendment, the Kopman Guaranties shall have
no further force or effect.
5. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when and only when the
Agent has received the following:
(i) at least one copy (or counterparts) of this Amendment
duly executed and delivered by each of the parties hereto;
(ii) a Limited Guaranty of Anuhco, in the form set forth as
Exhibit A; and
(iii) a Fidelity Guaranty of Anuhco, in the form set forth
as Exhibit B; and
(iii) a certificate of the Secretary or an Assistant
Secretary of Anuhco with respect to resolutions of the Board of
Directors of Anuhco authorizing the execution and delivery of the
Anuhco Guaranties and identifying the officer(s) authorized to
execute, deliver and take all other actions required under the
Anuhco Guaranties, and providing specimen signatures of such
officers.
6. Representations and Warranties, Etc.
(a) The Company represents and warrants to the Agent and the
Banks that (i) the Company has the corporate power and all
necessary authority to execute and deliver this Amendment, and (ii)
each of this Amendment and the Restated Secured Credit Agreement
(as amended hereby) is the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its
respective terms.
(b) The Company hereby reaffirms all covenants,
representations and warranties made in the Restated Secured Credit
Agreement to the extent not amended hereby and agrees that all such
covenants, representations and warranties shall be deemed to have
been remade as of the date of this Amendment.
7. References, Etc.
(a) Upon and after the effectiveness of this Amendment, (i)
each reference in the Restated Secured Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import
shall mean and be a reference to the Restated Secured Credit
Agreement as amended hereby, and (ii) each reference to the
Restated Secured Credit Agreement in all other Bank Agreements and
other related documents shall mean and be a reference to the
Restated Secured Credit Agreement, as amended hereby.
(b) Except as specifically amended or waived above, the terms
of the Restated Secured Credit Agreement, the Notes, the Security
Agreement and all other Bank Agreements shall remain in full force
and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as an amendment to, or a waiver of, any provisions of the Restated
Secured Credit Agreement or any right, power or remedy of the Agent
of the Banks.
8. Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws (as opposed to the
conflicts of law provisions) of The Commonwealth of Massachusetts.
9. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
10. Counterparts, Etc. This Amendment may be executed by one
or more of the parties to the Amendment on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of this
Amendment may be made by telecopy of a duly signed counterpart
hereof.
IN WITNESS WHEREOF, this Amendment has been duly executed as
of the day and year first above written.
UNIVERSAL PREMIUM ACCEPTANCE
CORPORATION
/s/ C. Ted McCarter
By: C. Ted McCarter
Title: President
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
/s/ William J. Sherald, Jr.
By: William J. Sherald, Jr.
Title: Vice President
MAGNA BANK OF MISSOURI
/s/ Anne D. Silvestri
By: Anne D. Silvestri
Title: Vice President
THE SUMITOMO BANK, LIMITED
/s/ Jayleen R. P. Hague
By: Jayleen R. P. Hague
Title: Vice President
/s/ Teresa A. Lekich
By: Teresa A. Lekich
Title: Vice President
</PAGE>
<TABLE>
SCHEDULE 13.1
LIST OF BANKS AND THEIR RESPECTIVE PERCENTAGE INTERESTS
<CAPTION>
Bank Revolving Loan Percentage
Commitment
<S> <C> <C>
THE FIRST NATIONAL BANK OF BOSTON $15,600,000 52%
100 Federal Street
Boston, Massachusetts 02110
Attn: William J. Sherald, Jr.
Vice President
MAGNA BANK OF MISSOURI $ 7,200,000 24%
1401 South Brentwood Boulevard
St.Louis, Missouri 63144-1435
Attn: Anne D. Silvestri
Vice President
THE SUMITOMO BANK, LIMITED $ 7,200,000 24%
Notice Address:
USCBD St. Louis Office
200 North Broadway, Suite 1625
St. Louis, Missouri 63102
Attn: Teresa A. Lekich,
Vice President
Lending Office Address:
The Sumitomo Bank, Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606 $30,000,000 100%
</TABLE>
</PAGE>
GUARANTOR ACKNOWLEDGMENT
The undersigned UPAC OF CALIFORNIA, INC. (the "Guarantor"),
having guaranteed the obligations of UNIVERSAL PREMIUM ACCEPTANCE
CORPORATION (the "Company") under the Restated Secured Credit
Agreement dated as of July 29, 1994, as amended (as so amended, the
"Restated Secured Credit Agreement") by and among The First
National Bank of Boston ("FNBB"), in its capacity as agent for the
Banks hereinafter referred to (in such capacity, the "Agent") and
in its individual capacity as a Bank, Magna Bank of Missouri,
successor by merger to Landmark Bank and formerly known as Magna
Bank of St. Louis ("Magna"), and The Sumitomo Bank, Limited, as
successor to The Daiwa Bank, Limited ("Sumitomo"; Sumitomo, Magna
and FNBB in its individual capacity are herein referred to as the
"Banks") pursuant to the Guaranty dated as of April 1, 1993 (the
"Guaranty") to the extent and on the terms and conditions set forth
in the Guaranty, hereby acknowledges receipt of a copy of the
foregoing Amendment No. 2 and Waiver to Restated Secured Credit
Agreement and consents to the amendments to the Restated Secured
Credit Agreement set forth therein; agrees that its obligations as
Guarantor have not been released or adversely affected by such
Amendment No. 2 and Waiver and the execution, delivery and
performance thereof by the Company; and hereby ratifies and
reconfirms to the Bank its obligations under the Guaranty.
The undersigned represents and warrants to the Banks that it
is duly authorized to execute and deliver this form of Guarantor
Acknowledgment on behalf of the Guarantor.
UPAC OF CALIFORNIA, INC.
/s/ C. Ted McCarter
By: C. Ted McCarter
Title: President
Dated:
Exhibit 19(a)
ANUHCO, INC.
REPORT TO SHAREHOLDERS
FIRST QUARTER 1996
First quarter 1996 results mark the 19th consecutive quarter of
profits for our company despite an extremely difficult economic
operating environment for the transportation industry.
Consolidated income from continuing operations for the first
quarter of 1996 was $353,000, or $0.05 per share, on operating
revenue of $25.2 million; compared with consolidated income from
continuing operations of $911,000, or $0.12 per share, on operating
revenue of $24.6 million during the same quarter of 1995. The
first quarter 1995 results also included additional income from
discontinued operations of $368,000, or $0.05 per share.
The first quarter of 1996 saw the continuation from 1995 of a
difficult operating environment for the transportation industry and
for Crouse Cartage Company, Anuhco's general commodities motor
carrier. Crouse Cartage had first quarter 1996 operating income of
$499,000 on revenue of $24.3 million; compared to first quarter
1995 operating income of $1,175,000 on revenue of $24.6 million.
While Crouse Cartage has maintained its freight volumes, continued
competitive market pressures on freight rates and the effects of
severe winter storms on linehaul, fuel and maintenance costs
adversely impacted first quarter 1996 operating results.
Anuhco completed the acquisition of Universal Premium Acceptance
Corporation ("UPAC"), an insurance premium finance company
headquartered in St. Louis, Missouri on March 29, 1996. This
operation will effectively double our market presence in the
industry and provide operating licensing or qualification in 45 of
the 48 contiguous states. In the first quarter of 1996, Agency
Premium Resource, Inc. ("APR") operated at a break-even level,
including certain costs incurred on the acquisition and integration
of UPAC, on revenues of $923,000. While there will be some
additional costs incurred in integrating UPAC's operations with
APR, this acquisition gives us an immediate nationwide presence and
provides substantial opportunities for expansion in this market.
Anuhco continues to maintain a strong cash and investment position
of approximately $20 million as of March 31, 1996. Since its
inception in the third quarter of 1995, the Company's stock buyback
program has been active with a total of 435,800 shares, 5.8% of
total outstanding, acquired and held in treasury at a total cost of
approximately $3.7 million. In addition to using its liquidity for
this program, Anuhco continues to consider potential acquisitions
which would complement its operations.
/s/ Timothy P. O'Neil /s/ Roy R. Laborde
Timothy P. O'Neil, Roy R. Laborde,
President Chairman
April 19, 1996
</PAGE>
ANUHCO, INC.
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(in thousands, except per share data)
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
First Quarter Ended March 31, 1996 and 1995
<CAPTION>
1996 1995
<S> <C> <C>
Operating Revenues................. $25,216 $24,632
Operating Expenses................. 25,022 23,663
Operating Income................... 194 969
Non-Operating Income............... 425 630
Income from Continuing Operations
Before Income Taxes.............. 619 1,599
Income Tax Provision............... 266 688
Income from Continuing Operations.. 353 911
Income from Discontinued Operations -0- 368
Net Income......................... $ 353 $ 1,279
Income Per Share-
Continuing Operations............ $ 0.05 $ 0.12
Discontinued Operations.......... 0.00 0.05
Total.......................... $ 0.05 $ 0.17
Average Common Shares Outstanding.. 7,136 7,554
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
03/31/96 12/31/95
ASSETS
<S> <C> <C>
Cash and Short-Term Investments.... $ 20,268 $ 33,983
Finance Accounts Receivable, net... 37,284 8,290
Other Current Assets............... 28,352 26,260
Total Current Assets............. 85,904 68,533
Operating Property, net............ 19,033 16,223
Intangibles and Other Assets....... 10,643 3,670
$115,580 $ 88,426
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes Payable, Secured............. $ 21,817 $ -0-
Other Current Liabilities.......... 12,635 7,603
Total Current Liabilities........ 34,452 7,603
Deferred Income Taxes.............. 593 543
Shareholders' Equity............... 80,535 80,280
$115,580 $ 88,426
</TABLE>
Anuhco, Inc., 8245 Nieman Road, Suite 100
Lenexa, Kansas 66214
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ANUHCO, INC. CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 1996 AND CONSOLIDATED BALANCE SHEET AS OF MARCH 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000719271
<NAME> ANUHCO, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 8,335
<SECURITIES> 11,934
<RECEIVABLES> 48,053
<ALLOWANCES> 1,158
<INVENTORY> 0
<CURRENT-ASSETS> 86,601
<PP&E> 37,042
<DEPRECIATION> 18,049
<TOTAL-ASSETS> 115,690
<CURRENT-LIABILITIES> 34,562
<BONDS> 0
0
0
<COMMON> 76
<OTHER-SE> 80,459
<TOTAL-LIABILITY-AND-EQUITY> 86,083
<SALES> 0
<TOTAL-REVENUES> 25,216
<CGS> 0
<TOTAL-COSTS> 25,022
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3
<INCOME-PRETAX> 619
<INCOME-TAX> 266
<INCOME-CONTINUING> 353
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 353
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
