Document:

Fulbright & Jaworski Document

Exhibit

10.32

 

 

SECOND AMENDMENT

TO AMENDED AND RESTATED FINANCING AGREEMENT

THIS SECOND AMENDMENT TO

AMENDED AND RESTATED FINANCING AGREEMENT (this “Amendment”) is made and entered

into on March 13, 2002, but effective as of December 31, 2001, by and among THE

CIT GROUP/BUSINESS CREDIT, INC. a New York corporation (hereinafter “CITBC”),

in its individual capacity and as Agent (hereinafter the “Agent”) for itself

and any other party hereafter becoming a Lender pursuant to Section 13 of the

Agreement (as hereinafter defined), each individually sometimes referred to as

a “Lender” and collectively the “Lenders”), Lone Star Technologies, Inc.  (herein “Parent”), a Delaware corporation,

Lone Star Steel Company (herein “LSSC”), a Delaware corporation, Fintube Technologies,

Inc. (herein “FTI”), an Oklahoma corporation, Lone Star Logistics, Inc., a

Texas corporation (“Logistics”), T&N Lone Star Warehouse Co., a Texas

corporation (“T&N Warehouse”), Texas & Northern Railway Company, a

Texas corporation (“T&N Railway”), Fintube Canada, Inc., a Delaware

corporation (“FCI”) and Bellville Tube Company, L.P., a Texas limited

partnership, as successor in interest by conversion to Bellville Tube

Corporation, a Texas corporation (“BTCLP”), (herein Parent, LSSC, FTI,

Logistics, T&N Warehouse, T&N Railway, FCI and BTCLP each individually

a “Company” and collectively as the “Companies”), Environmental Holdings, Inc.,

a Delaware corporation (“EHI”), Zinklahoma, Inc., a Delaware corporation

(“Zinklahoma”), Lone Star Steel International, Inc., a Delaware corporation

(“Steel International”), Lone Star Steel Sales Company, a Delaware corporation

(“Steel Sales”), Rotac, Inc., a Texas corporation (“Rotac”), Lone Star ST

Holdings, Inc., a Delaware corporation (“ST Holdings”), Bellville Tube General,

LLC, a Nevada limited liability company (“BTG”) and Bellville Tube Limited,

LLC, a Nevada limited liability company (“BTL”) (herein EHI, Zinklahoma, Steel

International, Steel Sales, Rotac, ST Holdings, BTG and BTL each individually

as “Guarantor” and collectively as the “Guarantors”).

RECITALS:

A.            WHEREAS, pursuant to the terms and

subject to the conditions of that certain Amended and Restated Financing

Agreement dated as of October 8, 2001 between the Agent, the Companies and the

Guarantors (such Amended and Restated Financing Agreement, as the same is

hereby amended and may hereafter be amended from time to time, being

hereinafter referred to as the “Agreement”), the Companies were granted a

$100,000,000 revolving line of credit which included a letter of credit

facility;

B.            WHEREAS, payment of the Obligations

of the Companies is supported by the guaranties of the Guarantors (other than

BTG and BTL) pursuant to that certain Guaranty dated as of October 8, 2001

executed by the Guarantors (other than BTG and BTL) and the guaranties of BTG

and BTL pursuant to that certain Guaranty dated as of December 31, 2001

executed by BTG and BTL (the “Guaranties”);

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C.            WHEREAS, to secure, in part, the

Obligations (as defined in the Agreement), (i) the Companies and the Guarantors

have heretofore executed in favor of the Agent certain Loan Documents (as

defined in the Agreement), including, without limitation, the Guaranties, which

Loan Documents shall continue in full force and effect upon the execution of

this Amendment, all of the Loan Documents to continue to secure the payment by

the Companies of the Obligations, all as more fully set forth therein and

herein;

D.            WHEREAS, in furtherance of the

foregoing and to evidence the agreements of the parties hereto in relation

thereto the parties hereto desire to amend the Agreement as hereinafter

provided;

NOW, THEREFORE, in

consideration of the premises herein contained and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged,

the parties, intending to be legally bound, agree as follows:

AGREEMENT:

ARTICLE I

DEFINITIONS

1.01.        Capitalized terms used in this Amendment

are defined in the Agreement, as amended hereby, unless otherwise stated.

ARTICLE II

AMENDMENTS TO AGREEMENT

Effective as of the

respective date herein indicated, the Agreement is hereby amended as follows:

2.01.        Clause (b)(xi) of the definition of Eligible Accounts Receivable set forth

in Section 1 of the Agreement is hereby amended to read “(xi) sales not payable

in United States currency (except up to $7,500,000 in the aggregate at any one

time of accounts receivable of all of the Companies payable in Canadian

currency); and”.

2.02.        Clause (a) of the definition of Fixed

Charge Coverage Ratio set forth in Section 1 of the Agreement is

hereby amended to read “(a) EBITDA less cash taxes for such period”.

2.03.        Subparagraphs 7.10(c) (Leverage Ratio)

and 7.10(d) (Senior Leverage Ratio) of Section 7 of the Agreement are deleted

in their entirety.

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2.04.        Paragraph 7.11 of Section 7 of the

Agreement is hereby amended to change the last line thereof (everything after

the colon) to read as follows: 

“$26,000,000 for the Fiscal Year ending December 31, 2001 and

$22,000,000 for each Fiscal Year thereafter.”

ARTICLE III

CONDITIONS PRECEDENT

3.01.        Conditions to Effectiveness.  The effectiveness of this Amendment is

subject to the satisfaction of the following conditions precedent in a manner

satisfactory to CITBC, unless specifically waived in writing by Agent:

(a)           Agent shall have

received each of the following, each in form and substance satisfactory to

Agent, in its sole discretion, and, where applicable, each duly executed by

each party thereto, other than Agent:

(i)            This Amendment,

duly executed by Companies and the Guarantors; and

(ii)           Certified copies of

the resolutions of the Board of Directors or Executive Committee of each of the

Companies and the Guarantors, authorizing the execution, delivery and

performance of this Amendment and any and all other Loan Documents executed by

any of the Companies or the Guarantors in connection therewith, along with a

certificate of incumbency certified by the secretary of each of the Companies

and the Guarantors if there has been any change from the most recent incumbency

certificates delivered by any of the Companies or Guarantors, with specimen

signatures of the officers of the Companies or the Guarantors who are

authorized to sign such documents, all in form and substance satisfactory to

the Agent;

(iii)          Opinion from

Fulbright & Jaworski L.L.P. opining, in form and substance satisfactory to

Agent, which shall cover such matters incident to the transactions contemplated

by this Amendment as Agent may reasonably require and the Companies and the

Guarantors hereby authorize and direct such counsel to deliver such opinions to

Agent; and

(iv)          All other documents

Agent may request with respect to any matter relevant to this Amendment or the

transactions contemplated hereby.

(b)           The representations

and warranties contained herein and in the Agreement and the other documents

executed in connection with the Agreement (herein referred to as “Loan

Documents”), as each is amended hereby, shall be true and correct as of the

date hereof, as if made on the date hereof, except for such representations and

warranties as are by their express terms limited to a specific date.

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(c)           No Default or Event of

Default shall have occurred and be continuing, unless such Default or Event of

Default has been otherwise specifically waived in writing by Agent.

(d)           All corporate

proceedings taken in connection with the transactions contemplated by this

Amendment and all documents, instruments and other legal matters incident

thereto shall be satisfactory to Agent.

ARTICLE IV

NO WAIVER

4.01.        No Waivers.  Nothing contained herein shall be construed as a waiver by Agent

of any covenant or provision of the Agreement, the other Loan Documents, this

Amendment or any other contract or instrument between the Obligors and Agent,

and the failure of Agent at any time or times hereafter to require strict

performance by the Obligors of any provision thereof shall not waive, affect or

diminish any right of Agent to thereafter demand strict compliance therewith.

Agent hereby reserves all rights granted under the Agreement, the other Loan

Documents, this Amendment, and any other contract or instrument between the

Obligors and Agent.

ARTICLE V

RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

5.01.        Ratifications.  The terms and provisions set forth in this Amendment shall modify

and supersede all inconsistent terms and provisions set forth in the Agreement

and the other Loan Documents, and, except as expressly modified and superseded

by this Amendment, the terms and provisions of the Agreement and the other Loan

Documents are ratified and confirmed and shall continue in full force and

effect.  The Companies, the Guarantors

and Agent agree that the Agreement and the other Loan Documents, as amended

hereby, shall continue to be legal, valid, binding and enforceable in

accordance with their respective terms.

5.02.        Representations and Warranties. The

Companies and the Guarantors hereby represent and warrant to Agent that (a) the

execution, delivery and performance of this Amendment and any and all other

Loan Documents executed and/or delivered in connection herewith have been

authorized by all requisite corporate or limited partnership or limited

liability company action (as applicable) on the part of the Companies and the

Guarantors and will not violate the Articles (or Certificates) of Incorporation

or Bylaws of the Companies and the Guarantors that are corporations or the

limited partnership agreements or certificates of limited partnership of the

Companies and the Guarantors that are limited partnerships or the articles of

formation/organization, regulations or limited liability company agreements of

the Companies that are limited liability companies; (b) each of the Company’s

and Guarantor’s Board of Directors or Executive Committee (or the general

partner of the applicable limited partnership) or the members or the Board of

Managers of the applicable limited liability company has authorized 

4

 

the execution, delivery

and performance of this Amendment and any and all other Loan Documents executed

and/or delivered in connection herewith; (c) the representations and warranties

contained in the Agreement, as amended hereby, and any other Loan Document are

true and correct on and as of the date hereof and on and as of the date of

execution hereof as though made on and as of each such date; (d) no Default or

Event of Default under the Agreement, as amended hereby, has occurred and is

continuing, unless such Default or Event of Default has been specifically

waived in writing by Agent; (e) the Companies and the Guarantors are in full

compliance with all covenants and agreements contained in the Agreement and the

other Loan Documents, as amended hereby; and (f) the Companies and the

Guarantors have not amended their Articles (or Certificates) of Incorporation

or their Bylaws or similar organizational documents since the date of the

Agreement, except as otherwise disclosed to Agent.

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.01.        Survival of Representations and

Warranties.  All representations and

warranties made in the Agreement or any other Loan Document, including, without

limitation, any  document furnished in

connection with this Amendment, shall survive the execution and delivery of

this Amendment and the other Loan Documents, and no investigation by Agent or

any closing shall affect the representations and warranties or the right of

Agent to rely upon them.

6.02.        Reference to Agreement.  Each of the Agreement and the other Loan

Documents, and any and all other Loan Documents, documents or instruments now

or hereafter executed and delivered pursuant to the terms hereof or pursuant to

the terms of the Agreement, as amended hereby, are hereby amended so that any

reference in the Agreement and such other Loan Documents to the Agreement shall

mean a reference to the Agreement, as amended hereby.

6.03.        Expenses of Agent.  As provided in the Agreement, Companies agree

to pay on demand all costs and expenses incurred by Agent in connection with

the preparation, negotiation, and execution of this Amendment and the other

Loan Documents executed pursuant hereto and any and all amendments,

modifications, and supplements thereto, including, without limitation, the

costs and fees of Agent’s legal counsel, and all costs and expenses incurred by

Agent in connection with the enforcement or preservation of any rights under

the Agreement, as amended hereby, or any other Loan Documents, including,

without, limitation, the costs and fees of Agent’s legal counsel.

6.04.        Severability.  Any provision of this Amendment held by a court of competent

jurisdiction to be invalid or unenforceable shall not impair or invalidate the

remainder of this Amendment and the effect thereof shall be confined to the

provision so held to be invalid or unenforceable.

6.05.        Successors and Assigns.  This Amendment is binding upon and shall

inure to the benefit of Agent and Companies and their respective successors and

assigns, except that 

5

 

Companies may not assign

or transfer any of their rights or obligations hereunder without the prior

written consent of Agent.

6.06.        Counterparts.  This Amendment may be executed in one or more counterparts, each

of which when so executed shall be deemed to be an original, but all of which

when taken together shall constitute one and the same instrument.

6.07.        Effect of Waiver.  No consent or waiver, express or implied, by

Agent to or for any breach of or deviation from any covenant or condition by

Companies shall be deemed a consent to or waiver of any other breach of the

same or any other covenant, condition or duty.

6.08.        Headings.  The headings, captions, and arrangements used in this Amendment

are for convenience only and shall not affect the interpretation of this

Amendment.

6.09.        Applicable Law.  THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS

EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE

PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE

LAWS OF THE STATE OF NEW YORK.

6.10.        Final Agreement.  THE AGREEMENT AND THE OTHER LOAN DOCUMENTS,

EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH

RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS

EXECUTED.  THE AGREEMENT AND THE OTHER

LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF

PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS

BETWEEN THE PARTIES.  NO MODIFICATION,

RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT

SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY COMPANIES AND AGENT.

6.11.        Release by the Companies. THE COMPANIES

HEREBY ACKNOWLEDGE THAT THEY HAVE NO DEFENSE, COUNTERCLAIM, OFFSET,

CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE

ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE

“OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE

FROM AGENT.  THE COMPANIES HEREBY

VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE AGENT, THE OTHER

LENDERS, AND THEIR RESPECTIVE PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND

ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE CLAIMS,

DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES

WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR

UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY,

ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS

EXECUTED, WHICH THE COMPANIES MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED

PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE 

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OUT OF CONTRACT, TORT,

VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”,

INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING,

RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL

RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT OR

OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

6.12.        Release by the Guarantors.  Each Guarantor hereby consents to the terms

of this Amendment, confirms and ratifies the terms of the Guaranty executed by

such Guarantor, acknowledges that such Guaranty is in full force and effect and

ratifies the same, and acknowledges that such Guarantor has no defense,

counterclaim, set-off or any other claim to diminish such Guarantor’s liability

under such document. THE GUARANTORS EACH HEREBY VOLUNTARILY AND KNOWINGLY

RELEASES AND FOREVER DISCHARGES THE RELEASED PARTIES, FROM ALL POSSIBLE CLAIMS,

DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES

WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR

UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY,

ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS

EXECUTED, WHICH THE GUARANTORS MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED

PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF

CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM

ANY “LOANS”, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING,

TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST

LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN

AGREEMENT OR OTHER CREDIT DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS

AMENDMENT.

[The

Remainder of this Page Intentionally Left Blank]

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                                IN WITNESS WHEREOF, this Amendment

has been executed and is effective as of the date first above-written.

 

 

COMPANIES:

 

LONE STAR TECHNOLOGIES, INC.

FINTUBE TECHNOLOGIES, INC.

LONE STAR STEEL COMPANY

LONE STAR LOGISTICS, INC.

T&N LONE STAR WAREHOUSE CO.

TEXAS & NORTHERN RAILWAY COMPANY

FINTUBE CANADA, INC.

 

 

 

	

  By:

  	

   

  	

  /s/ Robert F. Spears

  
	

  Name:

  	

  Robert F. Spears

  
	

  Title:

  	

  Vice President of each

  of the

  
	

   

  	

  foregoing companies

  

 

 

BELLVILLE TUBE COMPANY, L.P.

as successor in interest by conversion to

Bellville Tube Corporation

 

By:          Bellville Tube General, LLC,
                its general partner

 

 

 

	

  By:

  	

   

  	

  /s/ Robert F. Spears

  
	

  Name:

  	

  Robert F. Spears

  
	

  Title:

  	

  Vice President

  

 

8

 

GUARANTORS:

 

ENVIRONMENTAL HOLDINGS, INC.

ZINKLAHOMA, INC.

LONE STAR STEEL INTERNATIONAL, INC.

LONE STAR STEEL SALES COMPANY

ROTAC, INC.

LONE STAR ST HOLDINGS, INC.

 

 

 

	

  By:

  	

   

  	

  /s/ Robert F. Spears

  
	

  Name:

  	

  Robert F. Spears

  
	

  Title:

  	

  Vice President of each

  of the

  
	

   

  	

  foregoing companies

  

 

 

BELLVILLE TUBE GENERAL, LLC

BELLVILLE TUBE LIMITED, LLC

 

 

 

	

  By:

  	

   

  	

  /s/ Robert F. Spears

  
	

  Name:

  	

  Robert F. Spears

  
	

  Title:

  	

  Vice President of each

  of the

  
	

   

  	

  foregoing limited

  liability companies

  

 

 

LENDERS:

 

THE CIT GROUP/BUSINESS CREDIT, INC.

as Agent and Lender

 

 

 

	

  By:

  	

   

  	

  /s/ Mark Porter

  
	

  Name:

  	

  Mark Porter

  
	

  Title:

  	

   

  	

  Vice President

  
				

 

9AMENDMENT NUMBER TWO TO AMENDED AND RESTATED

Exhibit 10.1

WAIVER

AND AMENDMENT NUMBER ONE

TO LOAN AND SECURITY AGREEMENT

This Waiver and Amendment

Number One to Loan and Security Agreement (“Amendment”) is entered into

as of March 27, 2002, among US SEARCH.COM, INC., a Delaware corporation

(“USI”) and PROFESSIONAL RESOURCE SCREENING, INC., a

Delaware corporation (“PRSI”), formerly known as US SEARCH SCREENING

SERVICES, INC., a Delaware corporation (“Screening”) (each a “Borrower”,

and collectively, jointly and severally, the “Borrowers”), on the one hand,

and COMERICA

BANK — CALIFORNIA, successor by merger to Imperial Bank (“Bank”),

on the other hand, and in light of the following:

A.            USI and Bank have

previously entered into that certain Loan and Security Agreement, dated as of

September 12, 2001 (as amended from time to time, the “Loan Agreement”).

B.            USI, Screening and

Bank have previously entered into that certain Forbearance Agreement, dated as

of December 24, 2001 (the “Forbearance Agreement”), and that certain

Joint and Several Borrower Rider, dated as of December 24, 2001 (the “Rider”),

whereby, among other things, Screening became a Borrower under the Loan

Agreement.  In connection with the Loan

Agreement, the Forbearance Agreement, and the Rider, Borrowers and Bank have

entered into various other agreements (such agreements, together with the Loan

Agreement, the Forbearance Agreement, and the Rider, are collectively referred

to herein as the “Loan Documents”).

C.            Events of Default

occurred under the terms of the Loan Documents as a result of:  (i) Borrowers’ failure to comply with

Financial Statements, Reports, Certificates covenant set forth in Section 6.2

of the Loan Agreement for the month ending January 31, 2002, failure to comply

with such covenant being an Event of Default under Section 8.2 of the Loan

Agreement, and (ii) Borrowers’ failure to comply with the Compliance with VISA

Merchant Card Services covenants set forth in Section 6.10(a) and Section

6.10(b) of the Loan Agreement for the month ending January 31, 2002, failure to

comply with such covenants being an Event of Default under Section 8.2 of the

Loan Agreement (collectively, the “Existing Defaults”).

D.            Screening changed

its name to PRSI pursuant to that certain Certificate of Amendment of Articles

of Incorporation, dated as February 25, 2002.

E.             Borrowers and Bank

desire to amend the Loan Agreement and to waive the Existing Defaults in

accordance with the terms and conditions contained herein.

NOW, THEREFORE, Borrowers and Bank hereby amend and supplement the

Loan Agreement as follows:

1.             DEFINITIONS.  All initially capitalized terms used in this

Amendment shall have the meanings given to them in the Loan Agreement unless

specifically defined herein.

 

2.             WAIVER.  Bank hereby waives the Events of Default

arising out of the Existing

 

 Defaults. 

This waiver applies only to the Existing Defaults and shall not in any

way affect any other obligation, agreement or covenant of Borrowers, or any

right or remedy of Bank, under the Loan Agreement, as amended hereby.

3.             AMENDMENTS.

(a)           All references to “US Search

Screening Services, Inc., a Delaware corporation” or “Screening” in the Loan

Agreement and all other Loan Documents shall be and mean, and shall be revised

to say, “Professional Resource Screening Services, Inc., a Delaware corporation”.

(b)           Section 2.1 of the Loan Agreement is

hereby amended and restated in its entirety to read as follows:

2.1           Credit Extensions.  Borrower promises to pay to Bank, in lawful

money of the United States of America, the aggregate unpaid principal amount of

all Credit Extensions made by Bank to Borrower, together with interest on the

unpaid principal amount of such Credit Extensions at rates in accordance with

the terms hereof.

(a)           Revolving Advances.

(i)            Amount.  Subject to and upon the terms and conditions

of this Agreement (1) Borrower may request Advances in an aggregate outstanding

amount not to exceed the Committed Revolving Line, and (2) amounts borrowed

pursuant to this Section 2.1(a) may be repaid and reborrowed at any time prior

to the Revolving Maturity Date, at which time all Advances under this Section

2.1(a) shall be immediately due and payable. 

Borrower may prepay any Advances without penalty or premium.

(ii)           Form of Request.  Whenever Borrower desires an Advance,

Borrower will notify Bank by facsimile transmission or telephone no later than

3:00 p.m. Pacific time, on the Business Day that the Advance is to be

made.  Each such notification shall be

promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit C.  Bank is authorized to make Advances under

this Agreement, based upon instructions received from a Responsible Officer or

a designee of a Responsible Officer, or without instructions if in Bank’s

discretion such Advances are necessary to meet Obligations which have become

due and remain unpaid.  Bank shall be

entitled to rely on any telephonic notice given by a person who Bank reasonably

believes to be a Responsible Officer or a designee thereof, and Borrower shall

indemnify and hold Bank harmless for any damages or loss suffered by Bank as a

result of such reliance.  Bank will

credit the amount of Advances made under this Section 2.1(a) to Borrower’s

deposit account.

 

2

 

(b)           Borrowing Base Advances.

(i)            Amount.  If no availability exists under the

Committed Revolving Line, then (1) Borrower may request Borrowing Base Advances

in an aggregate outstanding amount not to exceed the lesser of (A) the

Borrowing Base Line or (B) the Borrowing Base, and (2) amounts borrowed pursuant

to this Section 2.1(b) may be repaid and reborrowed at any time prior to the

Revolving Maturity Date, at which time all Borrowing Base Advances under this

Section 2.1(b) shall be immediately due and payable.  Borrower may prepay any Borrowing Base Advances without penalty

or premium.

(ii)           Form of Request.  Whenever Borrower desires a Borrowing Base

Advance, Borrower will notify Bank by facsimile transmission or telephone no

later than 3:00 p.m. Pacific time, on the Business Day that the Borrowing Base

Advance is to be made.  Each such

notification shall be promptly confirmed by a Payment/Advance Form in

substantially the form of Exhibit C. 

Bank is authorized to make Advances under this Agreement, based upon

instructions received from a Responsible Officer or a designee of a Responsible

Officer, or without instructions if in Bank’s discretion such Borrowing Base

Advances are necessary to meet Obligations which have become due and remain

unpaid.  Bank shall be entitled to rely

on any telephonic notice given by a person who Bank reasonably believes to be a

Responsible Officer or a designee thereof, and Borrower shall indemnify and

hold Bank harmless for any damages or loss suffered by Bank as a result of such

reliance.  Bank will credit the amount

of Borrowing Base Advances made under this Section 2.1(b) to Borrower’s deposit

account.

(c)           Equipment Advances.

(i)            Subject to and upon the terms and

conditions of this Agreement, Bank agrees to make advances (each an “Equipment

Advance” and, collectively, the “Equipment Advances”) to Borrower at any time

from the date hereof through the Equipment Advance Availability End Date.  The aggregate outstanding amount of

Equipment Advances shall not exceed the Equipment Line.  And Bank may advance up to 30% of the aggregate

amount of outstanding Equipment Advances as Software Equipment Advances; provided,

however, that each Software Equipment Advance shall be in a minimum

amount of $100,000.  Each Equipment

Advance shall not exceed 100% of the invoice amount of equipment and software

approved by Bank from time to time (which Borrower shall, in any case, have

purchased within 60 days of the date of the corresponding Equipment

Advance), excluding taxes, shipping, warranty charges, freight discounts,

installation expense, and other such soft costs.

(ii)           At the time of each

Hardware Advance, the aggregate of the then outstanding principal balance of

the Hardware Advances, if 

 

3

 

any, shall be

added to the new Hardware Advance and the total aggregate balance of both shall

be payable in equal monthly installments, including all accrued interest

thereon, on the last day of each month commencing on the first (1st) full

calendar month following the initial advance and each such subsequent advance

hereunder and continuing on the last day of each succeeding month until the

Equipment Maturity Date, at which time all amounts due in connection with the

Hardware Advances made under this Section 2.1(c) and any other amounts due

under this Agreement shall be immediately due and payable.

(iii)          Interest on each Software Equipment

Advance shall begin to accrue on the funding date of the relevant Software

Equipment Advance.  Each Software

Equipment Advance shall be payable in eighteen (18) equal monthly principal

installments, plus all accrued interest, beginning on the date that is one

month after such Software Equipment Advance is funded and continuing on the

same day of each subsequent month thereafter (or on the last day of the month

if the date of funding was on the 31st day of any month) through the

date that is 18 months after such Software Equipment Advance funding date.

(iv)          Equipment Advances may not be

prepaid.  Any Equipment Advance or

portion thereof, once repaid may not be reborrowed.

(v)           When Borrower desires to obtain an

Equipment Advance, Borrower shall notify Bank (which notice shall be

irrevocable) by facsimile transmission to be received no later than 3:00 p.m.

Pacific time one Business Day before the day on which the Equipment Advance is

to be made.  Such notice shall be

substantially in the form of Exhibit C. 

The notice shall be signed by a Responsible Officer or its designee and

include a copy of the invoice for any Equipment to be financed.

(d)           Letter of Credit.

(i)            Bank issued for the account of

Borrower a standby letter of credit (ID No. 569842), with a maturity date of

November 30, 2002 (“Letter of Credit”). 

On each and every L/C Commitment Reduction Date, Bank shall reduce the

L/C Commitment in such amount and the stated amount of the Letter of Credit

shall reduce, per the terms of the Letter of Credit, to an amount not greater

than the L/C Commitment as reduced and in effect on such date.  Borrower will pay any standard fees that Bank

notifies Borrower will be charged for processing the Letter of Credit.

(ii)           Borrower

agrees to grant and pledge to Bank a continuing security interest in the Second

TCD to secure prompt repayment of the Letter of Credit.  Such security interest shall constitute a

valid, first priority security interest in the Second TCD, and will constitute

a valid, first priority security interest in accrued interest or proceeds

therefrom.  Notwithstanding any 

4

termination, Bank’s Lien on the Second TCD shall

remain in effect for so long as the Letter of Credit is outstanding.

 

 

(c)           Section 2.2 of the Loan Agreement is

hereby amended and restated in its entirety to read as follows:

2.2           Overadvances.  If the aggregate amount of the outstanding

Advances, Borrowing Base Advances and Equipment Advances exceeds the Maximum

Commitment at any time, Borrower shall immediately pay to Bank, in cash, the

amount of such excess.

(d)           Section 2.3(a) of the Loan Agreement

is hereby amended and restated in its entirety to read as follows:

(a)           Interest Rates.

(i)            Advances, Borrowing Base

Advances, and Letter of Credit. 

Except as set forth in Section 2.3(b) the Advances, the Borrowing Base

Advances, and any drawn but unreimbursed amounts under the Letter of Credit

shall bear interest, on the outstanding daily balance thereof, at a rate equal

to 2.50% above the Prime Rate.

(ii)           Equipment Advances.  Except as set forth in Section 2.3(b) the

Equipment Advances shall bear interest, on the outstanding daily balance

thereof, at a rate equal to 2.75% above the Prime Rate.

(e)           Section 2.3(c) of the Loan Agreement

is hereby amended and restated in its entirety to read as follows:

(c)           Interest on the Advances shall be due

and payable on the last calendar day of each month during the term hereof.  Any interest not paid when due shall be

compounded by becoming a part of the Obligations, and such interest shall

thereafter accrue interest at the rate then applicable hereunder.  Bank shall, at its option, charge such

interest, all Bank Expenses, and all Periodic Payments against any of

Borrower’s deposit accounts, including Account Number 38–059–297

(such debits are not a setoff), or against the Committed Revolving Line or, if

no availability exists under the Committed Revolving Line, then against the

Borrowing Base Line, in which case those amounts shall thereafter accrue

interest at the rate then applicable hereunder.

(f)            Section 5.3 of the Loan Agreement is

hereby amended and restated in its entirety to read as follows:

5.3           Collateral.  Borrower has good title to the Collateral,

free and clear of Liens, except for Permitted Liens.  The Eligible Accounts are bona fide existing obligations.  The property giving rise to such Eligible

Accounts has been delivered to the account debtor or its agent for immediate

shipment to and 

 

5

 

unconditional

acceptance by the account debtor. 

Borrower has not received notice of actual or imminent Insolvency

Proceeding of any account debtor whose accounts are included in any Borrowing

Base Certificate as an Eligible Account. 

All Inventory is in all material respects of good and marketable

quality, free from all material defects, except for Inventory for which

adequate reserves have been made.

(g)           Section 6.2 is hereby amended and

restated in its entirety to read as follows:

6.2           Financial Statements, Reports,

Certificates.  Borrower shall

deliver to Bank:  (a) as soon as

available, but in any event within 30 days after the end of each calendar

month, a company prepared consolidated balance sheet and income statement

covering Borrower’s consolidated operations during such period, in a form

acceptable to Bank and certified by a Responsible Officer; (b) as soon as

available, but in any event within 90 days after the end of Borrower’s fiscal

year commencing December 31, 2001, audited consolidated financial statements of

Borrower prepared in accordance with GAAP, consistently applied, together with

an opinion which is unqualified or otherwise consented to in writing by Bank on

such financial statements of an independent certified public accounting firm

reasonably acceptable to Bank; (c) if applicable, copies of all statements,

reports and notices sent or made available generally by Borrower to its

security holders or to any holders of Subordinated Debt and all reports on

Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (d)

promptly upon receipt of notice thereof, a report of any legal actions pending

or threatened against Borrower or any Subsidiary that could result in damages

or costs to Borrower or any Subsidiary of $100,000 or more; (e) such budgets,

sales projections, operating plans or other financial information generally

prepared by Borrower in the ordinary course of business as Bank may reasonably request

from time to time, including the minutes from Borrower’s board of directors;

and (f) within 30 days of the last day of each fiscal quarter, a report signed

by Borrower, in form reasonably acceptable to Bank, listing any applications or

registrations that Borrower has made or filed in respect of any Patents,

Copyrights or Trademarks and the status of any outstanding applications or

registrations, as well as any material change in Borrower’s Intellectual

Property Collateral, including but not limited to any subsequent ownership

right of Borrower in or to any Trademark, Patent or Copyright not specified in Exhibits

A, B, and C of the Intellectual Property Security Agreement

delivered to Bank by Borrower in connection with this Agreement.

(a)           Within 30 days after

the last day of each month, Borrower shall deliver to Bank with the monthly

financial statements a Compliance Certificate signed by a Responsible Officer

in substantially the form of Exhibit D hereto.

 

6

 

(b)           Within 20 days after the last day of

each month, and in addition, in connection with each request of a Borrowing

Base Advance, Borrower shall deliver to Bank a Borrowing Base Certificate

signed by a Responsible Officer in substantially the form of Exhibit E

hereto, together with aged listings of accounts receivable and accounts

payable.

(c)           Bank shall have a right from time to

time hereafter to audit Borrower’s Accounts and appraise Collateral during

normal business hours at Borrower’s expense.

(d)           Borrower shall immediately provide

Bank with a detailed schedule of all equipment purchases and associated

expenses in connection with each Equipment Advance.

(e)           On the fifth (5th) and

twentieth (20th) day of every month, Borrower shall deliver to Bank a cash flow

report, signed by a Responsible Officer, in form reasonably acceptable to Bank,

which cash flow report shall include 3 weeks trailing (actual) cash flow and 6

weeks forward (projected) cash flow.

(f)            On or before November 30, 2002,

Borrower shall deliver the Plan Projections to Bank.

(h)           Section 6.6 of the Loan Agreement is

hereby amended and restated in its entirety to read as follows:

6.6           Primary Depository; First TCD and

Second TCD.

(a)           Borrower shall maintain its primary

depository and operating accounts with Bank or Bank’s affiliates.

(b)           Effective March 31, 2002, Borrower

shall maintain not less than $1,250,000 of its unrestricted cash and cash

equivalents in deposit or investment accounts with Bank or Bank’s Affiliates

(subject to control agreements if with Affiliates) at all times.

(c)           Borrower shall maintain the First TCD

and Second TCD at Bank, such amount of Second TCD reducing per reduction of the

L/C Commitment on the L/C Commitment Reduction Dates.

(i)            Section 6.7 of the Loan Agreement is

hereby amended and restated in its entirety to read as follows:

6.7           Financial

Covenants.  Borrower shall maintain,

as of the last day of each calendar month unless stated otherwise:

 

7

 

(a)           Operating Performance.      Actual company revenues of no less than

75% of the Plan Projections effective March 2002, and continuing monthly

thereafter;

(b)           Minimum EBITDA.  Effective August 31, 2002, and monthly

thereafter, an EBITDA calculated on a two month trailing average of at least

$1.00; and

(c)           Debt/Tangible Net Worth Ratio.  Effective March 31, 2002, a ratio of Total

Liabilities less Subordinated Debt to Tangible Net Worth plus Subordinated Debt

of not more than 1.50 to 1.00.

(j)            Section 6.10(b) of the Loan Agreement

is hereby amended and restated in its entirety to read as follows:

(b)           Commencing on or before April 30,

2002, and continuing up to and including April 30, 2003, Borrower shall cause

itself to be removed from VISA’s Merchant Chargeback Monitoring Program (the “Program”).

(k)           Section 8 of the Loan Agreement is

further amended by adding the following clause (8.10):

8.10         Dissolution of Pequot.         

If Pequot Private Equity Fund II, L.P., a Delaware limited partnership

(“Pequot”), during the term of this Agreement, unless Bank shall

otherwise consent in writing, winds up, dissolves or otherwise terminates its

corporate existence, or consolidates with or merges with or into, or sells,

loans or otherwise transfers all or substantially all of its assets to, any entity

unless: (a) the entity formed by a consolidation with or into which Pequot is

merged or the entity that acquires all or substantially all of the assets of

Pequot, as the case may be, shall be organized and existing under the laws of

the United States or any state thereof; (b) such entity shall expressly assume

the obligations of Pequot under that certain Limited Guaranty, dated as of

March 29, 2002, executed by Guarantor in favor of Bank (the “Guaranty”), in a

written instrument duly authorized, executed and delivered to Bank; and (c)

such entity shall have, immediately after the consolidation, merger, transfer

or loan, a net worth not less than the net worth of Pequot, and a debt to net

worth ratio not greater than that of Pequot, in each case, as determined in

accordance with generally accepted accounting principles, and measured with

respect to Pequot immediately before the consolidation, merger, transfer or

loan.

(l)            Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“Borrowing Base” means an amount equal to 80% of Eligible Accounts, as

determined by Bank with reference to the most recent Borrowing Base Certificate

delivered by Borrower.

 

8

 

(m)          Exhibit A of the Loan Agreement

is hereby amended by adding the following new definition thereto in the

appropriate alphabetical order:

“Borrowing Base Advance”

or “Borrowing Base Advances” means a cash advance or cash advances under the

Borrowing Base Facility.

(n)           Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“Borrowing Base Facility”

means the facility under which Borrower may request Bank to issue Borrowing

Base Advances, as specified in Section 2.3(b) hereof.

(o)           Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“Borrowing Base Line”

means a Credit Extension of up to $1,000,000.

(p)           The definition of “Committed

Revolving Line” in Exhibit A to the Loan Agreement is hereby amended and

restated in its entirety to read as follows:

“Committed Revolving

Line” means a Credit Extension of up to $2,000,000.

(q)           The definition of “Credit Extension”

in Exhibit A to the Loan Agreement is hereby amended and restated in its

entirety to read as follows:

“Credit Extension” means

each Advance, Borrowing Base Advance, Equipment Advance, issuance of the Letter

of Credit, or any other extension of credit by Bank for the benefit of Borrower

hereunder.

(r)            Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“Eligible Accounts” means

those Accounts that arise in the ordinary course of Borrower’s business that

comply with all of Borrower’s representations and warranties to Bank set forth

in Section 5.3; provided, that Bank may change the standards of eligibility by

giving Borrower 30 days prior written notice. 

Unless otherwise agreed to by Bank, Eligible Accounts shall not include

the following:

(a)           Accounts that the account debtor has

failed to pay within 90 days of invoice date;

(b)           Accounts with

respect to an account debtor, 25% of whose Accounts the account debtor has

failed to pay within 90 days of invoice date;

 

9

 

(c)           Accounts with respect to which the

account debtor is an officer, employee, or agent of Borrower;

(d)           Accounts with respect to which goods

are placed on consignment, guaranteed sale, sale or return, sale on approval,

bill and hold, or other terms by reason of which the payment by the account

debtor may be conditional;

(e)           Accounts with respect to which the

account debtor is an Affiliate of Borrower;

(f)            Accounts with respect to which the

account debtor does not have its principal place of business in the United

States;

(g)           Accounts with respect to which the

account debtor is the United States or any department, agency, or instrumentality

of the United States;

(h)           Accounts with respect to which

Borrower is liable to the account debtor for goods sold or services rendered by

the account debtor to Borrower, but only to the extent of any amounts owing to

the account debtor against amounts owed to Borrower;

(i)            Accounts with respect to an account

debtor, including Subsidiaries and Affiliates, whose total obligations to

Borrower exceed 20% of all Accounts, to the extent such obligations exceed the

aforementioned percentage, except as approved in writing by Bank;

(j)            Accounts with respect to any

accounts receivables derived from any credit card transactions;

(k)           Accounts with respect to which the

account debtor disputes liability or makes any claim with respect thereto as to

which Bank believes, in its sole discretion, that there may be a basis for

dispute (but only to the extent of the amount subject to such dispute or

claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or

goes out of business; and

(l)            Accounts the collection of which

Bank reasonably determines after inquiry and consultation with Borrower to be

doubtful.

(s)           Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“First TCD” means

that certain $550,000 time certificate of deposit account held by Bank, account

number 942750000005786, and any replacement or substitution therefor, and the

proceeds of any of the foregoing.

 

10

 

(t)            Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“L/C Commitment” means

the amount set forth in the table below opposite the applicable period:

	

  Period

  	

   

  	

  L/C Commitment

  
	

  04/01/02 — 04/30/02

  	

   

  	

  $666,668

  
	

  05/01/02 — 05/31/02

  	

   

  	

  $583,335

  
	

  06/01/02 — 06/30/02

  	

   

  	

  $500,002

  
	

  07/01/02 — 07/31/02

  	

   

  	

  $416,669

  
	

  08/01/02 — 08/31/02

  	

   

  	

  $333,336

  
	

  09/01/02 — 09/30/02

  	

   

  	

  $250,003

  
	

  10/01/02 — 10/31/02

  	

   

  	

  $166,670

  
	

  11/01/02 — 11/30/02

  	

   

  	

  $83,337

  
	

  12/01/02

  	

   

  	

  $0

  

(u)           Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“L/C Commitment

Reduction Date” means the first day of April, May, June, July, August,

September, October, and November, 2002.

(v)           The definition of “Letter of Credit

Sublimit” in Exhibit A to the Loan Agreement is hereby deleted in its

entirety and replaced with the following:

[Intentionally Deleted.]

(w)          Exhibit A of the Loan Agreement

is hereby amended by adding the following new definition thereto in the

appropriate alphabetical order:

“Maximum Commitment”

means a Credit Extension of up to $3,000,000.

(x)            The

definition of “Plan Projections” in Exhibit A to the Loan Agreement is

hereby amended and restated in its entirety to read as follows:

 

11

 

“Plan Projections” means

those certain  projections for the

period commencing January 1, 2003 through and including April 30, 2003 set

forth in a business plan delivered to Bank.

(y)           The definition of “Revolving Maturity

Date” in Exhibit A to the Loan Agreement is hereby amended and restated

in its entirety to read as follows:

“Revolving Maturity Date”

means March 26, 2003.

(z)            Exhibit A of the Loan

Agreement is hereby amended by adding the following new definition thereto in

the appropriate alphabetical order:

“Tangible Net Worth”

means, on any date, the consolidated total assets of Borrower and its

Subsidiaries plus Subordinated Debt minus, (i) any amounts

attributable to (a) goodwill, (b) intangible items such as unamortized debt

discount and expense, Patents, trade and service marks and names, Copyrights

and research and development expenses except prepaid expenses, and (c) reserves

not already deducted from assets, and (ii) Total Liabilities.

(aa)         Exhibit A of the Loan Agreement

is hereby amended by adding the following new definition thereto in the

appropriate alphabetical order:

“Second TCD” means that certain $750,000 time

certificate of deposit account held by Bank, account number 942750000006008,

and any replacement or substitution therefor, and the proceeds of any of the

foregoing.  The Second TCD shall be

reduced per reduction of the L/C Commitment on the L/C Commitment Reduction

Dates.

(bb)         Exhibit A of the Loan Agreement

is hereby amended by adding the following new definition thereto in the

appropriate alphabetical order:

“Total Liabilities” is on

any day, obligations that should, under GAAP, be classified as liabilities on

Borrower’s consolidated balance sheet, including all Indebtedness, and current

portion Subordinated Debt allowed to be paid, but excluding all other

Subordinated Debt.

(cc)         Exhibit D of the Loan Agreement

is hereby amended and restated in its entirety to read as attached hereto and

incorporated by this reference into the Amendment.

(dd)         A new Exhibit E is hereby added

to the Loan Agreement to read as attached hereto and incorporated by this

reference into the Amendment.

4.             REPRESENTATIONS

AND WARRANTIES. 

Borrowers hereby affirm to Bank that all of Borrowers’ representations

and warranties set forth in the Loan Agreement are true, complete and accurate

in all respects as of the date hereof.

 

12

 

5.             NO DEFAULTS.  Borrowers hereby affirm to Bank that, other

than the Existing Defaults, no Event of Default has occurred and is continuing

as of the date hereof.

6.             CONDITIONS PRECEDENT.  The effectiveness of this Amendment

(including the waiver of the Existing Defaults under Section 2 hereof) is

expressly conditioned upon the following:

(a)           Receipt by Bank of a fully earned,

non-refundable Amendment Fee of $10,000;

(b)           Receipt by Bank of a warrant to

purchase 51,086 shares of USI’s Common Stock at an exercise price per share

equal to $0.783 per share, on Bank’s form, with a 7-year maturity, inclusive of

certain provisions to include but not be limited to assignability to Bank’s

affiliates, antidilution protection and a net exercise provision, and on the

same terms as provided to Pequot Private Equity Fund II, L.P., a Delaware

limited partnership (“Pequot”) in the last equity round, except that

Bank shall have piggyback and S-3 registration rights, duly executed and

delivered by USI and Pequot to Bank;

(c)           Receipt by Bank of a limited

continuing guaranty of the Obligations of Borrowers to Bank, in a form

acceptable to Bank in its sole discretion, duly executed and delivered by

Pequot to Bank (the “Guaranty”);

(d)           Receipt by Bank of that certain

Certified Certificate of Amendment of Articles of Incorporation, dated as of

February 25, 2002, evidencing that Screening changed its name to PRSI;

(e)           Filing of amendments to financing

statements as a result of Screening changing its name to PRSI; and

(f)            Receipt by Bank of an executed copy

of this Amendment.

7.             COSTS AND EXPENSES.  Borrower shall pay to Bank all of Bank’s

out-of-pocket costs and expenses (including, without limitation, the fees and

expenses of its counsel, which counsel may include any local counsel deemed

necessary, search fees, filing and recording fees, documentation fees,

appraisal fees, travel expenses, and other fees) arising in connection with the

preparation, execution, and delivery of this Amendment, the Guaranty, and all

related documents.

8.             LIMITED EFFECT.  In the event of a conflict between the terms

and provisions of this Amendment and the terms and provisions of the Loan

Agreement, the terms and provisions of this Amendment shall govern.  In all other respects, the Loan Agreement,

as amended and supplemented hereby, shall remain in full force and effect.

9.             COUNTERPARTS; EFFECTIVENESS.  This Amendment may be executed in any number

of counterparts and by different parties on separate counterparts, each of

which when so executed and delivered shall be deemed to be an original.  All such counterparts, taken 

 

13

 

together, shall

constitute but one and the same Amendment. 

This Amendment shall become effective upon the execution of a

counterpart of this Amendment by each of the parties hereto.

***

[remainder of this page

intentionally left blank]

***

 

 

14

 

IN WITNESS WHEREOF, the

parties hereto have executed this Amendment as of the date first set forth

above.

	

  COMERICA

  BANK  —

  CALIFORNIA,

  
	

  successor

  by merger to Imperial Bank

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  US

  SEARCH.COM, INC.,

  
	

  a

  Delaware corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  PROFESSIONAL RESOURCE SCREENING,

  INC., formerly known as US SEARCH SCREENING SERVICES, INC.,

  
	

  a Delaware

  corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  

 

15

 

EXHIBIT D

COMPLIANCE CERTIFICATE

TO:                                                                            COMERICA

BANK - CALIFORNIA

FROM:                                                         US

SEARCH.COM, INC.

The undersigned

authorized officer of US SEARCH.COM, INC. hereby certifies that in accordance

with the terms and conditions of the Loan and Security Agreement between

Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for

the period ending

                                    

with all required covenants, including without limitation the ongoing

registration of intellectual property rights in accordance with Section 6.8,

except as noted below and (ii) all representations and warranties of Borrower

stated in the Agreement are true and correct in all material respects as of the

date hereof.  Attached herewith are the

required documents supporting the above certification.  The Officer further certifies that these are

prepared in accordance with Generally Accepted Accounting Principles (GAAP) and

are consistently applied from one period to the next except as explained in an

accompanying letter or footnotes.

Please

indicate compliance status by circling Yes/No under “Complies” column.

	

  Reporting

  Covenant

  	

   

  	

   

  	

  Required

  	

   

  	

   

  	

  Complies

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Monthly financial statements*

  	

   

  	

  Monthly within 30 days

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  Annual (CPA Audited)

  	

   

  	

  FYE within 120 days

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  10K and 10Q

  	

   

  	

  (as applicable)

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  A/R & A/P Agings, Borrowing Base Cert

  	

   

  	

  With each Borrowing Base Advance

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  A/R Audit

  	

   

  	

  Initial and Semi-annual

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  IP Report

  	

   

  	

  Quarterly within 30 days

  	

   

  	

  Yes

  	

   

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Financial

  Covenant

  	

   

  	

   

  	

  Required

  	

   

  	

  Actual

  	

   

  	

  Complies

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Maintain on a Monthly  Basis:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1.Minimum Liquidity

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  2.EBITDA Negative Variance

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  3.Monthly Cash Burn

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  4.Operating Performance

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  5.Minimum EBITDA

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

  6.Debt/Tangible Net Worth Ratio

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Comments

  Regarding Exceptions:  See Attached.

  	

   

  	

  BANK

  USE ONLY

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Received by:

  	

   

  
	

  Sincerely,

  	

   

  	

  AUTHORIZED SIGNER

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Date:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Verified:

  	

   

  
	

  SIGNATURE

  	

   

  	

  AUTHORIZED SIGNER

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Date:

  	

   

  
	

  TITLE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Compliance Status

  	

   

  	

   

  	

   

  	

  Yes

  	

   

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  DATE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
																					

 

*Until Borrower implements CVV-2, Borrower shall include within its

monthly financial reporting to Bank, Pequot Capital’s written certification

that Borrower is observing a “No Questions Asked” refund policy for billing

disputes involving either fraud or customer dissatisfaction.

 

16

 

EXHIBIT E

BORROWING BASE

CERTIFICATE

Borrowers:  US SEARCH.COM, INC., and PROFESSIONAL

RESOURCE SCREENING, INC.

Lender:  Comerica Bank — California

Commitment Amount:  $1,000,000

 

	

  ACCOUNTS RECEIVABLE

  	

   

  	

   

  	

   

  	

   

  
	

  1.  Accounts

  Receivable Book Value as of 

  	

   

  	

   

  	

  $

  	

   

  
	

  2.  Additions

  (please explain on reverse)

  	

   

  	

   

  	

  $

  	

   

  
	

  3.  TOTAL

  ACCOUNTS RECEIVABLE

  	

   

  	

   

  	

  $

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)

  	

   

  	

   

  	

   

  	

   

  
	

  4.  Amounts

  over 90 days from invoice date

  	

  $

  	

   

  	

   

  	

   

  
	

  5.  Balance of

  25% over 90 day accounts

  	

  $

  	

   

  	

   

  	

   

  
	

  6.  Concentration

  Limits

  	

   

  	

   

  	

   

  	

   

  
	

  7.  Foreign

  Accounts

  	

  $

  	

   

  	

   

  	

   

  
	

  8.  Governmental

  Accounts

  	

  $

  	

   

  	

   

  	

   

  
	

  9.  Contra

  Accounts

  	

  $

  	

   

  	

   

  	

   

  
	

  10.       Demo

  Accounts

  	

  $

  	

   

  	

   

  	

   

  
	

  11.       Intercompany/Employee

  Accounts

  	

  $

  	

   

  	

   

  	

   

  
	

  12.       Other

  (please explain on reverse)

  	

  $

  	

   

  	

   

  	

   

  
	

  13.       TOTAL

  ACCOUNTS RECEIVABLE DEDUCTIONS

  	

   

  	

   

  	

  $

  	

   

  
	

  14.       Eligible

  Accounts (#3 minus #13)

  	

   

  	

   

  	

  $

  	

   

  
	

  15.       LOAN

  VALUE OF ACCOUNTS (    % of #14)

  	

   

  	

   

  	

  $

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  BALANCES

  	

   

  	

   

  	

   

  	

   

  
	

  16.       Maximum

  Loan Amount

  	

   

  	

   

  	

  $

  	

  1,000,000

  
	

  17.       Total

  Funds Available [Lesser of #16 or #15]

  	

   

  	

   

  	

  $

  	

   

  
	

  18.       Present

  balance owing on Borrowing Base Line

  	

   

  	

   

  	

  $

  	

   

  
	

  19.       RESERVE

  POSITION (#17 minus #18 and #19)

  	

   

  	

   

  	

  $

  	

   

  

 

The

undersigned represents and warrants that the foregoing is true, complete and

correct, and that the information reflected in this Borrowing Base Certificate

complies with the representations and warranties set forth in the Loan and Security

Agreement between the undersigned and Comerica Bank - California.

	

  US

  SEARCH.COM, INC.

  	

   

  	

  PROFESSIONAL

  RESOURCE

  
	

   

  	

   

  	

  SCREENING,

  INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

  Authorized

  Signer

  	

   

  	

   

  	

  Authorized

  Signer

  

 

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]