EXHIBIT 10.21
LOAN AGREEMENT
This is an agreement executed on May 1, 2002 between CENTENE
CORPORATION, a Delaware corporation, as Borrower, and LASALLE BANK NATIONAL
ASSOCIATION, as Lender.
In consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, Borrower and Lender
agree as follows:
1. EFFECTIVE DATE. This Agreement is effective May 1, 2002.
2. DEFINITIONS AND RULES OF CONSTRUCTION.
2.1. LISTED DEFINITIONS. Capitalized terms defined in the Glossary
attached hereto as Exhibit 2.1 shall have such defined meanings
wherever used in this Agreement and the other Loan Documents.
2.2. OTHER DEFINITIONS. If a capitalized term used in this
Agreement is not defined in the Glossary, it shall have such meaning as
defined elsewhere herein, or if not defined elsewhere herein, the
meaning defined in the UCC.
2.3. REFERENCES TO COVERED PERSONS. The words Covered Person, a
Covered Person, any Covered Person, each Covered Person and every
Covered Person refer to Borrower and each of its Subsidiaries
separately, including Centene Management Corporation, a Wisconsin
corporation, Centene Corporation of Texas, a Texas corporation, Managed
Health Services Insurance Corp., a Wisconsin corporation, Superior
HealthPlan, Inc., a Texas corporation, Coordinated Care Corporation
Indiana, Inc., an Indiana corporation, Managed Health Services
Illinois, Inc., an Illinois corporation, MHS Consulting Corporation, a
Wisconsin corporation, MHS Behavioral Health of Texas, Inc., a Texas
corporation, and Bankers Reserve Life Insurance Company of Wisconsin, a
Wisconsin insurance company. The words Covered Persons refer to
Borrower and its Subsidiaries, including each of the Persons
specifically mentioned in the prior sentence, collectively.
2.4. ACCOUNTING TERMS. Unless the context otherwise requires,
accounting terms herein that are not defined herein shall be calculated
under GAAP. All financial measurements contemplated hereunder
respecting Borrower shall be made and calculated for Borrower and all
of its Subsidiaries, if any, unless otherwise expressly provided
otherwise herein, on a consolidated and consolidating basis in
accordance with GAAP.
2.5. MEANING OF SATISFACTORY. Wherever herein a document or matter
is required to be satisfactory to Lender, unless expressly stated
otherwise such document must be satisfactory to Lender in both form and
substance, and unless expressly stated otherwise, Lender shall have the
absolute discretion to determine whether the document or matter is
satisfactory.
2.6. COMPUTATION OF TIME PERIODS. In the computation of periods of
time from a specified date to a later specified date, the word from
shall mean from and including and the words to and until shall each
mean to but excluding. Periods of days referred to in this Agreement
shall be counted in calendar days unless Business Days are expressly
prescribed. References in this Agreement to months and years shall be
to calendar months and calendar years unless otherwise specified, and
periods counted as a number of months or years from a particular date
shall be measured to the numerically corresponding date of each
following month or year, as applicable.
2.7. GENERAL. Unless the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and vice
versa; (ii) references to any Person include such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement; (iii) references to one gender include all
genders; (iv) including is not limiting; (v) or has the inclusive
meaning represented by the phrase and/or; (vi) the words hereof,
herein, hereby, hereunder and similar terms in this Agreement refer to
this Agreement as a whole, including its Exhibits, and not to any
particular provision of this Agreement; (vii) the word Section or
section and Page or page refer to a section or page, respectively, and
the word Exhibit refers to an Exhibit to this Agreement unless it
expressly refers to something else; (viii) reference to any agreement
(including this Agreement and any other Loan Document or other
agreement, document or instrument defined herein), document or
instrument means such agreement, document or instrument as amended,
modified or restated and in effect from time to time in accordance with
the terms thereof and, if applicable, the terms hereof; and (ix)
general and specific references to any Law means such Law as amended,
modified, codified or reenacted, in whole or in part, and in effect
from time to time. Section captions and the Table of Contents are for
convenience only and shall not affect the interpretation or
construction of this Agreement or the other Loan Documents.
3. LENDER'S COMMITMENTS. Subject to the terms and conditions hereof, and
in reliance upon the representations and warranties of Borrower herein, Lender
makes the following commitments to Borrower:
3.1. REVOLVING COMMITMENT.
3.1.1. REVOLVING ADVANCES. Subject to the limitations in
Section 3.1.2 and elsewhere herein, Lender will make available
from the Effective Date to the Maturity Date, a Revolving
Commitment of $25,000,000, available as Revolving Advances
made from time to time as provided herein. Subject to the
limitations in Section 3.1.2 and elsewhere herein, payments
and prepayments that are applied to reduce the Revolving Loan
may be reborrowed. At any time that there is an Existing
Default, the Revolving Commitment may be canceled as provided
in Section 16.3.
3.1.2. LIMITATIONS ON REVOLVING ADVANCES. No Revolving
Advance will be made which would result in the Revolving Loan
exceeding the Maximum Available Amount and no Revolving
Advance will be made on or after the Maturity Date. Lender
may, however, in its absolute discretion make such Revolving
Advances, but shall not be deemed by doing so to have
increased the Maximum Available Amount and shall not be
obligated to make any such Revolving Advances thereafter. The
Maximum Available Amount on any date shall be a Dollar amount
equal to the amount of (i) the Revolving Commitment minus (ii)
the Letter of Credit Exposure on such date (except to the
extent that such Revolving Advance will be used immediately to
reimburse Lender for unreimbursed draws on a Letter of
Credit).
3.1.3. REVOLVING NOTE. The obligation of Borrower to repay
the Revolving Loan shall be evidenced by a promissory note
payable to the order of Lender in a maximum principal amount
equal to the amount of the Revolving Commitment and otherwise
satisfactory to Lender.
3.2. LETTER OF CREDIT COMMITMENT. Lender commits to issue
commercial and standby letters of credit for the account of Borrower
from time to time from the Effective Date to the Maturity Date, but
only in connection with transactions satisfactory to Lender and only if
the Letter of Credit Exposure will not as a result of such issuance
exceed the lesser of (i) $10,000,000 and (ii)
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any excess of the Revolving Commitment over the Revolving Loan. The
expiration date of any Letter of Credit will not be more than one year
after its issuance date and in no event will be later than the Maturity
Date unless Borrower deposits with Lender cash collateral satisfactory
to Lender to secure reimbursement by Borrower of all amounts drawn on
such Letter of Credit.
4. INTEREST.
4.1. INTEREST ON DRAWS ON LETTERS OF CREDIT. Borrower shall pay
interest on the unreimbursed amount of each draw on a Letter of Credit
at a rate per annum equal to the Adjusted Base Rate plus 3%.
4.2. ALTERNATIVE RATES AND INTEREST PERIODS. Each Loan shall bear
interest at either the Adjusted Base Rate or the Adjusted Eurodollar
Rate as designated by Borrower as provided herein. If Borrower
designates a Loan to be a Eurodollar Loan, Borrower shall also select
an Interest Period for it. Each Interest Period shall be either 30, 60,
or 90 days; provided that (i) every such Interest Period for an Advance
that will be a Eurodollar Loan shall commence on the date of the
Advance or on the date of conversion or continuation of any Loan as a
Eurodollar Loan; (ii) if any Interest Period would otherwise expire on
a day of a calendar month which is not a Business Day, then such
Interest Period shall expire on the next succeeding Business Day in
that calendar month; provided, however, that if the next succeeding
Business Day would be in the following calendar month, it shall expire
on the first preceding Business Day; (iii) any Interest Period that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month; (iv) no Interest Period shall extend beyond the
Maturity Date. A Eurodollar Loan shall bear interest at the Adjusted
Eurodollar Rate throughout the applicable Interest Period designated by
Borrower.
4.3. ADJUSTED BASE RATE. The Adjusted Base Rate for any Loan shall
be the Prime Rate (which will fluctuate as provided in Section 4.8)
plus the applicable Prime Rate Increment determined from time to time
as provided in Section 4.5.
4.4. ADJUSTED EURODOLLAR RATE. The Adjusted Eurodollar Rate for any
Loan shall be the Eurodollar Rate (which shall be determined before the
beginning of the Interest Period for such Loan as provided herein and
shall apply throughout such Interest Period) plus the applicable
Eurodollar Increment determined from time to time as provided in
Section 4.5.
4.5. PRIME RATE INCREMENTS AND EURODOLLAR INCREMENTS. The
applicable Prime Rate Increment and applicable Eurodollar Increment
shall be determined by Lender on the Effective Date and quarterly
thereafter in accordance with the following table based upon the ratio
of (i) Borrower's Senior Indebtedness (as of the last day of Borrower's
quarter most recently ended) to (ii) the product of (a) Borrower's
EBITDA for the quarter most recently ended multiplied by (b) four:
RATIO OF SENIOR INDEBTEDNESS TO PRIME RATE INCREMENT EURODOLLAR INCREMENT
EBITDA
Less than or equal to 1.00 to 1.00 0% 1.50%
Greater than 1.00 to 1.00 and 0% 2.00%
less than or equal to 1.50 to
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1.00
Greater than 1.50 to 1.00 0% 2.50%
Any change in the Prime Rate Increment and Eurodollar Increment shall
become applicable on the first day following the day when Borrower
delivers to Lender its Financial Statements for its fiscal quarter just
ended as required in Section 13.15.2. If Borrower does not deliver its
quarterly Financial Statements to Lender within the period required by
Section 13.15.2, the highest possible Prime Rate Increment and
Eurodollar Increment shall become applicable as of the last day of such
period and shall remain applicable until Borrower delivers such
Financial Statements to Lender.
4.6. CONVERSIONS AND CONTINUATIONS. Borrower may (i) at any time
convert some or all of an Adjusted Base Rate Loan to a Eurodollar Loan,
or (ii) at the end of any Interest Period of a Eurodollar Loan,
continue some or all of such Eurodollar Loan as a Eurodollar Loan for
an additional Interest Period or convert some or all of such Eurodollar
Loan to an Adjusted Base Rate Loan. To cause any conversion or
continuation, Borrower shall give Lender, prior to 11:00 a.m., Chicago
time, three Business Days prior to the date the conversion or
continuation is to be effective, a written request (which may be
mailed, personally delivered or telecopied as provided in Section 21.1)
(a) specifying the Loan to be converted or continued in whole or in
part and the amount which is to be converted and the amount which is to
be continued, (b) in the case of a conversion, specifying whether the
amount converted is to be a Eurodollar Loan or an Adjusted Base Rate
Loan upon the conversion, and (c) in the case of conversion to or
continuation of a Eurodollar Loan, specifying the Interest Period
therefor. If such notice is not made by 11:00 a.m. Chicago time on the
third Business Day preceding the last day of the Interest Period of a
Eurodollar Loan, then Borrower shall be deemed to have timely given a
notice to convert the Loan to an Adjusted Base Rate Loan. A conversion
to or continuation of a Eurodollar Loan shall become effective only on
the day following the last day of the current Interest Period.
4.7. TIME OF ACCRUAL. Interest shall accrue on all principal
amounts outstanding from the date when first outstanding to the date
when no longer outstanding. Amounts shall be deemed outstanding until
payments are applied thereto as provided herein.
4.8. COMPUTATION. Interest accruing at the Adjusted Eurodollar Rate
shall be computed for the actual days elapsed over a year deemed to
consist of 360 days. Interest accruing at the Adjusted Base Rate shall
be computed for the actual days elapsed over a year deemed to consist
of 360 days. Interest rates that are based on the Prime Rate shall
change simultaneously with any change in the Prime Rate and such rates
shall be effective for the entire day on which any Prime Rate change
becomes effective.
4.9. RATE AFTER MATURITY. Borrower shall pay interest on the Loans
after their Maturity, and (at the option of Lender) on the Loans and on
the other Loan Obligations after the occurrence of an Event of Default,
at a rate per annum equal to the Adjusted Base Rate plus 3%.
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5. FEES.
5.1. UNUSED FEE. Borrower shall pay to Lender an Unused Fee calculated
by applying the daily equivalent of 0.25% to the Unused Revolving
Commitment on each day during the period from the Effective Date to the
Maturity Date. The Unused Revolving Commitment on any day shall be the
amount of the Revolving Commitment minus the sum of the Revolving Loan
and the Letter of Credit Exposure. The Unused Fee shall be payable
quarterly in arrears, commencing on the first day of the first calendar
quarter beginning after the Effective Date and continuing on the first
day of each calendar quarter thereafter and on the Maturity Date.
5.2. LETTER OF CREDIT FEES. Borrower shall pay to Lender a Letter
of Credit Fee for each Letter of Credit issued by Lender. The Letter of
Credit Fee for each Letter of Credit shall be calculated by applying
the daily equivalent of 1.00% per annum to the undrawn amount available
under such Letter of Credit as of each day such Letter of Credit is
outstanding commencing when such Letter of Credit is issued by Lender.
Borrower shall also pay to Lender Lender's other customary fees for
issuance, amendment, or renewal of a Letter of Credit and, as Lender
and Borrower may agree with respect to each Letter of Credit, for each
negotiation of a draft drawn under such Letter of Credit. The Letter of
Credit Fee due for any Letter of Credit shall be payable in advance on
its issuance date and on the first day of the first calendar quarter
beginning after such Letter of Credit is issued and on each anniversary
thereof while such Letter of Credit is outstanding. Lender's customary
fees for processing draws on Letters of Credit and the like shall be
payable in accordance with Lender's practice at the time.
5.3. CALCULATION OF FEES. All of the foregoing fees and all other
fees payable to Lender that are based on an annual percentage shall be
calculated on the basis of a year deemed to consist of 360 days and for
the actual number of days elapsed.
6. SCHEDULED PAYMENTS.
6.1. MATURITY DATE. Borrower shall repay the Revolving Loan and all
unpaid accrued interest thereon on May 1, 2003.
6.2. INTEREST PAYMENTS BEFORE MATURITY DATE. While a Loan is an
Adjusted Base Rate Loan, Borrower shall pay interest accrued thereon
monthly in arrears, beginning on the first day of the first calendar
month following the Effective Date, and continuing on the first day of
each calendar month thereafter until the Maturity Date. While a Loan is
a Eurodollar Loan, Borrower shall, until the Maturity Date, pay
interest accrued thereon in arrears at the end of the applicable
Interest Period.
6.3. REIMBURSEMENT OBLIGATIONS. Borrower hereby unconditionally
agrees to immediately pay to Lender on demand at the Lending Office all
amounts required to pay all drafts drawn under all Letters of Credit
issued for the account of Borrower and all reasonable expenses incurred
by Lender in connection with such Letters of Credit and, in any event
and without demand, to remit to Lender (which may be through obtaining
Advances if permitted under Section 3.1.2) sufficient funds to pay all
Obligations arising under any Letter of Credit issued for the account
of Borrower.
6.4. AUTOMATIC DEBIT. After the occurrence of an Event of Default,
Lender may debit against the Centene Management Company Master Account,
Account Number 5800366386, or any successor account, the amount of each
payment hereunder on the date due.
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7. PREPAYMENTS.
7.1. VOLUNTARY PREPAYMENTS. Subject to the limitations of this
Section, Borrower may wholly prepay any Base Rate Loan or Eurodollar
Loan that is included in the Revolving Loan at any time and may make a
partial prepayment thereon from time to time, without penalty or
premium, but only if (i) Borrower pays any accrued interest on the
amount prepaid at the time of such prepayment, and (ii) Borrower pays
any amount that is due under Section 17.4 as a consequence of the
prepayment. All such prepayments, unless otherwise expressly stated in
writing by Borrower to Lender prior to the making of such prepayment,
will be deemed made on Base Rate Loans included in the Revolving Loan
until they are reduced to zero and then to Eurodollar Loans included in
the Revolving Loan (and all penalties and premiums due hereunder in
connection therewith) until they are reduced to zero.
7.2. MANDATORY PREPAYMENTS WHEN OVER-ADVANCES EXIST. If at any time
the Revolving Loan exceeds the Maximum Available Amount, whether as a
result of optional Revolving Advances by Lender as contemplated in
Section 3.1.2, or otherwise, Borrower shall on demand by Lender make a
prepayment in the amount of the excess. Each such prepayment will be
applied by Lender first to reduce pro rata all the Revolving Loans
included in the Revolving Loan that are Adjusted Base Rate Loans, and
then to reduce (in the order of the maturities of their respective
Interest Periods) the Revolving Loans included in the Revolving Loan
that are Eurodollar Loans.
8. MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.
8.1. PAYMENT REQUIREMENT. Unless expressly provided to the contrary
elsewhere herein, Borrower shall make each payment on the Loan
Obligations to Lender as required under the Loan Documents at the
Lending Office. All such payments shall be made in Dollars on the date
when due, without deduction, set-off or counterclaim.
8.2. APPLICATION OF PAYMENTS AND PROCEEDS. All payments received by
Lender in immediately available funds at or before 1:00 p.m., Chicago
time, on a Business Day will be applied to the relevant Loan Obligation
on the same day. Such payments received on a day that is not a Business
Day or after 1:00 p.m. on a Business Day will be applied to the
relevant Loan Obligation on the next Business Day. For purposes of
interest calculation only, (i) a payment by check, draft or other
instrument received at or before 1:00 p.m., Chicago time, on a Business
Day shall be deemed to have been applied to the relevant Loan
Obligation on the second following Business Day, (ii) a payment by
check, draft or other instrument received on a day that is not a
Business Day or after 1:00 p.m., Chicago time, on a Business Day shall
be deemed to have been applied to the relevant Loan Obligation on the
third following Business Day, (iii) a payment in cash or by wire
transfer received at or before 1:00 p.m., Chicago time, on a Business
Day shall be deemed to have been applied to the relevant Loan
Obligation on the Business Day when it is received, and (iv) a payment
in cash or by wire transfer received on a day that is not a Business
Day or after 1:00 p.m., Chicago time, on a Business Day shall be deemed
to have been applied to the relevant Loan Obligation on the next
Business Day.
8.3. RETURNED INSTRUMENTS. If a payment is made by check, draft or
other instrument and the check, draft or other instrument is returned
unpaid, the application of the payment to the Loan Obligations will be
reversed and will be treated as never having been made.
8.4. COMPELLED RETURN OF PAYMENTS OR PROCEEDS. If Lender is for any
reason compelled to surrender any payment or any proceeds of any
Collateral because such payment or the application of such proceeds is
for any reason invalidated, declared fraudulent, set aside, or
determined to be
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void or voidable as a preference, an impermissible setoff, or a
diversion of trust funds, then this Agreement and the Loan Obligations
to which such payment or proceeds was applied or intended to be applied
shall be revived as if such application was never made; and Borrower
shall be liable to pay to Lender, and shall indemnify Lender for and
hold Lender harmless from any loss with respect to, the amount of such
payment or proceeds surrendered. This Section shall be effective
notwithstanding any contrary action that Lender may take in reliance
upon its receipt of any such payment or proceeds. Any such contrary
action so taken by Lender shall be without prejudice to Lender's rights
under this Agreement and shall be deemed to have been conditioned upon
the application of such payment or proceeds having become final and
irrevocable. The provisions of this Section shall survive termination
of the Commitments, and the payment and satisfaction of all of the Loan
Obligations.
8.5. DUE DATES NOT ON BUSINESS DAYS. If any payment required
hereunder becomes due on a date that is not a Business Day, then such
due date shall be deemed automatically extended to the next Business
Day; provided, however, that if the next Business Day would be in the
next calendar month, such payment shall instead be due on the
immediately preceding Business Day.
9. PROCEDURE FOR OBTAINING ADVANCES AND LETTERS OF CREDIT.
9.1. REQUESTS FOR REVOLVING ADVANCES. Borrower may request a
Revolving Advance (to the extent such an Advance is available
hereunder) by submitting a request therefor to Lender that meets the
requirements in Section 9.6. Every request for a Revolving Advance
shall be irrevocable. A request for a Revolving Advance received by
Lender on a day that is not a Business Day or that is received by
Lender after 1:00 p.m. (Chicago time) on a Business Day shall be
treated as having been received by Lender at 1:00 p.m. (Chicago time)
on the next Business Day. Provided that all conditions precedent herein
to a requested Revolving Advance have been satisfied, Lender will make
the amount of such requested Revolving Advance available to Borrower on
the requested date for the Revolving Advance in immediately available
funds in Dollars at the Lending Office. Such funds will be deposited in
an account of Borrower at the Lending Office unless Borrower gives
Lender contrary specific disbursement instructions satisfactory to
Lender.
9.2. LENDER'S RIGHT TO MAKE OTHER REVOLVING ADVANCES. Lender shall
have the right to make Revolving Advances at any time and from time to
time to cause timely payment of any of the Loan Obligations. Lender
will give notice to Borrower after any such Revolving Advance is made.
Any such Revolving Advance will be an Adjusted Base Rate Loan. If
Lender is obligated to reimburse or pay to any creditor of Borrower any
amount in order to (i) obtain a release of such creditor's Security
Interest in any of the Collateral, or (ii) otherwise satisfy Borrower's
obligations to such creditor to the extent not irrevocably satisfied by
the initial Revolving Advance, then Lender may make Revolving Advances
for that purpose.
9.3. LETTERS OF CREDIT. Borrower may request the issuance of a
Letter of Credit by submitting an issuance request to Lender that meets
the requirements of Section 9.7 and executing the reimbursement
agreement and other letter of credit documents required under Section
11.3.1 no less than five Business Days prior to the requested issue
date for such Letter of Credit.
9.4. AMOUNT, NUMBER, AND USE OF REVOLVING ADVANCES. No Revolving
Advance will be made unless it is a whole multiple of $10,000 and not
less than $100,000 in the case of a Eurodollar Advance, or a whole
multiple of $1,000 and not less than $1,000 in the case of a Base Rate
Advance. On any one day, no more than one Revolving Advance will be
made. Advances will only be made for the purposes permitted in Section
13.1. No more than five Eurodollar Loans with different Interest
Periods may be outstanding at any one time.
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9.5. EACH REQUEST FOR A REVOLVING ADVANCE A CERTIFICATION. Each
submittal by Borrower of a request for a Revolving Advance shall
constitute a certification by Borrower that (i) there is no Existing
Default, (ii) the Representations and Warranties are then true and
correct and will be true on the Date of the Revolving Advance, as if
then made, and (iii) all conditions herein and in the other Loan
Documents to the making of the requested Revolving Advance have been
satisfied.
9.6. REQUIREMENTS FOR EVERY REQUEST FOR AN ADVANCE. A request to
Lender for an Advance may be oral or in writing (but if oral shall be
confirmed in writing), shall be from a Borrowing Officer, and shall
specify the amount of the Advance to be made, the date when the Advance
is requested to be made, whether the Advance is to be a Eurodollar Loan
or an Adjusted Base Rate Loan, and the Interest Period therefor if the
Advance is to be a Eurodollar Loan. If a request for an Advance does
not fully meet the foregoing requirements, Lender may reject it and not
treat it as a request for a Advance. A request for a Eurodollar Advance
must be given prior to 11:00 a.m., Chicago time, at least three
Business Days prior to the date of Advance for such Eurodollar Advance.
A request for a Base Rate Advance must be given prior to 11:00 a.m.,
Chicago time, on the date of Advance for such Base Rate Advance.
9.7. REQUIREMENTS FOR EVERY REQUEST FOR ISSUANCE OF A LETTER OF
CREDIT. Only a written request (which may be mailed, personally
delivered or telecopied as provided in Section 21.1) from a Borrowing
Officer to Lender that specifies the amount, the requested issue date
and the beneficiary of the requested Letter of Credit and other
information necessary for its issuance shall be treated as an issuance
request for purposes hereof.
9.8. EXONERATION OF LENDER. Lender will not incur any liability to
Borrower for treating a request that meets the express requirements of
Section 9.6 or Section 9.7 as a request for an Advance or a request for
issuance of a Letter of Credit, as applicable, if Lender believes in
good faith that the Person making the request is a Borrowing Officer.
Lender will not incur any liability to Borrower for failing to treat
any such request as a request for an Advance or a request for issuance
of a Letter of Credit, as applicable, if Lender believes in good faith
that the Person making the request is not a Borrowing Officer.
10. SECURITY. As security for payment and performance of the Loan
Obligations, Borrower shall on the Execution Date execute and deliver, or cause
to be executed and delivered, to Lender a stock pledge agreement from Borrower
satisfactory to Lender granting to Lender a Security Interest under the UCC in
all of capital stock of Borrower in its now owned or hereafter acquired
Subsidiaries, and all proceeds thereof, subject only to Permitted Security
Interests that exist on the Execution Date and affect the foregoing, and shall
deliver to Lender original stock certificates evidencing the stock so pledged,
together with stock powers duly executed in blank. All of the Loan Obligations
are hereby cross-collateralized. Any property of any Borrower in which Lender
has a Security Interest to secure the repayment of any of the Loan Obligations
are deemed to secure the repayment of each of the other Loan Obligations,
whether or not the documents giving rise to such Security Interest so provide.
At the request of Lender, Borrower agrees to execute and deliver to Lender, or
cause to be executed and delivered to Lender, such documents and agreements
(including without limitation amendments to existing Loan Documents), and shall
take or cause to be taken such actions, as Lender deems necessary to carry out
the purpose and intent of this paragraph. Lender may, either before or after an
Event of Default, exchange, waive or release the Security Interests in any of
the Collateral, or in Lender's absolute discretion permit Borrower to substitute
any real or personal property for any of the Collateral, without affecting the
Loan Obligations or Lender's right to take any other action with respect to any
other Collateral.
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11. CONDITIONS.
11.1. CONDITIONS TO INITIAL ADVANCES. Lender will have no obligation
to fund the initial Revolving Advance or any subsequent Revolving
Advance unless:
11.1.1. LISTED DOCUMENTS AND OTHER ITEMS. Lender has received
on or before the Effective Date all of the documents and other
items listed or described in Exhibit 11.1.1 hereto as being
delivered or executed on or before the Execution Date, with
each being satisfactory to Lender and (as applicable) duly
executed and (also as applicable) sealed, attested,
acknowledged, certified, or authenticated.
11.1.2. REPRESENTATIONS AND WARRANTIES. The Representations
and Warranties are true and correct as of the time of such
Advance and with the same force and effect as if made at such
time.
11.1.3. NO DEFAULT. There is no Existing Default and no
Default or Event of Default will occur as a result of the
making of the Advance or Borrower's use of the proceeds
thereof.
11.1.4. PERFECTION OF SECURITY INTERESTS. Every Security
Interest and assignment required to be granted or made by
Borrower under Section 10 has been perfected and is, except as
to applicable Permitted Security Interests or as otherwise
satisfactory to Lender, a first priority Security Interest.
11.1.5. PAYMENT OF FEES. Borrower, on or before the date of
the Advance, has paid and reimbursed to Lender, or
concurrently with such Advance will pay and reimburse to
Lender, all fees, costs and expenses that are payable or
reimbursable to Lender hereunder.
11.1.6. PENDING MATERIAL PROCEEDINGS. There are no pending
Material Proceedings involving Borrower.
11.1.7. NO MATERIAL ADVERSE CHANGE. There has not been any
change since the date of the Initial Financial Statements
which has had or is reasonably likely to have a Material
Adverse Effect.
11.1.8. OTHER ITEMS. Lender has received such other consents,
approvals, opinions, certificates or documents as it
reasonably deems necessary.
11.2. CONDITIONS TO SUBSEQUENT ADVANCES. Lender will have no
obligation to fund any Advance after the initial Advance unless:
11.2.1. CONDITIONS TO INITIAL ADVANCES. All of the conditions
in Section 11.1 have been and remain satisfied.
11.2.2. REPRESENTATIONS AND WARRANTIES. The Representations
and Warranties are true and correct as of the time of such
Advance.
11.2.3. NO DEFAULT. There is no Existing Default and no
Default or Event of Default will occur as a result of the
making of the Advance or Borrower's use of the proceeds
thereof.
9
11.2.4. NO MATERIAL ADVERSE CHANGE. Since the date of the
most recent prior Advance nothing has occurred which has had
or is reasonably likely to have a Material Adverse Effect.
11.3. CONDITIONS TO ISSUANCE OF LETTERS OF CREDIT. No Letter of
Credit will be issued unless at the time of such issuance:
11.3.1. REIMBURSEMENT AGREEMENT. Borrower has executed and
delivered to Lender a Master Letter of Credit Agreement and
Application for Standby Letter of Credit satisfactory to
Lender under which Borrower undertakes to reimburse to Lender
on demand the amount of each draw on such Letter of Credit,
together with interest from the date of the draw. In the event
of a direct and irreconcilable conflict between the terms of
this Agreement and the terms of the documents executed by
Borrower in connection with the issuance of any Letter of
Credit, the terms of this Agreement will control.
11.3.2. NO PROHIBITIONS. No order, judgment or decree of any
Governmental Authority exists which purports by its terms to
enjoin or restrain Lender from issuing such Letter of Credit,
and no Law or request or directive (whether or not having the
force of law) from any Governmental Authority with
jurisdiction over Lender shall exist which prohibits, or
requests that Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular, or
imposes upon Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which
Lender is not otherwise compensable by Borrower hereunder).
11.3.3. CONDITIONS TO INITIAL ADVANCES. All of the conditions
in Section 11.1 have been and remain satisfied.
11.3.4. REPRESENTATIONS AND WARRANTIES. The Representations
and Warranties are true and correct as of the time of the
issuance of such Letter of Credit.
11.3.5. NO DEFAULT. There is no Existing Default and no
Default or Event of Default will occur as a result of the
issuance of the Letter of Credit or the incurrence of
Borrower's reimbursement obligations with respect thereto.
11.3.6. NO MATERIAL ADVERSE CHANGE. Since the date of the
most recent prior Advance or issuance of a Letter of Credit
nothing has occurred which has had or is reasonably likely to
have a Material Adverse Effect.
12. REPRESENTATIONS AND WARRANTIES. Except as otherwise described in the
Disclosure Schedule that is attached hereto as Exhibit 12, Borrower represents
and warrants to Lender as follows (and such representations and warranties shall
survive the execution of each of the Loan Documents and the making of every
Advance):
12.1. ORGANIZATION AND EXISTENCE. Each Covered Person is duly
organized and existing in good standing under the Laws of the state of
its organization, is duly qualified to do business and is in good
standing in every state where the nature or extent of its business or
properties require it to be qualified to do business, except where the
failure to so qualify will not have a Material Adverse Effect. Each
Covered Person has the power and authority to own its properties and
carry on its business as now being conducted.
12.2. AUTHORIZATION. Each Covered Person is duly authorized to
execute and perform every Loan Document to which such Covered Person is
a party, and Borrower is duly authorized to
10
borrow hereunder, and execution, delivery and performance under this
Agreement and the other Loan Documents has been duly authorized. No
consent, approval or authorization of, or declaration or filing with,
any Governmental Authority, and no consent, approval or authorization
by any other Person, is required in connection with Borrower's
execution, delivery or performance of this Agreement and the other Loan
Documents, except for those already duly obtained, copies of which have
been delivered to Lender.
12.3. DUE EXECUTION. Every Loan Document to which a Covered Person
is a party has been executed on behalf of such Covered Person by a
legally competent Person duly authorized to do so.
12.4. ENFORCEABILITY OF OBLIGATIONS. Each of the Loan Documents to
which a Covered Person is a party constitutes the legal, valid and
binding obligation of such Covered Person, enforceable against such
Covered Person in accordance with its terms, except to the extent that
the enforceability thereof against such Covered Person may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting creditors' rights generally or by equitable principles of
general application.
12.5. BURDENSOME OBLIGATIONS. No Covered Person is a party to or
bound by any Contract or is subject to any provision in the Charter
Documents of such Covered Person which would, if performed by such
Covered Person, result in a Default or Event of Default either
immediately or within the reasonably foreseeable future.
12.6. LEGAL RESTRAINTS. Neither the execution and delivery of, nor
performance under, any Loan Document by a Covered Person will violate
or constitute a default under the Charter Documents of such Covered
Person, any Material Agreement of such Covered Person, or, to
Borrower's knowledge, any Material Law, or, except as expressly
contemplated or permitted in this Agreement, result in any Security
Interest being imposed on any of such Covered Person's property.
12.7. LABOR DISPUTES. There is no pending or, to Borrower's
knowledge, threatened union organization or recognition effort, strike,
work stoppage, material unfair labor practice claim or other material
labor dispute against or affecting any Covered Person or its employees
which has had or is reasonably likely to have a Material Adverse
Effect.
12.8. NO MATERIAL PROCEEDINGS. There are no pending or, to
Borrower's knowledge, threatened Material Proceedings involving a
Covered Person. None of the operations of any Covered Person are the
subject of any judicial or administrative complaint, order or
proceeding alleging the violation of any applicable Environmental Law
which might result in a Material Adverse Effect. None of the operations
of any Covered Person are the subject of investigation by any
Governmental Authority regarding the improper transportation, storage,
disposal, generation or release into the environment of any Hazardous
Material, the results of which are reasonably likely to have a Material
Adverse Effect, or reduce materially the value of the Collateral.
12.9. MATERIAL LICENSES. All Material Licenses have been obtained or
exist for each Covered Person.
12.10. COMPLIANCE WITH MATERIAL LAWS. To Borrower's knowledge, each
Covered Person is in compliance with all Material Laws. Without
limiting the generality of the foregoing, the operations and employee
compensation practices of every Covered Person comply in all material
respects with all applicable Material Laws.
11
12.11. S CORPORATION. There is no election in effect under Section
1362(a) of the Code for Borrower to be treated as an S Corporation as
defined in Section 1361(a) of the Code.
12.12. SUBSIDIARIES AND AFFILIATES. Borrower has no Affiliates who
are not individuals and has no Subsidiaries other than those listed in
item 12.12 of the Disclosure Schedule.
12.13. MARGIN STOCK. Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U), and none of the proceeds of any
Advance will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any
such margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation U. None of the
transactions contemplated by any Acquisition Documents will violate
Regulations T, U or X.
12.14. SECURITIES MATTERS. No proceeds of any Advance will be used to
acquire any security in a tender offer transaction which is subject to
Section 14(d) of the Securities Exchange Act of 1934, as amended.
12.15. FINANCIAL STATEMENTS. The Financial Statements of Borrower as
of December 31, 2001 as delivered to Lender by Borrower are complete
and correct in all material respects, have been prepared in accordance
with GAAP, and fairly reflect the financial condition, results of
operations and cash flows of Borrower and its Subsidiaries as of the
date and for the periods stated therein.
12.16. NO CHANGE IN CONDITION. Since the date of the Financial
Statements, nothing has occurred which has had or is reasonably likely
to have a Material Adverse Effect.
12.17. NO DEFAULTS. To Borrower's knowledge, no Covered Person has
breached or violated or otherwise defaulted under any Material
Agreement, or has defaulted with respect to any Material Obligation of
such Covered Person. There is no Existing Default.
12.18. INVESTMENTS. No Covered Person has any Investments in other
Persons except Permitted Investments.
12.19. INDEBTEDNESS. No Covered Person has any Indebtedness except
Permitted Indebtedness.
12.20. INDIRECT OBLIGATIONS. No Covered Person has any Indirect
Obligations except Permitted Indirect Obligations.
12.21. CAPITAL LEASES. No Covered Person has an interest as a lessee
under any Capital Lease, except for Capital Leases for capital assets
whose aggregate cost if purchased would not exceed $750,000.
12.22. TAX LIABILITIES; GOVERNMENTAL CHARGES. Each Covered Person has
filed or caused to be filed all tax reports and returns required to be
filed by it with any Governmental Authority, except where extensions
have been properly obtained or where failure to file is not reasonably
likely to have a Material Adverse Effect. Each Covered Person has paid
or made adequate provision for payment of all Taxes of such Covered
Person, except Taxes which are being diligently contested in good faith
by appropriate proceedings and as to which such Covered Person has
established adequate reserves in conformity with GAAP. No Security
Interest for any such Taxes has been filed and no claims are being
asserted with respect to any such Taxes which,
12
if adversely determined, has or is reasonably likely to have a Material
Adverse Effect. There are no material unresolved issues concerning any
Tax liability.
12.23. PENSION BENEFIT PLANS. All Pension Benefit Plans maintained by
each Covered Person or an ERISA Affiliate of such Covered Person
qualify under Section 401 of the Code and are in compliance with the
provisions of ERISA. Except with respect to events or occurrences which
do not have and are not reasonably likely to have a Material Adverse
Effect on such Covered Person:
12.23.1. PROHIBITED TRANSACTIONS. None of such Pension Benefit
Plans has participated in, engaged in or been a party to any
non-exempt prohibited transaction as defined in ERISA or the
Code, and no officer, director or employee of a Covered Person
or of an ERISA Affiliate of such Covered Person has committed
a breach of any of the responsibilities or obligations imposed
upon fiduciaries by Title I of ERISA.
12.23.2. CLAIMS. Other than normal claims for benefits, there
are no claims, pending or threatened, involving any such
Pension Benefit Plan by a current or former employee (or
beneficiary thereof) of such Covered Person or ERISA Affiliate
of such Covered Person, nor is there any reasonable basis to
anticipate any claims involving any such Pension Benefit Plan
which would likely be successfully maintained against such
Covered Person or ERISA Affiliate of such Covered Person.
12.23.3. REPORTING AND DISCLOSURE REQUIREMENTS. There are no
violations of any reporting or disclosure requirements with
respect to any such Pension Benefit Plan and none of such
Pension Benefit Plans has violated any applicable Law,
including ERISA and the Code.
12.23.4. ACCUMULATED FUNDING DEFICIENCY. No such Pension
Benefit Plan has (i) incurred an accumulated funding
deficiency (within the meaning of Section 412(a) of the Code),
whether or not waived; (ii) been a Pension Benefit Plan with
respect to which a Reportable Event (to the extent that the
reporting of such events to the PBGC within thirty days of the
occurrence has not been waived) has occurred and is
continuing; or (iii) been a Pension Benefit Plan with respect
to which there exist conditions or events which have occurred
that present a significant risk of termination of such Pension
Benefit Plan by the PBGC.
12.23.5. MULTI-EMPLOYER PLAN. All Multi-employer Plans to
which any Covered Person contributes or is obligated to
contribute are listed in item 12.23.5 of the Disclosure
Schedule. No Covered Person or ERISA Affiliate of such Covered
Person has received notice that any such Multi-employer Plan
is in reorganization or has been terminated within the meaning
of Title IV of ERISA, and no such Multi-employer Plan is
reasonably expected to be in reorganization or to be
terminated within the meaning of Title IV of ERISA.
12.24. WELFARE BENEFIT PLAN LIABILITIES. No Covered Person or ERISA
Affiliate of such Covered Person maintains a Welfare Benefit Plan that
has a liability which, if enforced or collected, is reasonably likely
to have a Material Adverse Effect. Each Covered Person and ERISA
Affiliate of such Covered Person has complied in all material respects
with the applicable requirements of Section 4980B of the Code
pertaining to continuation coverage as mandated by COBRA.
12.25. RETIREE BENEFITS. No Covered Person or ERISA Affiliate of such
Covered Person has an obligation to provide any Person with any
medical, life insurance, or similar benefit following
13
such Person's retirement or termination of employment (or to such
Person's beneficiary subsequent to such Person's death), including
obligations under COBRA, which if enforced or collected, is reasonably
likely to have a Material Adverse Effect.
12.26. OTHER NAMES. No Covered Person has used any name other than
the full name which identifies such Covered Person in this Agreement.
The only trade name or style under which a Covered Person sells
Inventory or creates Accounts, or to which instruments in payment of
Accounts are made payable, is the name which identifies such Covered
Person in this Agreement.
12.27. CHIEF PLACE OF BUSINESS. As of the Execution Date, the only
chief executive office and the principal places of business of Borrower
are located at the places listed and so identified in item 12.28 of the
Disclosure Schedule.
12.28. REAL PROPERTY. Item 12.28 of the Disclosure Schedule contains
a correct and complete list of (i) the street addresses and a general
description of all real property owned by Borrower, and (ii) a list of
all leases and subleases of real property by Borrower, with Borrower
identified for each as the lessee, sublessee, lessor, or sublessor, as
is the case, together with the street addresses and a general
description of the real property involved and the names of the other
parties to such leases and subleases. Each of such leases and subleases
is valid and enforceable in accordance with its terms and is in full
force and effect, and no default by any party to any such lease or
sublease exists which has had or is reasonably likely to have a
Material Adverse Effect.
12.29. STATE OF COLLATERAL AND OTHER PROPERTY. Each Covered Person
has good and marketable or merchantable title to all real and personal
property purported to be owned by it or reflected in the Financial
Statements, except for personal property sold in the ordinary course of
business after the date of the Financial Statements. There are no
Security Interests on any of the property purported to be owned by any
Covered Person, including the Collateral, except Permitted Security
Interests. Each tangible item of personal property purported to be
owned by a Covered Person is in good operating condition and repair and
is suitable for the use to which it is customarily put by its owner,
except in the case of immaterial items of office equipment. With
respect to each Account scheduled, listed or referred to in reports or
Financial Statements submitted by any Covered Person to Lender, except
as disclosed therein: (i) the Account arose from a bona fide
transaction completed in accordance with the terms of any documents
pertaining to such transaction; (ii) there are no facts, events or
occurrences which in any way impair the validity or enforcement of the
Account or tend to reduce the amount payable thereunder as shown on the
applicable Covered Person's books and records and all invoices and
statements delivered to Lender with respect thereto; and (iii) the
Account arose in the ordinary course of the applicable Covered Person's
business.
12.30. HAZARDOUS MATERIALS ON REAL PROPERTY. No Covered Person, nor
to Borrower's knowledge, any other Person, has at any time transported,
stored, disposed of, generated or released any Hazardous Material on
the surface, below the surface, or within the boundaries of any of the
real property owned or operated by Borrower. Borrower has no knowledge
of any Hazardous Material on the surface, below the surface, or within
the boundaries of any of the real property owned or operated by
Borrower. None of the real property owned or operated by Borrower is
subject to a Security Interest in favor of any Governmental Authority
for any liability under any Environmental Law or damages arising from
or costs incurred by such Governmental Authority in response to a spill
or release of Hazardous Material into the environment.
12.31. CAPITALIZATION. The authorized capital stock, issued and
outstanding capital stock, and other equity interests in each Covered
Person are as described in item 12.31 of the Disclosure Schedule, and
all issued and outstanding shares and other equity interests of each
Covered Person
14
are validly issued and outstanding, fully paid and non-assessable, and
are owned beneficially and of record by the Persons listed.
12.32. SECURITY DOCUMENTS. Each Security Document is effective to
grant to Lender an enforceable Security Interest in the Collateral
described therein. Upon appropriate filing (as to all Collateral in
which a Security Interest may be perfected under the UCC by filing) or
Lender's taking possession or control (as to all Collateral in which a
Security Interest may be perfected under the UCC by possession or
control by the secured party), Lender will have a fully perfected first
priority Security Interest in the Collateral described in each Security
Document.
12.33. NEGATIVE PLEDGES. No Covered Person is a party to or bound by
any Contract which prohibits the creation or existence of any Security
Interest upon or assignment or conveyance of any of the Collateral.
12.34. SOLVENCY. Borrower is Solvent.
12.35. FILINGS. All registration statements, reports, proxy
statements and other documents, if any, required to be filed by
Borrower with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, and the Securities Exchange Act of 1934, have
been filed, and such filings are complete and accurate and contain no
untrue statements of material fact or omit to state any material facts
required to be stated therein or necessary in order to make the
statements therein not misleading.
13. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, while any of
the Commitments remains in effect or any of the Loan Obligations are owing to
Lender by Borrower, Borrower shall do, or cause to be done, the following:
13.1. USE OF PROCEEDS. Proceeds of Revolving Advances may be used
only for working capital and general corporate purposes and for
Permitted Acquisitions.
13.2. CORPORATE EXISTENCE. Each Covered Person shall maintain its
existence in good standing and shall maintain in good standing its
right to transact business in those states in which it is now or
hereafter doing business, except where the failure to so qualify is not
reasonably likely to have a Material Adverse Effect.
13.3. MATERIAL LICENSES. Each Covered Person shall obtain and
maintain all Material Licenses for such Covered Person.
13.4. MAINTENANCE OF PROPERTY AND LEASES. Each Covered Person shall
maintain in good condition and working order, ordinary wear and tear
excepted, and repair and replace as required, all buildings, equipment,
machinery, fixtures and other real and personal property which is
necessary for the ordinary conduct of the business of such Covered
Person. Each Covered Person shall maintain in good standing and free of
defaults all of its leases of buildings, equipment, machinery, fixtures
and other real and personal property whose useful economic life has not
elapsed and which is necessary for the ordinary conduct of the business
of such Covered Person.
13.5. INSURANCE. Each Covered Person shall at all times keep insured
or cause to be kept insured, in insurance companies having a rating of
at least A by Best's Rating Service, all property owned by it of a
character usually insured by others carrying on businesses similar to
that of such Covered Person in such manner and to such extent and
covering such risks as such properties are usually insured and
otherwise satisfactory to Lender. Each Covered Person shall at all
times carry insurance, in insurance companies having a rating of at
least A by Best's Rating
15
Service, against liability on account of damage to persons or property
(including product liability insurance and insurance required under all
applicable workers' compensation Laws) and covering all other
liabilities common to such Covered Person's business, in such manner
and to such extent as such coverage is usually carried by others
conducting businesses similar to that of such Covered Person and
otherwise satisfactory to Lender. All policies of liability insurance
maintained hereunder shall name Lender as an additional insured. All
policies of insurance maintained hereunder shall contain a clause
providing that such policies may not be canceled, reduced in coverage
or otherwise modified without 30 days prior written notice to Lender.
Borrower shall upon request of Lender at any time furnish to Lender
updated evidence of insurance (in the form required as a condition to
Lender's lending hereunder) for such insurance.
13.6. PAYMENT OF TAXES AND OTHER OBLIGATIONS. Each Covered Person
shall promptly pay and discharge or cause to be paid and discharged, as
and when due, all Taxes lawfully assessed or imposed upon it, and all
Taxes lawfully assessed upon any of the Collateral or its other
property, or upon the income or profits therefrom, and all claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons for labor, materials, supplies, storage or other items or
services which if unpaid might be or become a Security Interest or
charge upon any of the Collateral or its other property; provided,
however, that a Covered Person may diligently contest in good faith by
appropriate proceedings the validity of any such Taxes if Borrower has
established adequate reserves therefor in conformity with GAAP on the
books of such Covered Person, and no Security Interest, other than a
Permitted Security Interest, results from such non-payment.
13.7. COMPLIANCE WITH LAWS. Each Covered Person shall comply with
all Material Laws. Without limiting the generality of the foregoing:
13.7.1. ENVIRONMENTAL LAWS. Each Covered Person shall comply
and shall use commercially reasonable efforts to ensure
compliance by all tenants, subtenants and other occupants of
the real property owned or operated by such Covered Person,
with all Environmental Laws whose violation has or is
reasonably likely to have a Material Adverse Affect.
13.7.2. PENSION BENEFIT PLANS. Each Covered Person and each
ERISA Affiliate of such Covered Person shall at all times make
prompt payments or contributions to meet the minimum funding
standards under ERISA and the Code with respect to any Pension
Benefit Plan maintained by such Covered Person or ERISA
Affiliate of such Covered Person, and shall comply with all
reporting and disclosure requirements and all provisions of
the Code and ERISA applicable to any Pension Benefit Plan
maintained by such Covered Person or ERISA Affiliate of such
Covered Person if non-compliance therewith has or is
reasonably likely to have a Material Adverse Affect.
13.8. DISCOVERY AND CLEAN-UP OF HAZARDOUS MATERIAL. Upon
any Covered Person receiving notice of any violation of Environmental
Laws, or upon any Covered Person otherwise discovering Hazardous
Material on any real property owned or operated by such Covered Person
which is in violation of, or which is reasonably likely to result in
liability under, any Environmental Law, Borrower shall: (i) promptly
take such acts as may be necessary to prevent danger or harm to the
affected property or any person therein as a result of such Hazardous
Material; (ii) at the request of Lender, and at Borrower's sole cost
and expense, obtain and deliver to Lender promptly, but in no event
later than 90 days after such request, a then currently dated
environmental
16
assessment of the property certified to Lender and any future holder of
the Loan Obligations, a proposed plan for responding to any
environmental problems described in such assessment, and an estimate of
the costs thereof; and (iii) take all necessary steps to initiate and
expeditiously complete all removal, remedial, response, corrective and
other action to eliminate any such environmental problems, and keep
Lender informed of such actions and the results thereof.
13.9. TERMINATION OF PENSION BENEFIT PLAN. No Covered Person or
ERISA Affiliate of such Covered Person shall terminate or amend any
Pension Benefit Plan maintained by such Covered Person or ERISA
Affiliate of such Covered Person if such termination or amendment would
result in any liability to such Covered Person or ERISA Affiliate of
such Covered Person under ERISA which has or is reasonably likely to
have a Material Adverse Effect.
13.10. SERVICE FEE; CASH MANAGEMENT AND TRUST SERVICES BUSINESS.
Borrower shall pay to Lender a recurring, non-refundable monthly
service fee of $10,000 on the first day of each calendar month
beginning July 1, 2002, unless Borrower and each of the other Covered
Persons transfers its cash management and trust services business, and
its principal operating accounts, to Lender within 60 days of the
Effective Date and thereafter maintains such business and accounts with
Lender.
13.11. NOTICE TO LENDER OF MATERIAL EVENTS; MINIMUM STATUTORY NET
WORTH REQUIREMENTS. Borrower shall, promptly upon any Responsible
Officer of Borrower obtaining knowledge or notice thereof, give written
notice in reasonable detail to Lender of (i) any Default or Event of
Default; (ii) the commencement of any Material Proceeding; (iii) any
loss of or damage to any of the Collateral or any material part of the
other assets of a Covered Person or the commencement of any proceeding
for the condemnation or other taking of any of the Collateral or any
material part of the other assets of a Covered Person, if such loss,
damage or proceeding has or is reasonably likely to have a Material
Adverse Effect, and (iv) any violation by any Covered Person of the
minimum statutory net worth requirements imposed by any Governmental
Authority to which Borrower or such Covered Person is subject. Borrower
shall deliver written notice to Lender of any change in the name, state
of incorporation, or form of organization of any Covered Person, or the
trade names or styles under which a Covered Person conducts business,
at least 30 days prior to such change. Borrower shall, promptly after
becoming aware thereof, deliver notice to Lender of any event that has
or is reasonably likely to have a Material Adverse Effect. Borrower
shall notify Lender in writing promptly of any fact or condition of
which any Responsible Officer is aware which materially reduces the
value of the Collateral as a whole or reduces the value of any material
item of the Collateral, together with the estimated amount of such
reduction.
13.12. BORROWING OFFICER. Borrower shall keep on file with Lender at
all times an appropriate instrument naming each Borrowing Officer.
13.13. MAINTENANCE OF SECURITY INTERESTS OF SECURITY DOCUMENTS.
13.13.1. PRESERVATION AND PERFECTION OF SECURITY INTERESTS.
Borrower shall promptly, upon the reasonable request of Lender
and at Borrower's expense, execute, acknowledge and deliver,
or cause the execution, acknowledgment and delivery of, and
thereafter file or record in the appropriate governmental
office, any document or instrument supplementing or confirming
the Security Documents or otherwise deemed necessary by Lender
to create, preserve or perfect any Security Interest purported
to be created by the Security Documents or to fully consummate
the transactions contemplated by the Loan Documents. The
foregoing actions by Borrower shall include (i) filing
financing or continuation statements, and amendments thereof,
in form and substance satisfactory to Lender; (ii) delivering
to Lender the originals of all instruments, documents and
chattel
17
paper, and all other Collateral of which Lender determines it
should have physical possession in order to perfect and
protect Lender's Security Interest therein, duly endorsed or
assigned to Lender without restriction; and (iii) placing a
notice of the existence of Lender's Security Interest,
acceptable to Lender, upon those writings evidencing the
Collateral and the books and records of Borrower pertaining to
the Collateral, as designated by Lender. Borrower hereby
authorizes Lender to file in the appropriate governmental
office any financing statement (including amendments and
continuations thereof) deemed necessary by Lender in
connection with the Security Documents or otherwise deemed
necessary by Lender to create, preserve or perfect any
Security Interest purported to be created by the Security
Documents.
13.13.2. COMPLIANCE WITH TERMS OF SECURITY DOCUMENTS.
Borrower shall comply with all of the terms, conditions and
covenants in the Security Documents to which Borrower is a
party.
13.14. ACCOUNTING SYSTEM. Each Covered Person shall maintain a system
of accounting from which financial statements may be prepared in
accordance with GAAP.
13.15. FINANCIAL STATEMENTS. Borrower shall deliver to Lender:
13.15.1. ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each fiscal year of Borrower, year-end consolidated
and consolidating Financial Statements of Borrower and its
Subsidiaries, containing a balance sheet, income statement,
statement of cash flows and an audit report without
qualification by a nationally recognized independent certified
public accounting firm selected by Borrower, and in each case
accompanied by (a) a Compliance Certificate of the Chief
Financial Officer of Borrower, and (b) a certificate of the
independent certified public accounting firm that examined
such Financial Statements to the effect that they have
reviewed and are familiar with this Agreement and that, in
examining such Financial Statements, they did not become aware
of any fact or condition which then constituted a Default or
Event of Default, except for those, if any, described in
reasonable detail in such certificate.
13.15.2. QUARTERLY FINANCIAL STATEMENTS. Within 45 days after
the end of each quarter, internally prepared unaudited
consolidated and consolidating Financial Statements of
Borrower and its Subsidiaries for the quarters not covered by
the latest year-end Financial Statements, in each case
containing a balance sheet, income statement and statement of
cash flows, accompanied by a Compliance Certificate of the
Chief Financial Officer of Borrower.
13.15.3. QUARTERLY STATUTORY STATEMENTS. Within 60 days after
the end of each fiscal quarter of Borrower, each Covered
Person's Minimum Regulatory Capital and Surplus Report.
Each Compliance Certificate shall be in the form of Exhibit
13.15, shall contain detailed calculations of the financial
measurements referred to in Section 15 for the relevant
periods, and shall contain statements by the signing officer
to the effect that, except as explained in reasonable detail
in such Compliance Certificate, (i) the attached Financial
Statements are complete and correct in all material respects
(subject, in the case of Financial Statements other than
annual, to normal year-end audit adjustments) and (except in
the case of the Minimum Regulatory Capital and Surplus Report
described in Section 13.15.3) have been prepared in accordance
with GAAP applied consistently throughout the periods covered
thereby and with prior periods (except as disclosed
18
therein), (ii) all of the Representations and Warranties are
true and correct as of the date such certification is given as
if made on such date, and (iii) there is no Existing Default.
If any Compliance Certificate delivered to Lender discloses
that a representation or warranty is not true and correct, or
that a Default or Event of Default has occurred that has not
been waived in writing by Lender, such Compliance Certificate
shall state what action Borrower has taken or proposes to take
with respect thereto.
13.16. OTHER FINANCIAL INFORMATION. Borrower shall also deliver to
Lender the following:
13.16.1. STOCKHOLDER AND SEC INFORMATION. Promptly after their
preparation, copies of all (i) proxy statements, financial
statements and reports which Borrower makes available to its
stockholders, and (ii) reports, registration statements and
prospectuses, if any, filed by Borrower with any securities
exchange or the Securities and Exchange Commission or any
Governmental Authority succeeding to any of its functions.
13.16.2. MONTHLY FINANCIAL STATEMENTS. Upon Lender's written
request (which will remain effective until withdrawn and need
not be provided each month), within 30 days of the end of each
month, monthly internally prepared consolidated and
consolidating financial statements of Borrower and its
Subsidiaries for the months not covered by the latest
quarterly Financial Statements, in each case containing a
balance sheet, income statement and statement of cash flows.
13.16.3. BUDGETS. Within 30 days after the beginning of each
fiscal year of Borrower, a budget for such fiscal year for
Borrower and its Subsidiaries in form and detail satisfactory
to Lender.
13.16.4. ADDITIONAL. Promptly upon Lender's written request
(which will remain effective until withdrawn and need not be
provided each month), such additional information about the
business, operations, revenues, financial condition, property,
or business prospects of Borrower as Lender may, from time to
time, reasonably request.
13.17. AUDITS BY LENDER. After reasonable notice, Lender or Persons
authorized by and acting on behalf of Lender may at any time and from
time to time during normal business hours audit the books and records,
and inspect any of the property, of each Covered Person from time to
time upon reasonable notice to such Covered Person, and in the course
thereof may make copies or abstracts of such books and records
(provided, however, that no notice shall be required prior to such
audit or inspection at any time there is an Existing Default). Each
Covered Person shall cooperate with Lender and such Persons in the
conduct of such audits and shall deliver to Lender any instrument
necessary for Lender to obtain records from any service bureau
maintaining records for such Covered Person. Borrower shall reimburse
Lender for all costs and expenses actually incurred by it in conducting
each audit. Borrower shall be required to reimburse Lender for only one
such audit in each fiscal year, unless there is an Existing Default, in
which case Borrower shall be required to reimburse Lender for all such
audits conducted by Lender.
13.18. ACCESS TO OFFICERS AND AUDITORS. Each Covered Person shall
permit Lender and Persons authorized by Lender to discuss the Accounts,
affairs, finances, books and records of such Covered Person with its
accountants, officers and employees as often as Lender may reasonably
request, and such Covered Person shall direct such accountants,
officers and employees to cooperate with Lender and make full
disclosure to Lender of those matters that they may deem relevant to
the continuing ability of Borrower timely to pay and perform the Loan
Obligations.
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13.19. ACQUISITION DOCUMENTS. Each Covered Person shall fully perform
all of its obligations under all Acquisition Documents, and shall
enforce all of its rights and remedies thereunder, in each case as it
deems appropriate in its reasonable business judgment; provided,
however, that such Covered Person shall not take any action or
knowingly fail to take any action which would result in a waiver or
other loss of any material right or remedy of such Covered Person
thereunder.
13.20. FURTHER ASSURANCES. Borrower shall execute and deliver, or cause
to be executed and delivered, to Lender such documents and agreements,
and shall take or cause to be taken such actions, as Lender may from
time to time request to carry out the terms and conditions of this
Agreement and the other Loan Documents.
14. NEGATIVE COVENANTS. Borrower covenants and agrees that, while any of
the Commitments remains in effect or any of the Loan Obligations are owing to
Lender by Borrower or any of the Letters of Credit are outstanding, Borrower
shall not, directly or indirectly, do any of the following, or permit any
Covered Person to do any of the following, without the prior written consent of
Lender:
14.1. INVESTMENTS. Make any Investments in any other Person except
the following:
14.1.1. Investments which are described in Borrower's
investment policy attached hereto as item 14.1 of the
Disclosure Schedule, which may not modified or replaced
without Lender's prior written consent.
14.1.2. Accounts arising in the ordinary course of business
and payable in accordance with Borrower's customary trade
terms.
14.1.3. Investments that are Permitted Acquisitions.
14.1.4. Investments by any Covered Person in any other Covered
Person.
14.2. INDEBTEDNESS. Create, incur, assume, or allow to exist any
Indebtedness of any kind or description, except the following:
14.2.1. Indebtedness to trade creditors incurred in the
ordinary course of business, to the extent that it is not
overdue past the original due date by more than 90 days.
14.2.2. The Loan Obligations.
14.2.3. Indebtedness secured by Permitted Security Interests.
14.2.4. Indebtedness existing on the Execution Date and
disclosed in item 14.2.4 of the Disclosure Schedule.
14.3. PREPAYMENTS. Voluntarily prepay any Indebtedness other than
(a) the Loan Obligations in accordance with the terms of the Loan
Documents and (b) trade payables in the ordinary course of business.
14.4. INDIRECT OBLIGATIONS. Create, incur, assume or allow to
exist any Indirect Obligations which exceed $750,000 in the aggregate
at any time, except Indirect Obligations existing on the Execution Date
and disclosed in item 12.20 of the Disclosure Schedule.
14.5. SECURITY INTERESTS. Create, incur, assume or allow to exist
any Security Interest upon all or any part of its property, real or
personal, now owned or hereafter acquired, except the following:
20
14.5.1. Security Interests for taxes, assessments or
governmental charges not delinquent or being diligently
contested in good faith and by appropriate proceedings and for
which adequate book reserves in accordance with GAAP are
maintained.
14.5.2. Security Interests arising out of deposits in
connection with workers' compensation insurance, unemployment
insurance, old age pensions, or other social security or
retirement benefits legislation.
14.5.3. Deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds, and other
obligations of like nature arising in the ordinary course of
business.
14.5.4. Security Interests imposed by any Law, such as
mechanics', workmen's, materialmen's, landlords', carriers',
or other like Security Interests arising in the ordinary
course of business which secure payment of obligations which
are not past due or which are being diligently contested in
good faith by appropriate proceedings and for which adequate
book reserves in accordance with GAAP are maintained.
14.5.5. Purchase money Security Interests securing payment of
the purchase price of capital assets acquired by Borrower
after the Execution Date in an amount not to exceed $250,000
in the aggregate during any fiscal year of Borrower.
14.5.6. Security Interests in favor of Lender.
14.5.7. Security Interests existing on the Execution Date that
are disclosed in item 12.29 of the Disclosure Schedule.
14.6. ACQUISITIONS. Acquire stock, membership interests or any other
equity interest in a Person, or acquire all or substantially all of the
assets of a Person (including without limitation assets comprising all
or substantially all of an unincorporated business unit or division of
any Person) (in each case, an Acquisition); except an Acquisition with
respect to which all of the following requirements have been met (in
each case a Permitted Acquisition):
14.6.1. There is no Existing Default and no Default or Event
of Default will occur as a result of such Acquisition.
14.6.2. At least 30 days prior to the consummation of such
Acquisition, Borrower shall have prepared and furnished to
Lender pro forma consolidated and consolidating financial
statements for Borrower giving effect to such Acquisition,
demonstrating to the satisfaction of Lender that Borrower will
be Solvent upon consummation of such Acquisition and upon the
passage of time thereafter, and that none of the covenants in
Section 15 will be violated as a consequence of such
Acquisition or with the passage of time thereafter. Such pro
forma financial statements shall contain balance sheets,
income statements, statements of cash flows and such other
reports and disclosures, and shall cover such historical
periods and forecast periods, as Lender may in its discretion
require. Borrower shall also provide to Lender copies of the
audited financial statements (if available, or unaudited
financial statements if no audited financial statements exist)
for the Person which is the subject of such Acquisition for
the three fiscal years most recently ended and for each of the
completed months in the then current fiscal year.
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14.6.3. The Acquisition must be non-hostile and must be of
assets, or equity interests in a Person based in the United
States and in the same or similar line of business as
Borrower.
14.6.4. The Covered Person which is a party to such
Acquisition shall pledge to Lender the stock, membership
interests, or other equity interests in such other Person
acquired by such Covered Person in such Acquisition on terms
satisfactory to Lender.
14.6.5. Borrower shall have promptly delivered to Lender any
financial information or due diligence materials (including
UCC search results) regarding the target of the proposed
Acquisition as Lender may reasonably request, along with
copies of all documents executed and delivered in connection
with the proposed Acquisition in final form.
14.7. DISPOSAL OF PROPERTY. Sell, transfer, exchange, lease, or
otherwise dispose of any material portion of its assets except (i) in
the ordinary course of business or (ii) sales of capital assets which
have been approved in writing in advance by Lender, which approval will
not be unreasonably withheld.
14.8. DISTRIBUTIONS. Directly or indirectly declare or make, or
incur any liability to make, any Distribution without the prior written
consent of Lender. For purposes of this Section, a Distribution means
and includes (i) any cash dividend, (ii) any purchase or redemption of
any outstanding stock, (iii) any retirement or prepayment of
outstanding debt securities before their regularly scheduled maturity
dates, and (iv) any loan or advance to a shareholder.
14.9. CHANGE OF CONTROL. Merge or consolidate with or into another
Person, or permit any Person or Group to (i) become the record or
beneficial owner, directly or indirectly, of securities representing
20% or more of the voting power of Borrower's outstanding securities
having the power to vote, or (ii) acquire the power to elect a majority
of the Board of Directors of Borrower.
14.10. CAPITAL STRUCTURE; EQUITY SECURITIES. Make any change in its
capital structure which has or could have a Material Adverse Effect; or
create any new class of stock or issue any stock, or issue any other
equity securities or non-equity securities that are convertible into
equity securities except common stock and other securities that are
subordinated in right of payment to all the Loan Obligations in a
manner satisfactory to Lender.
14.11. CHANGE OF BUSINESS. Engage in any business other than
substantially as conducted on the Execution Date or managed health care
business.
14.12. TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
transaction or arrangement, including the purchase, sale or exchange of
property of any kind or the rendering of any service, with any
Affiliate, or make any Loans or advances to any Affiliate. If there is
no Existing Default, however, Borrower may engage in such transactions
in the ordinary course of business and pursuant to the reasonable
requirements of its business and on fair and reasonable terms
substantially as favorable to it as those which it could obtain in a
comparable arm's-length transaction with a non-Affiliate.
14.13. CONFLICTING AGREEMENTS. Enter into any agreement, that would,
if fully complied with by it, result in a Default or Event of Default
either immediately or in a reasonably foreseeable time.
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14.14. NEW SUBSIDIARIES. Acquire any Subsidiary unless it is part
of a Permitted Acquisition, or organize or create any Subsidiary
unless, in either case, contemporaneously with the acquisition,
organization, or creation of such Subsidiary, (i) the applicable
Covered Person executes and delivers to Lender a pledge of 100% of such
Subsidiary's capital stock, membership interests, or other equity
interests on terms satisfactory to Lender, (ii) such Subsidiary becomes
(and agrees in writing that it is) a Covered Person under this
Agreement, and (iii) all of the representations and warranties
contained in this Agreement are true and correct with respect to such
Subsidiary as of the date of acquisition, organization, or creation.
14.15. FISCAL YEAR. Change its fiscal year.
14.16. TERMINATION OF PENSION BENEFIT PLAN. Terminate or amend any
Pension Benefit Plan maintained by any Covered Person or such ERISA
Affiliate if such termination or amendment would result in any
liability to such Covered Person or such ERISA Affiliate under ERISA or
any increase in current liability for the plan year for which such
Covered Person or such ERISA Affiliate is required to provide security
to such Pension Benefit Plan under the Code.
14.17. TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT. Enter into any
transaction which has or is reasonably likely to have a Material
Adverse Effect.
15. FINANCIAL COVENANTS.
15.1. SPECIAL DEFINITIONS. As used in this Section 15 and
elsewhere in this Agreement, the following capitalized terms have the
following meanings:
EBITDA -- for any period of calculation, an amount equal to the sum of
(i) Net Income, (ii) Interest Expense in such period, (iii) federal,
state and local income tax expense, and (iv) depreciation and
amortization expense.
Interest Expense -- for any period of calculation, all interest,
whether paid in cash or accrued as a liability, but without
duplication, on Indebtedness during such period.
Senior Indebtedness -- at any date, the sum of all Indebtedness of
Borrower to Lender.
Tangible Assets -- at any date, all assets as determined in accordance
with GAAP except: (a) deferred assets; (b) patents, copyrights,
trademarks, trade names, franchises, goodwill, and other similar
intangibles; (c) unamortized debt discount and expense; and (d) fixed
assets to the extent of any write-up in the book value thereof
resulting from a revaluation.
Tangible Net Worth -- at any date: (a) the book value (net of
depreciation, obsolescence, amortization, valuation and other proper
reserves determined in accordance with GAAP) at which Tangible Assets
would be shown on a balance sheet at such date prepared in accordance
with GAAP; less (b) the amount at which all liabilities would be shown
on such balance sheet, including as liabilities all reserves for
contingencies and other potential liabilities which would be shown on
such balance sheet or disclosed in the notes thereto.
15.2. MINIMUM TANGIBLE NET WORTH. Borrower's Tangible Net Worth
shall not be less than $47,000,000 as of the Effective Date, and as of
the end of each fiscal quarter of Borrower shall not be less than an
amount equal to the sum of $47,000,000 plus (i) an amount equal to 50%
of the net proceeds (defined as gross proceeds less reasonable brokers'
and underwriters' fees and commissions and other reasonable issuing
expenses of the issuance) of the issuance by Borrower or any Covered
Person of any equity securities, or warrants or options therefor on a
cumulative
23
basis from the Effective Date through the date of measurement; plus
(ii) an amount equal to 50% of any increase in Borrower's Tangible Net
Worth associated with any Permitted Acquisition on a cumulative basis
from the Effective Date through the date of measurement.
15.3. MINIMUM EBITDA. Borrower's EBITDA, measured as of the last
day of each fiscal quarter for the fiscal quarter then ended
(calculated on a pro forma basis giving effect to any Permitted
Acquisition in such quarter), shall not be less than $1,500,000.
15.4. MAXIMUM LEVERAGE RATIO. The ratio of (i) Borrower's Senior
Indebtedness as of the end of any fiscal quarter of Borrower to (ii) an
amount equal to (a) Borrower's EBITDA for such fiscal quarter
(calculated on a pro forma basis giving effect to any Permitted
Acquisition in such quarter) multiplied by (b) four shall not be
greater than 2.00 to 1.00.
16. DEFAULT.
16.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an Event of Default:
16.1.1. FAILURE TO PAY PRINCIPAL OR INTEREST. Failure by
Borrower to make any principal or interest payment on the
Loans when due under the Loan Documents.
16.1.2. FAILURE TO PAY OTHER AMOUNTS OWED TO LENDER. Failure
of Borrower to pay any of the Loan Obligations (other than
principal or interest on the Loans) or any other amount owed
to Lender within five days after notice from Lender that the
same is due.
16.1.3. FAILURE TO PAY AMOUNTS OWED TO OTHER PERSONS. Failure
of any Covered Person to make any payments on any Indebtedness
of such Covered Person in an aggregate amount greater than
$100,000 to Persons other than Lender (other than Indebtedness
arising from claims which are being diligently contested in
good faith by such Covered Person by appropriate proceedings
and as to which such Covered Person has established adequate
reserves in conformity with GAAP), which continues unwaived
beyond any applicable grace periods specified in the documents
evidencing such Indebtedness.
16.1.4. ACCELERATION OF OTHER INDEBTEDNESS. Any Obligation of
Borrower (other than the Loan Obligations) for the payment of
borrowed money becomes or is declared to be due and payable or
required to be prepaid (other than by a regularly scheduled
payment or prepayment) prior to the original maturity thereof
as a consequence of a default with respect thereto by
Borrower.
16.1.5. REPRESENTATIONS OR WARRANTIES. Any of the
Representations and Warranties is discovered to have been
false in any material respect when made or deemed made.
16.1.6. COVENANTS. Failure of Borrower to comply with any
term, condition, agreement, or covenant applicable to Borrower
herein or in the Loan Documents. Notwithstanding the foregoing
sentence, a failure to comply with covenants 13.2, 13.3, 13.4,
13.5, 13.6, 13.7, 13.8, 13.9, 13.12, 13.13, or 13.20 of this
Agreement shall not constitute an Event of Default if such
failure is remedied or waived in writing by Lender within 30
days after the initial occurrence of such failure; provided,
however, that no such grace period shall apply, and an Event
of Default shall exist promptly upon such failure to comply,
if such failure may not, in Lender's reasonable determination,
be cured by Borrower during such 30 day period.
24
16.1.7. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any
default or event of default under any agreement to which
Borrower is a party (other than the Loan Documents) which
default or event of default continues unwaived beyond any
applicable grace period provided therein and either (i)
involves Obligations requiring payments by Borrower totaling
greater than $100,000 or (ii) has or is reasonably likely to
have a Material Adverse Effect.
16.1.8. BANKRUPTCY; INSOLVENCY; ETC. Borrower (i) fails to
pay, or admits in writing its inability to pay, its debts
generally as they become due, or otherwise becomes insolvent
(however evidenced); (ii) makes a general assignment for the
benefit of creditors; (iii) files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any
tribunal for any receiver or any trustee of Borrower or any
substantial part of its property; (iv) commences any
proceeding relating to Borrower under any reorganization,
arrangement, readjustment of debt, dissolution or liquidation
Law or statute of any jurisdiction, whether now or hereafter
in effect; (v) has commenced against it any such proceeding
which remains undismissed for a period of ninety days, or by
any act indicates its consent to, approval of, or acquiescence
in any such proceeding or the appointment of any receiver of
or any trustee for it or any substantial part of its property,
or allows any such receivership or trusteeship to continue
undischarged for a period of 90 days; or (vi) takes any
corporate action to authorize any of the foregoing.
16.1.9. JUDGMENTS; ATTACHMENT; ETC. Any one or more judgments
or orders is entered against Borrower or any attachment or
other levy is made against the property of Borrower, including
but not limited to the Collateral, with respect to a claim or
claims involving in the aggregate liabilities (not paid or
fully covered by insurance, less the amount of deductibles
satisfactory to Lender on the Execution Date) greater than
$100,000, and, in the case of a judgment or order, such
judgment or order becomes final and non-appealable or if
timely appealed is not fully bonded and collection thereof
stayed pending the appeal; or any Covered Person enters into
an agreement to settle any claim or controversy and the total
amount (at current value based on a capitalization rate of
10%) of the monetary Obligations of such Covered Person under
such agreement is in excess of $100,000.
16.1.10. PENSION BENEFIT PLAN TERMINATION, ETC. Any
termination by the PBGC of a Pension Benefit Plan of Borrower
or an ERISA Affiliate of Borrower or the appointment by the
appropriate United States District Court of a trustee to
administer any Pension Benefit Plan of Borrower or an ERISA
Affiliate of Borrower or to liquidate any Pension Benefit Plan
of Borrower or an ERISA Affiliate of Borrower; or any event
which constitutes grounds either for the termination of any
Pension Benefit Plan of Borrower or an ERISA Affiliate of
Borrower by PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer or
liquidate any Pension Benefit Plan of Borrower or an ERISA
Affiliate of Borrower has occurred and is continuing for 30
days after Borrower has notice of any such event; or any
voluntary termination of any Pension Benefit Plan of Borrower
or an ERISA Affiliate of Borrower which is a defined benefit
pension plan as defined in Section 3(35) of ERISA while such
defined benefit pension plan has an accumulated funding
deficiency, unless Lender has been notified of such intent to
voluntarily terminate such plan and Lender has given its
consent and agreed that such event shall not constitute an
Event of Default; or the plan administrator of any Pension
Benefit Plan of Borrower or an ERISA Affiliate of Borrower
applies under Section 412(d) of the Code for a waiver of the
minimum funding standards of Section 412(1) of the Code and
Lender determines that the substantial business hardship
25
upon which the application for such waiver is based could
subject Borrower or any ERISA Affiliate of Borrower to a
liability in excess of $100,000.
16.1.11. LIQUIDATION OR DISSOLUTION. Borrower files a
certificate of dissolution under applicable state Law or is
liquidated or dissolved, or has commenced against it any
action or proceeding for its liquidation or dissolution, or
takes any corporate action in furtherance thereof.
16.1.12. SEIZURE OF ASSETS. Any material part of the
Collateral or a substantial part of the other property of
Borrower is nationalized, expropriated, seized or otherwise
appropriated, or custody or control of such property or of
Borrower is assumed by any Governmental Authority, unless the
same is being contested in good faith by appropriate
proceedings diligently pursued and a stay of enforcement is in
effect.
16.1.13. LOAN DOCUMENTS; SECURITY INTERESTS. Any Loan Document
ceases to be in full force and effect or any Security Interest
in any of the Collateral is not or ceases to be (other than as
a result of voluntary release thereof by Lender) valid,
perfected and prior to all other Security Interests (other
than relevant Permitted Security Interests) or is terminated,
revoked or declared void or invalid.
16.1.14. MATERIAL ADVERSE CHANGE. There occurs any event which
has or is reasonably likely to have a Material Adverse Effect.
16.2. CROSS DEFAULT. An Event of Default under this Agreement will
automatically and immediately constitute a default under any other
agreement between Borrower and Lender or any Affiliate of Lender and
under any evidence of Indebtedness of any Borrower held by Lender or
any Affiliate of Lender, whether or not it is defined as such therein
and without regard to any requirement therein for the giving of notice
or the passing of time.
16.3. RIGHTS AND REMEDIES UPON AN EVENT OF DEFAULT.
16.3.1. CANCELLATION OF COMMITMENTS. Upon the occurrence of an
Event of Default described in Section 16.1.8, the Commitments
shall be deemed canceled without presentment, demand or notice
of any kind. Upon any other Event of Default, and at any time
thereafter, Lender may cancel the Commitments. Such
cancellation may be without demand or notice of any kind,
which Borrower expressly waives.
16.3.2. ACCELERATION. Upon the occurrence of an Event of
Default described in Section 16.1.8, all of the outstanding
Loan Obligations shall automatically become immediately due
and payable. Upon any other Event of Default, and at any time
thereafter, Lender may declare all of the outstanding Loan
Obligations immediately due and payable. Such acceleration in
either case may be without presentment, demand or notice of
any kind, which Borrower expressly waives.
16.3.3. RIGHT OF SET-OFF. Upon the occurrence of any Event of
Default and at any time and from time to time thereafter,
Lender is hereby authorized, without notice to Borrower (any
such notice being expressly waived by Borrower), to set off
and apply against the Loan Obligations any and all deposits
(general or special, time or demand, provisional or final) at
any time held, or any other Indebtedness at any time owing by
Lender to or for the credit or the account of Borrower (other
than any account maintained by a Covered Person in which such
Person is required by Law to maintain a minimum balance,
provided Borrower has given prior written notice to Lender of
such requirement
26
specifying the account number, owner, and financial
institution where such account is maintained), irrespective of
whether or not Lender has made any demand under the Loan
Documents and although such Loan Obligations may be unmatured.
The rights of Lender under this Section are in addition to
other rights and remedies (including, without limitation,
other rights of set-off) which Lender may otherwise have.
16.3.4. EXERCISE OF RIGHTS AS SECURED PARTY. Upon an Event of
Default and acceleration of the Loan Obligations as provided
herein, and at any time and from time to time thereafter:
16.3.4.1. Lender may exercise any or all of its
rights under the Security Documents, if any;
16.3.4.2. Lender may exercise any or all of its
rights as a secured party under the UCC and any other
applicable Law; and
16.3.4.3. Lender may sell or otherwise dispose of any
or all of the Collateral at public or private sale in
a commercially reasonable manner, for cash or credit,
and after giving any notice as may be required by any
applicable Law. Lender may postpone any such sale
from time to time by announcement at the time and
place of sale stated in the notice of sale or by
announcement at any adjourned sale without being
required to give a new notice of sale, all as Lender
deems advisable. Lender may become the purchaser at
any such sale if permissible under applicable Law,
and Lender may, in lieu of actual payment of the
purchase price, offset the amount thereof against
Borrower's Loan Obligations owing to Lender, and
Borrower agrees that Lender has no obligation to
preserve rights to Collateral against prior parties
or to marshal any Collateral for the benefit of any
Person. In connection with the advertising for sale,
selling, or otherwise realizing upon any of the
Collateral securing the obligations of Borrower to
Lender, Lender may use and is hereby granted a
license to use, without charge or liability to Lender
therefor, any of Borrower's labels, trade names,
trademarks, trade secrets, service marks, patents,
patent applications, licenses, certificates of
authority, advertising materials, or any of
Borrower's other properties or interests in
properties of similar nature, to the extent that such
use thereof is not prohibited by agreements under
which Borrower has rights therein, and all of
Borrower's rights under license, franchise and
similar agreements shall inure to Lender's benefit.
16.3.5. MISCELLANEOUS. Upon the occurrence of an Event of
Default and at any time thereafter, Lender may exercise any
other rights and remedies available to Lender under the Loan
Documents or otherwise available to Lender at law or in
equity.
16.4. APPLICATION OF FUNDS. Any funds received by Lender with
respect to the Loan Obligations after acceleration of the Loan
Obligations as provided herein, including proceeds of Collateral, shall
be applied as follows: (i) first, to reimburse Lender for any amounts
due to Lender under Section 20.7; (ii) second, to reimburse to Lender
all unreimbursed costs and expenses paid or incurred by Lender that are
payable or reimbursable by Borrower hereunder; (iii) third, to
reimburse to Lender all unreimbursed costs and expenses paid or
incurred by Lender (including costs and expenses incurred by Lender as
Lender that are not reimbursable as provided in the preceding clause)
that are payable or reimbursable by Borrower hereunder; (iv) fourth, to
payment of accrued and unpaid fees due under the Loan Documents and all
other amounts due under the Loan Documents (other than the Loans and
interest accrued thereon); (v) fifth, to
27
payment of interest accrued on the Loans; (vi) sixth, to payment of the
Loans; and (vii) seventh, to payment of the other Loan Obligations. Any
amounts remaining after the application of funds and proceeds as
provided in this Section shall be paid to Borrower, or to such other
Persons as are legally entitled thereto. Borrower hereby irrevocably
waives the right to direct the application of payments and proceeds of
the Collateral.
16.5. LIMITATION OF LIABILITY; WAIVER. Lender shall not be liable to
Borrower as a result of any commercially reasonable possession,
repossession, collection or sale by Lender of Collateral; and Borrower
hereby waives all rights of redemption from any such sale and the
benefit of all valuation, appraisal and exemption Laws. If Lender seeks
to take possession of any of the Collateral by replevin or other court
process after an Event of Default, Borrower hereby irrevocably waives
(i) the posting of any bonds, surety and security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession, (ii) any demand for possession of the Collateral prior to
the commencement of any suit or action to recover possession thereof,
(iii) any requirement that Lender retain possession and not dispose of
any Collateral until after trial or final judgment, and (iv) to the
extent permitted by applicable Law, all rights to notice and hearing
prior to the exercise by Lender of its right to repossess the
Collateral without judicial process or to replevy, attach or levy upon
the Collateral without notice or hearing. No Lender shall have any
obligation to preserve rights to the Collateral or to xxxxxxxx any
Collateral for the benefit of any Person.
16.6. NOTICE. Any notice of intended action required to be given by
either Lender (including notice of a public or private sale of
Collateral), if given as provided in Section 21.1 at least 10 days
prior to such proposed action, shall be effective and constitute
reasonable and fair notice to Borrower.
17. CHANGES IN CIRCUMSTANCES.
17.1. COMPENSATION FOR INCREASED COSTS AND REDUCED RETURNS; CAPITAL
ADEQUACY.
17.1.1. INCREASED COSTS OR REDUCED RETURNS TO LENDER. If,
after the date hereof, the adoption of any applicable Law or
any change in any applicable Law or any change in the
interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration
thereof, or compliance by Lender (or the Lending Office) with
any request or directive (whether or not having the force of
law) of any such Governmental Authority:
17.1.1.1. subjects Lender (or the Lending Office) to
any Tax with respect to any Eurodollar Loan or its
obligation to make any Advance that will be a
Eurodollar Loan, or change the basis of taxation of
any amounts payable to Lender (or the Lending Office)
under this Agreement in respect of any Eurodollar
Loan (other than Taxes imposed on the overall net
income of Lender by the jurisdiction in which Lender
has its principal office or the Lending Office);
17.1.1.2. imposes, modifies, or deems applicable any
reserve, special deposit, assessment, compulsory Loan
or similar requirement (other than the Reserve
Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit
or other assets of, or any deposits
with or other liabilities or commitments of, Lender
(or the Lending Office), including the Commitments j
of Lender hereunder; or
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17.1.1.3. imposes on Lender (or the Lending Office),
or the London interbank market, any other condition
affecting this Agreement, the Commitments or any of
the Loan Obligations;
and the result of any of the foregoing is to increase
the cost to Lender (or the Lending Office) of making,
converting into, continuing, or maintaining any Loans
or to reduce any sum received or receivable by Lender
(or the Lending Office) under this Agreement or any
of the other Loan Documents with respect to any of
the Loans, then Borrower shall pay to Lender on
demand such amount or amounts as will compensate
Lender for such increased cost or reduction. If
Lender requests compensation by Borrower under this
Section Borrower may, by notice to Lender, suspend
the obligation of Lender to make or continue Loans of
the type with respect to which such compensation is
requested, or to convert Loans of any other type into
Loans of such type, until the event or condition
giving rise to such request ceases to be in effect
(in which case the provisions of Section 17.5 shall
be applicable); provided, however, that such
suspension shall not affect the right of Lender to
receive the compensation so requested.
17.2. LIMITATIONS ON EURODOLLAR LOANS. If on or prior to the first
day of any Interest Period for any Eurodollar Loan:
17.2.1. Lender determines (which determination shall be
conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period;
or
17.2.2. Lender determines (which determination shall be
conclusive) that the Eurodollar Rate will not adequately and
fairly reflect the cost to Lender of funding Eurodollar Loans
for such Interest Period;
then Lender will give Borrower prompt notice thereof, and
while such condition remains in effect, Lender will have no
obligation to make additional Advances that will be Eurodollar
Loans, to continue Eurodollar Loans, or to convert Adjusted
Base Rate Loans into Eurodollar Loans.
17.3. ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for Lender or the
Lending Office to make Advances that will be Eurodollar Loans or
maintain Eurodollar Loans hereunder, then Lender shall promptly notify
Borrower thereof and Lender's obligation to do so or to convert
Adjusted Base Rate Loans into Eurodollar Loans shall be suspended until
such time as Lender may again do so, and Lender's outstanding
Eurodollar Loans shall be converted into Adjusted Base Rate Loans in
accordance with Section 17.5.
17.4. COMPENSATION. Upon the request of Lender, Borrower shall
pay to Lender such amount or amounts as will be sufficient (in the
reasonable determination of Lender) to compensate it for any loss,
cost, or expense (including loss of anticipated profits) incurred by it
as a result of:
17.4.1. any payment, prepayment, or conversion of a Eurodollar
Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to the terms hereof) on a
date other than the last day of the Interest Period for such
Eurodollar Loan; or
29
17.4.2. any failure by Borrower for any reason (other than
pursuant to Section 17.2 or 17.3) to take an Advance that is
requested to be a Eurodollar Loan or to convert, continue, or
prepay a Eurodollar Loan on the date therefor specified in the
relevant request for an Advance or notice of prepayment,
continuation, or conversion under this Agreement.
If Lender claims compensation under this Section 17.4, Lender
shall furnish a certificate to Borrower that states the amount
to be paid to it hereunder and includes a description in
reasonable detail of the method used by Lender in calculating
such amount. Borrower shall have the burden of proving that
the amount of any such compensation calculated by Lender is
not correct. Any compensation payable by Borrower to Lender
under this Section shall be payable without regard to whether
Lender has funded any Advance or Eurodollar Loan through the
purchase of deposits in an amount or of a maturity
corresponding to the deposits used as a reference in
determining the Eurodollar Rate as provided herein.
17.5. TREATMENT OF AFFECTED LOANS. If the obligation of Lender to
make an Advance that will be a Eurodollar Loan or to continue any
Eurodollar Loan or to convert any Adjusted Base Rate Loan into a
Eurodollar Loan shall be suspended pursuant to Section 17.2 or 17.3
each such Loan shall be automatically and immediately converted into an
Adjusted Base Rate Loan on the last day of its Interest Period (or, in
the case of a conversion required by Section 17.3, on such earlier date
as Lender may specify to Borrower). Unless and until Lender gives
notice as provided below that the circumstances specified in Section
17.2 or 17.3 that gave rise to such conversion no longer exist:
17.5.1. to the extent that such Loans have been so converted,
all payments and prepayments of principal that would otherwise
be applied to such Loans shall continue to be made and applied
as provided for herein; and
17.5.2. all Advances by Lender that would otherwise become
Eurodollar Loans and all Loans that would otherwise be
continued by Lender as Eurodollar Loans shall become or be
continued instead as Adjusted Base Rate Loans, and all Loans
that would otherwise be converted into Eurodollar Loans shall
be converted instead into (or shall remain as) Adjusted Base
Rate Loans.
Lender shall give prompt notice to Borrower if and when the
circumstances specified in Section 17.2 or 17.3 that gave rise
to the conversion of such Loans pursuant to this Section 17.5
no longer exist.
18. TAXES.
18.1. GROSS-UP. All payments by Borrower to or for the account of
Lender hereunder or under any other Loan Document shall be made free
and clear of and without deduction for all present or future Taxes,
excluding franchise Taxes and Taxes imposed on Lender's net income, by
the jurisdiction under the Laws of which Lender is organized or the
Lending Office is located or any political subdivision thereof. If
Borrower is required by Law to deduct any Taxes from or in respect of
any sum payable under this Agreement or any other Loan Document to
Lender, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable
to additional sums payable under this Section) Lender receives an
amount equal to the sum it would have received had no such deductions
been made, (ii) Borrower shall make such deductions, (iii) Borrower
shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Law, and
30
(iv) Borrower shall furnish to Lender, at its address referred to
herein, the original or a certified copy of a receipt evidencing
payment thereof. In addition, Borrower agrees to pay any and all
present or future Impositions. Impositions include stamp or documentary
taxes and any other excise or property taxes or charges or similar
levies which arise from the Loan Obligations, any payment made under
this Agreement or any other Loan Document or from the execution or
delivery of, or otherwise with respect to, the Loan Obligations, this
Agreement or any other Loan Document. Borrower agrees to indemnify
Lender for the full amount of all Impositions and Taxes, excluding
franchise Taxes and Taxes imposed on Lender's net income, (including
any such Taxes or Impositions imposed or asserted by any jurisdiction
on amounts payable under this Section) paid by Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. Within thirty days after the date of any payment of
Taxes, Borrower shall furnish Lender the original or a certified copy
of a receipt evidencing such payment.
18.2. LENDER'S UNDERTAKING. If Borrower is required to pay
additional amounts to or for the account of Lender pursuant to Section
18.1, then Lender will use reasonable efforts to change the
jurisdiction of the Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in
the judgment of Lender, is not otherwise disadvantageous to Lender.
19. USURY LIMITATIONS. Notwithstanding any provisions to the contrary
in Section 4 or elsewhere in any of the Loan Documents, Borrower shall not be
obligated to pay interest at a rate which exceeds the maximum rate permitted by
Law. If, but for this Section 19, Borrower would be deemed obligated to pay
interest at a rate which exceeds the maximum rate permitted by Law, or if any of
the Loan Obligations is paid or becomes payable before its originally scheduled
Maturity and as a result Borrower has paid or would be obligated to pay interest
at such an excessive rate, then (i) Borrower shall not be obligated to pay
interest to the extent it exceeds the interest that would be payable at the
maximum rate permitted by Law; (ii) if the outstanding Loan Obligations have not
been accelerated as provided in Section 16.3.2, any such excess interest that
has been paid by Borrower shall be refunded; (iii) if the outstanding Loan
Obligations have been accelerated as provided in Section 16.3.2, any such excess
that has been paid by Borrower shall be applied to the Loan Obligations as
provided in Section 16.4; and (iv) the effective rate of interest shall be
deemed automatically reduced to the maximum rate permitted by Law.
20. GENERAL.
20.1. LENDER'S RIGHT TO CURE. Lender may from time to time, in its
absolute discretion, for Borrower's account and at Borrower's expense,
pay any amount or do any act required of Borrower under the Loan
Documents or requested by Lender to preserve, protect, maintain or
enforce the Loan Obligations, the Collateral or Lender's Security
Interests therein, and which Borrower fails to pay or do, including
payment of any judgment against Borrower, insurance premium, Taxes or
assessments, warehouse charge, finishing or processing charge,
landlord's claim, and any other Security Interest upon or with respect
to the Collateral. All payments that Lender makes pursuant to this
Section and all out-of-pocket costs and expenses that Lender pays or
incurs in connection with any action taken by them hereunder shall be a
part of the Loan Obligations, the repayment of which shall be secured
by the Collateral. Any payment made or other action taken by Lender
pursuant to this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to pursue Lender's other
rights and remedies with respect thereto.
31
20.2. RIGHTS NOT EXCLUSIVE. Every right granted to Lender
hereunder or under any other Loan Document or allowed to them at law or
in equity shall be deemed cumulative and may be exercised from time to
time.
20.3. SURVIVAL OF AGREEMENTS. All covenants and agreements made
herein and in the other Loan Documents shall survive the execution and
delivery of this Agreement, the Notes and other Loan Documents and the
making of every Advance. All agreements, obligations and liabilities of
Borrower under the Loan Documents concerning the payment of money to
Lender, including Borrower's obligations under Sections 20.6 and 20.7,
but excluding the obligation to repay the Loans and interest accrued
thereon, shall survive the repayment in full of the Loans and interest
accrued thereon, the return of the Notes to Borrower, and the
termination or cancellation of the Commitments.
20.4. SALE OF PARTICIPATIONS. Lender may sell participations to
one or more banks or other entities in all or a portion of its rights
and obligations under this Agreement provided that the terms of sale
satisfy the following requirements:
20.4.1. Lender's obligations under this Agreement shall remain
unchanged.
20.4.2. Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations.
20.4.3. Lender shall remain the holder of the Notes for the
purpose of this Agreement.
20.4.4. Borrower and Lender shall continue to deal solely and
directly with each other in connection with Lender's rights
and obligations under this Agreement and with regard to
Advances and payments to be made under this Agreement.
Participation agreements between Lender and its participants
may, however, provide that Lender will obtain the approval of
such participant prior to Lender agreeing to any amendment or
waiver of any provisions of this Agreement which would (i)
extend the maturity of the Notes, (ii) reduce the interest
rate on the Loans, (iii) increase any of the Commitments of
Lender, or (iv) release all or any substantial part of the
Collateral other than in accordance with the terms of the Loan
Documents.
Lender may furnish any information concerning Borrower or any of its
Subsidiaries in the possession of Lender from time to time to
participants (including prospective participants). Upon the sale of
any such participation, Lender will notify Borrower of such sale and
the identity of such participant (but will not be liable for failing
to do so).
20.5. ASSIGNMENTS TO AFFILIATES. Lender may assign all or any
portion of its interest in the Loans to its Affiliates without the
acceptance or consent of Lender or Borrower, and may assign all or any
portion of its interest in the Loans to the Federal Reserve Bank
without acceptance or approval of Borrower. Upon such assignment,
Lender will notify Borrower of such sale and the identity of such
assignee (but will not be liable for failing to do so).
20.6. PAYMENT OF EXPENSES. Borrower agrees to pay or reimburse to
Lender all of Lender's out-of-pocket costs incurred in connection with
Lender's due diligence review before execution of the Loan Documents;
the negotiation and preparation of the commitment letters and the Loan
Documents; the perfection of Lender's Security Interest in any
Collateral; the interpretation of any of the Loan Documents; the
enforcement of Lender's rights and remedies under the Loan Documents
after a Default or Event of Default; any amendment of or
supplementation to any of
32
the Loan Documents; and any waiver, consent or forbearance with respect
to any Default or Event of Default. Out-of-pocket costs may include but
are not limited to the following, to the extent they are actually paid
or incurred: title insurance fees and premiums; the cost of searches
for Security Interests existing against Borrower; recording and filing
fees; fees for all required appraisals; environmental consultant fees;
litigation costs; and all attorneys' and paralegals' expenses and
reasonable fees. Attorneys' and paralegals' expenses may include but
are not limited to filing charges; telephone, data transmission,
facsimile and other communication costs; courier and other delivery
charges; and photocopying charges. Litigation costs may include but are
not limited to filing fees, deposition costs, expert witness fees,
expenses of service of process, and other such costs paid or incurred
in any administrative, arbitration, or court proceedings involving
Lender and Borrower, including proceedings under the Federal Bankruptcy
Code. All costs which Borrower is obligated to pay or reimburse to
Lender are Loan Obligations payable to Lender, secured by the
Collateral, and are payable on Lender's demand.
20.7. GENERAL INDEMNITY.
20.7.1. Borrower shall indemnify and hold harmless Lender and
its directors, officers, employees, agents, and
representatives (the Indemnified Parties) for, from and
against, and promptly reimburse the Indemnified Parties for,
any and all claims, damages, liabilities, losses, costs and
expenses (including reasonable attorneys' fees and expenses
and amounts paid in settlement) incurred, paid or sustained by
the Indemnified Parties in connection with, arising out of,
based upon or otherwise involving or resulting from any
threatened, pending or completed action, suit, investigation
or other proceeding by, against or otherwise involving the
Indemnified Parties and in any way dealing with, relating to
or otherwise involving this Agreement, any of the other Loan
Documents, or any transaction contemplated hereby or thereby,
except to the extent that they arise from the gross
negligence, bad faith or willful misconduct of any of the
Indemnified Parties. Borrower shall indemnify and hold
harmless the Indemnified Parties for, from and against, and
promptly reimburse the Indemnified Parties for, any and all
claims, damages, liabilities, losses, costs and expenses
(including reasonable attorneys' and consultant fees and
expenses, investigation and laboratory fees, removal,
remedial, response and corrective action costs, and amounts
paid in settlement) incurred, paid or sustained by the
Indemnified Parties as a result of the manufacture, storage,
transportation, release or disposal of any Hazardous Material
on, from, over or affecting any of the Collateral or any of
the assets, properties, or operations of Borrower or any
predecessor in interest, directly or indirectly, except to the
extent that they arise from the gross negligence, bad faith or
willful misconduct of any of the Indemnified Parties.
20.7.2. The obligations of Borrower under this Section 20.7
shall survive the termination or cancellation of the
Commitments, the payment and satisfaction of all of the Loan
Obligations, and the release of the Collateral.
20.7.3. To the extent that any of the indemnities required
from Borrower under this Section are unenforceable because
they violate any Law or public policy, Borrower shall pay the
maximum amount which it is permitted to pay under applicable
Law.
20.8. LETTERS OF CREDIT. Borrower assumes all risks of the acts or
omissions of any beneficiary of any of the Letters of Credit. Neither
Lender nor any of its directors, officers, employees, agents, or
representatives shall be liable or responsible for: (a) the use which
may be made of any of the Letters of Credit or for any acts or
omissions of beneficiary in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement(s)
33
thereon, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment
by Lender against presentation of documents which, on their face,
appear to comply with the terms of any Letter of Credit, even though
such documents may fail to bear any reference or adequate reference to
any such Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit in
connection with which Lender would, pursuant to the Uniform Customs and
Practices for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 (as amended from time to time)
or the International Standby Practices (ISP98), be absolved from
liability. In furtherance and not in limitation of the foregoing,
Lender may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any
notice or information to the contrary.
20.9. LOAN RECORDS. The date and amount of all Advances and
payments of amounts due from Borrower under the Loan Documents will be
recorded in Lender's records and the records that Lender normally
maintains for such types of transactions. The failure to record, or any
error in recording, any of the foregoing shall not, however, affect the
obligation of Borrower to repay the Loans and other amounts payable
under the Loan Documents. Borrower shall have the burden of proving
that Lender's records are not correct. Borrower agrees that Lender's
books and records showing the Loan Obligations and the transactions
pursuant to this Agreement shall be admissible in any action or
proceeding arising therefrom, and shall constitute prima facie proof
thereof, absent manifest error, irrespective of whether any Loan
Obligation is also evidenced by a promissory note or other instrument.
Lender will provide to Borrower a monthly statement of Advances,
payments, and other transactions pursuant to this Agreement. Such
statements shall be deemed correct, accurate and an account stated
(except for reversals and reapplications of payments as provided in
Section 8.4 and corrections of errors discovered by Lender), unless
Borrower notifies Lender in writing to the contrary within 30 days
after such statement is rendered. In the event a timely written notice
of objections is given by Borrower, only the items to which exception
is expressly made will be considered to be disputed by Borrower.
20.10. OTHER SECURITY AND GUARANTIES. Lender may, without notice or
demand and without affecting Borrower's obligations hereunder, from
time to time: (a) take from any Person and hold collateral (other than
the Collateral) for the payment of all or any part of the Loan
Obligations and exchange, enforce and release such collateral or any
part thereof; and (b) accept and hold any endorsement or guaranty of
payment of all or any part of the Loan Obligations and release or
substitute any such endorser or guarantor, or any Person who has given
any Security Interest in any other collateral as security for the
payment of all or any part of the Loan Obligations, or any other Person
in any way obligated to pay all or any part of the Loan Obligations.
21. MISCELLANEOUS.
21.1. NOTICES. All notices, consents, requests and demands to
or upon the respective parties hereto shall be in writing, and shall be
deemed to have been given or made when delivered in person to those
Persons listed on the signature pages hereof or three days after being
deposited in the United States mail, postage prepaid, or, in the case
of overnight courier services, when delivered to the overnight courier
service, or in the case of facsimile machine notice, when sent,
verification received, in each case addressed as set forth on the
signature pages hereof, or such other address as either party may
designate by notice to the other in accordance with the terms of this
Section. No notice given to or demand made on Borrower by Lender in any
instance shall entitle Borrower to notice or demand in any other
instance.
34
21.2. AMENDMENTS, WAIVERS AND CONSENTS. Unless otherwise provided
herein, no amendment to or modification of any provision of this
Agreement, or of any of the other Loan Documents shall be effective
unless it is in writing and signed by authorized officers of Borrower
and Lender. Unless otherwise provided herein, no waiver of, or consent
to any departure by Borrower from, the requirements of any provision of
this Agreement or any of the other Loan Documents shall be effective
unless it is in writing and signed by an authorized officer of Lender.
Any such amendment, modification, waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No
notice to or demand on Borrower in any case shall entitle Borrower to
any other or further notice or demand in similar or other
circumstances. No failure by Lender to exercise, and no delay by Lender
in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
by Lender of any right, remedy, power or privilege hereunder preclude
any other exercise thereof, or the exercise of any other right, remedy,
power or privilege. Each and every right granted to Lender hereunder or
under any other Loan Document or other document delivered hereunder or
in connection with this Agreement or allowed to Lender at law or in
equity shall be deemed cumulative and may be exercised from time to
time.
21.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and all future
holders of the Notes and their respective successors and assigns,
except that Borrower may not assign, delegate or transfer any of its
rights or obligations under this Agreement without the prior written
consent of Lender. With respect to Borrower's successors and assigns,
such successors and assigns shall include any receiver, trustee or
debtor-in-possession of or for Borrower.
21.4. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or lack of authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction
unless the ineffectiveness of such provision would result in such a
material change as to cause completion of the transactions contemplated
hereby to be unreasonable.
21.5. COUNTERPARTS. This Agreement may be executed by the parties
hereto on any number of separate counterparts, and all such
counterparts taken together shall constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement
to produce or account for more than one counterpart signed by the party
to be charged.
21.6. GOVERNING LAW; NO THIRD PARTY RIGHTS. This Agreement, the
other Loan Documents and the Notes and the rights and obligations of
the parties hereunder and thereunder shall be governed by and construed
and interpreted in accordance with the internal Laws of the State of
Illinois applicable to contracts made and to be performed wholly within
such state, without regard to choice or conflict of laws provisions;
except that the provisions of the Loan Documents pertaining to the
creation or perfection of Security Interests or the enforcement of the
rights of Lender in Collateral located in states other than Illinois,
if any, and other related matters subject to the Law of such states,
shall be governed by the Laws of such states. This Agreement is solely
for the benefit of the parties hereto and their respective successors
and assigns, and no other Person shall have any right, benefit,
priority or interest under, or because of the existence of, this
Agreement.
21.7. COUNTERPART FACSIMILE EXECUTION. For purposes of this
Agreement, a document (or signature page thereto) signed and
transmitted by facsimile machine or telecopier is to be treated as an
original document. The signature of any Person thereon, for purposes
hereof, is to be
35
considered as an original signature, and the document transmitted is to
be considered to have the same binding effect as an original signature
on an original document. At the request of any party hereto, any
facsimile or telecopy document is to be re-executed in original form by
the Persons who executed the facsimile or telecopy document. No party
hereto may raise the use of a facsimile machine or telecopier or the
fact that any signature was transmitted through the use of a facsimile
or telecopier machine as a defense to the enforcement of this Agreement
or any amendment or other document executed in compliance with this
Section.
21.8. NO OTHER AGREEMENTS. There are no other agreements between
Lender and Borrower, oral or written, concerning the subject matter of
the Loan Documents, and all prior agreements concerning the same
subject matter, including any term sheet or commitment letter, are
merged into the Loan Documents and thereby extinguished.
21.9. NEGOTIATED TRANSACTION. Borrower and Lender represent one to
the other that in the negotiation and drafting of this Agreement they
have been represented by and have relied upon the advice of counsel of
their choice. Borrower and Lender affirm that their counsel have both
had substantial roles in the drafting and negotiation of this Agreement
and, therefore, this Agreement shall be deemed drafted by both Borrower
and Lender, and the rule of construction to the effect that any
ambiguities are to be resolved against the drafter shall not be
employed in the interpretation of this Agreement.
21.10. JURY TRIAL WAIVER. BORROWER AND LENDER HEREBY WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(1) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM IN RESPECT OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. BORROWER AND LENDER AGREE AND CONSENT
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND THAT ANY OF THEM MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
21.11. CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT
SENTENCE, BORROWER AND LENDER HEREBY AGREE TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL COURTS OF THE NORTHERN DISTRICT OF
ILLINOIS, AND THE STATE COURTS OF ILLINOIS LOCATED IN XXXX COUNTY, AND
WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT
TO ANY ACTION INSTITUTED THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING
THE RELATIONSHIP BETWEEN LENDER AND BORROWER OR THE CONDUCT OF ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE.
NOTWITHSTANDING THE FOREGOING: (1) LENDER SHALL HAVE THE RIGHT TO BRING
ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN ANY COURTS
OF ANY OTHER JURISDICTION LENDER DEEMS NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE COLLATERAL, REAL ESTATE OR OTHER SECURITY FOR
THE LOAN OBLIGATIONS, AND (2) EACH OF THE PARTIES
36
HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE
IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
21.12. SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED)
DIRECTED TO BORROWER AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES
HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5)
DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS; OR
AT LENDER'S OPTION, BY SERVICE UPON CT CORPORATION, WHICH BORROWER
IRREVOCABLY APPOINTS AS BORROWER'S AGENT FOR THE PURPOSE OF ACCEPTING
SERVICE OF PROCESS WITHIN THE STATE OF ILLINOIS. LENDER SHALL PROMPTLY
FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED UPON SAID AGENT TO
BORROWER AT ITS ADDRESS ON THE SIGNATURE PAGES HEREOF. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
21.13. INCORPORATION BY REFERENCE. All of the terms of the other Loan
Documents are incorporated in and made a part of this Agreement by this
reference.
21.14. STATUTORY NOTICE -- ORAL AGREEMENT. Nothing contained in the
following notice shall be deemed to limit or modify the terms of the
Loan Documents: ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT
YOU (BORROWER) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.
Borrower acknowledges that there are no other agreements between Lender
and Borrower, oral or written, concerning the subject matter of the
Loan Documents, and that all prior agreements concerning the same
subject matter, including any proposal or commitment letter, are merged
in to the Loan Documents and thereby extinguished.
21.15. STATUTORY NOTICE -- INSURANCE. The following notice is given
pursuant to Section 10 of the Collateral Protection Act set forth in
Chapter 815 Section 180/1 of the Illinois Compiled Statutes (1996);
nothing contained in such notice shall be deemed to limit or modify the
terms of the Loan Documents: UNLESS YOU PROVIDE EVIDENCE OF THE
INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US, WE MAY PURCHASE
INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR COLLATERAL.
THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS. THE COVERAGE
THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT
IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL. YOU MAY LATER
CANCEL ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE
THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE
PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE
37
RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE
PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION
WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE
MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS
OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE
TO OBTAIN ON YOUR OWN.
21.16. CONFIDENTIALITY. Lender agrees to take normal and reasonable
precautions and exercise due care, in accordance with its usual
procedures, to maintain the confidentiality of all strategic or
financial information of Borrower and the Covered Persons, and all
other information of Borrower and the Covered Persons which Lender has
been specifically notified should be treated as confidential, provided
to it by Borrower or any Covered Person under any Loan Documents, and
Lender shall not use any such information other than in connection with
or in the enforcement of the Loan Documents or in connection with other
business now or hereafter existing or contemplated with Borrower or any
Covered Person; except to the extent such information (i) was or
becomes generally available to the public other than as a result of
disclosure by Lender, or (ii) was or becomes available on a
non-confidential basis from a source other than Borrower or any Covered
Person, provided that such source is not bound by a confidentiality
agreement with Borrower or any Covered Person known to Lender;
provided, however, that Lender may disclose such information (a) at the
request or pursuant to any requirement of any Governmental Authority to
which Lender is subject or in connection with an examination of Lender
by any such Governmental Authority; (b) pursuant to subpoena or other
court process; (c) when required to do so in accordance with the
provisions of any applicable requirement of Law; (d) to the extent
reasonably required in connection with any litigation or proceeding to
which Lender may be party; (e) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other
Loan Document; (f) to Lender's officers, auditors, examiners, and
professional advisors; and (g) to any participant or assignee, actual
or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of Lender
hereunder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
38
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by appropriate duly authorized officers as of the date first above
written.
CENTENE CORPORATION LASALLE BANK NATIONAL ASSOCIATION
By: /s/ XXXXX X. XXXXX By: /s/ XXX X. X'XXXXXXXXXXX
Name: Xxxxx X. Xxxxx Name: Xxx X. X'Xxxxxxxxxxx
Title: Senior Vice President and Title: First Vice President
Chief Financial Officer
Notice Address: Notice Address:
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Attn: Xxx X'Xxxxxxxxxxx
Chief Financial Officer Tel: 000-000-0000
Tel: 000-000-0000 Fax: 000-000-0000
Fax: 000-000-0000
with a copy to:
with a copy to: Xxxxx, Xxxx & Xxxxxxxx, X.X.
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000