REVOLVING LOAN AGREEMENT
Exhibit
10.1
THIS
REVOLVING LOAN AGREEMENT (this “Agreement) dated as of October 14, 2009 (the
“Closing Date”), is made by and between and among MIDAS MEDICI GROUP HOLDINGS,
INC., a Delaware corporation (“Midas Medici”), and UTILIPOINT INTERNATIONAL,
INC., a New Mexico corporation (“Utilipoint”) (Midas Medici and Utilipoint are
hereinafter collectively referred to as “Borrower”) and PROFICIO BANK, a Utah
corporation (“Bank”).
W I T N E
S S E T H:
That for
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and in consideration of the mutual promises herein made, Bank and
Borrower, intending to be legally bound, agree as follows:
ARTICLE
I
THE
LOAN
Section
1.1
Bank
hereby agrees to lend to Borrower, and Borrower hereby agrees to borrow from
Bank, upon the terms and conditions, set forth in this Agreement, the principal
sum of up to Five Hundred Thousand and No/100 Dollars ($500,000.00) (the
“Revolving Loan”). Borrower’s obligation to repay the Revolving Loan
and the interest thereon shall be evidenced by this Agreement and a Secured
Revolving Promissory Note (the “Revolving Note”) in form and substance
satisfactory to Bank. Until the earlier of October 14, 2010 (the
“Maturity Date”), or the occurrence of any Event of Default (as defined under
Article 6 of this Agreement), Borrower may borrow hereunder, prepay the
principal sum of such Revolving Loan in whole or in part without penalty, and
re-borrow hereunder, so long as the aggregate unpaid principal balance of such
loan does not exceed the Borrowing Base at such time. Bank may
require at any time that advances be made upon at least one (1) banking day’s
notice to Bank. Bank may also require at any time that advances be
requested in writing on Bank’s loan request form. Bank may disburse
each advance by credit to Borrower’s account with Bank. Interest on
the Revolving Loan, calculated at the Applicable Interest Rate, shall be paid
monthly in arears commencing on November 1, 2009, and continuing on the same day
of each successive month thereafter through the Maturity Date, at which time all
accrued but unpaid interest, together with any other amount due and payable
hereunder shall be paid in full. Principal payable on account of the
Revolving Loan shall be payable by Borrower to Bank immediately upon the
earliest of (i) the occurrence of an Event of Default which Bank elects to
accelerate the maturity and payment of the Revolving Loan, or (ii) the Maturity
Date; provided,
however, that if the principal balance of the Revolving Loan outstanding at any
time shall exceed the Borrowing Base at such time, Borrower shall, promptly on
demand, repay the Revolving Loan in an amount sufficient to reduce the aggregate
unpaid principal amount of the Revolving Loan by an amount equal to such
excess.
Each
request for a Revolving Loan advance, if requested by Bank or required pursuant
to Section 4.12, shall be accompanied by a complete and accurate borrowing base
certificate (“Borrowing Base Certificate”) in the form attached hereto as Exhibit A, and shall
be confirmed by Borrower with Bank by telephone; provided, that Bank shall at
any time have the right to review and adjust, in the exercise of its reasonable
discretion, any calculation set forth in the Borrowing Base Certificate (i) to
reflect Bank’s reasonable estimate of declines in value of any of the Eligible
Accounts described in such Borrowing Base Certificate, and (ii) to the extent
such calculation is not in accordance with this Agreement. Borrower
shall make no more than one (1) request for Revolving Loan advances per business
day.
1
Section
1.2 Bank
retains the right at any time, after the occurrence of an Event of Default which
Event of Default is continuing, to notify Account debtors that Accounts have
been assigned to Bank and to collect Accounts directly in its own name and to
charge the reasonable collection costs and expenses, including reasonable
attorneys’ fees, to Borrower. Bank has no duty to protect, insure,
collect or realize upon the Accounts or preserve rights in them. For
the purpose of computing interest hereunder, all items of payment received by
Bank shall be deemed applied by Bank on account of the Revolving Loan (subject
to final payment of such items) on the next Business Day after receipt by Bank
of such items of payment in Salt Lake City, Utah.
Section
1.3 In no
event shall the amount of interest due and payable under this Agreement, the
Revolving Note, or the Security Agreement (as defined in Section 2.1 below)
exceed the maximum rate of interest allowed by applicable law and, in the event
any such payment is made by Borrower or received by Bank, such excess sum shall
be credited as a payment of principal (or, if no principal shall remain
outstanding, shall be refunded to Borrower). It is the express intent
hereof that the Borrower not pay and Bank not receive, directly or indirectly or
in any manner, interest in excess of that which may be lawfully paid under
applicable law.
Section
1.4 Borrower
shall pay Bank an origination fee equal to two percent (2.00%) of the amount of
the Revolving Loan (i.e., Ten Thousand Dollars and No/100 ($10,000.00)) (the
“Loan Origination Fee”) for the Revolving Loan. Borrower previously
paid Bank one-half of the Loan Origination Fee (i.e., $5,000.00) upon the
execution of the commitment letter, which amount is
non-refundable. The remaining one-half of the Loan Origination Fee
(i.e., $5,000.00) shall be paid by Borrower to Bank on the Closing Date and
shall be deemed fully earned by Bank upon the execution of this
Agreement.
ARTICLE
II
COLLATERAL
Section
2.1 The
repayment by Borrower of its indebtedness under the Revolving Loan and the
Revolving Note, and the performance by Borrower of all obligations under this
Agreement shall be secured by (i) a security agreement (“Security Agreement”)
that secures obligations so defined as to include the Revolving Loan or the
Revolving Note, and by all property of Borrower in, or coming into, the
possession, control or custody of Bank, or in which Bank has or hereafter
acquires a lien, security interest, or other right, including, without
limitation all accounts, inventory, furniture, fixtures, equipment, leasehold
improvements, chattel paper, and general intangibles of Borrower and all
proceeds thereof (individually and collectively, the “Collateral”).
Section
2.2 Borrower
shall execute and deliver, or shall cause to be executed and delivered, such
documents relating to the Collateral as Bank may from time to time
request.
2
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES: CONDITIONS PRECEDENT
Borrower
represents and warrants to Bank as follows:
Section
3.1 Each
Borrower is a corporation duly organized and existing under the laws of its
state of incorporation, and is qualified to do business in all jurisdictions in
which it conducts its business, except where the failure to be so qualified is
not reasonably likely to have a material adverse affect on such
Borrower.
Section
3.2 The
execution and delivery by Borrower of, and the performance by each Borrower of
its obligations under, this Agreement, the Revolving Note and the Security
Agreement have been duly authorized by all requisite action on the part of
Borrower and do not and will not (i) violate any provision of Borrower’s
articles of incorporation, by-laws, or other organizational documents, any law
or any judgment, order or ruling of any court or governmental agency, or (ii) be
in conflict with, result in a breach of, or constitute, following notice or
lapse of time or both, a default under any material indenture, agreement or
other instrument to which Borrower is a party or by which either Borrower or any
of its property is bound.
Section
3.3 Each of
this Agreement, the Revolving Note, and the Security Agreement is the legal,
valid and binding obligation and agreement of Borrower, enforceable against the
Borrower which executed it in accordance with its terms.
Section
3.4 There are
no pending or threatened actions or proceedings before any court or
administrative or governmental agency that are reasonably likely to,
individually or collectively, materially adversely affect the financial
condition or business operations of Borrower.
Section
3.5 Borrower
has furnished to Bank financial statements which reflect fiscal year end dated
December 31, 2008 (on Utilipoint) and interim statement dated June 30, 2009 (on
Utilipoint) as well as June 30, 2009 (on Midas Medici) (collectively the
“Financial Statements”), which Financial Statements are true and correct in all
material respects. Such Financial Statements fairly and accurately present the
financial condition of the applicable Borrower as of the dates
indicated. Since the dates of the latest Financial Statements
referred to above, there has been no material adverse change in the financial
condition, business, or operations of Borrower, and there exists no material
contingent liability or obligation assertable against Borrower that is not
identified and disclosed to Bank in the Financial Statements.
Section
3.6 All
federal, state and other tax returns of Borrower required by law to be filed
have been completed in full and have been duly filed, and all taxes, assessments
and withholdings shown on such returns or billed to Borrower have been paid, and
Borrower maintains adequate reserves and accruals in respect of all such
federal, state and other taxes, assessments and withholdings. There
are no assessments pending against Borrower for any taxes or withholdings, and
Borrower knows of no basis therefor.
Section
3.7 The
obligations of Borrower under this Agreement and the Revolving Note are not
subordinated in right of payment to any other obligations of
Borrower.
3
Section
3.8 Borrower
possesses all permits, memberships, franchises, contracts, licenses, trademark
rights, trade names, patents, and other authorizations necessary to enable it to
conduct its business operations as now conducted, and no filing with, and no
consent, permission, authorization, order or license of, any individual, entity,
or governmental authority is necessary in connection with the execution,
delivery, performance or enforcement of this Agreement or the Revolving
Note.
Section
3.9 No event
has occurred and is continuing which is, or which with the giving of notice or
lapse of time or both would be, an Event of Default of this
Agreement.
Section
3.10
Borrower
has good and marketable title to all of its properties and assets including,
without limitation, the Collateral and the properties and assets reflected in
the above-described financial statement, unless disclosed in such financial
statements.
Section
3.11 Bank’s
obligations to make the Revolving Loan and to enter into and perform its
agreements under this Agreement are subject to the full and complete
satisfaction of the following conditions precedent, including receipt and
approval by Bank of the following agreements, documents and instruments, each in
form and substance satisfactory to Bank, in each case as determined by Bank in
its sole and absolute discretion on or before the Closing Date:
(a) The
representations and warranties by Borrower shall be correct in all respects on
and as of the Closing Date (other than those that specifically relate to an
earlier date).
(b) Bank
shall have received and approved fully executed counterparts of the following
documents, each of which shall have been duly authorized, executed (and, where
appropriate, acknowledged), and delivered by the respective parties thereto, as
well as any and all other documents and instruments as Bank may deem reasonably
necessary with respect to the Revolving Loan:
|
(i)
|
this
Agreement;
|
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(ii)
|
the
Revolving Note;
|
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(iii)
|
the
Security Agreement;
|
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(iv)
|
the
Subordination and Standstill
Agreement;
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(v)
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the
Financing Statements in Delaware and New Mexico;
and
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(vi)
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the
Compliance Certificate.
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All documentation evidencing the
foregoing shall be in form and substance reasonably satisfactory to Bank and
shall include consents from such third parties as Lender deems necessary or
appropriate.
(c) Bank
shall have received a Letter of Comfort from Xxxx Xxxxxxxx International, LLC in
form and substance reasonably satisfactory to Bank.
(d) All
reasonable out-of-pocket costs and expenses incurred by Bank (including, without
limitation, fees, costs and expenses for Bank’s legal counsel) shall be paid by
Borrower on or before the Closing Date.
(e) Any and
all obligations of Utilipoint under the Business Loan Agreement by and between
Utilipoint and Bank of Albuquerque, dated January 6, 2009, have been paid in
full.
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ARTICLE
IV
AFFIRMATIVE
COVENANTS
Borrower
covenants and agrees that, so long as it may borrow under this Agreement or so
long as any indebtedness remains outstanding under the Revolving Loan or under
the Revolving Note, Borrower shall:
Section
4.1 Maintain
its books, accounts and records in accordance with generally accepted accounting
principles and upon reasonable prior notice to Borrower shall permit any person
or entity designated in writing by Bank, during Borrower’s normal business
hours, to visit and inspect any of its properties, books and financial records,
and to make copies thereof and take extracts therefrom.
Section
4.2 Pay and
discharge all taxes, assessments, fees, withholdings and other governmental
charges or levies imposed upon it or upon its income and profits, or upon any
property belonging to it, prior to the date on which penalties attached thereto,
unless the legality thereof shall be promptly and actively contested in good
faith by appropriate proceedings.
Section
4.3 Promptly
notify Bank in writing of the occurrence of any Event of Default or of any
pending or threatened litigation claiming damages in any amount seeking relief
that, if granted, would materially adversely affect the financial condition or
business operations of Borrower.
Section
4.4 Maintain
and keep in force insurance of the types and in amounts customarily carried in
lines of business similar to Borrower’s, including, without limitation, fire,
public liability, property damage, and worker’s compensation insurance, which
insurance shall be carried with companies and in amounts reasonably satisfactory
to Bank, and Borrower shall deliver to Bank from time to time at Bank’s request
schedules setting forth all insurance then in effect and if applicable,
certificates showing the Bank as loss payee or an additional insured
thereunder.
Section
4.5 Keep all
its property in good repair and condition, ordinary wear and tear excepted, and
from time to time make necessary repairs, renewals and replacements thereto so
that Borrower’s property shall be fully and efficiently preserved and
maintained.
Section
4.6 Deliver
to Bank (i) within forty-five (45) days after each quarter end, an internally
prepared unaudited profit and loss statement and balance sheet of Borrower, and
(ii) within one hundred-twenty (120) days after the end of each fiscal year end
a profit and loss statement and balance sheet of Borrower, audited by the
present independent certified public accountants of Borrower or by such other
firm of independent public accountants as may be designated by Borrower and be
reasonably satisfactory to Bank.
5
Section
4.7 Maintain
its existence in good standing in the state of its organization or incorporation
and its qualification and good standing in all jurisdictions where such
qualification is required under applicable law, and conduct its business in the
manner in which it is now conducted subject only to changes made in the ordinary
course of business.
Section
4.8 Perform
or take, on request of Bank, such action as may be necessary or advisable to
perfect any lien or security interest in the Collateral or otherwise to carry
out the intent of this Agreement.
Section
4.9 Pay or
reimburse Bank for any reasonable out-of-pocket expenses, including reasonable
attorneys’ fees, incurred by Bank in preparing or enforcing this Agreement, the
Revolving Note, the Security Agreement, and all other transaction documents, or
in collecting the Revolving Loan and any other sums due under the Revolving Note
or this Agreement after default by Borrower in the payment thereof.
Section
4.10
Maintain
its primary deposit and operation accounts with Bank; provided that, Borrower
may have secondary accounts at other financial institutions with the prior
consent of Bank.
Section
4.11 Use the
proceeds of the Revolving Loan only for working capital purposes.
Section
4.12 No later
than 1:00 p.m., Mountain Time on each day on which Borrower requests a Revolving
Loan advance (but in any event no later than the tenth (10th) day
of each month for the immediately preceding month), Borrower shall deliver to
Bank a Borrowing Base Certificate based on the Eligible Accounts as of the end
of the preceding week.
Section
4.13 No later
than the forty-fifth (45th) day
after the end of each fiscal quarter, Borrower shall deliver to Bank a
compliance certificate (“Compliance Certificate”) (in the form attached hereto
as Exhibit B)
as of the end of the preceding quarter.
ARTICLE
V
NEGATIVE
COVENANTS
Borrower
covenants and agrees that, without the prior written consent of Bank, so long as
it may borrow under this Agreement or so long as any indebtedness remains
outstanding under the Revolving Loan or under the Revolving Note, Borrower shall
not:
Section
5.1 Use any
proceeds of the Revolving Loan except for working capital purposes.
Section
5.2 Merge or
consolidate or enter into any analogous reorganization or transaction with any
person or entity (other than an affiliate of Borrower), or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution).
Section
5.3 Without
Bank’s prior written consent, enter into or offer or agree to: any sale, lease,
sublease, assignment, transfer, conveyance, exchange, spin off or other
disposition of, individually or in a series of related transactions, any of the
material assets or properties of Borrower except for sales in the ordinary
course of business.
6
Section
5.4 Cause,
permit, or suffer, directly or indirectly, any Change of Control.
Section
5.5 Guarantee
or become contingently liable for any obligation or indebtedness of any other
person or entity, except that Borrower may endorse negotiable instruments for
collection in the ordinary course of business.
Section
5.6 Make any
loans, advances or extensions of credit to any person or entity, other than
subsidiaries, except in the ordinary course of business.
Section
5.7 Pay or
declare any dividend or distribution to any of its shareholders after the date
hereof.
Section
5.8 Grant any
lien on or security interest in, or otherwise encumber, any of its properties or
assets, including, without limitation, the Collateral, except for liens for
taxes not yet due and payable or which are being actively contested in good
faith by appropriate proceedings and for which adequate reserves are being
maintained by Borrower, and those liens disclosed to Bank by Borrower in writing
prior to the execution of this Agreement.
Section
5.9 Make any
significant principal payments in respect of any of the Subordinated Debt prior
to the public offering of Midas Medici’s capital stock.
Section
5.10 Permit
its minimum tangible net worth (“Tangible Net Worth”), as defined in accordance
with GAAP, and as measured as of the last day of each fiscal quarter, to not be
less than Two Million and No/100 Dollars ($2,000,000.00). Tangible
Net Worth will include the Subordinated Debt.
Section
5.11 Permit
the Fixed Charge Coverage Ratio (as defined below) to be less than 1.30 to
1.00.
ARTICLE
VI
EVENTS OF
DEFAULT AND REMEDIES
Section
6.1 Any one
or more of the following shall constitute an “Event of Default” hereunder by
Borrower:
6.1.1 Failure
to pay within ten (10) days after the date when due any payment of principal or
interest due on the Revolving Note or any other sum due hereunder;
or
6.1.2 Failure
to pay when due any payment of principal or interest due on any other material
obligation for money borrowed hereunder; or
6.1.3 Default
under the Security Agreement or any other document, note, agreement, letter of
credit, mortgage, security agreement, instrument, or understanding with, held
by, or executed in favor of Bank, where such default continues for ten (10) days
after written notice thereof from Bank to Borrower; or
7
6.1.4 Should
any representation or warranty contained herein or made by or furnished on
behalf of Borrower in connection herewith be false or misleading in any material
respect as of the date made; or
6.1.5 Failure
to perform or observe any covenant or agreement contained in Articles 4 or
5 of this Agreement, where such failure continues for ten (10) days after
written notice thereof from Bank to Borrower; or
6.1.6 Failure
to pay its debts generally as they become due unless such debts are the subject
of a bona fide dispute; or
6.1.7 Borrower’s
making or taking any action to make an assignment for the benefit of creditors,
or petitioning or taking any action to petition any tribunal for the appointment
of a custodian, receiver or any trustee for it or a substantial part of its
assets, or commencing or taking any action to commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution,
liquidation or debtor relief law or statute of any jurisdiction, whether now or
hereafter in effect, including, without limitation, any chapter of the federal
Bankruptcy Code; or, if there shall have been filed or commenced against
Borrower any such petition, application or proceeding which is not dismissed
within sixty (60) days or in which an order for relief is entered; or should
Borrower by any act or omission indicate its approval of or acquiescence in any
such petition, application or proceeding or order for relief or the appointment
of a custodian, receiver or any trustee for it or any substantial part of any of
its properties; or should Borrower suffer to exist any such custodianship,
receivership or trusteeship; or
6.1.8 Borrower’s
concealing, removing, or permitting to be concealed or removed, any part of its
property, with intent to hinder, delay or defraud its creditors or any of them,
or making or suffering a transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or making any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid, or suffering or
permitting, while insolvent, any creditor to obtain a lien upon any of its
property through legal proceedings which is not vacated within thirty (30) days
after the date thereof.
Section
6.2 Upon the
occurrence and continuation of an Event of Default, Bank may (i) terminate all
obligations of Bank to Borrower, including, without limitation, all obligations
to lend money under this Agreement, (ii) declare immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are expressly waived, the Revolving Note and any other note of Borrower
held by Bank, including, without limitation, principal, accrued interest and
costs of collection (including, without limitation, a reasonable attorney’s fee
if collected by or through an attorney who is not a salaried employee of Bank,
in bankruptcy or in other judicial proceedings), and (iii) pursue any remedy
available to it under this Agreement, under the Revolving Note, under any other
note of Borrower held by Bank, or under any available law, rule or regulation,
and at law or in equity.
Section
6.3 After the
occurrence of an Event of Default, the obligations outstanding on the Revolving
Loan shall bear interest at the then applicable Applicable Interest Rate plus
three percent (3.0%) (the “Default Rate”).
8
ARTICLE
VII
DEFINITIONS
Section
7.1 As used
in this Agreement, the following terms shall have the meanings set forth
below:
7.1.1 Accounting
terms used in this Agreement shall have the meanings normally given them by, and
shall be calculated, both as to amounts and classification of items, in
accordance with, generally accepted accounting principles.
7.1.2 “Accounts”
means all accounts, contract rights, chattel paper, instruments and documents,
whether now owned or hereafter created or acquired by Borrower or in which
Borrower now has or hereafter acquires any interest.
7.1.3 “Agreement”
means this Revolving Loan Agreement, as amended or supplemented in writing from
time to time.
7.1.4 “Applicable
Interest Rate” shall mean the rate of interest, rounded upward to the nearest
whole one-thousandth of one percent, equal to the sum of (a) the Prime Rate plus
(b) two and one-half percent (2.50%); provided that, in no event shall the
Applicable Interest Rate be less than six and one-half percent (6.50%) (the
“Interest Rate Floor”).
7.1.5 “Bank” is
defined in the introductory clause of this Agreement.
7.1.6 “Borrowing
Base” means as of any date of determination thereof, an amount equal to eighty
percent (80%) of the face value of Eligible Accounts in the United States and
fifty percent (50%) of the face value of Eligible Accounts in
Canada. Borrower’s inventory shall not be included in the Borrowing
Base.
7.1.7 “Borrowing
Base Certificate” is defined in Section 1.1 of this Agreement.
7.1.8 “Borrower”
is defined in the introductory clause of this Agreement.
7.1.9 “Change
of Control” shall mean (a) Midas Medici ceasing to be the beneficial owner of at
least fifty-one percent (51%) of the shares of capital stock of Utilipoint
having the power to vote in the election of directors; (b) a sale, transfer or
other disposition of all or substantially all of the assets of either Borrower;
or (c) a merger or consolidation involving either Borrower which results in
either Borrower not being the surviving entity. For purposes of this
definition, (i) “beneficial owner” has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (as in
effect on the Closing Date), whether or not applicable, except that a person or
entity shall be deemed to have “beneficial ownership” of all shares of capital
stock that any such person or entity has the right to acquire, whether such
right is exercisable immediately or only after the passage of time,
(ii) “capital stock” means, with respect to any corporation, any and all
shares, interests, rights to purchase, warrants, options, participation or their
equivalents of or interests (however designated) in stock issued by that
corporation, and (iii) “control” means the power to direct or cause the
direction of management and policies of a person or entity, whether by ownership
of voting stock, contract or otherwise.
9
7.1.10 “Closing
Date” is defined in the introductory clause of this Agreement.
7.1.11 “Collateral”
is defined in Section 2.1 of this Agreement.
7.1.12 “Compliance
Certificate” is defined in Section 4.13 of this Agreement.
7.1.13 “Current
Portion of Long Term Debt” means, for any period, that portion of Borrower’s
Long Term Debt that must be repaid within the next 12 months.
7.1.14 “Default
Rate” is defined in Section 6.3 of this Agreement.
7.1.15 “EBITDA”
means, for any period, the sum of the amounts for such period of (a) Net Income,
(b) interest expense, (c) taxes imposed on or measured by income or excess
profits (for such period and without regard to any prior periods), and (d) the
amount of all depreciation and amortization allowances and other non-cash
expenses of Borrower. EBITDA in 2009 will be adjusted to reflect
one-time charges. No such adjustment will be made for 2010
EBITDA.
7.1.16 “Eligible
Account(s)” means any invoiced Account arising in the ordinary course of
Borrower’s business, which Bank, in its reasonable judgment, deems to be an
Eligible Account. Without limiting the foregoing, an Account shall
not be an Eligible Account if:
(f) such
Account is unpaid more than ninety (90) days after the original invoice date
thereof;
(g) such
Account is owing by an Account debtor with respect to which fifty percent (50%)
or more of all accounts receivable of such Account debtor (in Dollar value) are
unpaid more than sixty (60) days after the original invoice date thereof;
or
(h) such
Account is owing by an Account debtor that is obligated to Borrower respecting
accounts receivable, the aggregate unpaid balance of which exceeds fifty percent
(50%) (unless otherwise agreed to in writing by Lender) of the aggregate unpaid
balance of all otherwise Eligible Accounts owed to Borrower at such time by all
Account debtors, but only to the extent of such excess.
7.1.17 “Event
of Default” is defined in Section 6.1 of this Agreement.
7.1.18 “Financial
Statements” are defined in Section 3.5 of this Agreement.
7.1.19 “Financing
Statements” means those certain UCC-1 financing statements to be filed in the
States of Delaware (with respect to Midas Medici) and New Mexico (with respect
to Utilipoint) in connection herewith.
7.1.20 “Fixed
Charge Coverage Ratio” means, with respect to the Borrower for any period, the
ratio of (a) the sum of EBITDA plus Rental Expense to (b) the sum of Rental
Expense plus Interest Expense plus Current Portion of Long Term
Debt.
10
7.1.21 “GAAP”
means generally accepted accounting principles consistently applied and
maintained throughout the period indicated and, when used with reference to
Borrower, consistent with the prior financial practices of
Borrower.
7.1.22 “Interest
Expense” means for any period as determined in conformity with GAAP, total
Borrower interest expense, whether paid or accrued or due (including without
limitation, in respect of the Revolving Loan and Subordinated Debt) and
payable.
7.1.23 “Interest
Rate Floor” is defined in Section 7.1.4 of this Agreement.
7.1.24 “Letter
of Comfort” means that certain letter of comfort in favor of Lender by Xxxx
Xxxxxxxx International, LLC.
7.1.25 “Loan
Origination Fee” is defined in Section 1.4 of this Agreement.
7.1.26 “Long
Term Debt” means debt with a maturity of greater than one (1) year and does not
include the Subordinated Debt or the Revolving Loan.
7.1.27 “Maturity
Date” is defined in Section 1.1 of this Agreement.
7.1.28 “Midas
Medici” is defined in the introductory clause of this Agreement.
7.1.29 “Net
Income” means, as applied to the Borrower for any fiscal period, the aggregate
amount of net income (or net loss) of the Borrower, after taxes, for such period
as determined in accordance with GAAP.
7.1.30 “Prime
Rate” shall mean the published Wall Street Journal (Western Edition) Prime
Rate.
7.1.31 “Rental
Expense” means for any period as determined in conformity with GAAP, total
Utilipoint rental expense, whether paid or accrued or due and
payable.
7.1.32 “Revolving
Loan” is defined in Section 1.1 of this Agreement.
7.1.33 “Revolving
Note” is defined in Section 1.1 of this Agreement.
7.1.34 “Security
Agreement” is defined in Section 2.1 of this Agreement.
7.1.35 “Subordinated
Debt” shall mean those certain senior subordinated debentures by and between
Utilipoint and Xxxxx X. Xxxxxxxx Trust, Xxxxxx X. Xxxxxxxxx, Xxx Xxxxx and Xxxx
Xxxxxxxx International, LLC.
7.1.36 “Subordination
and Standstill Agreement” means that certain subordination and standstill
agreement delivered in connection herewith.
7.1.37 “Tangible
Net Worth” is defined in Section 5.10 of this Agreement.
7.1.38 “Utilipoint”
is defined in the introductory clause of this Agreement.
11
ARTICLE
VIII
MISCELLANEOUS
Section
8.1 No delay
or failure on the part of Bank in the exercise of any right, power or privilege
granted to Bank under this Agreement or the Revolving Note, or available at law
or in equity, shall impair any such right, power or privilege of Bank or be
construed as a waiver of any Event of Default or any acquiescence therein. No
single or partial exercise of any such right, power or privilege of Bank shall
preclude the further exercise of such right, power or privilege. No
waiver shall be valid against Bank unless made in writing and signed by Bank,
and then only to the extent expressly specified therein.
Section
8.2 All
notices and communications required or provided for hereunder by any party shall
be in writing and shall be (a) delivered personally, (b) sent by certified or
registered mail, postage prepaid, (c) sent by private courier or other overnight
delivery service, or (d) sent by telecopy (with evidence of transmittal) to the
party or parties to whom such notice is required to be given, to the address set
forth below (or to such other address as any party may designate from time to
time in accordance with the terms of this section:
|
If
to Bank:
|
Proficio
Bank
000 X.
Xxxxx Xxxxxx, Xxxxx 000
Xxxx
Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx
Xxxxx, Chief Credit & Lending Officer
Facsimile
No.: (000) 000-0000
|
|
With a copy
to:
|
Xxxxxx
X. Xxxxxx, Esq.
Holme,
Xxxxxxx & Xxxx, LLP
000
Xxxxx Xxxx Xx., Xxxxx 0000
Xxxx
Xxxx Xxxx, Xxxx 00000
Facsimile
No.: (000) 000-0000
|
|
If
to
Borrower:
|
000
Xxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxx
Xxxxxxx, Chief Executive Officer
Facsimile
No.: (000) 000-0000
|
|
With a copy
to:
|
Xxxxxx
X. Xxxx, Esq.
360
Venture Law (Shmalo Lang) LLP
X.X.
Xxx 00000
Xxxxxxx,
Xxxxxxx 00000
Facsimile
No.: (000)
000-0000
|
12
A notice
delivered personally shall be effective upon receipt. A notice
delivered by private courier or other overnight delivery service shall be
effective on the day delivered (or the day on which delivery is refused in the
event delivery is refused). A notice delivered by certified or
registered mail shall be effective on the third business day after the day of
mailing. A notice sent by telecopy shall be effective twenty-four
(24) hours after the dispatch thereof.
Section
8.3 This
Agreement and the Revolving Note reflects the entire understanding
and agreement of the parties with respect to the subject matter
hereof. This Agreement shall be construed in accordance with and
governed by the laws of the State of Utah, and any disputes now or hereafter
arising in connection with the execution or operation of this Agreement,
regardless of whether such disputes shall arise in contract, tort or otherwise,
shall be governed and determined by the laws of the State of Utah, without
regard to the conflicts of laws provisions thereof. Jurisdiction and
venue for purposes of this Agreement shall be solely with the state and federal
courts sitting in Salt Lake City, Salt Lake County, Utah.
Section
8.4 All
representations and warranties contained in this Agreement or made or furnished
by or on behalf of Borrower in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Revolving Loan and shall
continue in effect until the Revolving Loan and the interest thereon are paid in
full and Borrower may no longer borrow under this Agreement.
Section
8.5 This
Agreement shall bind and inure to the benefit of Borrower and Bank, and their
respective successors and assigns; provided, however, Borrower shall have no
right to assign its rights or delegate its obligations hereunder without prior
written consent of Bank which can be denied in its sole discretion.
Section
8.6 Time is
of the essence in the payment and performance of every term and covenant of this
Agreement and the Revolving Note.
Section
8.7 This
Agreement may be amended or modified, and Borrower may take any action herein
prohibited, or omit to perform any action required to be performed by it, only
if Borrower shall obtain the prior written consent of Bank to such amendment,
modification action or omission to act, and no course of dealing between
Borrower and Bank shall operate as a waiver of any right, power or privilege
granted under this Agreement, under the Revolving Note or the Security
Agreement, or available at law or in equity. This Agreement, the
Revolving Note, and the Security Agreement contain the entire agreement between
and among Borrower and Bank regarding the Revolving Loan and the Collateral. No
oral representations or statements shall be binding on Bank, and no agent of
Bank has the authority to vary the terms of this Agreement except in writing on
the face hereof or on a separate page attached hereto.
Section
8.8 All
rights, powers and privileges granted hereunder shall be cumulative, and shall
not be exclusive of any other rights, powers and privileges granted by the
Revolving Note or any other document or agreement, or available at law or in
equity.
13
Section
8.9 Upon the
occurrence and during the continuation of an Event of Default, Borrower
recognizes Bank’s right, without notice or demand, to apply any indebtedness due
or to become due to Borrower from Bank in satisfaction of any of the
indebtedness, liabilities or obligations of Borrower under this Agreement, under
the Revolving Note, or under any other note, instrument, agreement, document or
writing of Borrower held by or executed in favor of Bank, including, without
limitation, the right to set off against any deposits or cash collateral of
Borrower held by Bank. In addition to the right of setoff, as
additional collateral for the Revolving Loan, Borrower hereby grants to Bank a
continuing lien on and security interest in all deposit accounts of Borrower now
or hereafter held by Bank, including all certificates of deposits now or
hereafter issued to Borrower by Bank.
Section
8.10 To the
extent permitted by applicable law, Borrower and Bank irrevocably waive all
right of trial by jury in any action, proceeding or counterclaim arising out of
or in connection with this Agreement, the Revolving Note or the Security
Agreement or any matter arising hereunder or thereunder. Borrower and Bank also
agree that any legal action or proceeding with respect to this Agreement, the
Revolving Note, or the Security Agreement or to enforce any judgment obtained
against Borrower in connection therewith shall exclusively be brought by Bank or
Borrower in the courts of the State of Utah sitting in Salt Lake County or in
the United States District Court for the Central Division of Utah, or in any
other court to the jurisdiction of which Borrower or any of its property is or
may be subject. Borrower and Bank irrevocably submit to the
jurisdiction of the courts of the State of Utah sitting in Salt Lake County and
of the United States District Court for the Central Division of Utah, and
irrevocably waive any present or future objection to venue in any such court,
and any present or future claim that any such court is an inconvenient forum, in
connection with any action or proceeding relating to this Agreement, the
Revolving Note, or the Security Agreement.
Section
8.11 The
parties to this Agreement have participated jointly in the negotiation and
drafting of this Agreement. In the event of an ambiguity or if a
question of intent or interpretation arises, this Agreement shall be constructed
as if drafted jointly by the parties to this Agreement and no presumption or
burden of proof shall arise favoring or disfavoring either party to this
Agreement by virtue of the authorship of any of the provisions of this
Agreement.
Section
8.12 If any
lawsuit is brought to enforce this Agreement or in connection with any breach or
violation hereof, the prevailing party shall be entitled to recover from the
non-prevailing party all of its costs and expenses, including, without
limitation, all reasonable attorneys’ fee and expenses.
[Signatures
on following page]
14
[Signature
page to Revolving Loan Agreement]
WITNESS
the hand and seal of the parties hereto on or as of the date first above
written.
BORROWER:
MIDAS
MEDICI GROUP HOLDINGS, INC., a Delaware corporation
By:/s/ Xxxx
Xxxxxxx
Name:
_Nana
Baffour
Title:
Chief Executive
Officer
[CORPORATE
SEAL]
UTILIPOINT
INTERNATIONAL, a New Mexico corporation
By:/s/ Xxxx
Xxxxxxx
Name:
_Nana
Baffour
Title:
Chief Executive
Officer
[CORPORATE
SEAL]
PROFICIO
BANK, a Utah corporation
By:/s/
Xxxxx X. Xxxxx
Name:
__Terry
Grant
Title:CCO
15
Exhibit
A
Form of
Borrowing Base Certificate
[Attached
hereto]
16
Exhibit
B
Form of
Compliance Certificate
[Attached
hereto]
