EXHIBIT 10.1
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of this 21st day
of July, 2006, by and between HEALTHSTREAM, INC., a Tennessee corporation
("Borrower"), and SUNTRUST BANK, a Georgia banking corporation ("Lender").
WITNESSETH:
WHEREAS, Borrower has requested that Lender extend it a revolving credit
facility described in more detail herein; and
WHEREAS, Lender has agreed to extend such credit to Borrower conditioned
upon Borrower entering into this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
LOAN FACILITY
1.1 Loan Facility. Subject to the Conditions Precedent and the other terms
and conditions contained in this Agreement and the other Loan Documents, and in
reliance upon the representations, warranties and covenants in this Agreement
and the other Loan Documents, Lender agrees to make Advances to Borrower on a
revolving credit basis up to $7,000,000.00 from time to time until the Revolving
Note Maturity Date, as evidenced by and pursuant to the Revolving Note.
1.2 Payment Terms. Payment terms for the Revolving Loan shall be as set
forth in the Revolving Note. All amounts owed by Borrower to Lender relating to
the Revolving Loan and pursuant to this Agreement, the Revolving Note, or any
other Loan Document shall be due and payable in full on the Revolving Note
Maturity Date.
1.3 Interest. Interest shall accrue on all amounts advanced under the
Revolving Note at the rate set forth in the Revolving Note, except that interest
shall accrue at the Default Rate following the occurrence of an Event of Default
(regardless of whether notice thereof has been given to Borrower).
1.4 Borrowing Procedures for the Revolving Loan. Except to the extent that
the funding of Advances is accomplished through an automated cash management
system administered by Lender, Borrower shall request Advances under the
Revolving Loan pursuant to an operating account maintained with Lender. The
following persons are authorized to request Advances: Xxxxxx X. Xxxxx, Xx.
(Chairman and CEO), Xxxxxx Xxxxxx (Executive Vice President), or Xxxxx X.
Brownie (Senior Vice President and CFO). Subject to the conditions contained
herein, any advance requested by 12:00 noon (Nashville, Tennessee time) shall be
made by Lender on the day of the request. Lender, upon approving the Advance,
shall make the
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Advance by depositing the funds being advanced into Borrower's operating account
with Lender. Each request by Borrower for an Advance shall constitute a
representation and warranty by Borrower, as of the date of the request and as of
the date of the Advance, that Borrower has complied with the Conditions
Precedent set forth in Section 4.2 hereof.
1.5 Use of Proceeds. Proceeds of the Revolving Loan shall be used to
provide funds for general working capital needs, Permitted Acquisitions, and for
stock repurchase and/or redemption transactions that the Borrower may authorize.
1.6 Payments to Lender's Office; Right of Offset. Each payment under the
Revolving Note shall be made to Lender at Lender's Office for the account of
Lender in Dollars on the date such payment is due. Lender may, but shall not be
obligated to, debit the amount of any such payment that is not made by such time
to any ordinary deposit account of Borrower with Lender. Lender shall promptly
notify Borrower of any such setoff, but its failure to give such notice shall
not affect the validity thereof.
1.7 Usury. The parties to this Agreement intend to conform strictly to
applicable usury laws as presently in effect. Accordingly, if the transactions
contemplated hereby would be usurious under applicable law (including the laws
of the United States of America and the State of Tennessee), then, in that
event, notwithstanding anything to the contrary in any Loan Document, Borrower
and Lender agree as follows: (a) the aggregate of all consideration that
constitutes interest under applicable law which is contracted for, charged, or
received under any of the Loan Documents or otherwise in connection with the
Obligations, shall under no circumstance exceed the amount collectible at the
maximum lawful rate of interest permitted by applicable law, and any excess
shall be credited on the Obligations by the holder thereof (or, if the
Obligations shall have been paid in full, refunded to Borrower); and (b) if the
maturity of the Obligations is accelerated by reason of an election of the
holder resulting from any Event of Default or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount of interest permitted by
applicable law, and excess interest, if any, for which this Agreement provides,
or otherwise, shall be canceled automatically as of the date of such
acceleration or prepayment and, if previously paid, shall be credited on the
Obligations (or, if the Obligations shall have been paid in full, refunded to
Borrower).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter this Agreement and extend credit under this
Agreement, Borrower covenants, represents, and warrants to Lender that as of the
date hereof and as of the date of each Advance:
2.1 Existence and Qualification. Borrower is a corporation, legally
existing, and in good standing under the laws of the State of Tennessee.
Borrower is duly qualified as a corporation in all jurisdictions in which a
failure to be so qualified would have a Material Adverse Effect.
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2.2 Power and Authorization. Borrower is duly authorized and empowered to
execute, deliver, and perform under all Loan Documents, in accordance with its
charter and by-laws.
2.3 Binding Obligations. This Agreement is and the other Loan Documents are
legal, valid and binding upon and against Borrower and its Properties,
enforceable in accordance with their respective terms, subject to no defense,
counterclaim, or set-off subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws affecting
creditors' rights generally and to the application of equitable principles.
2.4 No Legal Bar or Resultant Lien. Borrower's execution, delivery and
performance of the Loan Documents do not constitute a default under, and will
not violate any provisions of (to the extent that such default or violation
would have a Material Adverse Effect), the charter and by-laws of Borrower or
any contract, agreement, law, regulation, order, injunction, judgment, decree,
or writ to which Borrower is subject, nor result in the creation or imposition
of any lien upon any Properties of Borrower other than those contemplated by the
Loan Documents.
2.5 No Consent. Borrower's execution, delivery, and performance of the Loan
Documents do not require the consent or approval of any other Person, if the
failure to obtain the same would have a Material Adverse Effect.
2.6 Financial Condition. The consolidated financial statements of Borrower
for the fiscal year ended December 31, 2005, which have been delivered to
Lender, have been prepared in accordance with GAAP, consistently applied, and
such financial statements present fairly the financial condition of Borrower as
of the date or dates and for the period or periods stated therein, subject to
finalizing adjustments determined not to be material. No Material Adverse Change
has occurred since the date of such financial statements.
2.7 Investments, Advances, and Guaranties. Neither Borrower nor any of its
Subsidiaries have made investments in, advances to, or guaranties of the
obligations of any Person, or committed or agreed to undertake any of these
actions or obligations, except as referred to or reflected in the financial
statements delivered to Lender as set forth in Section 2.6 hereof.
2.8 Liabilities; Litigation; Labor Disputes; Etc. The Borrower and its
Subsidiaries have no material liabilities (individually or in the aggregate)
direct or contingent, except as referred to or reflected in the financial
statements or the footnotes thereto delivered to Lender as set forth in Section
2.6 hereof. There is no litigation, bankruptcy or insolvency proceeding,
injunction, order, claim, legal or administrative proceeding, investigation, or
other action of any nature pending or, to the knowledge of Borrower, threatened
against or affecting Borrower and its Subsidiaries that involves the possibility
of any judgment or liability not fully covered by insurance (subject to
customary deductibles), and that may have a Material Adverse Effect. Borrower
and its Subsidiaries have not recently experienced and is not now experiencing
any strike, labor dispute, slowdown, or work stoppage due to labor disagreements
that would have a Material Adverse Effect, and no such strike, dispute,
slowdown, or work stoppage is threatened against Borrower and its Subsidiaries.
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2.9 Taxes; Governmental Charges. Except as set forth on Schedule 2.9
attached hereto, Borrower and each of its Subsidiaries have filed or caused to
be filed all tax returns and reports required to be filed. Except for taxes,
assessments, fees, and other governmental charges that are currently being
contested in good faith, for which appropriate amounts, including penalties and
interest have been accrued and reserved and reflected on the appropriate
financial statements, Borrower has paid all due and payable taxes, assessments,
fees, and other governmental charges levied upon it or upon any of their
respective Properties or income including interest and penalties. Borrower and
each of its Subsidiaries have made all required withholding deposits.
2.10 Title, Etc. Borrower and each of its Subsidiaries have good title to
their respective Properties, free and clear of all liens except for Permitted
Liens.
2.11 Intellectual Property. Except to the extent that a failure to do so
will not have a Material Adverse Effect, Borrower and its Subsidiaries possess
or have the right to use all trademarks, service marks, copyrights, trade names,
patents, licenses, and other intellectual property, and rights therein, as are
necessary for the conduct of its business as now conducted and presently
proposed to be conducted, without conflict with the rights or claimed rights of
others.
2.12 No Default. Except to the extent that the same will not have a
Material Adverse Effect, neither Borrower nor any of its Subsidiaries is in
default, in any respect that affects their respective business, Properties,
operations, or condition, financial or otherwise, under any indenture, mortgage,
deed of trust, credit agreement, note, agreement, or other instrument to which
Borrower and/or its Subsidiaries are a party or by which any of them or their
respective Properties are bound. Borrower is not in violation of its charter or
by-laws.
2.13 Casualties; Taking of Properties, Etc. Neither the business nor the
Properties of Borrower or its Subsidiaries have been affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property,
cancellation of contracts, permits, concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy in such a way as to have a Material Adverse Effect.
2.14 Compliance with Laws, Etc. Except to the extent the same will not have
a Material Adverse Effect, neither Borrower nor any of its Subsidiaries is in
violation of any law, judgment, decree, order, ordinance, or governmental rule
or regulation to which Borrower any of its Subsidiaries, or any of their
respective Properties is subject, including without limitation any Environmental
Law. Neither Borrower nor any of its Subsidiaries, has not failed to obtain any
license, permit, franchise, or other governmental authorization necessary to the
ownership of any of its Properties, the conduct of its business, or in
connection with the Loan.
2.15 ERISA. Borrower is in compliance in all material respects with the
applicable provisions of ERISA. Borrower has not incurred any material
"accumulated funding deficiency" within the meaning of ERISA, and has not
incurred any material liability to PBGC in connection with any Plan.
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2.16 Subsidiaries. Borrower has three Subsidiaries: (a) HealthStream
Acquisition I, Inc., a Tennessee corporation (b) HealthStream Acquisition II,
Inc., a Tennessee corporation, and (c) Data Management & Research, Inc., a
Tennessee corporation.
ARTICLE III
CONDITIONS PRECEDENT
3.1 Initial Conditions. Lender's obligation to make enter into this Loan
Agreement is subject to the Conditions Precedent that Lender shall have received
(or agreed in writing to waive or defer receipt of) all of the following, each
duly executed, dated and delivered as of the Closing Date, in form and substance
satisfactory to Lender and its counsel:
(a) Note and Loan Documents. The Revolving Note, payable to the order
of Lender, and all other Loan Documents, all duly executed by Borrower, the
Guarantors, and/or other parties, as applicable;
(b) Resolutions. Certified copies of resolutions of the board of
directors of Borrower and of each Guarantor authorizing the execution,
delivery, and performance, respectively, of this Agreement and all Loan
Documents;
(c) Certificate of Existence. A certificate of existence regarding
Borrower and each Guarantor certified by the Secretary of State of
Tennessee, containing no facts objectionable to Lender;
(d) Organizational Documents. Copies of the charter and by-laws, of
the Borrower and each of the Guarantors, as applicable, certified by the
secretary of Borrower;
(e) Evidence of Insurance. Evidence that Borrower and each Guarantor
has obtained policies of insurance as required by this Loan Agreement;
(f) Financial Statements. Receipt by Lender of Borrower's consolidated
audited year-end 2005 financial statements, together with current
company-prepared interim financial statements, all in a format acceptable
to Lender; and
(g) Other. Such other documents as Lender may reasonably request.
3.2 All Borrowings. After the Closing Date, Lender's obligation to make
Advances under the Revolving Loan is subject to the following additional
Conditions Precedent, which must be satisfied each time an Advance is requested
and an Advance is made:
(a) Representations. The representations of Borrower contained in
Article 2 are true and correct as of the date of the requested Advance,
except as to (i) representations and warranties expressly made as of a
specified date, which shall remain true and correct as of such specified
date, and (ii) changes occurring after the Closing Date caused by
transactions permitted under the Loan Agreement; and
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(b) No Default. No Event of Default has occurred and continues to
exist.
ARTICLE IV
AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement (including any
extensions hereof) and until all Indebtedness shall have been finally paid in
full and all Obligations shall have been fully discharged, unless Lender shall
otherwise first consent in writing, Borrower shall:
4.1 Financial Statements and Reports. Promptly furnish to Lender:
(a) Annual Reports. As soon as available, and in any event within one
hundred fifty (150) days after the close of each fiscal year of Borrower,
the unqualified consolidated audited financial statements of Borrower
prepared by an independent third party accounting firm reasonably
acceptable to Lender, setting forth the consolidated balance sheet of
Borrower and the related consolidated statements of income, stockholders'
equity and cash flows as at the end of such year, all prepared in
accordance with GAAP, along with copies of any Form 10-K submitted by
Borrower to the SEC, which SEC filings shall be deemed provided to Lender
upon Borrower's submission of the same to the SEC;
(b) Quarterly Reports. As soon as available and in any event within
sixty (60) days of the last day of each fiscal quarter of Borrower, company
prepared consolidated financial statements of Borrower, setting forth the
consolidated balance sheet of Borrower and the related consolidated
statements of income, stockholders' equity and cash flows as at the end of
such month, prepared in accordance with GAAP and certified by Borrower's
chief financial officer as being true and accurate, along with copies of
any Form 10-Q submitted by Borrower to the SEC, which SEC filings shall be
deemed provided to Lender upon Borrower's submission of the same to the
SEC;
(c) Compliance Certificate. Simultaneously with the financial
statements described in subparts (a) and (b) above, to the extent there are
Advances under the Revolving Note outstanding at such time, a compliance
certificate executed by Borrower's Chief Financial Officer setting forth in
reasonable detail calculations showing compliance (or lack thereof) with
the provisions of Section 5.8 herein; and
(d) Other Information. Promptly upon its becoming available, such
other material information about Borrower or the Indebtedness as Lender may
reasonably request from time to time.
4.2 Taxes and Other Liens. Pay and discharge, prior to delinquency, all
taxes, assessments, and governmental charges or levies imposed upon it , any of
its Subsidiaries or any of their respective income or Property as well as all
claims of any kind (including claims for labor, materials, supplies, and rent)
which, if unpaid, might become a Lien upon any or all of their respective
Property; provided, however, neither Borrower nor any Subsidiary of Borrower
shall be required to pay any such tax, assessment, charge, levy, or claim if the
amount,
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applicability, or validity thereof shall currently be contested in good faith by
appropriate proceedings diligently conducted, no Lien attaches to any of
Property of Borrower or any of its Subsidiaries, and Borrower or such
Subsidiary, as applicable has established reserves therefore adequate under
GAAP.
4.3 Maintenance.
(a) Except for transactions in which an inactive Subsidiary of
Borrower is dissolved and transactions in which the Borrower merges into or
consolidates with any Subsidiary of Borrower and the Borrower is the
surviving entity or two or more Subsidiaries merge into each other and one
such Subsidiary is the surviving entity, maintain for itself and each
Subsidiary the valid corporate existence, name, rights, and franchise of
each;
(b) Maintain all Property of Borrower and its Subsidiaries (and any
Property leased by or consigned to Borrower or any of its Subsidiaries or
held under title retention or conditional sales contracts) necessary for
the operation of Borrower's business in good and workable condition at all
times (ordinary wear and tear and damage from casualty excepted) and make
all repairs, replacements, additions, and improvements to their respective
Property reasonably necessary and proper to ensure that the business
carried on in connection with their respective Property may be conducted
properly and efficiently at all times; and
(c) Maintain such insurance coverage insuring such risks with such
insurers for such amounts and pursuant to policies with such terms and
conditions as reasonably required by Lender.
Borrower shall, upon request by Lender given no more frequently than
annually, furnish to Lender reports on each existing insurance policy
showing such information as Lender may reasonably request for itself and
each of its Subsidiaries, including, without limitation, the following:
(i) the name of the insurer;
(ii) the risks insured;
(iii) the amount of the policy;
(iv) the properties insured;
(v) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those
values; and
(vi) the expiration date of the policy.
4.4 Further Assurances. Promptly cure any defects in the creation,
issuance, and delivery of the Loan Documents. Borrower at its expense promptly
will execute and deliver to Lender upon request all other and further documents,
agreements, and instruments reasonably
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required in order to comply with or accomplish the covenants and agreements of
Borrower in the Loan Documents, or to correct any omissions in the Loan
Documents, or to state more fully the Obligations and agreements set out in any
of the Loan Documents.
4.5 Accounts and Records. Keep books of record and account, in which full,
true, and correct entries will be made of all dealings or transactions in
accordance with GAAP, except only for changes in accounting principles or
practices with which Borrower's certified public accountants concur and which
changes have been reported to Lender in writing and with an explanation thereof.
4.6 Notice of Certain Events. Promptly give to Lender, if Borrower learns
of the occurrence of any of the following events, notice of (a) any event that
constitutes an Event of Default, together with a detailed statement by a
responsible officer of Borrower of the steps being taken as a result thereof; or
(b) the receipt of any written notice from, or the taking of any other action
by, the holder of any promissory note, debenture, or other evidence of Debt of
Borrower or of any security (as defined under the Securities Act of 1933, as
amended) of Borrower with respect to a claimed default, wherein the amount at
issue exceeds $250,000 together with a detailed statement by a responsible
officer of Borrower specifying the notice given or other action taken by such
holder and the nature of the claimed default and what action Borrower is taking
or proposes to take with respect thereto; provided that if the amount at issue
is less than $1,000,000 and the Borrower is contesting the same by appropriate
means and in good faith, then Borrower's detailed statement needs only to
reference that fact; or (c) any legal, judicial, or regulatory proceedings
affecting Borrower or any Subsidiary of Borrower in which the amount involved is
material and is not covered by insurance (subject to customary deductibles) and
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect; or (d) any dispute between Borrower and/or any Subsidiary of
Borrower and any governmental or regulatory authority or any other person,
entity, or agency which, if adversely determined, might interfere with the
normal business operations of Borrower; or (e) any Material Adverse Changes,
either individually or in the aggregate, in the assets, liabilities, financial
condition, business, operations, affairs, or circumstances of Borrower from
those reflected in the financial statements of Borrower and any Subsidiary of
Borrower delivered to Lender pursuant to this Agreement or from the facts
warranted or represented in any Loan Document.
4.7 Compliance with Laws. Observe and comply (to the extent necessary so
that any failure will not have a Material Adverse Effect) with all applicable
laws, statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, certificates, franchises, permits, licenses,
authorizations, and requirements of all federal, state, county, municipal, and
other governments, including without limitation all Environmental Laws.
4.8 ERISA Information and Compliance. Except to the extent that a failure
to do so will not have a Material Adverse Effect, comply with ERISA and all
other applicable laws governing any pension or profit sharing plan or
arrangement to which Borrower is a party or is otherwise subject. Borrower shall
provide Lender with notice of any "reportable event" or "prohibited transaction"
or the imposition of a "withdrawal liability" within the meaning of ERISA.
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4.9 Depository Accounts. As consideration for the interest rate charged
under the Note and to further secure repayment of the Note, Borrower shall
maintain its primary depository and treasury management accounts with Lender.
4.10 Unused Fee. In order to reimburse Lender for the expense of
maintaining and setting aside reserves to fund the Revolving Note, the Borrower
shall pay to Lender on the 15th day of each September, December, March and June
during the term of the Revolving Note and on the Revolving Note Maturity Date a
fee equal to 10 basis points per annum of the average daily unused portion of
the Revolving Note.
ARTICLE V
NEGATIVE COVENANTS
Borrower covenants and agrees that, during the term of this Agreement and
until all Indebtedness shall have been finally paid in full and all Obligations
shall have been fully discharged, unless Lender shall otherwise first consent in
writing, Borrower will not, either directly or indirectly:
5.1 Nature of Business. Suffer or permit any material change to be made in
the character of its business as carried on at the Closing Date.
5.2 Acquisitions; Mergers; Disposition of Assets; Etc. Make, receive, or
obtain any acquisitions or merge or consolidate with or into, or sell, assign,
lease, or otherwise dispose of any of its assets (except for obsolete and/or
damaged assets no longer necessary in Borrower's business) other than (i) sale
of assets in the ordinary course of Borrower's present business upon terms
standard in Borrower's industry, (ii) Permitted Acquisitions, (iii) Permited
Dispositions, (iv) the sale for fair market value to non-affiliated third
parties of other assets not in excess of $500,000 in any fiscal year, (v) sales
or transfers of assets by and between the Borrower and its Subsidiaries, and
(vi) transactions permitted by Section 4.3(a).
5.3 Proceeds of Loan. Permit the proceeds of the Indebtedness to be used
for any purpose other than those permitted under this Agreement.
5.4 Sale or Discount of Receivables. Except to minimize losses on bona fide
debts previously contracted, discount or sell with recourse, or sell for less
than the greater of the face or market value thereof, any of its notes
receivable or Accounts.
5.5 Creation of Subsidiaries, Etc. Except for Permitted Acquisitions,
create, purchase, or otherwise acquire any other Subsidiary; provided that the
Borrower may acquire or create other Subsidiaries so long as no provision of
this Agreement is violated or would be violated by the acquisition of such
Subsidiary and so long as the acquired Subsidiary guarantees the repayment of
the Obligations hereunder pursuant to Guaranty agreements substantially in the
form executed by the Guarantors.
5.6 Change of Control. [Omitted by Agreement]
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5.7 Additional Debt. Incur, create, assume, or in any manner become or be
liable with respect to any Debt other than Debt owed to Lender; provided that
this provision shall not apply to Permitted Debt.
5.8 Financial Covenants.
(a) Debt to EBITDA. Permit the ratio of (i) the consolidated Funded
Debt of Borrower and its Subsidiaries to (ii) EBITDA, as determined on a
consolidated basis in accordance with GAAP, to be greater than 2.0 to 1.0,
as measured on a rolling four quarter basis beginning September 30, 2006
and calculated as of the last day of each fiscal quarter thereafter.
(b) Tangible Net Worth. Permit its Tangible Net Worth, as determined
on a consolidated basis in accordance with GAAP, at any time to be less
than $5,000,000.00.
5.9 Negative Pledge. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its
assets or property now owned or hereafter acquired or, except for Permitted
Liens.
ARTICLE VI
EVENTS OF DEFAULT
6.1 Events of Default. Any of the following events shall be considered an
Event of Default (and shall be considered a Default pending the passage of time,
giving of notice or other condition specified below):
(a) Principal and Interest Payments. Borrower fails to pay any amount
due hereunder, under the Revolving Note (including without limitation
principal and interest payments) or any other Loan Document within ten (10)
days of the applicable due date; or
(b) Representations and Warranties. Any representation, warranty,
statement (including financial statements), certification or data made or
furnished by or on behalf of Borrower in connection with this Agreement or
any other Loan Document is incorrect in any material respect as of the date
as of which the facts therein set forth were stated or certified; or
(c) Obligations. Except as provided in the remaining subparts of this
Section 6.1, Borrower fails to perform any of the promises, covenants or
obligations contained in or required by this Agreement or in any other Loan
Document, and such failure to perform continues for thirty (30) days
following written notice from Lender to Borrower detailing such failure to
perform; provided that no such notice and cure period shall be required if
a violation or breach occurs under Article V of this Agreement; or
(d) Involuntary Bankruptcy or Receivership Proceedings. Any of the
following events or conditions occurs with respect to Borrower or its
Subsidiaries, and is not dismissed within sixty (60) days: (i) a receiver,
custodian, liquidator, or trustee of
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itself or of any of the respective Property owned by Borrower and its
consolidated Subsidiaries is appointed by the order or decree of any court
or agency or supervisory authority having jurisdiction; or (ii) any of
their respective Property is sequestered by court order; or (iii) a
petition is filed against the Borrower or any of its Subsidiaries under any
state or federal bankruptcy, reorganization, debt arrangement, insolvency,
readjustment of debt, dissolution, liquidation or receivership law of any
jurisdiction, whether now or hereafter in effect; or
(e) Voluntary Petitions. Borrower or any of its Subsidiaries files (or
takes formal company action authorizing the filing of) a voluntary
bankruptcy petition or other petition to seek relief under any provision of
any bankruptcy, reorganization, debt arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction or consents to
the filing of any such petition against it under any such law; or
(f) Assignments for Benefit of Creditors, Etc. Borrower or any of its
Subsidiaries makes an assignment for the benefit of its creditors, or
admits in writing its inability to pay its debts generally as they become
due, or consents to the appointment of a receiver, trustee, or liquidator
of itself or of all or any part of their respective Property; or
(g) Cross-Default on Other Debt or Security. Subject to any applicable
grace period or waiver prior to any due date, Borrower or any of its
Subsidiaries fails to make any payment due on any of its respective Debts,
or any event shall occur or any condition shall exist with respect to any
of its respective Debts, the effect of which is to cause or to permit any
trustee or any holder of such Debt to cause (whether or not such holder or
trustee elects to cause) any or all of such Debt to become due prior to its
stated maturity or its regularly scheduled dates of payment; or
(h) Undischarged Judgments. Any court or other governmental authority
renders a final, non-appealable judgment against Borrower or any of its
Subsidiaries for the payment of money in excess of $250,000, the payment of
which is not fully covered by valid collectible insurance or not paid or
otherwise satisfied within thirty (30) days of the date said judgment is
rendered; or
(i) Default Under Loan Documents. A default shall occur under any
other Loan Document.
6.2 Remedies. Upon the occurrence of an Event of Default, Lender may
declare the entire principal amount of all Indebtedness then outstanding,
including interest accrued thereon, to be immediately due and payable without
presentment, demand, protest, notice of protest, or dishonor or other notice of
default of any kind, all of which Borrower hereby expressly waives, and, at
Lender's sole discretion and option, all obligations of Lender under this
Agreement shall immediately cease and terminate unless and until Lender shall
reinstate such obligations in writing. Such acceleration and cessation of
Lender's obligations shall occur automatically, without any declaration by
Lender or any notice, upon the occurrence of an Event of Default under Section
6.1(d), (e) or (f). Upon the occurrence of any Event of Default, Lender may also
exercise all rights afforded a creditor under applicable law, and/or bring an
action to protect or
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enforce its rights under the Loan Documents or seek to collect the Indebtedness
and/or enforce the Obligations by any lawful means. All remedies provided in
this agreement or in any other loan documents shall be cumulative, in addition
to all other remedies available to lender under the principles of law and equity
or pursuant to any other body of law, statutory or otherwise, and the exercise
or partial exercise of any such right or remedy shall not preclude the exercise
of any other right or remedy.
6.3 Right of Set-off. Upon the occurrence and during the continuance of any
Event of Default, Lender is authorized, at any time and from time to time,
without notice to Borrower (any such notice being expressly waived by Borrower),
to set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by Lender to or for the credit or the account of Borrower against any and all of
the Obligations, irrespective of whether or not Lender shall have accelerated
the Indebtedness or made any demand under this Agreement or the Note and
although such Obligations may be unmatured.
ARTICLE VII
GENERAL PROVISIONS
7.1 Notices. All notices, requests, demands, directions and other
communications (collectively "notices") required under this Agreement shall be
in writing (including communication by facsimile transmission) and shall be sent
by hand, by registered or certified mail return receipt requested, by overnight
courier service maintaining records of receipt, or by facsimile transmission
with confirmation in writing mailed first-class, in all cases with charges
prepaid. Any such properly given notice shall be effective upon the earlier of
receipt or (a) the date delivered by hand, or (b) the third Business Day after
being mailed, or (c) the following Business Day if sent by overnight courier
service, or (d) upon sender's receipt of transmission confirmation, if sent by
facsimile. All notices shall be sent to the applicable party at its address (or
facsimile number) set forth below or in accordance with the last written
direction from such party to the other party hereto:
Borrower: HealthStream, Inc,
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile Number: (000) 000-0000
With a copy to: Bass, Xxxxx & Xxxx PLC
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: J. Page Davidson
Facsimile Number: (000) 000-0000
12
Lender: SunTrust Bank
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Facsimile Number: (000) 000-0000
7.2 Invalidity. If any one or more of the provisions contained in any Loan
Document for any reason shall be held invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provision of any Loan Document.
7.3 Term of This Agreement. This Agreement shall be binding on Borrower as
long as any portion of the Obligations remains outstanding or Lender has any
obligations to make Advances hereunder, except that Borrower's indemnity
agreements shall survive the payment in full of the Obligations and the
termination of this Agreement.
7.4 Successors and Assigns. Borrower shall not assign its rights or
delegate its duties under this Agreement or any other Loan Document. All
covenants and agreements made by or on behalf of Borrower in any Loan Document
shall bind Borrower's successors and assigns and shall inure to the benefit of
Lender and its successors and assigns.
7.5 Participation. Lender shall have the right to enter into one or more
participation or syndication agreements with one or more participating lenders
approved by Lender on such terms and conditions as Lender shall deem advisable.
7.6 Waivers. As provided in T.C.A. Section 00-00-000, no custom, conduct,
action or course of dealing on the part of Lender, its officers, employees,
consultants, or agents, nor any failure or delay by Lender with respect to
exercising any right, power, or privilege of Lender under the Note, this
Agreement, or any other Loan Document shall operate as a waiver thereof, except
as otherwise provided in this Agreement. Lender may from time to time waive any
requirement hereof, including any of the Conditions Precedent, but no waiver
shall be effective unless in writing and signed by Lender. The execution by
Lender of any waiver shall not obligate Lender to grant any further, similar, or
other waivers.
7.7 Amendments. This Agreement may not be modified or amended except in
writing signed by Borrower and Lender.
7.8 Governing Law. This Agreement, the Revolving Note, and the other Loan
Documents constitute a contract made under, and shall be construed in accordance
with and governed by, the laws of the State of Tennessee.
7.9 No Fiduciary Relationship. Nothing contained herein or in any related
document shall be deemed to create any partnership, joint venture or other
fiduciary relationship between Lender and Borrower for any purpose.
7.10 Nature of Commitment. Lender's obligation to make any Loans or
Advances shall be deemed to be pursuant to a contract to make a loan or to
extend debt financing or financial accommodations to or for the benefit of
Borrower within the meaning of Sections 365(c)(2) and 365(e)(2)(B) of the United
States Bankruptcy Code, 11 U.S.C. Section 101 et seq.
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7.11 Governance; Exhibits. The terms of this Agreement shall govern if
determined to be in conflict with the terms or provisions in any other Loan
Document. The exhibits attached to this Agreement are incorporated in this
Agreement and shall be considered a part of this Agreement except that in the
event of any conflict between an exhibit and this Agreement or another Loan
Document, the provisions of this Agreement or the Loan Document, as the case may
be, shall prevail over the exhibit.
7.12 Time of Essence. Time is of the essence with regard to each and every
provision of this Agreement.
7.13 Costs, Expenses, and Taxes. Borrower agrees to pay on demand all
out-of-pocket costs and expenses of Lender (including the reasonable fees and
out-of-pocket expenses of Lender's attorneys, paralegals, accountants, auditors,
and consultants) incurred by Lender in connection with the preparation,
execution, delivery, administration, interpretation, amendment, waiver or
enforcement of this Agreement or the other Loan Documents, or in the protection
of Lender's rights under the Loan Documents (including any suit for declaratory
judgment or interpretation of the provisions hereof and any bankruptcy,
insolvency or condemnation proceedings involving Borrower, its Property, and/or
any Collateral). In addition, Borrower agrees to pay, and to hold Lender
harmless from all liability for, any stamp, recording, intangibles or other
taxes (including taxes under Tennessee Code Annotated Section 67-4-409 due upon
the recordation of financing statements) payable in connection with the
execution or delivery of this Agreement, the Advances, the Collateral, or the
issuance or delivery of the Note or any other Loan Documents, excluding,
however, taxes based upon the income or assets of Lender. Upon Lender's request,
Borrower shall promptly reimburse Lender for all amounts expended, advanced, or
incurred by Lender in endeavoring to satisfy any obligation of Borrower under
this Agreement or any other Loan Documents, or to perfect a Lien in favor of
Lender, or to protect the Properties or business of Borrower or to collect the
Obligations, or to enforce or protect the rights of Lender under this Agreement
or any other Loan Document, including all court costs, attorney's and
paralegal's fees, fees of auditors and accountants, and investigation expenses
reasonably incurred by Lender in connection with any such matters, and all such
amounts shall bear interest at the Default Rate until paid in full. All
obligations under this Section shall be part of the Indebtedness and shall
survive any termination of this Agreement.
7.14 Counterparts. This Agreement may be executed in any number of
counterparts or counterpart signature pages (by facsimile transmission or
otherwise), each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
7.15 Distribution of Information. Borrower hereby authorizes Lender, as
Lender may elect in its sole discretion, to discuss with and furnish to any
affiliate of Lender, to any government or self-regulatory agency with
jurisdiction over Lender, or to any participant or prospective participant, all
financial statements, audit reports and other information pertaining to Borrower
whether such information was provided by Borrower or prepared or obtained by
Lender or third parties. Neither Lender nor any of its employees, officers,
directors or agents make any representation or warranty regarding any audit
reports or other analyses of Borrower which Lender may elect to distribute,
whether such information was provided by Borrower or prepared or obtained by
Lender or third parties, nor shall Lender or any of its employees,
14
officers, directors or agents be liable to any Person receiving a copy of such
reports or analyses for any inaccuracy or omission contained in such reports or
analyses or relating thereto.
7.16 Jurisdiction; Venue; Service of Process. BORROWER HEREBY IRREVOCABLY
CONSENTS TO THE JURISDICTION OF THE COURTS LOCATED IN DAVIDSON COUNTY,
TENNESSEE, INCLUDING WITHOUT LIMITATION FEDERAL COURTS SITTING IN THE MIDDLE
DISTRICT OF TENNESSEE AND THE CHANCERY COURT FOR DAVIDSON COUNTY, TENNESSEE, FOR
ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS AGREEMENT, ANY OF
THE INDEBTEDNESS OR OBLIGATIONS, ANY COLLATERAL, OR ANY RELATIONSHIP BETWEEN
LENDER AND BORROWER, AND AGREES NOT TO CONTEST OR CHALLENGE VENUE IN ANY SUCH
COURTS. Borrower irrevocably consents to the service of process of any such
courts in any such action or proceeding by registered or certified mail, postage
prepaid, return receipt requested, to Borrower at the address provided pursuant
to Section 7.1 hereof, and agrees that such service shall become effective
thirty (30) days after such mailing. However, nothing herein shall affect the
right of Lender or Borrower to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against Lender or
Borrower in any other jurisdiction. This Section does not confer or expand any
standing to Borrower to bring any cause of action.
7.17 Jury Waiver. BORROWER AND LENDER HEREBY KNOWINGLY, WILLINGLY AND
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION
OR PROCEEDING INVOLVING THIS AGREEMENT, ANY OF THE INDEBTEDNESS OR OBLIGATIONS,
ANY COLLATERAL, OR ANY RELATIONSHIP BETWEEN LENDER AND BORROWER. BORROWER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS
LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
SECTION MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
7.18 Waiver of Certain Damages. IN ANY ACTION TO ENFORCE THIS AGREEMENT,
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS UNDER
THE LAWS OF ANY STATE TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE,
CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN ACTUAL DIRECT DAMAGES.
7.19 Entire Agreement. This Agreement represents the entire agreement
between the parties hereto except for such other agreements set forth in the
Loan Documents, superseding any and all other agreements, promises or
representations existing prior to or made simultaneously with this Agreement.
Any oral statements regarding the subject matter of this Agreement are merged
herein.
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ARTICLE VIII
DEFINITIONS AND USAGE
8.1 DEFINED TERMS. In addition to other words and terms defined in the
preamble hereof or elsewhere in this Agreement, the following terms shall have
the following meanings herein, unless the context expressly requires otherwise:
"ACCOUNTS" means all of Borrower's accounts, as that term is defined in the
UCC.
"ADVANCE" means any advance or other extension of credit previously made by
Lender to Borrower or made pursuant to this Agreement. The terms "REVOLVING
LOAN" and "ADVANCE" may be used interchangeably hereunder.
"AFFILIATE" means a Person that directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with
Borrower.
"BUSINESS DAY" means any day other than a Saturday, Sunday or day on which
commercial banks are authorized to close under the laws of the State of
Tennessee.
"CAPITAL LEASE OBLIGATIONS" of any Person means all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CLOSING DATE" means July 21, 2006.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"CONDITIONS PRECEDENT" means those matters or events that by the terms of
the Loan Documents must be completed or must occur or exist before Lender would
become obligated to fund any Advance, including, without limitation, those
matters described in Article 3 hereof.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person, firm
or corporation whether through the ownership of voting securities, by contract
or otherwise. The terms "CONTROLLING", "CONTROLLED BY", "UNDER COMMON CONTROL
WITH", and "CONTROLLING INTEREST IN" have meanings correlative thereto.
"DEBT" means all of a Person's obligations, contingent or otherwise, that
would be classified on its balance sheet as its liabilities in accordance with
GAAP, including, in any event and without limitation, (a) liabilities secured by
any mortgage, pledge or lien existing on Property owned by such Person, whether
or not the liability secured thereby has assumed by such Person; (b) all
indebtedness and other similar monetary obligations of such Person, including
without limitation, all senior and subordinated indebtedness; (c) all
guaranties, obligations in respect of letters of credit, endorsements (other
than endorsements of negotiable instruments for
16
purposes of collection in the ordinary course of business), obligations to
purchase goods or services for the purpose of supplying funds for the purchase
or payment of Debt of others and other contingent obligations in respect of, or
to purchase, or otherwise acquire, or advance funds for the purchase of, Debt of
others; (d) all obligations of such Person to indemnify another Person to the
extent of the amount of indemnity, if any, that would be payable by such Person
at the time of determination; (e) the principal portion of all obligations of
such Person under capital leases (specifically excluding obligations under
operating leases), and (f) all obligations of such Person to purchase or
repurchase any accounts, instruments, chattel paper or general intangibles.
"DEFAULT" means the occurrence of any of the events specified in Section
6.1 hereof, even though any requirement for notice or lapse of time or other
condition precedent has not been satisfied.
"DEFAULT RATE" means the maximum rate allowed by applicable law.
"EBITDA" means, for any period, for the Borrower and its Subsidiaries, an
amount equal to the sum of (a) Net Income for such period plus (b) to the extent
deducted in determining Net Income for such period, (i) Interest Expense, (ii)
income tax expense, (iii) depreciation and amortization and (iv) all other
non-cash charges (including, but not limited to stock option compensation costs
applicable under and calculated in accordance with Statement of Financial
Accounting Standards No. 123 (revised 2004) [FAS 123 (revised)] as promulgated
by the Financial Accounting Standards Board), (c) minus interest income,
determined on a consolidated basis in accordance with GAAP (except for non-cash
charges, which are not determined in accordance with GAAP) in each case for such
period; provided, however, with respect to any Person that became a Subsidiary
of, or was merged with or consolidated into, the Borrower during any such
period, "EBITDA" shall also include the EBITDA of such Person during such period
and prior to the date of such acquisition, merger, or consolidation and shall
also include the pro forma EBITDA of the Person prepared by the Borrower after
the date of acquisition; provided, however, that the pro forma EBITDA revenues
of the Person shall not exceed the historical revenue of the Person to the date
of acquisition.
"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any governmental
authority, relating in any way to the environment, preservation or reclamation
of natural resources, or the management, release or threatened release of any
hazardous material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EVENT OF DEFAULT" means the occurrence of any of the events specified in
Section 6.1 hereof, provided that any requirement in Section 6.1 for notice or
lapse of time or other condition precedent has been satisfied.
"FUNDED DEBT" means any Debt evidenced by a promissory note or
instrument.
"GAAP" means generally accepted accounting principles consistently applied.
17
"GUARANTY" means the Guaranty executed by each Guarantor.
"GUARANTOR" means each of HealthStream Acquisition I, Inc., HealthStream
Acquisition II, Inc., and Data Management & Research, Inc.
"HEDGING AGREEMENTS" mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity agreements and other similar agreements or
arrangements designed to protect against fluctuations in interest rates,
currency values or commodity values.
"INDEBTEDNESS" means any and all amounts and liabilities of any nature
owing or to be owing by Borrower to Lender from time to time in respect of the
Loan, whether now existing or hereafter incurred.
"INTEREST EXPENSE" means, for the Borrower and its Subsidiaries for any
period determined on a consolidated basis in accordance with GAAP, the sum of
(i) total cash interest expense, including without limitation the interest
component of any payments in respect of Capital Lease Obligations capitalized or
expensed during such period (whether or not actually paid during such period)
plus (ii) the net amount payable (or minus the net amount receivable) under
Hedging Agreements during such period (whether or not actually paid or received
during such period).
"LENDER'S OFFICE" means the office of Lender located at the address set
forth in Section 7.1 hereof.
"LIEN" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute, or contract, and including, without
limitation, the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale, sale of Accounts or general
intangibles, trust receipt or a lease, consignment, or bailment for security
purposes. The term "LIEN" includes reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting any Property. For the purposes of
this Agreement, Borrower shall be deemed to be the owner of any Property that it
has acquired or holds subject to a conditional sale agreement, financing lease,
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"LOAN" means the Revolving Loan.
"LOAN DOCUMENTS" means, collectively, all of the agreements, documents,
papers and certificates executed, furnished or delivered in connection with this
Agreement (whether before, at, or after the Closing Date) or at any time
evidencing any of the Obligations, including, without limitation, this
Agreement, the Revolving Note, the Guaranties, and all other documents,
certificates, reports, and instruments that this Agreement requires or that were
executed or delivered (or both) at Lender's request.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means, as
applicable, a material adverse effect on, or material adverse change in, (a) the
business, operations or financial
18
condition of Borrower, and its Subsidiaries taken as a whole, (b) the ability of
Borrower and any Subsidiary to perform its respective obligations under this
Loan Agreement, the Revolving Note, or other Loan Documents, or (c) Lender's
ability to enforce the rights and remedies granted under this Agreement or other
Loan Documents, in all cases whether attributable to a single circumstance or
event or an aggregation of circumstances or events.
"NET INCOME" means, for any period, the net income (or loss) of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, but excluding therefrom (to the extent otherwise
included therein) (i) any extraordinary gains or losses and (ii) any gains
attributable to write-ups of assets.
"OBLIGATIONS" means all of the Indebtedness and all of Borrower's
undertakings in the Loan Documents including, but not limited to, all
agreements, representations, warranties, and covenants.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITIONS" means an acquisition by Borrower of the assets or
capital stock of any Person provided, that, (i) Borrower delivers written notice
to Lender fifteen (15) days prior to the completion of the intended acquisition,
which notice shall provide general details about the acquisition, (ii) together
with such written notice, Borrower provides Lender with pro forma calculations
detailing the post-acquisition effect that the acquisition will have on the
Borrower's consolidated financial statements and the Financial Covenants set
forth in Section 5.8 of this Loan Agreement, (iii) the information provided by
the Borrower and identified in subpart (i) and (ii) above confirms that the
Borrower will be in compliance with the Financial Covenants set forth in Section
5.8 herein after giving effect to the acquisition, (iv) the information provided
by the Borrower and identified in subparts (i) and (ii) above confirms that no
Material Adverse Effect will occur as a result of the acquisition, and (v) in
the event that the acquisition results in the acquisition of any new Subsidiary,
such new Subsidiary executes a Guaranty Agreement in form and substance required
by Lender substantially similar to the Guaranty executed by the Guarantors.
"PERMITTED DEBT" means any of: (a) trade debt, (b) unsecured borrowings not
to exceed $100,000 in the aggregate at any one time, and (c) purchase money
loans and Capital Lease Obligations existing as of the Closing Date, and (d)
additional purchase money loans and Capital Leases incurred in an aggregate
amount up to $750,000 in any fiscal year.
"PERMITTED DISPOSITIONS" means a disposition by Borrower of the assets or
capital stock of any Person that does not arise to the standard of materiality
for purposes of filing disclosures with the Securities and Exchange Commission
provided, that, (i) Borrower delivers written notice to Lender fifteen (15) days
prior to the completion of the intended disposition, which notice shall provide
general details about the disposition, (ii) together with such written notice,
Borrower provides Lender with pro forma calculations detailing the
post-disposition effect that the disposition will have on the Borrower's
consolidated financial statements and the Financial Covenants set forth in
Section 5.8 of this Loan Agreement, (iii) the information provided by the
Borrower and identified in subparts (i) and (ii) above confirms that the
Borrower
19
will be in compliance with the Financial Covenants set forth in Section 5.8
herein after giving effect to the disposition, and (iv) the information provided
by the Borrower and identified in subparts (i) and (ii) above confirms that no
Material Adverse Effect will occur as a result of the disposition.
"PERMITTED LIENS" means Liens securing purchase money loans and Liens
securing Capital Lease Obligations, to the extent included in "Permitted Debt".
"PERSON" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization, government, or any agency or political subdivision
thereof, or any other form of entity.
"PLAN" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Borrower and covered by Title IV of
ERISA or to which Section 412 of the Code applies.
"PROPERTY" or "PROPERTIES" means any interest in any kind of property or
asset, whether real, personal, or mixed, or tangible or intangible.
"REVOLVING LOAN" means the $7,000,000.00 revolving loan facility described
in Section 1.1 hereof. The terms "REVOLVING LOAN" and "ADVANCE" may be used
interchangeably hereunder.
"REVOLVING NOTE" means that certain $7,000,00.00 Revolving Credit Note
executed in connection herewith, as such may be amended and/or restated from
time to time.
"REVOLVING NOTE MATURITY DATE" means the earlier of: (a) July 21, 2009, (b)
the occurrence of any event described in Section 6.1(d) or Section 6.1(e)
hereof; or (c) Lender's acceleration of the Indebtedness following the
occurrence of an Event of Default.
"SEC" means the Securities and Exchange Commission and any division
thereof.
"SUBSIDIARY" means, at the time as of which any determination is being
made, any corporation, partnership, or other entity of which more than fifty
percent (50%) of the issued and outstanding voting securities is owned or
controlled, directly or indirectly, by Borrower.
"TANGIBLE NET WORTH" means, as of any date, the total assets of the
Borrower that would be reflected on the Borrower's balance sheet as of such
date, excluding any items that would be classified as an intangible asset or
goodwill, minus the total liabilities of the Borrower that would be reflected on
the Borrower's balance sheet as of such date, all calculated in accordance with
GAAP.
"UCC" means the Uniform Commercial Code as adopted in the State of
Tennessee.
8.2 Computations; Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, such determination or calculation,
to the extent applicable and except as otherwise specified in this
20
Agreement, shall be made in accordance with GAAP consistent with those in effect
at the Closing Date.
8.3 General Construction; Captions. All definitions and other terms used in
this Agreement are equally applicable to the singular and plural forms thereof,
and all references to any gender include all other genders. The captions in this
Agreement are for convenience only, and in no way limit or amplify the
provisions hereof.
8.4 UCC Terms. Terms used in this Agreement that are defined in the UCC
shall have the same meanings herein, except as otherwise expressly provided or
amplified (but not limited) herein.
8.5 References to Documents and Laws. All defined terms and references in
this Agreement with respect to any agreements, notes, instruments, certificates
or other documents shall be deemed to refer to such documents and to any
amendments, modifications, renewals, extensions, replacements, restatements,
substitutions and supplements of and to such documents. Unless otherwise
provided, all references to statutes and related regulations shall include any
amendments thereof and any successor statutes and regulations.
[SIGNATURES ON FOLLOWING PAGE]
21
ENTERED INTO as of the date first written above.
BORROWER:
HEALTHSTREAM, INC.
By: /s/ Xxxxx X. Brownie
-------------------------------------------
Title: Senior Vice President and Chief
Financial Officer
LENDER:
SUNTRUST BANK
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------------
Title: Senior Vice President
22