Exhibit 10.44
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is executed and entered into as
of the 15th day of March, 2006 (the "Effective Date"), by and between Xxxx
Investments, LLC, a Wisconsin limited liability company ("Lender"), whose
address is 0000 X. Xxxx Xxxxx, Xxxxxxxxx, XX 00000, and MedSolutions, Inc., a
Texas corporation, on behalf of itself and its subsidiaries (MedSolutions, Inc.
and its subsidiaries collectively referred to as "Borrower"), whose address is
00000 Xxxxx Xxxxx, Xxxx Xxxxxxx XXX, Xxxxx 000, Xxxxxx, Xxxxx 00000.
PRELIMINARY STATEMENTS
A. Lender has offered to make a loan to Borrower in the aggregate
amount of up to $500,000.00 (the "Loan"), which Loan will be secured by a
first-priority lien on certain equipment, and the Accounts of the Borrower as
set forth in the Security Agreements (as defined below); and
B. Lender is willing to make the Loan to Borrower subject to the terms
and conditions stated in this Agreement.
NOW, THEREFORE, for and in consideration of Lender's agreement to make
the Loan to Borrower and the mutual covenants contained herein and other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged by the parties hereto, Borrower and Lender hereby agree as
follows:
1. Commitment of Lender. Upon Borrower's compliance with all conditions
set forth in Section 3 of this Agreement, Lender will advance and disburse the
Loan to Borrower. The Loan shall be repaid and is secured according to the terms
of the Note (as defined below) and the Security Agreements. Once fully advanced,
no payment or prepayment of principal shall entitle Borrower to any additional
advances.
2. Loan Documents. Borrower agrees to execute or cause to be executed
contemporaneously herewith or immediately hereafter all of the following
documents:
(a) the Convertible Secured Promissory Note in the form attached hereto
as Exhibit A (the "Note");
(b) the Security Agreement in the form attached hereto as Exhibit B
(such Security Agreement and the General Business Security Agreement
dated as of July 15, 2005 between Lender and Borrower are collectively
referred to as the "Security Agreements"); and
(c) Such other documents, certificates, affidavits and agreements that
Lender may reasonably require prior to advancing proceeds of the Loan.
All of the foregoing and such other agreements, documents and instruments now or
hereafter evidencing, governing, or securing any portion of the indebtedness
evidenced by the Note or the performance and discharge of the obligations
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related hereto or thereto, together with any and all renewals, modifications,
amendments, restatements, increases, consolidations, substitutions,
replacements, extensions and supplements hereof or thereof, are collectively
referred to herein as the "Loan Documents."
3. Conditions to Closing. The obligation of the Lender to close the
Loan and to make each advance of the proceeds of the Loan shall be subject to
the prior or simultaneous occurrence or satisfaction of the following
conditions:
(a) Borrower shall have duly executed and delivered to Lender each of
the Loan Documents and provided Lender with evidence that all necessary
action on the part of Borrower has been taken with respect to the
execution and delivery of this Agreement and the Loan Documents and the
consummation of the transactions contemplated hereby and thereby, so
that the Loan Documents, and each of them, shall be valid and binding
upon Borrower;
(b) The representations and warranties of the Borrower contained in
Section 4 hereof, in the Loan Documents shall be true and correct as of
the date of each such advance;
(c) With respect to each advance of the proceeds of the Loan, receipt
by the Lender from the Borrower of a written request therefor
accompanied by documentation reflecting the use of proceeds thereof to
the reasonable satisfaction of the Lender; provided, however, that the
Lender hereby agrees that the use of proceeds of the Loan to purchase
equipment relating to the Borrower's and its affiliates' businesses
shall be deemed satisfactory;
(d) On the date of each advance, the Borrower shall have complied, and
be in compliance, with all of the covenants of the Borrower contained
in the Loan Documents and in the Transaction Documents;
(e) There shall be no continuing Event of Default (as defined in the
Loan Documents or in the "Transaction Documents", as that term is
defined in the Loan Documents); and
(f) The Borrower shall have reimbursed Lender for the reasonable costs
and expenses incurred by Lender in connection with the preparation,
execution and delivery of the Loan Documents and the transactions
contemplated thereby, including the reasonable fees and disbursements
of Xxxxx & Kuelthau, s.c.; provided, however, that such reimbursement
shall not exceed Four Thousand Dollars ($4,000.00).
4. Representations and Warranties of the Borrower. To induce the Lender
to enter into this Agreement and to consummate the transactions contemplated
hereby, the Borrower hereby makes the following representations and warranties
to the Lender on and as of the Effective Date:
(a) Authority. The Borrower has full legal power to execute, deliver,
and perform this Agreement and the Loan Documents. This Agreement and
the Loan Documents represent valid and binding obligations of the
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Borrower enforceable against the Borrower in accordance with their
respective terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting the
enforcement of creditors' rights generally and the application of
general principles of equity and judicial discretion;
(b) No Violation. The consummation of the transactions contemplated by
this Agreement and the Loan Documents will not be in conflict with, or
result in a breach of, any term, condition, or provision of, or
constitute a default under, any indenture, mortgage, deed of trust, or
other material agreement or instrument to which the Borrower is a
party, and will not constitute an event that with the lapse of time or
action by a third party could result in any default under any of the
foregoing;
(c) No Event of Default has occurred under the Transaction Documents;
and
(d) The Borrower has complied with and is in compliance with all
covenants of the Borrower in the Transaction Documents.
5. Remedies. Upon the occurrence of an Event of Default (as defined in
the Loan Documents or Transaction Documents, Lender shall have the immediate
right, at the sole discretion of Lender without notice or demand and without
prejudice to any other right of Lender, to: (i) declare the entire unpaid
balance of the Note and all accrued but unpaid interest and any amounts payable
by Borrower to Lender under the Transaction Documents at once immediately due
and payable (and the same shall be at once immediately due and payable and the
same may be collected forthwith), (ii) foreclose and enforce all liens and
security interests securing payment thereof, and (iii) exercise any of Lender's
other rights, powers, recourses and remedies under the Note, any of the other
Loan Documents or any of the Transaction Documents, or at law or in equity.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower shall not affect Lender's right to declare an Event of
Default and to exercise its rights and remedies.
6. General Interest and Usury Provisions.
(a) Savings Clause. It is expressly stipulated and agreed to be the
intent of Borrower and Lender at all times to comply strictly with the
applicable Texas law governing the maximum rate or amount of interest
payable on the indebtedness evidenced by the Note and the Related
Indebtedness (as hereinafter defined) or applicable United States
federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than
under Texas law. If the applicable law is ever judicially interpreted
so as to render usurious any amount (i) contracted for, charged, taken,
reserved or received pursuant to the Note, any of the other Loan
Documents or any other communication or writing by or between Borrower
and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged,
taken, reserved or received by reason of Lender's exercise of the
option to accelerate the maturity of the Note and/or the Related
Indebtedness, or (iii) Borrower will have paid or Lender will have
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received by reason of any voluntary prepayment by Borrower of the Note
and/or the Related Indebtedness, then it is Borrower's and Lender's
express intent that all amounts charged in excess of the Maximum Lawful
Rate shall be automatically canceled, ab initio, and all amounts in
excess of the Maximum Lawful Rate theretofore collected by Lender shall
be credited on the principal balance of the Note and/or the Related
Indebtedness (or, if the Note and all Related Indebtedness have been or
would thereby be paid in full, refunded to Borrower), and the
provisions of the Note and the other Loan Documents shall immediately
be deemed reformed and the amounts thereafter collectible hereunder and
thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable laws, but so as to permit
the recovery of the fullest amount otherwise called for hereunder and
thereunder; provided, however, that if the Note has been paid in full
before the end of the stated term of the Note, then Borrower and Lender
agree that Lender shall, with reasonable promptness after Lender
discovers or is advised by Borrower that interest was received in an
amount in excess of the Maximum Lawful Rate, either credit such excess
interest against the Note and/or any Related Indebtedness then owing by
Borrower to Lender and/or refund such excess interest to Borrower.
Borrower hereby agrees that as a condition precedent to any claim
seeking usury penalties against Lender, Borrower will provide written
notice to Lender, advising Lender in reasonable detail of the nature
and amount of the violation, and Lender shall have 60 days after
receipt of such notice in which to correct such usury violation, if
any, by either refunding such excess interest to Borrower or crediting
such excess interest against the Note and/or the Related Indebtedness
then owing by Borrower to Lender. All sums contracted for, charged,
taken, reserved or received by Lender for the use, forbearance or
detention of any debt evidenced by the Note and/or the Related
Indebtedness shall, to the extent permitted by applicable law, be
amortized, prorated, allocated or spread, using the actuarial method,
throughout the stated term of the Note and/or the Related Indebtedness
(including any and all renewal and extension periods thereof) until
payment in full so that the rate or amount of interest on account of
the Note and/or the Related Indebtedness does not exceed the Maximum
Lawful Rate from time to time in effect and applicable to the Note
and/or the Related Indebtedness for so long as any debt thereunder is
outstanding. In no event shall the provisions of Chapter 346 of the
Texas Finance Code (which regulates certain revolving credit loan
accounts and revolving triparty accounts) apply to the Note and/or any
of the Related Indebtedness. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the
intention of Lender to accelerate the maturity of any interest that has
not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration. The terms and provisions of
this paragraph shall control and supersede every other term, covenant
or provision contained herein, in any other Loan Document or in any
other agreement between the Borrower and Lender.
(b) Ceiling Election. To the extent that Lender is relying on Chapter
303 of the Texas Finance Code to determine the Maximum Lawful Rate
payable on the Note and/or any other portion of the Related
Indebtedness, Lender will utilize the weekly ceiling from time to time
in effect as provided in such Chapter 303, as amended. To the extent
United States federal law permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law,
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Lender will rely on United States federal law instead of such Chapter
303 for the purpose of determining the Maximum Lawful Rate.
Additionally, to the extent permitted by applicable law now or
hereafter in effect, Lender may, at its option and from time to time,
utilize any other method of establishing the Maximum Lawful Rate under
such Chapter 303 or under other applicable law by giving notice, if
required, to Borrower as provided by such applicable law now or
hereafter in effect.
(c) Definitions.
(i) As used herein, the term "Maximum Lawful Rate" shall mean the
maximum lawful rate of interest which may be contracted for, charged,
taken, received or reserved by Lender in accordance with the applicable
laws of the State of Texas (or applicable United States federal law to
the extent that such law permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law),
taking into account all Charges made in connection with the transaction
evidenced by the Note and the other Loan Documents.
(ii) As used herein, the term "Charges" shall mean all fees, charges
and/or any other things of value, if any, contracted for, charged,
taken, received or reserved by Lender in connection with the
transactions relating to the Note and the other Loan Documents, which
are treated as interest under applicable law.
(iii) As used herein, the term "Related Indebtedness" shall mean any
and all indebtedness paid or payable by Borrower to Lender pursuant to
the Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are
the subject matter of the Loan Documents, except such indebtedness
which has been paid or is payable by Borrower to Lender under the Note.
7. Notices. Any notice or demand required hereunder shall be deemed to
be delivered when deposited in the United States mail, postage prepaid,
certified mail, return receipt requested, addressed to Borrower or Lender, as
the case may be, at the address first set forth above, or at such other address
as such party may hereafter deliver in accordance herewith. Any other method of
delivery or demand shall be effective only when actually received by the
recipient thereof. If and when included within the term "Borrower" or "Lender"
there are more than one person, all shall jointly arrange among themselves for
their joint execution and delivery of a notice to the other specifying some
person at some specific address for the receipt of all notices, demands,
payments or other documents. All persons included within the terms "Borrower" or
"Lender," respectively, shall be bound by notices, demands, payments and
documents given in accordance with the provisions of this paragraph to the same
extent as if each had received such notice, demand, payment or document.
8. Governing Law. This Agreement and each of the other Loan Documents
shall be deemed a contract and instrument made under the laws of the State of
Wisconsin and shall be construed and enforced in accordance with and governed by
the laws of the State of Wisconsin and the laws of the United States of America.
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9. Survival; Parties Bound. All representations, warranties, covenants
and agreements made by or on behalf of the Borrower in connection herewith shall
survive the execution and delivery of the Loan Documents, shall not be affected
by any investigation made by or on behalf of Lender, and shall bind the Borrower
and its successors, trustees, receivers and assigns and inure to the benefit of
the successors and assigns of the Lender. The term of this Agreement shall be
until the later of the final maturity of the Note and the payment of all amounts
due under the Loan Documents.
10. Counterparts. This Agreement may be executed in several identical
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
11. Severability. If any provision of any of the Loan Documents shall
be invalid, illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining provisions shall not
be affected or impaired thereby.
12. Captions. The headings and captions appearing in the Loan Documents
have been included solely for convenience and shall not be considered in
construing the Loan Documents.
13. ENTIRE AGREEMENT. THIS WRITTEN LOAN AGREEMENT, THE OTHER LOAN
DOCUMENTS AND THE TRANSACTION DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day first written above.
LENDER:
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XXXX INVESTMENTS, LLC
By: Xxxx Revocable Trust, sole member
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Trustee
BORROWER:
MEDSOLUTIONS, INC.
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President & CEO
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EXHIBIT A
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FORM OF PROMISSORY NOTE
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EXHIBIT B
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FORM OF SECURITY AGREEMENT
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