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Exhibit 10.2
$15,000,000.00
LOAN AND SECURITY AGREEMENT
by and between
THE TRIZETTO GROUP, INC.
CREATIVE BUSINESS SOLUTIONS, INC.
ELBEJAY ACQUISITION CORP.
FINSERV HEALTH CARE SYSTEMS, INC.
HEALTHCARE MEDIA ENTERPRISES, INC.
HEALTHWEB, INC.
XXXXXXXX HEALTH ENTERPRISES, INC.
XXXXXXX CORPORATION
TRIZETTO APPLICATION SERVICES, INC.
HEALTHCARE MEDIA PRIVATE LIMITED
DIGITAL INSURANCE SYSTEMS CORPORATION
HEALTH NETWORKS OF AMERICA, INC.
XXXXXXX DEVELOPMENT CORPORATION
XXXXXXX DEVELOPMENT & LICENSING CORPORATION
XXXXXXX SERVICES CORPORATION
(collectively, "Borrower")
and
XXXXXX HEALTHCARE FINANCE, INC.
("Lender")
September 11, 2000
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the "Agreement") is made as of September
11, 2000, by and among THE TRIZETTO GROUP, INC., a Delaware corporation
("TriZetto"), CREATIVE BUSINESS SOLUTIONS, INC., a Texas corporation ("CBS");
ELBEJAY ACQUISITION CORP., a Delaware corporation ("LBJ"); FINSERV HEALTH CARE
SYSTEMS, INC., a New York corporation ("Finserv"); HEALTHCARE MEDIA ENTERPRISES,
INC., a Delaware corporation ("HME"); HEALTHWEB, INC., a Delaware corporation
("HealthWeb"); XXXXXXXX HEALTH ENTERPRISES, INC., a California corporation
("Xxxxxxxx"); XXXXXXX CORPORATION, a Delaware corporation ("Xxxxxxx"); TRIZETTO
APPLICATION SERVICES, INC., a Colorado corporation ("TriZetto Application");
HEALTHCARE MEDIA PRIVATE LIMITED, an India company and subsidiary of HME
("HMP"); DIGITAL INSURANCE SYSTEMS CORPORATION, an Ohio corporation ("Digital");
HEALTH NETWORKS OF AMERICA, INC., a Maryland corporation ("Health Networks");
XXXXXXX DEVELOPMENT CORPORATION, a Delaware corporation ("Xxxxxxx Development");
XXXXXXX DEVELOPMENT & LICENSING CORPORATION, an Indiana corporation ("Xxxxxxx
Licensing"); XXXXXXX SERVICES CORPORATION, a Delaware corporation ("Xxxxxxx
Services" and collectively with TriZetto, CBS, LBJ, Finserv, HME, HealthWeb,
Margolis, Novalis, TriZetto Application, HMP, Digital, Health Networks, Xxxxxxx
Development, and Xxxxxxx Licensing, the "Borrower"), (collectively, the
"Borrower"), and XXXXXX HEALTHCARE FINANCE, INC., a Delaware corporation
("Lender").
RECITALS
A. Borrower desires to establish certain financing arrangements with
and borrow funds from Lender, and Lender is willing to establish such
arrangements for and make loans and extensions of credit to Borrower, on the
terms and conditions set forth below.
B. The parties desire to define the terms and conditions of their
relationship and to reduce their agreements to writing.
NOW, THEREFORE, in consideration of the promises and covenants contained
in this Agreement, and for other consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
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ARTICLE I
DEFINITIONS
As used in this Agreement, unless otherwise specified, all references to
"Sections" shall be deemed to refer to Sections of this Agreement, and the
following terms shall have the meanings set forth below:
SECTION 1.1. ACCOUNT. "Account" means any right to payment for goods sold
or leased or services rendered, whether or not evidenced by an instrument or
chattel paper, and whether or not earned by performance, including, without
limitation, the right to payment of management fees.
SECTION 1.2. ACCOUNT DEBTOR. "Account Debtor" means any Person obligated
on any Account of Borrower.
SECTION 1.3. AFFILIATE. "Affiliate" means, with respect to a specified
Person, any Person directly or indirectly controlling, controlled by, or under
common control with the specified Person, including without limitation their
stockholders and any Affiliates thereof. A Person shall be deemed to control a
corporation or other entity if the Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and business of the
corporation or other entity, whether through the ownership of voting securities,
by contract, or otherwise.
SECTION 1.4. AGREEMENT. "Agreement" means this Loan and Security
Agreement, as it may be amended or supplemented from time to time.
SECTION 1.5. BASE RATE. "Base Rate" means a rate of interest equal to One
and One Half Percent (1.5%) above the "Prime Rate of Interest".
SECTION 1.6. BORROWED MONEY. "Borrowed Money" means any obligation to
repay money, any indebtedness evidenced by notes, bonds, debentures or similar
obligations, any obligation under a conditional sale or other title retention
agreement and the net aggregate rentals under any lease which under GAAP would
be capitalized on the books of Borrower or which is the substantial equivalent
of the financing of the property so leased.
SECTION 1.7. BORROWER. "Borrower" has the meaning set forth in the
Preamble.
SECTION 1.8. BORROWING BASE. "Borrowing Base" has the meaning set forth in
Section 2.1(d).
SECTION 1.9. BUSINESS DAY. "Business Day" means any day on which financial
institutions are open for business in the State of Maryland, excluding Saturdays
and Sundays.
SECTION 1.9a CHANGE OF CONTROL. "Change of Control" of Borrower shall mean
(i) the acquisition, directly or indirectly, (other than pursuant to the
issuance of securities in a financing
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transaction) by any person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of the beneficial ownership of
securities of Borrower possessing more than fifty percent (50%) of the total
combined voting power of all outstanding securities of Borrower; (ii) a merger
or consolidation in which Borrower is not the surviving entity, except for a
transaction in which the holders of the outstanding voting securities of
Borrower immediately prior to such merger or consolidation hold, in the
aggregate, securities possessing more than fifty percent (50%) of the total
combined voting power of all outstanding voting securities of the surviving
entity immediately after such merger or consolidation; (iii) a reverse merger in
which Borrower is the surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power of all outstanding
voting securities of Borrower are transferred to or acquired by a person or
persons different from the persons holding those securities immediately prior to
such merger; (iv) the sale, transfer or other disposition (in one transaction or
a series of related transactions) of all or substantially all of the assets of
Borrower; or (v) the approval by the shareholders of a plan or proposal for the
liquidation or dissolution of Borrower.
SECTION 1.10. CLOSING; CLOSING DATE. "Closing" and "Closing Date" have the
meanings set forth in Section 5.3.
SECTION 1.11. COLLATERAL. "Collateral" has the meaning set forth in
Section 3.1.
SECTION 1.12. COMMITMENT FEE. "Commitment Fee" has the meaning set forth
in Section 2.4(a).
SECTION 1.13. CONCENTRATION ACCOUNT. "Concentration Account" has the
meaning set forth in Section 2.3.
SECTION 1.14. CONTROLLED GROUP. "Controlled Group" means all businesses
that would be treated as a single employer under Section 4001(b) of ERISA.
SECTION 1.15. CUSTOMER. "Customer" means any party (including without
limitation any hospital, health care provider, other health care-related entity,
insurance company or managed care organization) contracting with Borrower to
deliver Healthcare Services and all Persons legally liable to pay Borrower for
such Healthcare Services.
SECTION 1.16. CUSTOMER CONTRACT. "Customer Contract" means those certain
contracts to provide Healthcare Services to Customers, as such contracts are
listed on Schedule 1.16 to this Agreement as of the date hereof and such other
contracts as may be entered into after the date hereof (provided Borrower agrees
to update such Schedule 1.16 quarterly and otherwise upon the request of
Lender).
SECTION 1.17. DEFAULT RATE. "Default Rate" means a rate per annum equal to
five percent (5%) above the then-applicable Base Rate.
SECTION 1.18. ERISA. "ERISA" has the meaning set forth in Section 4.12.
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SECTION 1.19. EVENT OF DEFAULT. "Event of Default" and "Events of Default"
have the meanings set forth in Section 8.1.
SECTION 1.20. GAAP. "GAAP" means generally accepted accounting principles
applied in a consistent manner.
SECTION 1.21. GOVERNMENTAL AUTHORITY. "Governmental Authority" means and
includes any federal, state, District of Columbia, county, municipal, or other
government and any department, commission, board, bureau, agency or
instrumentality thereof, whether domestic or foreign.
SECTION 1.22. HAZARDOUS MATERIAL. "Hazardous Material" means any
substances defined or designated as hazardous or toxic waste, hazardous or toxic
material, hazardous or toxic substance, or similar term, by any environmental
statute, rule or regulation or any Governmental Authority applicable to Borrower
or its business, operations or assets.
SECTION 1.23. HEALTHCARE SERVICES. "Healthcare Services" means services
and products provided to a Customer, including, but not limited to intellectual
property-related services and products provided to a Customer and performed or
provided by Borrower which are covered by a contract with such Customer for a
necessary or specifically requested valid and proper purpose.
SECTION 1.24. HIGHEST LAWFUL RATE. "Highest Lawful Rate" means the maximum
lawful rate of interest referred to in Section 2.7 that may accrue pursuant to
this Agreement.
SECTION 1.25. LENDER. "Lender" means Xxxxxx Healthcare Finance, Inc., a
Delaware corporation.
SECTION 1.26. LOAN. "Loan" has the meaning set forth in Section 2.1(a).
SECTION 1.27. LOAN DOCUMENTS. "Loan Documents" means and includes this
Agreement, the Note, the Term Note (as defined herein), the Certificate of
Validity, and each and every other document now or hereafter delivered in
connection with this Agreement, as any of them may be amended, modified, or
supplemented from time to time.
SECTION 1.28. LOAN MANAGEMENT FEE. "Loan Management Fee" has the meaning
set forth in Section 2.4(c).
SECTION 1.29. LOCKBOX. "Lockbox" has the meaning set forth in Section 2.3.
SECTION 1.30. LOCKBOX ACCOUNT. "Lockbox Account" means collectively, the
accounts maintained by Borrower at the Lockbox Bank into which all collections
of Accounts are paid directly.
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SECTION 1.31. LOCKBOX BANK. "Lockbox Bank" has the meaning set forth in
Section 2.3.
SECTION 1.31a. MATERIAL ADVERSE EFFECT. "Material Adverse Effect" shall
mean any event or condition which, alone or when taken with other events or
conditions occurring or existing concurrently with such event or condition (i)
has or is reasonably expected to have a material adverse effect on the business,
operations, condition (financial or otherwise), assets, liabilities, or
properties of Borrower; (ii) has or is reasonably expected to have any material
adverse effect on the validity or enforceability of this Agreement or any Loan
Document; (iii) materially impairs or is reasonably expected to materially
impair the ability of Borrower to pay and perform the obligations under this
Agreement; (iv) materially impairs or is reasonably expected to materially
impair the ability of Lender to enforce its rights and remedies under this
Agreement or any of the Loan Documents; or (v) has or is reasonably expected to
have any material adverse effect on the Collateral, the liens of Lender in the
Collateral or the priority of such liens.
SECTION 1.32. MAXIMUM LOAN AMOUNT. "Maximum Loan Amount" has the meaning
set forth in Section 2.1(a).
SECTION 1.33. NOTE. "Note" has the meaning set forth in Section 2.1(c).
SECTION 1.34. OBLIGATIONS. "Obligations" has the meaning set forth in
Section 3.1.
SECTION 1.35. PERMITTED LIENS. "Permitted Liens" means: (i) deposits or
pledges to secure obligations under workmen's compensation, social security or
similar laws, or under unemployment insurance; (ii) deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of money),
operating and capital leases, statutory obligations, surety and appeal bonds and
other obligations of like nature arising in the ordinary course of business;
(iii) mechanic's, workmen's, materialmen's or other like liens arising in the
ordinary course of business with respect to obligations which are not due, or
which are being contested in good faith by appropriate proceedings which suspend
the collection thereof and in respect of which adequate reserves have been made
(provided that such proceedings do not, in Lender's sole discretion, involve any
substantial risk of the sale, loss or forfeiture of such property or assets or
any interest therein); (v) liens on equipment of Borrower to secure borrowed
money incurred for the sole purpose of financing the purchase price of the
equipment subject to such lien (i.e. purchase money security interests) in the
ordinary course of business; and (vi) liens set forth on Schedule 1.35.
SECTION 1.36. PERSON. "Person" means an individual, partnership,
corporation, trust, joint venture, joint stock company, limited liability
company, association, unincorporated organization, Governmental Authority, or
any other entity.
SECTION 1.37. PLAN. "Plan" has the meaning set forth in Section 4.12.
SECTION 1.38. PREMISES. "Premises" has the meaning set forth in Section
4.14.
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SECTION 1.39. PRIME RATE OF INTEREST. "Prime Rate of Interest" means that
rate of interest designated as such by Citibank, N.A., or any successor thereto,
as the same may from time to time fluctuate.
SECTION 1.40. PROHIBITED TRANSACTION. "Prohibited Transaction" means a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Internal Revenue Code that is not exempt under Section 407 or
Section 408 of ERISA or Section 4975(c)(2) or (d) of the Internal Revenue Code
or under a class exemption granted by the U.S. Department of Labor.
SECTION 1.41. QUALIFIED ACCOUNT. "Qualified Account" means an Account of
Borrower generated in the ordinary course of Borrower's business from the
rendition of Healthcare Services pursuant to a Customer Contract which Lender,
in its sole credit judgment, deems to be a Qualified Account. Without limiting
the generality of the foregoing, no Account shall be a Qualified Account if: (a)
the Account or any portion of the Account is payable by an individual
beneficiary, recipient or subscriber individually and not directly to Borrower
by an Account Debtor acceptable to Lender in its sole discretion; (b) the
Account remains unpaid more than one hundred and twenty (120) calendar days past
the claim or invoice date (but in no event more than one hundred and thirty five
(135) calendar days after the applicable Healthcare Services have been
rendered); (c) the Account is subject to any defense, set-off, counterclaim,
deduction, discount, credit, chargeback, freight claim, allowance, or adjustment
of any kind; (d) any part of any goods the sale of which has given rise to the
Account has been returned, rejected, lost, or damaged; (e) if the Account arises
from the sale of goods by Borrower, the sale was not an absolute sale, or the
sale was made on consignment or on approval or on a sale-or-return basis, or the
sale was made subject to any other repurchase or return agreement, or the goods
have not been shipped to the Account Debtor or its designee; (f) if the Account
arises from the performance of Healthcare Services, where the Healthcare
Services have not been actually been performed or the Healthcare Services were
undertaken in violation of any law; (g) the Account is subject to a lien other
than a Permitted Lien; (h) Borrower knows or should have known of the
bankruptcy, receivership, reorganization, or insolvency of the Account Debtor;
(i) the Account is evidenced by chattel paper or an instrument of any kind, or
has been reduced to judgment; (j) the Account is an Account of an Account Debtor
having its principal place of business or executive office outside the United
States; (k) the Account Debtor is an Affiliate or Subsidiary of Borrower; (l)
more than twenty percent (20%) of the aggregate balance of all Accounts owing
from the Account Debtor obligated on the Account are outstanding more than one
hundred and twenty (120) calendar days past their invoice date; (m) fifty
percent (50%) or more of the aggregate unpaid Accounts from any single Account
Debtor are not deemed Qualified Accounts under this Agreement; (n) the total
unpaid Accounts of any single Account Debtor exceed twenty percent (20%) of the
net amount of all Qualified Accounts; (o) any covenant, representation or
warranty contained in the Loan Documents with respect to such Account has been
breached; (p) any Account which is based on a contract which is invoiced and/or
paid based on a percentage of completion basis; (q) any Account which is based
on a contract in which Borrower is paid for services and which services have not
yet been fully provided by Borrower; (r) any license fee (other than fees which
are paid on a month-to-month basis and are otherwise eligible hereunder); or (s)
the Account fails to meet such other specifications and requirements which may
from time to time be established
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by Lender. In addition, Lender may include the following as Qualified Accounts:
Accounts derived from the contract in which Borrower receives software license
fees from Blue Cross/Blue Shield of Tennessee (and similar contracts which are
individually approved in writing by Lender), subject in all cases to Lender's
audit and due diligence of such contract and the performance thereunder,
including without limitation (i) Lender's confirmation that the contract has
been performed by Borrower pursuant to its terms and (ii) Lender's confirmation
that the payor under such contract has agreed that such contract has been
performed by Borrower and that such payor will pay the amount agreed upon
pursuant to the terms of such contract.
SECTION 1.43. REPORTABLE EVENT. "Reportable Event" means a "reportable
event" as defined in Section 4043(c) of ERISA for which the notice requirements
of Section 4043(a) of ERISA are not waived.
SECTION 1.44. REVOLVING CREDIT LOAN. "Revolving Credit Loan" has the
meaning set forth in Section 2.1(b).
SECTION 1.45. TERM. "Term" has the meaning set forth in Section 2.8.
SECTION 1.46. TERMINATION FEE. "Termination Fee " shall mean a fee payable
upon termination of the Agreement, as yield maintenance for the loss of bargain
and not as a penalty, equal to the greater of (i) two and one half percent
(2 1/2%) of the Maximum Loan Amount and (ii) the Yield Maintenance Amount.
SECTION 1.47. YIELD MAINTENANCE AMOUNT. "Yield Maintenance Amount" shall
mean the product obtained by multiplying (a) the difference between (i) the all
in effective yield (measured as a percentage per annum) earned by Lender under
this Agreement during the three (3) full calendar months immediately preceding
the Termination Date minus (ii) Xxxxxx Financial Inc.'s weighted average cost of
capital (measured as a percentage per annum) for the most recent publicly
disclosed quarterly financial period; times (b) the average principal amount of
outstanding Revolving Credit Loans for the three (3) calendar months immediately
preceding the Termination Date; times (c) the quotient of (i) the number of
months (full or partial) then-remaining in the Term divided by (ii) twelve (12).
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ARTICLE II
LOAN
SECTION 2.1. TERMS.
(a) The maximum aggregate principal amount of credit extended by
Lender to Borrower under this Agreement (the "Loan") that will be outstanding at
any time is Fifteen Million and No/100 Dollars ($15,000,000.00) (the "Maximum
Loan Amount"). The parties hereto shall negotiate in good faith to increase the
Maximum Loan Amount if the Borrowing Base exceeds the Maximum Loan Amount then
in effect; provided, however, that any increase in the Maximum Loan Amount shall
be subject, in all cases, to the approval of Lender's credit committee, acting
in its sole and absolute discretion.
(b) The Loan shall be in the nature of a revolving line of credit,
and shall include sums advanced and other credit extended by Lender to or for
the benefit of Borrower from time to time under this Article II (each a
"Revolving Credit Loan") up to the Maximum Loan Amount depending upon the
availability in the Borrowing Base, the requests of Borrower pursuant to the
terms and conditions of Section 2.2, and on such other basis as Lender may
reasonably determine. The outstanding principal balance of the Loan may
fluctuate from time to time, to be reduced by repayments made by Borrower (which
may be made without penalty or premium), and to be increased by future Revolving
Credit Loans, advances and other extensions of credit to or for the benefit of
Borrower, and shall be due and payable in full upon the expiration of the Term.
For purposes of this Agreement, any determination as to whether there is
availability within the Borrowing Base for advances or extensions of credit
shall be made by Lender in its sole discretion and is final and binding upon
Borrower.
(c) At Closing, Borrower shall execute and deliver to Lender a
promissory note evidencing Borrower's unconditional obligation to repay Lender
for Revolving Credit Loans, advances, and other extensions of credit made under
the Loan, in the form of Exhibit A to this Agreement (as amended, modified,
restated or replaced from time to time, the "Note"), dated the date of this
Agreement, payable to the order of Lender in accordance with the terms thereof.
The Note shall bear interest on the outstanding principal balance of the Note
from the date of the Note until repaid, with interest payable monthly in arrears
on the first Business Day of each month, at a rate per annum (on the basis of
the actual number of calendar days elapsed over a year of 360 days) equal to the
Base Rate, provided that after the occurrence and during the continuance of an
Event of Default such rate shall be equal to the Default Rate. Each Revolving
Credit Loan, advance and other extension of credit shall be deemed evidenced by
the Note, which is deemed incorporated into and made a part of this Agreement by
this reference.
(d) Subject to the terms and conditions of this Agreement,
advances under the Loan shall be made against a borrowing base equal to eighty
percent (80%) of Qualified Accounts due and owing from any Account Debtor (the
"Borrowing Base"). Lender, in its sole credit judgment, may further adjust the
Borrowing Base by applying percentages (known as "liquidity
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factors") to Qualified Accounts by payor class based upon Borrower's actual
recent collection history for each payor (i.e., hospitals, other health care
entities, etc.) in a manner consistent with Lender's underwriting practices and
procedures.(1) Such liquidity factors may be adjusted by Lender throughout the
Term as warranted by collection histories. Because the Loan under this Agreement
is a revolver which is separate and distinct from the loan made pursuant to that
certain Secured Term Note of even date hereof (the "Term Note") executed by
Borrower in favor of Lender in the original principal amount of $10,000,000
(which Term Note was a bridge financing), the liquidity factors determined
pursuant to the terms hereof shall be separate and distinct from the liquidity
factors determined pursuant to the Term Note and, at the sole discretion of
Lender, such liquidity factors hereunder shall be more narrowly defined than the
liquidity factors determined pursuant to the terms of Term Note.
SECTION 2.2. LOAN ADMINISTRATION. Borrowings under the Loan shall be as
follows:
(a) A request for a Revolving Credit Loan shall be made, or shall
be deemed to be made, in the following manner: (i) Borrower may give Lender
notice of its intention to borrow, in which notice Borrower shall specify the
amount of the proposed borrowing and the proposed borrowing date, not later than
2:00 p.m. Eastern time one (1) Business Day before the proposed borrowing date;
provided, however, that no such request may be made at a time when there exists
an Event of Default; and (ii) the becoming due of any amount required to be paid
under this Agreement, whether as interest or for any other Obligation, shall be
deemed irrevocably to be a request for a Revolving Credit Loan on the day
following the due date in the amount required to pay such interest or other
Obligation if such was not paid by Borrower on the due date.
(b) Borrower hereby irrevocably authorizes Lender to disburse the
proceeds of each Revolving Credit Loan requested, or deemed to be requested, as
follows: (i) the proceeds of each Revolving Credit Loan requested under
subsection 2.2(a)(i) shall be disbursed by Lender by wire transfer to such bank
account as may be agreed upon by Borrower and Lender from time to time or
elsewhere if pursuant to written direction from Borrower; and (ii) the proceeds
of each Revolving Credit Loan deemed to be requested under subsection 2.2(a)(ii)
shall be disbursed by Lender by way of direct payment of the relevant interest
or other Obligation.
(c) All Revolving Credit Loans, advances and other extensions of
credit to or for the benefit of Borrower shall constitute one general Obligation
of Borrower, and shall be secured by Lender's lien upon all of the Collateral.
(d) Lender shall enter all Revolving Credit Loans as debits to a
loan account in the name of Borrower and shall also record in said loan account
all payments made by Borrower on any Obligations and all proceeds of Collateral
which are indefeasibly paid to Lender, and may record therein, in accordance
with customary accounting practice, other debits and credits, including
----------------------------
(1) To demonstrate the methodology, the following is an illustration of the
application of liquidity factors: If Borrower historically collects x% of
invoices (where x is a number between 0 and 100) within the eligibility period
as set forth herein, the liquidity factor would be x%, so that availability
against such class of Accounts in the aggregate would be equal to Qualified
Accounts multiplied by an x% liquidity factor and then multiplied by the 80%
advance rate.
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interest and all charges and expenses properly chargeable to Borrower. All
collections into the Concentration Account pursuant to Section 2.3 shall be
applied first to fees, costs and expenses due and owing under the Loan
Documents, then to interest due and owing under the Loan Documents, and then to
principal outstanding with respect to Revolving Credit Loans.
(e) Lender will account to Borrower monthly with a statement of
Revolving Credit Loans, charges and payments made pursuant to this Agreement,
and such accounting rendered by Lender shall be deemed final, binding and
conclusive upon Borrower, absent manifest error, unless Lender is notified by
Borrower in writing to the contrary within thirty (30) calendar days of the date
each accounting is mailed to Borrower. Such notice shall be deemed an objection
to those items specifically objected to in the notice.
SECTION 2.3. COLLECTIONS, DISBURSEMENTS, BORROWING AVAILABILITY, AND
LOCKBOX ACCOUNT. Borrower shall maintain lockboxes (collectively, the "Lockbox")
with Bank One Colorado, N.A. (the "Lockbox Bank") and shall maintain the Lockbox
Account, subject to the provisions of this Agreement, and shall execute with the
Lockbox Bank a Lockbox Agreement in the form attached as Exhibit B, and such
other agreements related to the Lockbox Agreement as Lender may require.
Borrower shall ensure that all collections of Accounts are paid directly from
Account Debtors into the Lockbox, and that all funds paid into the Lockbox and
Lockbox Account are immediately transferred into a depository account maintained
by Lender at Bank One, N.A., or such other financial institution as determined
by Lender in its sole discretion, by written notice to Borrowers and the Lockbox
Bank (the "Concentration Account"). Lender shall apply, on a daily basis, all
funds transferred into the Concentration Account pursuant to this Section 2.3 to
reduce the outstanding indebtedness under the Loan (in accordance with Section
2.2(d)), and all future Revolving Credit Loans, advances and other extensions of
credit to be made by Lender under the conditions set forth in this Article II.
To the extent that any collections of Accounts or proceeds of other Collateral
are not sent directly to the Lockbox but are received by Borrower, such
collections shall be held in trust for the benefit of Lender and immediately
remitted, in the form received, to the Lockbox Bank for transfer to the
Concentration Account immediately upon receipt by Borrower. Borrower
acknowledges and agrees that its compliance with the terms of this Section 2.3
is essential, and that Lender will suffer immediate and irreparable injury and
have no adequate remedy at law, if Borrower, through its acts or omissions,
causes or permits Account Debtors to pay other than to the Lockbox Account, or
if Borrower fails to immediately deposit collections of Accounts or proceeds of
other Collateral in the Lockbox Account as herein required. Upon Borrower's
failure to comply with the terms of this Section 2.3 (after notice and a three
(3) calendar day period to cure such non-compliance), Lender will be entitled,
in addition to exercising any other rights and remedies available to it, to
assess a non-compliance fee which shall operate to increase the Base Rate by two
percent (2%) per annum during any period of non-compliance. Lender shall be
entitled to assess such fee whether or not an Event of Default is declared or
otherwise occurs. All funds transferred from the Concentration Account for
application to Borrower's indebtedness to Lender shall be applied to reduce the
Loan balance, but for purposes of calculating interest shall be subject to a
five (5) Business Day clearance period. If as the result of collections of
Accounts pursuant to the terms and conditions of this Section 2.3 a credit
balance exists with respect to the Concentration Account, such credit balance
shall not accrue interest in favor of Borrower, but shall be available to
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Borrower at any time or times for so long as no Event of Default, and no event
or circumstance which, with notice or the passage of time (or both), would
constitute an Event of Default, exists.
SECTION 2.4. FEES.
(a) By executing this Agreement, Borrower agrees unconditionally to pay
to Lender a commitment fee equal to Fifty Thousand Dollars ($50,000) (the
"Commitment Fee"). The Commitment Fee shall be due and payable two (2) Business
Days after Lender notifies Borrower that Lender's credit committee has approved
the Loan contemplated by this Agreement.
(b) For so long as the Loan is available to Borrower, Borrower
unconditionally shall pay to Lender a monthly usage fee (the "Usage Fee") equal
to 0.0333% of the average amount by which the Maximum Loan Amount exceeds the
average amount of the outstanding principal balance of the Revolving Credit
Loans during the preceding month. The Usage Fee shall be payable monthly in
arrears on the first Business Day of each successive calendar month.
(c) For so long as the Loan is available to Borrower, Borrower
unconditionally shall pay to Lender a monthly loan management fee (the "Loan
Management Fee") equal to one twelfth of one percent (0.083%) of the average
amount of the outstanding principal balance of the Revolving Credit Loans during
the preceding month. The Loan Management Fee shall be payable monthly in arrears
on the first day of each successive calendar month.
(d) Borrower shall pay to Lender all out-of-pocket audit and appraisal
fees in connection with audits and appraisals of Borrower's books and records
and such other matters as Lender shall deem appropriate, which shall be due and
payable on the first Business Day of the month following the date of issuance by
Lender of a request for payment thereof to Borrower. Absent an Event of Default,
Borrower shall be responsible to pay audit fees for no more than four (4) audits
per calendar year. Upon the occurrence of an Event of Default, such limitation
on Borrower's requirement to pay for audit fees shall not be limited.
SECTION 2.5. PAYMENTS. Principal payable on account of Revolving Credit
Loans shall be payable by Borrower to Lender immediately upon the earliest of
(i) the receipt by Borrower or Lender of any payments on or proceeds from any of
the Collateral, to the extent of such proceeds, (ii) the occurrence of an Event
of Default if the Loan and the maturity of the payment of the Obligations are
accelerated, or (iii) the termination of this Agreement pursuant to Section 2.8
of this Agreement; provided, however, that if any advance made by Lender in
excess of the Borrowing Base shall exist at any time, Borrower shall,
immediately as soon as possible upon demand (not in any event to exceed two (2)
Business Days), repay such overadvance. Interest accrued on the Revolving Credit
Loans shall be due on the earliest of (i) the first Business Day of each month
(for the immediately preceding month), computed on the last calendar day of the
preceding month, (ii) the occurrence of an Event of Default if the Loan and the
maturity of the payment of the Obligations are accelerated, or (iii) the
termination of this Agreement pursuant to Section 2.8. Except to the extent
otherwise set forth in this Agreement, all payments of principal and of interest
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on the Loan, all other charges and any other obligations of Borrower under this
Agreement, shall be made to Lender to the Concentration Account, in immediately
available funds.
SECTION 2.6. USE OF PROCEEDS. The proceeds of Lender's advances under the
Loan shall be used solely for working capital and for other costs of Borrower
arising in the ordinary course of Borrower's business.
SECTION 2.7. INTEREST RATE LIMITATION. The parties intend to conform
strictly to the applicable usury laws in effect from time to time during the
term of the Loan. Accordingly, if any transaction contemplated by this Agreement
would be usurious under such laws, then notwithstanding any other provision of
this Agreement: (i) the aggregate of all interest that is contracted for,
charged, or received under this Agreement or under any other Loan Document shall
not exceed the maximum amount of interest allowed by applicable law (the
"Highest Lawful Rate"), and any excess shall be promptly credited to Borrower by
Lender (or, to the extent that such consideration shall have been paid, such
excess shall be promptly refunded to Borrower by Lender); (ii) neither Borrower
nor any other Person now or hereafter liable under this Agreement shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the Highest Lawful Rate; and (iii) the effective rate of interest shall be
reduced to the Highest Lawful Rate. All sums paid, or agreed to be paid, to
Lender for the use, forbearance, and detention of the debt of Borrower to Lender
shall, to the extent permitted by applicable law, be allocated throughout the
full term of the Note until payment is made in full so that the actual rate of
interest does not exceed the Highest Lawful Rate in effect at any particular
time during the full term thereof. If at any time the rate of interest under the
Note exceeds the Highest Lawful Rate, the rate of interest to accrue pursuant to
this Agreement shall be limited, notwithstanding anything to the contrary in
this Agreement, to the Highest Lawful Rate, but any subsequent reductions in the
Base Rate shall not reduce the interest to accrue pursuant to this Agreement
below the Highest Lawful Rate until the total amount of interest accrued equals
the amount of interest that would have accrued if a varying rate per annum equal
to the interest rate under the Note had at all times been in effect. If the
total amount of interest paid or accrued pursuant to this Agreement under the
foregoing provisions is less than the total amount of interest that would have
accrued if a varying rate per annum equal to the interest rate under the Note
had been in effect, then Borrower agrees to pay to Lender an amount equal to the
difference between (x) the lesser of (A) the amount of interest that would have
accrued if the Highest Lawful Rate had at all times been in effect, or (B) the
amount of interest that would have accrued if a varying rate per annum equal to
the interest rate under the Note had at all times been in effect, and (y) the
amount of interest accrued in accordance with the other provisions of this
Agreement.
SECTION 2.8. TERM.
(a) Subject to Lender's right to cease making Revolving Credit
Loans to Borrower upon or after any Event of Default, this Agreement shall be in
effect for a period of two (2) years from the Closing Date, unless terminated as
provided in this Section 2.8 (the "Term"), and this Agreement shall be renewed
for one-year periods thereafter upon the mutual written agreement of the
parties.
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(b) Notwithstanding anything in this Agreement to the contrary,
Lender may terminate this Agreement without notice upon or after the occurrence
of an Event of Default.
(c) Upon at least thirty (30) days prior written notice to Lender
(the "Termination Notice Period"), Borrower may terminate this Agreement after
the first annual anniversary of the Closing Date, provided however, at the
effective date of any termination, Borrower shall pay to Lender (in addition to
the then outstanding principal, accrued interest and other Obligations owing
under the terms of this Agreement and any other Loan Documents) as yield
maintenance for the loss of bargain and not as a penalty, an amount equal to the
Termination Fee. Consistent with the foregoing, Borrower has no right to
terminate this Agreement until after the first anniversary of the Closing Date.
(d) All of the Obligations shall be immediately due and payable
upon the termination date stated in any notice of termination of this Agreement
(the "Termination Date"); provided that, notwithstanding anything in Section
2.8(c) to the contrary, the Termination Date shall be effective no earlier than
the first Business Day of the month following the expiration of the Termination
Notice Period. All undertakings, agreements, covenants, warranties, and
representations of Borrower contained in the Loan Documents shall survive any
such termination and Lender shall retain its liens in the Collateral and all of
its rights and remedies under the Loan Documents notwithstanding such
termination until Borrower has paid the Obligations to Lender, in full, in
immediately available funds.
(e) Notwithstanding any provision of this Agreement which makes
reference to the continuance of an Event of Default, nothing in this Agreement
shall be construed to permit Borrower to cure an Event of Default following the
lapse of the applicable cure period, and Borrower shall have no such right in
any instance unless specifically granted in writing by Lender.
SECTION 2.9. JOINT AND SEVERAL LIABILITY; BINDING OBLIGATIONS. Each entity
comprising Borrower and executing this Agreement on behalf of Borrower shall be
jointly and severally liable for all of the Obligations. In addition, each
entity comprising Borrower hereby acknowledges and agrees that all of the
representations, warranties, covenants, obligations, conditions, agreements and
other terms contained in this Agreement shall be applicable to and shall be
binding upon each entity comprising Borrower, and shall be binding upon all such
entities when taken together.
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ARTICLE III
COLLATERAL
SECTION 3.1. GENERALLY. As security for the payment of all liabilities of
Borrower to Lender, including without limitation: (i) indebtedness evidenced
under the Note, repayment of Revolving Credit Loans, advances and other
extensions of credit, all fees and charges owing by Borrower, (including without
limitation the Termination Fee) and all other liabilities and obligations of
every kind or nature whatsoever of Borrower to Lender, whether now existing or
hereafter incurred, joint or several, matured or unmatured, direct or indirect,
primary or secondary, related or unrelated, due or to become due, including but
not limited to any extensions, modifications, substitutions, increases and
renewals thereof, (ii) the payment of all amounts advanced by Lender to
preserve, protect, defend, and enforce its rights under this Agreement and in
the following property in accordance with the terms of this Agreement, and (iii)
the payment of all expenses incurred by Lender in connection therewith
(collectively, the "Obligations"), Borrower hereby assigns and grants to Lender
a continuing first priority lien on and security interest in, upon, and to the
following property (the "Collateral"):
(a) All of Borrower's now-owned and hereafter acquired or arising
Accounts, accounts receivable and rights to payment of every kind and
description, and all of Borrower's contract rights, chattel paper, documents and
instruments with respect thereto, and all of Borrower's rights, remedies,
security and liens, in, to and in respect of the Accounts, including, without
limitation, rights of stoppage in transit, replevin, repossession and
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party, guaranties or other contracts of suretyship with respect to the Accounts,
deposits or other security for the obligation of any Account Debtor, and credit
and other insurance;
(b) All moneys, securities and other property and the proceeds
thereof, now or hereafter held or received by, in transit to, in possession of,
or under the control of Lender or a bailee or Affiliate of Lender, from or for
Borrower, whether for safekeeping, pledge, custody, transmission, collection or
otherwise, and all of Borrower's deposits (general or special), balances, sums
and credits with Lender at any time existing;
(c) All of Borrower's right, title and interest in, to and in
respect of all goods relating to, or which by sale have resulted in, Accounts,
including, without limitation, all goods described in invoices or other
documents or instruments with respect to, or otherwise representing or
evidencing, any Account, and all returned, reclaimed or repossessed goods;
(d) All of Borrower's now owned or hereafter acquired deposit
accounts into which Accounts are deposited, including the Lockbox Account;
(e) All of Borrower's now owned and hereafter acquired or arising
general intangibles and other property of every kind and description with
respect to, evidencing or relating
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to its Accounts, accounts receivable and other rights to payment, including, but
not limited to, all existing and future customer lists, choses in action,
claims, books, records, ledger cards, contracts, licenses, formulae, tax and
other types of refunds, returned and unearned insurance premiums, rights and
claims under insurance policies, and computer programs, information, software,
records, and data, as the same relates to the Accounts;
(f) The proceeds (including, without limitation, insurance
proceeds) of all of the foregoing.
SECTION 3.2. LIEN DOCUMENTS. At Closing and thereafter as Lender deems
necessary in its sole discretion, Borrower shall execute and deliver to Lender,
or have executed and delivered (all in form and substance satisfactory to Lender
in its sole discretion):
(a) UCC-1 Financing Statements pursuant to the Uniform Commercial
Code in effect in the jurisdiction(s) in which Borrower operates, which Lender
may file in any jurisdiction where any Collateral is or may be located and in
any other jurisdiction that Lender deems appropriate; provided that a carbon,
photographic, or other reproduction or other copy of this Agreement or of a
financing statement is sufficient as and may be filed in lieu of a financing
statement; and
(b) Any other agreements, documents, instruments, and writings
deemed necessary by Lender or as Lender may otherwise request from time to time
in its sole discretion to evidence, perfect, or protect Lender's lien and
security interest in the Collateral required under this Agreement.
SECTION 3.3. COLLATERAL ADMINISTRATION.
(a) All Collateral (except deposit accounts) will at all times be
kept by Borrower at its principal office(s) as set forth on Schedule 4.15 and
shall not be moved from such locations without the prior written consent of
Lender, which consent shall not be unreasonably withheld.
(b) Borrower shall keep accurate and complete records of its
Accounts and all payments and collections thereon and shall submit to Lender on
such periodic basis as Lender shall request a sales and collections report for
the preceding period, in form satisfactory to Lender. In addition, if Accounts
in an aggregate face amount in excess of $100,000 become ineligible because they
fall within one of the specified categories of ineligibility set forth in the
definition of Qualified Accounts or otherwise, Borrower shall notify Lender of
such occurrence on the first Business Day following such occurrence and the
Borrowing Base shall thereupon be adjusted to reflect such occurrence. If
requested by Lender, Borrower shall execute and deliver to Lender formal written
assignments of all of its Accounts weekly or daily, which shall include all
Accounts that have been created since the date of the last assignment, together
with copies of claims, invoices or other information related thereto.
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(c) Whether or not an Event of Default has occurred, any of
Lender's officers, employees or agents shall have the right, at any time or
times hereafter, in the name of Lender or any designee of Lender or Borrower, to
verify the validity, amount or any other matter relating to any Accounts by
mail, telephone, telegraph or otherwise; provided, however, that Lender shall
endeavor to notify Borrower of any such action taken by Lender's agent. Borrower
shall cooperate fully with Lender in an effort to facilitate and promptly
conclude such verification process.
(d) To expedite collection, Borrower shall endeavor in the first
instance to make collection of its Accounts for Lender. Lender retains the right
at all times after the occurrence and during the continuance of an Event of
Default, subject to applicable law regarding Account Debtors, to notify Account
Debtors that Accounts have been assigned to Lender and to collect Accounts
directly in its own name and to charge the collection costs and expenses,
including attorneys' fees, to Borrower.
SECTION 3.4. OTHER ACTIONS. In addition to the foregoing, Borrower (i)
shall provide prompt written notice to each Customer who either is currently an
Account Debtor (including without limitation all Customers) or becomes an
Account Debtor at any time following the date of this Agreement that directs
each Account Debtor to make payments into the Lockbox, and hereby authorizes
Lender, upon Borrower's failure to send such notices within ten (10) calendar
days after the date of this Agreement (or ten (10) calendar days after the
Customer becomes an Account Debtor), to send any and all similar notices to such
Insurers, and (ii) shall do anything further that may be lawfully required by
Lender to secure Lender and effectuate the intentions and objects of this
Agreement, including but not limited to the execution and delivery of lockbox
agreements, continuation statements, amendments to financing statements, and any
other documents required under this Agreement. At Lender's request, Borrower
shall also immediately deliver to Lender all items for which Lender must receive
possession to obtain a perfected security interest. Borrower shall, on Lender's
demand, deliver to Lender all notes, certificates, and documents of title,
chattel paper, warehouse receipts, instruments, and any other similar
instruments constituting Collateral.
SECTION 3.5. SEARCHES. Before Closing, and thereafter (as and when
determined by Lender in its sole discretion), Lender will perform the searches
described in clauses (a) and (b) below against Borrower (the results of which
are to be consistent with Borrower's representations and warranties under this
Agreement), all at Borrower's expense:
(a) Uniform Commercial Code searches with the Secretary of State
and local filing offices of each jurisdiction where Borrower maintains its
executive offices, a place of business, or assets;
(b) Judgment, federal tax lien and corporate and partnership tax
lien searches, in each jurisdiction searched under clause (a) above; and
In addition, prior to Closing, at Borrower's expense, Borrower shall
obtain and deliver to Lender good standing certificates showing Borrower to be
in good standing in its state of formation and in each other state in which it
is doing and currently intends to do business for which
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qualification is required except for such locations where failure to qualify
could not have a Material Adverse Effect (provided, Lender agrees to accept
qualifications from other states after the Closing if and only if Borrower
provides such qualifications after closing and Borrower continues to diligently
pursue such qualifications).
SECTION 3.6. POWER OF ATTORNEY. Each of the officers of Lender is hereby
irrevocably made, constituted and appointed the true and lawful attorney for
Borrower (without requiring any of them to act as such) with full power of
substitution to do the following: (i) endorse the name of Borrower upon any and
all checks, drafts, money orders, and other instruments for the payment of money
that are payable to Borrower and constitute collections on Borrower's Accounts
(if Borrower fails to do so pursuant to the terms of this Agreement); (ii)
execute in the name of Borrower any financing statements, schedules,
assignments, instruments, documents, and statements that Borrower is obligated
to give Lender under this Agreement (if Borrower fails to do so pursuant to the
terms of this Agreement); and (iii) upon the occurrence and continuance of an
Event of Default, do such other and further acts and deeds in the name of
Borrower that Lender may deem necessary or desirable to enforce any Account or
other Collateral or perfect Lender's security interest or lien in any
Collateral. In addition, if Borrower breaches its obligation to direct payments
of the proceeds of the Collateral to the Lockbox Account, Lender, as the
irrevocably made, constituted and appointed true and lawful attorney for
Borrower pursuant to this paragraph, may, by the signature or other act of any
of Lender's officers (without requiring any of them to do so), direct any
federal, state or private payor or fiscal intermediary to pay proceeds of the
Collateral to Borrower by directing payment to the Lockbox Account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each entity comprising Borrower represents and warrants to Lender, and
shall be deemed to represent and warrant on each day on which any Obligations
shall be outstanding under this Agreement, that:
SECTION 4.1. SUBSIDIARIES. Except for Borrower entities which are
subsidiaries of other Borrower entities and except as set forth on Schedule 4.1,
Borrower has no subsidiaries. None of the subsidiaries set forth on
Schedule 4.1 has any assets or operations.
SECTION 4.2. ORGANIZATION AND GOOD STANDING. Borrower is a corporation (i)
duly organized, validly existing, and in good standing under the laws of its
state of formation, (ii) is in good standing as a foreign corporation in each
jurisdiction in which the character of the properties owned or leased by it
therein or the nature of its business makes such qualification necessary except
where the failure to so qualify could not have a Material Adverse Effect, (iii)
has the corporate power and authority to own its assets and transact the
business in which it is engaged, and (iv) has obtained all certificates,
licenses and qualifications required under all laws, regulations, ordinances, or
orders of public authorities necessary for the ownership and operation of all of
its properties and
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transaction of all of its business, except where the failure to obtain such
certificates, licenses and qualifications could not have a Material Adverse
Effect.
SECTION 4.3. AUTHORITY. Borrower has full corporate power and authority to
enter into, execute, and deliver this Agreement and to perform its obligations
under this Agreement, to borrow the Loan, to execute and deliver the Note, and
to incur and perform the obligations provided for in the Loan Documents, all of
which have been duly authorized by all necessary corporate action. No consent or
approval of stockholders of, or lenders to, Borrower and no consent, approval,
filing or registration with any Governmental Authority is required as a
condition to the validity of the Loan Documents or the performance by Borrower
of its obligations under the Loan Documents.
SECTION 4.4. BINDING AGREEMENT. This Agreement and all other Loan
Documents constitute, and the Note, when issued and delivered pursuant to this
Agreement for value received, will constitute, the valid and legally binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms.
SECTION 4.5. LITIGATION. Except as disclosed in Schedule 4.5, there are no
actions, suits, proceedings or investigations pending or threatened against
Borrower before any court or arbitrator or before or by any Governmental
Authority which, in any one case or in the aggregate, if determined adversely to
the interests of Borrower, could have a Material Adverse Effect on the business,
properties, condition (financial or otherwise) or operations, current or
prospective, of Borrower, or upon its ability to perform its obligations under
the Loan Documents. Borrower is not in default with respect to any order of any
court, arbitrator, or Governmental Authority applicable to Borrower or its
properties.
SECTION 4.6. NO CONFLICTS. The execution and delivery by Borrower of this
Agreement and the other Loan Documents do not, and the performance of its
obligations under the Loan Documents will not, violate, conflict with,
constitute a default under, or result in the creation of a lien or encumbrance
upon the property of Borrower (other than for the benefit of Lender) under: (i)
any provision of Borrower's articles of incorporation or bylaws, (ii) any
provision of any law, rule, or regulation applicable to Borrower, or (iii) any
of the following: (A) any indenture or other agreement or instrument to which
Borrower is a party or by which Borrower or its property is bound (other than
indentures, agreements and instruments, the violation, conflicts, or defaults of
which, individually or in the aggregate, do not have a Material Adverse Effect);
or (B) any judgment, order or decree of any court, arbitration tribunal, or
Governmental Authority having jurisdiction over Borrower which is applicable to
Borrower, other than such judgments, orders or decrees from such governmental
entities, the violation of which, individually or in the aggregate, do not have
a Material Adverse Effect.
SECTION 4.7. FINANCIAL CONDITION. The annual consolidated financial
statements of Borrower as of and for the period ending December 31, 1999 audited
by Borrower's independent outside auditing firm, the unaudited quarterly
consolidated financial statements of Borrower as of and for the period ending
June 30, 2000, certified by the chief financial officer of Borrower, which have
been delivered to Lender, fairly present the financial condition of Borrower and
the results of
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its operations and changes in financial condition as of the dates and for the
periods referred to, and have been prepared in accordance with GAAP. There are
no material unrealized or anticipated liabilities, direct or indirect, fixed or
contingent, of Borrower as of the dates of such financial statements which are
not reflected in such financial statements or in the notes to such financial
statements. There has been no adverse change in the business, properties,
condition (financial or otherwise) or operations (current or prospective) of
Borrower since December 31, 1999. Borrower's fiscal year ends on December 31.
The federal tax identification number of each entity comprising Borrower is
listed on Schedule 4.7.
SECTION 4.8. NO DEFAULT. Borrower is not in default under or with respect
to any obligation in any respect which could have a Material Adverse Effect on
its business, operations, property or financial condition, or which could have a
Material Adverse Effect on the ability of Borrower to perform its obligations
under the Loan Documents. No Event of Default or event which, with the giving of
notice or lapse of time, or both, could become an Event of Default, has occurred
and is continuing.
SECTION 4.9. TITLE TO PROPERTIES. Borrower has good and marketable title
to its properties and assets, including the Collateral and the properties and
assets reflected in the financial statements described in Section 4.7, subject
to no lien, mortgage, pledge, encumbrance or charge of any kind, other than
Permitted Liens. Borrower has not agreed or consented to cause any of its
properties or assets whether owned now or hereafter acquired to be subject in
the future (upon the happening of a contingency or otherwise) to any lien,
mortgage, pledge, encumbrance or charge of any kind other than Permitted Liens.
SECTION 4.10. TAXES. Borrower has filed, or has obtained extensions for
the filing of, all federal, state and other tax returns which are required to be
filed, and has paid all taxes shown as due on those returns and all assessments,
fees and other amounts due as of the date of this Agreement. All tax liabilities
of Borrower were, as of December 31, 1999 and are now, adequately provided for
on Borrower's books. No tax liability has been asserted by the Internal Revenue
Service or other taxing authority against Borrower for taxes in excess of those
already paid.
SECTION 4.11. SECURITIES AND BANKING LAWS AND REGULATIONS.
(a) The use of the proceeds of the Loan and Borrower's issuance of
the Note will not directly or indirectly violate or result in a violation of the
Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including without limitation
Regulations U, T or X of the Board of Governors of the Federal Reserve System.
Borrower is not engaged in the business of extending credit for the purpose of
the purchasing or carrying "margin stock" within the meaning of those
regulations. No part of the proceeds of the Loan under this Agreement will be
used to purchase or carry any margin stock or to extend credit to others for
such purpose.
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(b) Borrower is not an investment company within the meaning of
the Investment Company Act of 1940, as amended, nor is it, directly or
indirectly, controlled by or acting on behalf of any Person which is an
investment company within the meaning of that Act.
SECTION 4.12. ERISA. No employee benefit plan (a "Plan") subject to the
Employee Retirement Income Security Act of 1974 ("ERISA") and regulations issued
pursuant to ERISA that is maintained by Borrower or under which Borrower could
have any material liability under ERISA (i) has failed to meet minimum funding
standards established in Section 302 of ERISA, (ii) has failed to substantially
comply with all applicable requirements of ERISA and of the Internal Revenue
Code, including all applicable rulings and regulations thereunder, or (iii) has
engaged in or been involved in a prohibited transaction (as defined in ERISA)
under ERISA or under the Internal Revenue Code. Neither Borrower nor any member
of a Controlled Group that includes Borrower has assumed, or received notice of
a claim asserted against Borrower or another member of the Controlled Group for,
withdrawal liability (as defined in the Multi-Employer Pension Plan Amendments
Act of 1980, as amended) with respect to any multi-employer pension plan.
Borrower has timely made when due all contributions with respect to any
multi-employer pension plan in which it participates and no event has occurred
triggering a material claim against Borrower for withdrawal liability with
respect to any multi-employer pension plan in which Borrower participates.
SECTION 4.13. COMPLIANCE WITH LAW. Borrower is not in violation of any
statute, rule or regulation of any Governmental Authority (including, without
limitation, any statute, rule or regulation relating to employment practices or
to environmental, occupational and health standards and controls), the violation
of which could, individually or in the aggregate, have a Material Adverse
Effect. Borrower has obtained all licenses, permits, franchises, and other
governmental authorizations necessary for the ownership of its properties and
the conduct of its business, unless the failure to obtain such licenses,
individually or in the aggregate, could not have a Material Adverse Effect.
Borrower is current with all reports and documents required to be filed with any
state or federal securities commission or similar Governmental Authority and is
in full compliance with all applicable rules and regulations of such
commissions, unless the failure to comply, individually or in the aggregate,
could not have a Material Adverse Effect.
SECTION 4.14. ENVIRONMENTAL MATTERS. To the Borrower's best knowledge, no
use, exposure, release, generation, manufacture, storage, treatment,
transportation or disposal of Hazardous Material has occurred or is occurring on
or from any real property on which the Collateral is located or which is owned,
leased or otherwise occupied by Borrower (the "Premises"), or off the Premises
as a result of any action of Borrower. To Borrower's best knowledge, all
Hazardous Material used, treated, stored, transported to or from, generated or
handled on the Premises, or off the Premises by Borrower, has been disposed of
on or off the Premises by or on behalf of Borrower in a lawful manner. To
Borrower's best knowledge, there are no underground storage tanks present on or
under the Premises owned or leased by Borrower. To Borrower's best knowledge, no
other environmental, public health or safety hazards exist with respect to the
Premises.
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SECTION 4.15. PLACES OF BUSINESS. As of the Closing Date, the only places
of business of Borrower, and the places where it keeps and intends to keep the
Collateral and records concerning the Collateral, are at the addresses set forth
in Schedule 4.15. Schedule 4.15 also lists the owner of record of each such
property.
SECTION 4.16. INTELLECTUAL PROPERTY. Borrower exclusively owns or
possesses all the patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, franchises, licenses, and
rights with respect to the foregoing necessary for the current and planned
future conduct of its business, without any conflict with the rights of others,
except to the extent that failure to own or possess such property could not have
a Material Adverse Effect. A list of all such patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
franchises, licenses, and rights with respect to the foregoing (indicating the
nature of Borrower's interest), as well as all outstanding franchises and
licenses given by or held by Borrower, is attached as Schedule 4.16, except for
such patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, franchises, licenses, and rights with respect to
the foregoing (indicating the nature of Borrower's interest) which in the
aggregate could not have a Material Adverse Effect. Borrower is not in default
of any obligation or undertaking with respect to such intellectual property or
rights. Borrower is not infringing on any patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
franchises, licenses, any rights with respect to the foregoing, or any other
intellectual property rights of others except for infringement which
individually or in the aggregate could not have a Material Adverse Effect, and
the Borrower is not aware of any infringement by others of any such rights owned
by Borrower.
SECTION 4.17. STOCK OWNERSHIP. The identity of the greater than 5%
stockholders of record of all classes of the outstanding stock of Borrower,
together with the respective ownership percentages held by such stockholders as
of August 31, 2000, are as set forth in the proxy statement of Borrower dated as
of September 7, 2000
SECTION 4.18. MATERIAL FACTS. Neither this Agreement nor any other Loan
Document nor any other agreement, document, certificate, or statement furnished
to Lender by or on behalf of Borrower in connection with the transactions
contemplated by this Agreement contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements contained in
this Agreement or other Loan Document not misleading. Except as disclosed in the
"risk factors" section of the Borrower's Annual Report on Form 10-K and
subsequent filings with the Securities and Exchange Commission, there is no fact
known to Borrower that would have a Material Adverse Effect or in the future
could have a Material Adverse Effect on the business, operations, affairs or
financial condition of Borrower, or any of its properties or assets
SECTION 4.19. INVESTMENTS, GUARANTEES, AND CERTAIN CONTRACTS. Borrower
does not own or hold any equity or long-term debt investments in, have any
outstanding advances to, have any outstanding guarantees for the obligations of,
or have any outstanding borrowings from, any Person except as otherwise
disclosed in the financial statements and except to the extent such items,
individually or in the aggregate, could not have a Material Adverse Effect on
Borrower. Except as
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otherwise disclosed in the financial statements of the Borrower, Borrower is not
a party to any contract or agreement, or subject to any corporate restriction,
which could have a Material Adverse Effect.
SECTION 4.20. BUSINESS INTERRUPTIONS. Within five years before the date of
this Agreement, neither the business, property or assets, or operations of
Borrower has been adversely affected in any way by any strike, lockout,
combination of workers, or order of the United States of America or other
Governmental Authority, directed against Borrower. There are no pending or (to
Borrower's best knowledge) threatened labor disputes, strikes, lockouts, or
similar occurrences or grievances against Borrower or its business, which
individually or in the aggregate could have a Material Adverse Effect. The
casualties of Borrower within the prior five (5) years are listed on Schedule
4.20.
SECTION 4.21. NAMES. Within five years before the date of this Agreement,
Borrower has not conducted business under or used any other name (whether
corporate, partnership or assumed) other than as shown on Schedule 4.21.
Borrower is the sole owner of all names listed on that Schedule and any and all
business done and invoices issued in such names are Borrower's sales, business,
and invoices. Each trade name of Borrower represents a division or trading style
of Borrower and not a separate Person or independent Affiliate.
SECTION 4.22. INTENTIONALLY BLANK.
SECTION 4.23 ACCOUNTS. Lender may rely, in determining which Accounts are
Qualified Accounts, on all statements and representations made by Borrower with
respect to any Account or Accounts. Unless otherwise indicated in writing to
Lender, with respect to each Account, Borrower represents that:
(a) The Account is genuine and in all respects what it purports to
be, and is not evidenced by a judgment;
(b) The Account arises out of a completed, bona fide sale and
delivery of goods or rendition of Healthcare Services by Borrower in the
ordinary course of its business and in accordance with the terms and conditions
of all purchase orders, contracts, certification, participation, certificate of
need, or other documents relating thereto and forming a part of the contract
between Borrower and the Account Debtor;
(c) The Account is for a liquidated amount maturing as stated in a
duplicate claim or invoice covering such sale or rendition of Healthcare
Services, a copy of which has been furnished or is available to Lender;
(d) The Account, and Lender's security interest in such Account,
is not, and will not (by voluntary act or omission by Borrower), be in the
future, subject to any offset, lien, deduction, defense, dispute, counterclaim
or any other adverse condition, and each such Account is absolutely owing to
Borrower and is not contingent in any respect or for any reason;
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(e) There are no facts, events or occurrences which in any way
impair the validity or enforceability of any Accounts or tend to reduce the
amount payable thereunder from the face amount of the claim or invoice and
statements delivered to Lender with respect thereto;
(f) To the best of Borrower's knowledge, (i) the Account Debtor
under the Account had the capacity to contract at the time any contract or other
document giving rise to the Account was executed and (ii) such Account Debtor is
solvent;
(g) To the best of Borrower's knowledge, there are no proceedings
or actions which are threatened or pending against any Account Debtor under the
Account which might result in any material adverse change in such Account
Debtor's financial condition or the collectibility of such Account;
(h) The Account has been billed and forwarded to the Account
Debtor for payment in accordance with applicable laws and compliance and
conformance with any requisite procedures, requirements and regulations
governing payment by such Account Debtor with respect to such Account, and such
Account if due from an Account Debtor is properly payable directly to Borrower;
and
(i) Borrower has obtained and currently has all licenses, permits
and authorizations that are necessary in the generation of such Accounts, other
than such licenses, permits and authorizations, the absence of which could not
have a Material Adverse Effect.
SECTION 4.24. SOLVENCY. Both before and after giving effect to the
transactions contemplated by the terms and provisions of this Agreement,
Borrower (taken as a whole) (i) owns property whose fair saleable value is
greater than the amount required to pay all of Borrower's Indebtedness
(including contingent debts), (ii) was and is able to pay all of its
Indebtedness as such Indebtedness matures, and (iii) had and has capital
sufficient to carry on its business and transactions and all business and
transactions in which it about to engage. For purposes of this Agreement, the
term "Indebtedness" means, without duplication (x) all items which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Borrower as of the date on which
Indebtedness is to be determined, (y) all obligations of any other person or
entity which such Borrower has guaranteed, and (z) the Obligations.
SECTION 4.25. YEAR 2000 COMPLIANCE.
(a) All devices, systems, machinery, information technology,
computer software and hardware, and other date sensitive technology
(collectively, the "Systems") necessary for Borrower to carry on its business as
currently conducted and as expected to be conducted in the future are Year 2000
Compliant or will be Year 2000 Compliant within a period of time calculated to
result in no material disruption of any of Borrower's business operations. For
purposes of these provisions, "Year 2000 Compliant" means that such Systems are
designed to be used before, during
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and after the Gregorian calendar year 2000 A.D. and will operate during each
such time period without error related to date data, specifically including any
error relating to, or the product of, date data that represents or refers to
different centuries or more than one century.
(b) Borrower has: (i) undertaken a detailed inventory, review, and
assessment of all areas within its business and operations that could be
adversely affected by the failure of Borrower to be Year 2000 Compliant on a
timely basis; (ii) developed a detailed plan and time line for becoming Year
2000 Compliant on a timely basis; and (iii) to date, implemented that plan in
accordance with the timetable in all material respects.
ARTICLE V
CLOSING AND CONDITIONS OF LENDING
SECTION 5.1. CONDITIONS PRECEDENT TO AGREEMENT. The obligation of Lender
to enter into and perform this Agreement and to make Revolving Credit Loans is
subject to the following conditions precedent:
(a) Lender shall have received two (2) originals of this
Agreement, the Certificate of Validity and all other Loan Documents required to
be executed and delivered at or before Closing (other than the Note, as to which
Lender shall receive only one original), executed by Borrower and any other
required Persons, as applicable.
(b) Lender shall have received all searches and good standing
certificates required by Section 3.5.
(c) Borrower shall have complied and shall then be in compliance
with all the terms, covenants and conditions of the Loan Documents.
(d) There shall have occurred and be continuing no Event of
Default and no event which, with the giving of notice or the lapse of time, or
both, could constitute such an Event of Default.
(e) The representations and warranties contained in Article IV
shall be true and correct (except to the extent that any such representations
and warranties speak solely as to a specified date or are affected by
transactions occurring after the date hereof and specifically permitted
hereunder).
(f) Lender shall have received copies of all board of directors
resolutions of Borrower and other action taken by Borrower to authorize the
execution, delivery and performance of the Loan Documents and the borrowing of
the Loan under the Loan Documents, as well as the names and signatures of the
officers of Borrower authorized to execute documents on its behalf in
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connection with the Loan, all as also certified as of the date of this Agreement
by Borrower's chief financial officer, or equivalent, and such other papers as
Lender may require.
(g) Lender shall have received copies, certified as true, correct
and complete by a corporate officer of Borrower, of the certificate of
incorporation and bylaws of Borrower, with any amendments to any of the
foregoing, and all other documents necessary for performance of the obligations
of Borrower under this Agreement and the other Loan Documents.
(h) Lender shall have received a written opinion of counsel for
Borrower, dated the date of this Agreement, substantially in the form of Exhibit
C.
(i) Lender shall have received such financial statements, reports,
certifications, and other operational information required to be delivered under
this Agreement, including without limitation an initial borrowing base
certificate calculating the Borrowing Base.
(j) Lender shall have received the Commitment Fee.
(k) The Lockbox, Lockbox Account and the Concentration Account
shall have been established.
(l) Lender shall have received an estoppel certificate
substantially in the form of Exhibit D from Borrower's landlord or sublandlord,
as the case may be, with respect to each of the locations of Borrower identified
on Schedule 4.15 (except as otherwise waived by Lender).
(m) Lender shall have received a certificate of Borrower's chief
financial officer, dated the Closing Date, certifying that all of the conditions
specified in this Section have been fulfilled.
(n) Lender shall have received approval of this Loan (as
contemplated by this Agreement) by Lender's credit committee, which approval may
be withheld by Lender's credit committee in its sole and absolute discretion.
(o) All outstanding principal, interest, fees and other amounts
due under the Term Note must have been indefeasibly satisfied in full (and
cancelled) prior to any advances hereunder.
SECTION 5.2. CONDITIONS PRECEDENT TO ADVANCES. Notwithstanding any other
provision of this Agreement, no Loan proceeds, Revolving Credit Loans, advances
or other extensions of credit under the Loan shall be disbursed under this
Agreement unless the following conditions have been satisfied or waived
immediately before such disbursement:
(a) The representations and warranties on the part of Borrower
contained in Article IV of this Agreement shall be true and correct in all
respects at and as of the date of
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disbursement or advance, as though made on and as of such date (except to the
extent that such representations and warranties expressly relate solely to an
earlier date and except that the references in Section 4.7 to financial
statements shall be deemed to be a reference to the then most recent annual and
interim financial statements of Borrower furnished to Lender pursuant to Section
6.1).
(b) No Event of Default or event which, with the giving of notice
of the lapse of time, or both, could become an Event of Default shall have
occurred and be continuing or would result from the making of the disbursement
or advance.
(c) No Material Adverse Change (in Lender's discretion) in the
condition (financial or otherwise), properties, business, or operations of
Borrower shall have occurred and be continuing with respect to Borrower since
the date of this Agreement.
(d) There shall have been an audit of the Borrower's consolidated
financial statements for any prior fiscal year or quarter of Borrower prior to
funding.
SECTION 5.3. CLOSING. Subject to the conditions of this Article V (or
waiver of such conditions by Lender), the Loan shall be made available on the
date determined by Lender (the "Closing Date") at such time as determined by
Lender after the execution of this Agreement at such time on or before three (3)
Business Days after Borrower has satisfied all the conditions set forth in
Section 5.1 (or Lender has affirmatively waived any such conditions) (the
"Closing") at such place as may be requested by Lender.
SECTION 5.4. WAIVER OF RIGHTS. By completing the Closing under this
Agreement, or by making advances under the Loan, Lender does not waive a breach
of any representation or warranty of Borrower under this Agreement or under any
other Loan Document, and all of Lender's claims and rights resulting from any
breach or misrepresentation by Borrower are specifically reserved by Lender.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each entity comprising Borrower covenants and agrees that for so long as
Borrower may borrow under this Agreement and until payment in full of the Note
and performance of all other obligations of Borrower under the Loan Documents:
SECTION 6.1. FINANCIAL STATEMENTS AND COLLATERAL REPORTS. Borrower will
furnish to Lender (i) a sales and collections report and accounts receivable
aging schedule on a form acceptable to Lender within fifteen (15) Business Days
after the end of each calendar month, which shall include, but not be limited
to, a report of sales, credits issued, and collections received; (ii) payables
aging schedules within fifteen (15) Business Days after the end of each calendar
month;
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(iii) internally prepared unaudited monthly financial statements for Borrower,
certified by the chief financial officer (or other financial officer if such
other financial officer has executed the secretary's certificate on file with
Lender) of Borrower, within twenty (20) Business Days of the end of each
calendar month; (iv) all unaudited quarterly financial statements for Borrower,
certified by the chief financial officer of Borrower, within forty five (45)
calendar days of the end of each calendar month (including the last month of any
fiscal quarter or fiscal year); (v) INTENTIONALLY DELETED; (vi) to the extent
prepared and otherwise disclosed, annual projections, profit and loss
statements, balance sheets, and cash flow reports (prepared on a monthly basis)
for the succeeding fiscal year within forty-five (45) Business Days before the
end of each of Borrower's fiscal years; (vii) annual audited financial
statements for Borrower prepared by a firm of independent public accountants
satisfactory to Lender, within one hundred twenty (120) calendar days after the
end of each of Borrower's fiscal years; (vii) promptly upon receipt thereof,
copies of any reports submitted to Borrower by the independent accountants in
connection with any interim audit of the books of Borrower and copies of each
management control letter provided to Borrower by independent accountants,
unless the disclosure of such reports is prohibited by applicable laws; (ix) as
soon as available, copies of all financial statements and notices provided by
Borrower to all of its stockholders; and (x) such additional information,
reports or statements as Lender may from time to time reasonably request. Annual
financial statements shall set forth in comparative form figures for the
corresponding periods in the prior fiscal year. All financial statements shall
include a balance sheet and statement of earnings and shall be prepared in
accordance with GAAP.
SECTION 6.2. PAYMENTS UNDER THIS AGREEMENT. Borrower will make all
payments of principal, interest, fees, and all other payments required under
this Agreement and under the Loan, and under any other agreements with Lender to
which Borrower is a party, as and when due.
SECTION 6.3. EXISTENCE, GOOD STANDING, AND COMPLIANCE WITH LAWS. Borrower
will do or cause to be done all things necessary (except where the failure to do
so could not have a Material Adverse Effect), (i) to obtain and keep in full
force and effect all corporate existence, rights, licenses, privileges, and
franchises of Borrower necessary to the ownership of its property or the conduct
of its business, and comply with all applicable current and future laws,
ordinances, rules, regulations, orders and decrees of any Governmental Authority
having or claiming jurisdiction over Borrower; and (ii) to maintain and protect
the properties used or useful in the conduct of the operations of Borrower, in a
prudent manner, including without limitation the maintenance at all times of
such insurance upon its insurable property and operations as required by law or
by Section 6.7.
SECTION 6.4. LEGALITY. The making of the Loan and each disbursement or
advance under the Loan shall not be subject to any penalty or special tax, shall
not be prohibited by any governmental order or regulation applicable to
Borrower, and shall not violate any rule or regulation of any Governmental
Authority, and necessary consents, approvals and authorizations of any
Governmental Authority to or of any such disbursement or advance shall have been
obtained.
SECTION 6.5. LENDER'S SATISFACTION. All instruments and legal documents
and proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory
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in form and substance to Lender and its counsel, and Lender shall have received
all documents, including records of corporate proceedings and opinions of
counsel, which Lender may have reasonably requested in connection therewith.
SECTION 6.6. TAXES AND CHARGES. Borrower will timely file all tax
reports and pay and discharge all taxes, assessments and governmental charges or
levies imposed upon Borrower, or its income or profits or upon its properties or
any part thereof, before the same shall be in default and before the date on
which penalties attach thereto, as well as all lawful claims for labor,
material, supplies or otherwise which, if unpaid, might become a lien or charge
upon the properties or any part thereof of Borrower; provided, however, that
Borrower shall not be required to pay and discharge or cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith and by appropriate
proceedings by Borrower, and Borrower shall have set aside on their books
adequate reserve therefor; and provided further, that such deferment of payment
is permissible only so long as Borrower's title to, and its right to use, the
Collateral is not adversely affected thereby and Lender's lien and priority on
the Collateral are not adversely affected, altered or impaired thereby.
SECTION 6.7. INSURANCE. Borrower will carry adequate public liability and
professional liability insurance with responsible companies reasonably
satisfactory to Lender in such amounts and against such risks as is customarily
maintained by similar businesses and by owners of similar property in the same
general area.
SECTION 6.8. GENERAL INFORMATION. Borrower will furnish to Lender such
information as Lender may, from time to time, reasonably request with respect to
the business or financial affairs of Borrower, and permit any officer, employee
or agent of Lender to visit and inspect (upon reasonable notice of not less than
two (2) Business Days) any of the properties during regular business hours, to
examine the minute books, books of account and other records, including
management letters prepared by Borrower's auditors, of Borrower, and make copies
thereof or extracts therefrom, and to discuss its and their business affairs,
finances and accounts with, and be advised as to the same by, the accountants
and officers of Borrower, all at such times and as often as Lender may
reasonably require.
SECTION 6.9. MAINTENANCE OF PROPERTY. Borrower will maintain, keep and
preserve all of its properties in good repair, working order and condition,
normal wear and tear excepted, and from time to time make all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
so that the business carried on in connection therewith may be properly
conducted at all times.
SECTION 6.10. NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE DEVELOPMENTS.
Borrower promptly will notify Lender upon the occurrence of: (i) any Event of
Default; (ii) any event which, with the giving of notice or lapse of time, or
both, is reasonably likely to constitute an Event of Default; (iii) any event,
development or circumstance whereby the financial statements previously
furnished to Lender hereunder fail in any material respect to present fairly, in
accordance with GAAP, the financial condition and operational results of
Borrower as of the dates of such financial
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statements; (iv) any judicial, administrative or arbitration proceeding pending
against Borrower, and any judicial or administrative proceeding known by
Borrower to be threatened against it which, if adversely decided, could have a
Material Adverse Effect on its condition (financial or otherwise) or operations
(current or prospective) of Borrower or which may expose Borrower to uninsured
liability of $250,000 or more; (v) any default claimed by any other creditor for
Borrowed Money of Borrower other than Lender in excess of $100,000; and (vi) any
other development in the business or affairs of Borrower which may have a
Material Adverse Effect; in each case describing the nature of the event or
development. In the case of notification under clauses (i) and (ii)), Borrower
should set forth the action Borrower proposes to take with respect to such
event.
SECTION 6.11. EMPLOYEE BENEFIT PLANS. Borrower will (i) comply with the
funding requirements of ERISA with respect to the Plans for its employees, or
will promptly satisfy any accumulated funding deficiency that arises under
Section 302 of ERISA; (ii) furnish Lender, promptly after filing the same, with
copies of all reports or other statements filed with the United States
Department of Labor, the Pension Benefit Guaranty Corporation, or the Internal
Revenue Service with respect to all Plans, or which Borrower, or any member of a
Controlled Group, may receive from such Governmental Authority with respect to
any such Plans, and (iii) promptly advise Lender of the occurrence of any
Reportable Event or Prohibited Transaction with respect to any such Plan and the
action which Borrower proposes to take with respect thereto. Borrower will make
all contributions when due with respect to any multi-employer pension plan in
which it participates and will promptly advise Lender: (x) upon its receipt of
notice of the assertion against Borrower of a claim for withdrawal liability;
(y) upon the occurrence of any event which could trigger the assertion of a
claim for withdrawal liability against Borrower; and (z) upon the occurrence of
any event which would place Borrower in a Controlled Group as a result of which
any member (including Borrower) thereof may be subject to a claim for withdrawal
liability, whether liquidated or contingent.
SECTION 6.12. FINANCING STATEMENTS. Borrower shall provide to Lender
evidence satisfactory to Lender as to the due recording of termination
statements, releases of collateral, and Forms UCC-3, and shall cause to be
recorded financing statements on Form UCC-1, duly executed by Borrower and
Lender, in all places necessary to release all existing security interests and
other liens in the Collateral (other than as permitted by this Agreement) and to
perfect and protect Lender's first priority lien and security interest in the
Collateral, as Lender may request.
SECTION 6.13. FINANCIAL RECORDS. Borrower shall keep current and accurate
books of records and accounts in which full and correct entries will be made of
all of its business transactions, and will reflect in its financial statements
provided hereunder adequate accruals and appropriations to reserves, all in
accordance with GAAP.
SECTION 6.14. COLLECTION OF ACCOUNTS. Borrower shall continue to collect
its Accounts in the ordinary course of business.
SECTION 6.15. PLACES OF BUSINESS. Borrower shall give fifteen (15)
calendar days' prior written notice to Lender of any change in the location of
any of its places of business, of the places
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where its records concerning its Accounts are kept, of the places where the
Collateral is kept, or of the establishment of any new, or the discontinuance of
any existing, places of business.
SECTION 6.16. BUSINESS CONDUCTED. Borrower shall continue in the business
currently conducted by it using its commercially reasonable best efforts to
maintain its customers and goodwill. Borrower shall not engage, directly or
indirectly, in any line of business substantially different from the business
conducted by it immediately before the Closing Date, or engage in business or
lines of business which are not reasonably related thereto.
SECTION 6.17. LITIGATION AND OTHER PROCEEDINGS. Borrower shall give prompt
notice to Lender of any litigation, arbitration, or other proceeding before any
Governmental Authority against or affecting Borrower if the amount claimed is
more than $250,000.00.
SECTION 6.18. BANK ACCOUNTS. Borrower shall assign to Lender all of its
depository and disbursement accounts into which collections of Accounts are
deposited.
SECTION 6.19. SUBMISSION OF COLLATERAL DOCUMENTS. Borrower will, on
reasonable demand of Lender, make available to Lender copies of shipping and
delivery receipts evidencing the shipment of goods that gave rise to an Account,
insurance verification forms, assignment of benefits, in-take forms or other
proof of the satisfactory performance of services that gave rise to an Account,
a copy of the claim or invoice for each Account and copies of any written
contract or order from which the Account arose. Borrower shall promptly notify
Lender if an Account becomes evidenced or secured by an instrument or chattel
paper and upon request of Lender, will promptly deliver any such instrument or
chattel paper to Lender.
SECTION 6.20. LICENSURE. Borrower will maintain all licenses necessary to
conduct its business as currently conducted, and take any steps required to
comply with any such new or additional requirements that may be imposed on
Borrower, except where failure to do so could not have a Material Adverse
Effect.
SECTION 6.21. OFFICER'S CERTIFICATES. Together with the monthly financial
statements delivered pursuant to clause (iii) of Section 6.1, and together with
the audited annual financial statements delivered pursuant to clause (vi) of
that Section, Borrower shall deliver to Lender a certificate of its chief
financial officer, in form and substance satisfactory to Lender:
(a) Setting forth the information (including detailed
calculations) required to establish whether Borrower is in compliance with the
requirements of Articles VI and VII as of the end of the period covered by the
financial statements then being furnished; and
(b) Stating that the signer has reviewed the relevant terms of
this Agreement, and has made (or caused to be made under his supervision) a
review of the transactions and conditions of Borrower from the beginning of the
accounting period covered by the income statements being delivered to the date
of the certificate, and that such review has not disclosed the existence during
such period of any condition or event which constitutes an Event of Default or
which is then, or
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with the passage of time or giving of notice or both, could become an Event of
Default, and if any such condition or event existed during such period or now
exists, specifying the nature and period of existence thereof and what action
Borrower has taken or proposes to take with respect thereto.
SECTION 6.22. VISITS AND INSPECTIONS. Borrower agrees to permit
representatives of Lender, from time to time, as often as may be reasonably
requested, but only during normal business hours, to visit and inspect the
properties of Borrower, and to inspect, audit and make extracts from its books
and records, and discuss with its officers, its employees and its independent
accountants, Borrower's business, assets, liabilities, financial condition,
business prospects and results of operations.
SECTION 6.23. NET WORTH AND EBITDA. Borrower will not at any time allow
its net worth, as computed in accordance with GAAP, to fall below $25,000,000.
Borrower, in the aggregate, shall generate monthly earnings before interest,
taxes, depreciation and amortization, as determined in accordance with GAAP,
consistently applied (such amount referred to as "EBITDA"), for each month
beginning with the first full month which is two hundred and seventy (270) days
after the closing of the Acquisition (as defined in the Term Note), of at least
zero dollars ($0.00), as determined by an independent auditor (either Borrower's
then-current outside audit firm or an auditor mutually acceptable to both
Borrower and Lender).
SECTION 6.24. TERMINATION/DEFAULT OF CUSTOMER CONTRACTS. Borrower will
notify Lender of any modification or termination of any Customer Contract
(unless such Customer Contract could not have a Material Adverse Effect on
Borrower, including without limitation on Borrower's business, the Collateral or
the Loan hereunder) as soon as possible but not later than the earlier of (i)
three (3) Business Days prior to the subsequent borrowing under this Loan
Agreement or (ii) one (1) Business Day after any notice of termination or
modification thereunder (other than any such notices originated by Borrower
which must be sent concurrently to Lender). Borrower will notify Lender within
one (1) Business Day (but not later than two (2) Business Days prior to any
subsequent borrowing) upon receiving any such modification or receiving any
written notice of default that would give rise to a termination or upon
receiving any notice of overpayment under any such contract. Notwithstanding
anything in this Section 6.24 to the contrary, no provision in this Section 6.24
will modify, reduce or otherwise affect Lender's rights hereunder or under any
other Loan Document.
SECTION 6.25. FURTHER ASSURANCES. Borrower will defend its title to the
Collateral against all persons and will, upon request of the Lender, (i) furnish
such further assurances of title as may be reasonably required by the Lender,
(ii) deliver and execute or cause to be delivered and executed, in form and
content reasonably satisfactory to the Lender, any financing statements,
notices, certificates of title, and other documents and pay the cost of filing
or recording the same in all public offices deemed necessary by the Lender, as
well as any recordation, documentary, or transfer tax required by law to be paid
in connection with such filing or recording, and (iii) do such other acts as the
Lender may reasonably request in order to perfect, preserve, maintain, or
continue the perfection of the Lender's security interest in the Collateral
and/or its priority.
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SECTION 6.26. ENFORCEMENT OF RIGHTS. TriZetto, LBJ and all other
applicable Borrower entities hereby agree to (a) satisfy all of their respective
obligations under the Merger Agreement and the other Merger Documents (as
defined in the Term Note) and (b) diligently pursue, defend and otherwise
enforce all of their respective rights in all cases under the Merger Agreement
and other Merger Documents.
ARTICLE VII
NEGATIVE COVENANTS
Each entity comprising Borrower covenants and agrees that so long as
Borrower may borrow under this Agreement and until payment in full of the Note
and performance of all other obligations of Borrower under the Loan Documents:
SECTION 7.1. BORROWING. Borrower will not create, incur, assume or suffer
to exist any liability for Borrowed Money except: (i) indebtedness to Lender;
(ii) indebtedness of Borrower secured by mortgages, encumbrances or liens
expressly permitted by Section 7.3; (iii) accounts payable to trade creditors
and current operating expenses (other than for borrowed money) which are not
aged more than one hundred twenty (120) calendar days from the billing date or
more than thirty (30) calendar days from the due date, in each case incurred in
the ordinary course of business and paid within such time period, unless the
same are being contested in good faith and by appropriate and lawful
proceedings, and Borrower shall have set aside such reserves, if any, with
respect thereto as are required by GAAP and deemed adequate by Borrower and its
independent accountants; and (iv) borrowings incurred in the ordinary course of
its business and not exceeding $100,000 in the aggregate outstanding at any one
time. Borrower will not make prepayments on any existing or future indebtedness
for Borrowed Money to any Person (other than Lender, to the extent permitted by
this Agreement or any subsequent agreement between Borrower and Lender).
SECTION 7.2. JOINT VENTURES. Borrower will not invest directly or
indirectly in any joint venture for any purpose without at least fifteen (15)
calendar days prior written notice to Lender; provided, however, Borrower will
not invest directly or indirectly in any joint venture for any purpose without
the prior written consent of Lender if (A) such investment adversely affects,
alters or impairs in any manner either (i) Borrower's title to, and its right to
use, the Collateral or (ii) Lender's lien and priority on the Collateral, (B) an
Event of Default has occurred hereunder, (C) an event or circumstance which,
with notice or the passage of time (or both), would constitute an Event of
Default, has occurred hereunder, or (D) an Event of Default will result after
giving effect to such investment.
SECTION 7.3. LIENS AND ENCUMBRANCES. Borrower will not create, incur,
assume or suffer to exist any mortgage, pledge, lien or other encumbrance of any
kind (including the charge upon property purchased under a conditional sale or
other title retention agreement) upon, or any security interest in, any of its
Collateral, whether now owned or hereafter acquired, except for Permitted Liens.
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SECTION 7.4. RESTRICTION ON FUNDAMENTAL CHANGES; NO CHANGE IN OPERATION OR
CONTROL. Borrower will not: (i) enter into any transaction of merger or
consolidation except as set forth on Schedule 7.4 hereof; (ii) liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution); (iii)
convey, sell, lease, sublease (other than the subleases currently in existence
as reflected on Borrower's financial statements), transfer or otherwise dispose
of, in one transaction or a series of transactions, any of its assets, or the
capital stock of any subsidiary of Borrower, whether now owned or hereafter
acquired, other than in the ordinary course of business; or (iv) acquire by
purchase or otherwise all or any substantial part of the business or assets of,
or stock or other evidence of beneficial ownership of, any Person, other than
the Acquisition (as defined in the Term Note) and such acquisitions approved in
writing by Lender. Borrower agrees that compliance with this Section 7.4 is a
material inducement to Lender's advancing credit under this Agreement. Borrower
further agrees that in addition to all other remedies available to Lender,
Lender shall be entitled to specific enforcement of the covenants in this
Section 7.4, including without limitation injunctive relief.
SECTION 7.5. SALE AND LEASEBACK. Borrower will not, directly or
indirectly, enter into any arrangement whereby Borrower sells or transfers all
or any part of its assets and thereupon and within one year thereafter rents or
leases the assets so sold or transferred without prior written notice to and the
prior written consent of Lender, which consent shall not be unreasonably
withheld.
SECTION 7.6. DIVIDENDS, DISTRIBUTIONS AND MANAGEMENT FEES. Borrower will
not make, declare or pay any dividends or other distributions with respect to,
purchase, redeem or otherwise acquire for value any of its outstanding stock now
or hereafter outstanding, or return any capital of its stockholders, except
pursuant to the Borrower's existing Restricted Stock Agreements or future
Restricted Stock Grants under the terms of The TriZetto Group, Inc. 1998 Stock
Option Plan (as amended and restated on June 29, 2000) or as otherwise approved
by the Board of Directors of the applicable Borrower (provided, that such
issuances, in the aggregate shall not exceed 10% of any such Borrower), nor
shall Borrower pay management fees or fees of a similar nature to any person
other than to other entities which constitute the Borrower (in accordance with
the terms hereof).
SECTION 7.7. LOANS. Borrower will not make loans or advances to any
Person, other than (i) trade credit extended in the ordinary course of its
business (including advances provided to Customers pursuant to their respective
Customer Contracts in the ordinary course of business; provided, Borrower
provides prior written notice of such advances (i.e. which are in the ordinary
course of business) at least five (5) Business Days prior to such any such
advance), and (ii) advances for business travel and similar temporary advances
made in the ordinary course of business to officers, stockholders, directors,
and employees.
SECTION 7.8. CONTINGENT LIABILITIES. Borrower will not assume, guarantee,
endorse, contingently agree to purchase or otherwise become liable upon the
obligation of any Person, except by the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business (including advances provided to Customers pursuant to their respective
Customer Contracts in the ordinary course of business; provided, Borrower
provides prior written
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notice of such advances (i.e. which are in the ordinary course of business) at
least five (5) Business Days prior to such any such advance).
SECTION 7.9. SUBSIDIARIES. Except for subsidiaries which are also certain
of the entities which constitute Borrower and those subsidiaries set forth on
Schedule 4.1, Borrower will not form any subsidiary or make any investment in or
any loan in the nature of an investment to, any other Person without the prior
written consent of Lender, which consent shall not be unreasonably withheld. In
the event that any subsidiary listed on Schedule 4.1 or any other subsidiary of
a Borrower entity which is not a Borrower hereunder at any time acquires or
otherwise obtains any assets or commences operations of any kind, Borrower shall
immediately add such entity as a "Borrower" entity under this Agreement and the
Note and shall ensure that such subsidiary as well as the other Borrower
entities execute all documents required to include the collateral of such
subsidiary in the Collateral hereunder. Prior to the Closing, Borrower shall add
each of the subsidiaries listed on Schedule 4.1 or any other subsidiary of a
Borrower entity which is not a Borrower hereunder as a Borrower entity under
this Agreement.
SECTION 7.10. COMPLIANCE WITH ERISA. Borrower will not permit with respect
to any Plan covered by Title IV of ERISA any Prohibited Transaction or any
Reportable Event.
SECTION 7.11. QUALIFICATIONS. Borrower will not amend, alter or suspend or
terminate or make provisional in any material way, any qualification required to
operate its business without the prior written consent of Lender, except in the
event where such action could not have a Material Adverse Effect.
SECTION 7.12. TRANSACTIONS WITH AFFILIATES AND SUBSIDIARIES. Borrower will
not enter into any transaction, including without limitation the purchase, sale,
or exchange of property, or the loaning or giving of funds to any Affiliate or
subsidiary, except in the ordinary course of business and pursuant to the
reasonable requirements of Borrower's business and upon terms substantially the
same and no less favorable to Borrower as it would obtain in a comparable arm's
length transaction with any Person not an Affiliate or subsidiary, and so long
as the transaction is not otherwise prohibited under this Agreement. For
purposes of the foregoing, Lender consents to the transactions described on
Schedule 7.12. Notwithstanding the foregoing, no Borrower will transfer any
assets to any subsidiary listed on Schedule 4.1 or any other subsidiary of a
Borrower entity which is not a Borrower hereunder nor cause any such subsidiary
to commence operations without the prior written consent of Lender until such
subsidiary is added as a "Borrower" entity hereunder as set forth in paragraph
11(h) above for purposes of including the assets of such subsidiary in the
Collateral (provided, however, that Lender shall not be required to lend against
the assets of such subsidiary added as a Borrower entity).
SECTION 7.13. USE OF LENDER'S NAME. Borrower will not use Lender's name
(or the name of any of Lender's affiliates) in connection with any of its
business operations, except as required by law (provided, Lender is given prior
notice of such usage). Borrower may disclose to third parties that Borrower has
a borrowing relationship with Lender. Nothing contained in this Agreement is
intended to permit or authorize Borrower to make any contract on behalf of
Lender.
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SECTION 7.14. CHANGE IN CAPITAL STRUCTURE. Except as set forth on Schedule
7.14 and as contemplated by the Acquisition (as defined in the Term Note), there
shall occur no change in Borrower's capital structure as set forth in Section
4.17 without the prior written consent of Lender, which consent shall not be
unreasonably withheld.
SECTION 7.15. CONTRACTS AND AGREEMENTS. Borrower will not become or be a
party to any contract or agreement which would breach this Agreement, or breach
any other instrument, agreement, or document to which Borrower is a party or by
which it is or may be bound, including without limitation the Merger Agreement
(as defined in the Term Note), except for such breach which individually or in
the aggregate could have a Material Adverse Effect.
SECTION 7.16. MARGIN STOCK. Borrower will not carry or purchase any
"margin security" within the meaning of Regulations U, T or X of the Board of
Governors of the Federal Reserve System.
SECTION 7.17. TRUTH OF STATEMENTS AND CERTIFICATES. Borrower will not
furnish to Lender any certificate or other document that contains any untrue
statement of a material fact or that omits to state a material fact necessary to
make it not misleading in light of the circumstances under which it was
furnished.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. Each of the following (individually, an
"Event of Default" and collectively, the "Events of Default") shall constitute
an event of default under this Agreement:
(a) A default in the payment of any installment of principal of,
or interest upon, the Note when due and payable, whether at maturity or
otherwise, or any breach of Section 2.3, which default or breach, as applicable,
shall have continued unremedied for a period of ten (10) calendar days after
written notice of the default or breach from Lender to Borrower;
(b) A default in the payment of any other charges, fees, or other
monetary obligations owing to Lender arising out of or incurred in connection
with this Agreement when such payment is due and payable, which default shall
have continued unremedied for a period of ten (10) calendar days after written
notice of the default from Lender to Borrower;
(c) A default in the due observance or performance by Borrower or
any guarantor of the Obligations of any other term, covenant or agreement
contained in any of the Loan Documents, which default shall have continued
unremedied for a period of fifteen (15) Business Days after written notice of
the default from Lender to Borrower;
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(d) Any representation or warranty made by Borrower in this
Agreement or in any of the other Loan Documents, any financial statement, or any
statement or representation made in any other certificate, report or opinion
delivered in connection with this Agreement or the other Loan Documents proves
to have been incorrect or misleading in any material respect when made;
(e) Any obligation of Borrower (other than its Obligations under
this Agreement) for the payment of Borrowed Money in an amount greater than
$60,000 is not paid when due or within any applicable grace period, or such
obligation becomes or is declared to be due and payable before the expressed
maturity of the obligation, or there shall have occurred an event which, with
the giving of notice or lapse of time, or both, would cause any such obligation
to become, or allow any such obligation to be declared to be, due and payable;
(f) Borrower makes an assignment for the benefit of creditors,
offers a composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter conducted by
Borrower;
(g) (i) Borrower files a petition in bankruptcy, (ii) Borrower is
adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any
receiver of or any trustee for itself or any substantial part of its property,
(iii) Borrower commences any proceeding relating to itself under any
reorganization, arrangement, readjustment or debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect, (iv) any
such proceeding is commenced against Borrower and such proceeding remains
undismissed for a period of sixty (60) calendar days, (v) Borrower by any act
indicates its consent to, approval of, or acquiescence in, any such proceeding
or the appointment of any receiver of or any trustee for a Borrower or any
substantial part of its property, or suffers any such receivership or
trusteeship to continue undischarged for a period of sixty (60) calendar days;
(h) One or more final judgments in excess of $100,000 against
Borrower or attachments against its property not fully and unconditionally
covered by insurance shall be rendered by a court of record and shall remain
unpaid, unstayed on appeal, undischarged, unbonded and undismissed for a period
of twenty (20) calendar days;
(i) A Reportable Event which might constitute grounds for
termination of any Plan covered by Title IV of ERISA or for the appointment by
the appropriate United States District Court of a trustee to administer any such
Plan or for the entry of a lien or encumbrance to secure any deficiency, has
occurred and is continuing thirty (30) calendar days after its occurrence, or
any such Plan is terminated, or a trustee is appointed by an appropriate United
States District Court to administer any such Plan, or the Pension Benefit
Guaranty Corporation institutes proceedings to terminate any such Plan or to
appoint a trustee to administer any such Plan, or a lien or encumbrance is
entered to secure any deficiency or claim;
(j) Other than the Acquisition, any Change of Control of any
entity comprising Borrower;
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(k) There shall occur any uninsured damage to or loss, theft or
destruction of any portion of the Collateral that exceeds $100,000 in the
aggregate;
(l) Subject to applicable cure periods, Borrower breaches or
violates the terms of, or a default or an event which could, whether with notice
or the passage of time, or both, is reasonably likely to constitute a default,
occurs under any other existing or future agreement (related or unrelated)
between Borrower and Lender;
(m) Upon the issuance of any execution or distraint process
against Borrower or any of its material property or assets;
(n) Borrower ceases any material portion of its business
operations as currently conducted;
(o) Any indication or evidence is received by Lender that Borrower
may have directly or indirectly been engaged in any type of activity which, in
Lender's discretion, may result in the forfeiture of any property of Borrower to
any Governmental Authority, which default shall have continued unremedied for a
period of fifteen (15) calendar days after written notice from Lender;
(p) Borrower or any Affiliate of Borrower, shall challenge or
contest, in any action, suit or proceeding, the validity or enforceability of
this Agreement, or any of the other Loan Documents, the legality or the
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Lender;
(q) Borrower shall be criminally indicted or convicted under any
law that could have a Material Adverse Effect; or
(r) There shall occur an adverse change in the financial condition
or business prospects of Borrower (which change meets the standard of Material
Adverse Effect hereunder), or if Lender in good xxxxx xxxxx itself insecure as a
result of acts or events bearing upon the financial condition of Borrower or the
repayment of the Note, which default shall have continued unremedied for a
period of twenty (20) calendar days after written notice from Lender.
SECTION 8.2. ACCELERATION. Upon the occurrence of any of the foregoing
Events of Default, the Note shall become and be immediately due and payable upon
declaration to that effect delivered by Lender to Borrower; provided that, upon
the happening of any event specified in Section 8.1(g), the Note shall be
immediately due and payable without declaration or other notice to Borrower.
SECTION 8.3. REMEDIES.
(a) Upon the occurrence of and during the continuance of an Event
of Default under this Agreement or the other Loan Documents, Lender, in addition
to all other rights, options,
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and remedies granted to Lender under this Agreement or at law or in equity, may
take any of the following steps (which list is given by way of example and is
not intended to be an exhaustive list of all such rights and remedies):
(i) Terminate the Loan, whereupon all outstanding
Obligations (including without limitation the Termination Fee which fee shall
also be due and payable upon acceleration hereunder) shall be immediately due
and payable;
(ii) Exercise all other rights granted to it under this
Agreement and all rights under the UCC in effect in the applicable
jurisdiction(s) and under any other applicable law; and
(iii) Exercise all rights and remedies under all Loan
Documents now or hereafter in effect, including but not limited to:
(A) The right to take possession of, send notices
regarding, and collect directly the Collateral, with or without judicial
process;
(B) The right to (by its own means or with judicial
assistance) enter any of Borrower's premises and take possession of the
Collateral, or render it unusable, or dispose of the Collateral on such premises
in compliance with subsection (C) below, without any liability for rent,
storage, utilities, or other sums, and Borrower shall not resist or interfere
with such action;
(C) The right to require Borrower at Borrower's
expense to assemble all or any part of the Collateral and make it available to
Lender at any place designated by Lender; and
(D) The right to reduce the Maximum Loan Amount or to
use the Collateral and/or funds in the Concentration Account in amounts up to
the Maximum Loan Amount for any reason.
(b) Borrower agrees that a notice received by it at least ten (10)
calendar days before the time of any intended public sale, or the time after
which any private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition. If
permitted by applicable law, any perishable Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to Borrower. At any sale or
disposition of Collateral, Lender may (to the extent permitted by applicable
law) purchase all or any part of the Collateral, free from any right of
redemption by Borrower, which right is hereby waived and released. Borrower
covenants and agrees not to interfere with or impose any obstacle to Lender's
exercise of its rights and remedies with respect to the Collateral.
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SECTION 8.4. NATURE OF REMEDIES. Lender shall have the right to proceed
against all or any portion of the Collateral to satisfy the liabilities and
Obligations of Borrower to Lender in any order. All rights and remedies granted
Lender under this Agreement and under any agreement referred to in this
Agreement, or otherwise available at law or in equity, shall be deemed
concurrent and cumulative, and not alternative remedies, and Lender may proceed
with any number of remedies at the same time until the Loans, and all other
existing and future liabilities and obligations of Borrower to Lender, are
satisfied in full. The exercise of any one right or remedy shall not be deemed a
waiver or release of any other right or remedy, and Lender, upon the occurrence
of an Event of Default, may proceed against Borrower, and/or the Collateral, at
any time, under any agreement, with any available remedy and in any order.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. EXPENSES AND TAXES.
(a) Borrower agrees to pay, whether or not the Closing occurs, a
reasonable documentation preparation fee, together with actual audit and
appraisal fees and all other reasonable out-of-pocket charges and expenses
incurred by Lender in connection with the negotiation, preparation, legal review
and execution of each of the Loan Documents, including but not limited to UCC
and judgment lien searches and UCC filings and fees for post-Closing UCC and
judgment lien searches. In addition, Borrower shall pay all such fees associated
with any amendments to the Loan Documents following Closing.
(b) Borrower also agrees to pay all reasonable out-of-pocket
charges and expenses incurred by Lender (including the fees and expenses of
Lender's counsel) in connection with the enforcement, protection or preservation
of any right or claim of Lender, the termination of this Agreement, the
termination of any liens of Lender on the Collateral, and the collection of any
amounts due under the Loan Documents. If Lender uses in-house counsel for any of
these purposes (i.e., for any task in connection with the enforcement,
protection or preservation of any right or claim of Lender and the collection of
any amounts due under its Loan Documents), Borrower further agrees that its
Obligations under the Loan Documents include reasonable charges for such work
commensurate with the fees that would otherwise be charged by outside legal
counsel selected by Lender for the work performed.
(c) Borrower shall pay all taxes (other than taxes based upon or
measured by Lender's income or revenues or any personal property tax), if any,
in connection with the issuance of the Note and the recording of the security
documents therefor. The obligations of Borrower under this clause (c) shall
survive the payment of Borrower's indebtedness under this Agreement and the
termination of this Agreement.
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SECTION 9.2. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
Loan Documents constitute the full and entire understanding and agreement among
the parties with regard to their subject matter and supersede all prior written
or oral agreements, understandings, representations and warranties made with
respect thereto. No amendment, supplement or modification of this Agreement nor
any waiver of any provision thereof shall be made except in writing executed by
the party against whom enforcement is sought.
SECTION 9.3. NO WAIVER; CUMULATIVE RIGHTS. No waiver by any party to this
Agreement of any one or more defaults by the other party in the performance of
any of the provisions of this Agreement shall operate or be construed as a
waiver of any future default or defaults, whether of a like or different nature.
No failure or delay on the part of any party in exercising any right, power or
remedy under this Agreement shall operate as a waiver of such right, power or
remedy nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise of such right, power or remedy or
the exercise of any other right, power or remedy. The remedies provided for in
this Agreement are cumulative and are not exclusive of any remedies that may be
available to any party to this Agreement at law, in equity or otherwise.
SECTION 9.4. NOTICES. Any notice or other communication required or
permitted under this Agreement shall be in writing and personally delivered,
mailed by registered or certified mail (return receipt requested and postage
prepaid), sent by telecopier (with a confirming copy sent by regular mail), or
sent by prepaid overnight courier service, and addressed to the relevant party
at its address set forth below, or at such other address as such party may, by
written notice, designate as its address for purposes of notice under this
Agreement:
(a) If to Lender, at:
Xxxxxx Healthcare Finance, Inc.
0 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Executive Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Borrower, at:
The TriZetto Group, Inc.
000 Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxxxxx, CFO
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If mailed, notice shall be deemed to be given five (5) calendar days after being
sent, and if sent by personal delivery, telecopier or prepaid courier, notice
shall be deemed to be given when delivered.
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SECTION 9.5. SEVERABILITY. If any term, covenant or condition of this
Agreement, or the application of such term, covenant or condition to any party
or circumstance shall be found by a court of competent jurisdiction to be, to
any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to the fullest extent permitted by law. Upon determination that any
such term is invalid, illegal or unenforceable, Lender may, but is not obligated
to, advance funds to Borrower under this Agreement until the parties to this
Agreement amend this Agreement so as to effect the original intent of the
parties as closely as possible in a valid and enforceable manner.
SECTION 9.6. SUCCESSORS AND ASSIGNS. This Agreement, the Note, and the
other Loan Documents shall be binding upon and inure to the benefit of Borrower
and Lender and their respective successors and assigns. Notwithstanding the
foregoing, Borrower may not assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of Lender,
which may be withheld in its sole discretion. Lender may sell, assign, transfer,
or participate any or all of its rights or obligations under this Agreement
without notice to or consent of Borrower.
SECTION 9.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one instrument.
SECTION 9.8. INTERPRETATION. No provision of this Agreement or any other
Loan Document shall be interpreted or construed against any party because that
party or its legal representative drafted that provision. The titles of the
paragraphs of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. Any pronoun used in this
Agreement shall be deemed to include singular and plural and masculine, feminine
and neuter gender as the case may be. The words "herein," "hereof," and
"hereunder" shall be deemed to refer to this entire Agreement, except as the
context otherwise requires.
SECTION 9.9. SURVIVAL OF TERMS. All covenants, agreements, representations
and warranties made in this Agreement, any other Loan Document, and in any
certificates and other instruments delivered in connection with this Agreement
shall be considered to have been relied upon by Lender and shall survive the
making by Lender of the Loans contemplated by this Agreement and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
until all liabilities and obligations of Borrower to Lender are satisfied in
full.
SECTION 9.10. RELEASE OF LENDER. For and in consideration of the Loan,
Borrower, voluntarily, knowingly, unconditionally, and irrevocably, with
specific and express intent, for and on behalf of itself and its agents,
attorneys, heirs, successors, and assigns (collectively the "Releasing Parties")
does hereby fully and completely release, acquit and forever discharge Lender,
and its successors, assigns, heirs, affiliates, subsidiaries, parent companies,
principals, directors,
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officers, employees, shareholders and agents (hereinafter called the "Lender
Parties"); and any other person, firm, business, corporation, insurer, or
association which may be responsible or liable for the acts or omissions of the
Lender Parties, or who may be liable for the injury or damage resulting
therefrom (collectively the ("Released Parties"), of and from any and all
actions, causes of action, suits, debts, disputes, damages, claims, obligations,
liabilities, costs, expenses and demands of any kind whatsoever, at law or in
equity, whether matured or unmatured, liquidated or unliquidated, vested or
contingent, xxxxxx or inchoate, known or unknown that the Releasing Parties (or
any of them) have, whether now or in the future, (whether directly or
indirectly) against the Released Parties or any of them. The foregoing release
shall not apply to a claim by Borrower for actual damages to the extent Lender
or Lender's Parties are determined to have acted with willful misconduct or in a
grossly negligent manner. The Released Parties shall not be liable in any event
to Borrower for any special, incidental or consequential damages. The Borrower
acknowledges that the foregoing release is a material inducement to Lender's
decision to extend to Borrower the financial accommodations hereunder and has
been relied upon by Lender in agreeing to make the Loan.
SECTION 9.11. TIME. Whenever Borrower is required to make any payment or
perform any act on a Saturday, Sunday, or a legal holiday under the laws of the
State of Maryland (or other jurisdiction where Borrower is required to make the
payment or perform the act), the payment may be made or the act performed on the
next Business Day. Time is of the essence in Borrower's performance under this
Agreement and all other Loan Documents.
SECTION 9.12. COMMISSIONS. The transaction contemplated by this Agreement
was brought about by Lender and Borrower acting as principals and without any
brokers, agents, or finders being the effective procuring cause. Borrower
represents that it has not committed Lender to the payment of any brokerage fee,
commission, or charge in connection with this transaction. If any such claim is
made on Lender by any broker, finder, or agent or other person, Borrower will
indemnify, defend, and hold Lender harmless from and against the claim and will
defend any action to recover on that claim, at Borrower's cost and expense,
including Lender's counsel fees. Borrower further agrees that until any such
claim or demand is adjudicated in Lender's favor, the amount demanded will be
deemed a liability of Borrower under this Agreement, secured by the Collateral.
SECTION 9.13. THIRD PARTIES. No rights are intended to be created under
this Agreement or under any other Loan Document for the benefit of any third
party donee, creditor, or incidental beneficiary of Borrower. Nothing contained
in this Agreement shall be construed as a delegation to Lender of Borrower's
duty of performance, including without limitation Borrower's duties under any
account or contract in which Lender has a security interest.
SECTION 9.14. DISCHARGE OF BORROWER'S OBLIGATIONS. Lender, in its sole
discretion, shall have the right at any time, and from time to time, without
prior notice to Borrower if Borrower fails to do so, to: (i) obtain insurance
covering any of the Collateral as required under this Agreement; (ii) pay for
the performance of any of Borrower's obligations under this Agreement; (iii)
discharge taxes, liens, security interests, or other encumbrances at any time
levied or placed on any of the Collateral in violation of this Agreement unless
Borrower is in good faith with due diligence by
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appropriate proceedings contesting those items; and (iv) pay for the maintenance
and preservation of any of the Collateral. Reasonable expenses and advances
hereunder shall be added to the Loan, until reimbursed to Lender and shall be
secured by the Collateral. Any such payments and advances by Lender shall not be
construed as a waiver by Lender of an Event of Default.
SECTION 9.15. INFORMATION TO PARTICIPANTS. Lender may divulge to any
participant it may obtain in the Loan, or any portion of the Loan, all
information, and furnish to such participant copies of reports, financial
statements, certificates, and documents obtained under any provision of this
Agreement or any other Loan Document.
SECTION 9.16. INDEMNITY. Borrower hereby agrees to indemnify and hold
harmless Lender, its partners, officers, agents and employees (collectively,
"Indemnitee") from and against any liability, loss, cost, expense, claim,
damage, suit, action or proceeding ever suffered or incurred by Lender
(including reasonable attorneys' fees and expenses) arising from Borrower's
failure to observe, perform or discharge any of its covenants, obligations,
agreements or duties under this Agreement, or from the breach of any of the
representations or warranties contained in Article IV of this Agreement. In
addition, Borrower shall defend Indemnitee against and save it harmless from all
claims of any Person with respect to the Collateral. Notwithstanding any
contrary provision in this Agreement, the obligation of Borrower under this
Section 9.16 shall survive the payment in full of the Obligations and the
termination of this Agreement.
SECTION 9.17. LENDER APPROVALS. Unless expressly provided herein to the
contrary, any approval, consent, waiver or satisfaction of Lender with respect
to any matter that is the subject of this Agreement, the other Loan Documents
may be granted or withheld by Lender in its sole and absolute discretion.
SECTION 9.17. CHOICE OF LAW; CONSENT TO JURISDICTION. THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF MARYLAND, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS. IF ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE NOTE IS
COMMENCED BY LENDER IN THE STATE COURTS OF THE STATE OF MARYLAND OR IN THE U.S.
DISTRICT COURT FOR THE DISTRICT OF MARYLAND, BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE IN
THE STATE OF MARYLAND. ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED IF
MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS DESCRIBED
IN SECTION 9.4. OR IF SERVED BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAW.
SECTION 9.18. COOPERATION IN DISCOVERY AND LITIGATION. In any litigation,
trial, arbitration or other dispute resolution proceeding relating to this
Agreement or any of the other Loan Documents, all directors, officers, employees
and agents of Borrower or of its Affiliates shall be deemed to be employees or
managing agents of Borrower for purposes of all applicable law or court rules
regarding the production of witnesses by notice for testimony (whether in a
deposition, at trial
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or otherwise). Borrower agrees that Lender's counsel in any such dispute
resolution proceeding may examine any of these individuals as if under
cross-examination and that any discovery deposition of any of them may be used
in that proceeding as if it were an evidence deposition. Borrower in any event
will use all commercially reasonable efforts to produce in any such dispute
resolution proceeding, at the time and in the manner requested by Lender, all
Persons, documents (whether in tangible, electronic or other form) or other
things under its control and relating to the dispute in any jurisdiction that
recognizes that (or any similar) distinction.
SECTION 9.19. WAIVER OF TRIAL BY JURY. BORROWER HEREBY (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND
(B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT
SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY BORROWER, AND THIS WAIVER IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED AND
REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE
SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT, SO AS TO SERVE AS CONCLUSIVE
EVIDENCE OF BORROWER'S WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING LENDER'S
COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER THAT LENDER WILL
NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
SECTION 9.20. CONFESSION OF JUDGMENT. BORROWER AUTHORIZES ANY ATTORNEY
ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE
CLERK OF SUCH COURT TO APPEAR ON BEHALF OF BORROWER IN ANY COURT IN ONE OR MORE
PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OF PROTHONOTARY OR OTHER COURT
OFFICIAL, AND TO CONFESS JUDGMENT AGAINST BORROWER IN FAVOR OF LENDER IN THE
FULL AMOUNT DUE ON THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY
AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT
(15%) OF THE AMOUNT DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR
OPPORTUNITY OF BORROWER FOR PRIOR HEARING. NOTWITHSTANDING ANY OTHER PROVISIONS
OF THIS SECTION, THE LENDER ACKNOWLEDGES THAT ATTORNEYS' FEES ARE STATED TO BE
FIFTEEN PERCENT (15%) SOLELY FOR PURPOSES OF FIXING A SUM CERTAIN FOR WHICH
JUDGEMENT CAN BE ENTERED BY CONFESSION; AND THE LENDER AGREES THAT IN ENFORCING
ANY JUDGEMENT BY CONFESSION, LENDER SHALL NOT DEMAND, SOLELY WITH RESPECT TO
ATTORNEYS' FEES INCURRED BY THE LENDER IN CONNECTION WITH SUCH INDEBTEDNESS
AFTER SUCH JUDGEMENT IS RENDERED, ANY AMOUNTS IN EXCESS OF THE ACTUAL AMOUNT OF
ATTORNEYS' FEES CHARGED OR BILLED TO THE LENDER (WHICH
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ATTORNEYS' FEES SHALL BE CHARGED OR BILLED TO THE LENDER AT THE STANDARD HOURLY
RATES). BORROWER AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER
IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR OF BALTIMORE
CITY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MARYLAND. BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR
RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON BORROWER ANY RIGHT OR
PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR SUPPLEMENTARY
PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A
JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. THE AUTHORITY AND POWER TO APPEAR
FOR AND ENTER JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ONE OR MORE
EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE
EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER
MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR
DIFFERENT JURISDICTIONS, AS OFTEN AS LENDER SHALL DEEM NECESSARY, CONVENIENT, OR
PROPER.
SECTION 9.21 PRIORITY; OBLIGATIONS COMBINED. Borrower and Lender agree
that the first priority status of Lender's lien on and security interest in the
Collateral shall continue and date back to the date on which the Borrower's
original grant of such lien and security interest was made (i.e., September 11,
2000). The obligations under the Term Note are hereby combined and shall
constitute joint and several obligations of each and every Borrower.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
LENDER:
XXXXXX HEALTHCARE FINANCE, INC.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
BORROWER:
THE TRIZETTO GROUP, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
CREATIVE BUSINESS SOLUTIONS, INC.
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
ELBEJAY ACQUISITION CORP.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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FINSERV HEALTH CARE SYSTEMS, INC.
a New York corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
HEALTHCARE MEDIA ENTERPRISES, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
HEALTHWEB, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
XXXXXXXX HEALTH ENTERPRISES, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
XXXXXXX CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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TRIZETTO APPLICATION SERVICES, INC.
a Colorado corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
HEALTHCARE MEDIA PRIVATE LIMITED
an India company and subsidiary of HME
By:
-----------------------------------
Name:
Title:
DIGITAL INSURANCE SYSTEMS CORPORATION
an Ohio corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
HEALTH NETWORKS OF AMERICA, INC.
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
XXXXXXX DEVELOPMENT CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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XXXXXXX DEVELOPMENT & LICENSING CORPORATION
an Indiana corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
XXXXXXX SERVICES CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
and Secretary
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LIST OF EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Lockbox Agreement
Exhibit C - Form of Legal Opinion
Exhibit D - Form of Estoppel Certificate
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LIST OF SCHEDULES
Schedule 1.16 - Customer Contracts
Schedule 1.35 - Permitted Liens
Schedule 3.1 - Leases with prior liens
Schedule 4.1 - Subsidiaries
Schedule 4.5 - Litigation
Schedule 4.7 - Tax Identification Numbers
Schedule 4.15 - Places of Business
Schedule 4.16 - Licenses
Schedule 4.20 - Casualties within prior 5 years
Schedule 4.21 - Trade Names
Schedule 7.4 - Expected Major Transaction
Schedule 7.12 - Transactions with Affiliates
Schedule 7.14 - Anticipated Changes in Capital Structure
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