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ARCADIA SERVICES, INC.
GRAYROSE, INC.
ARCADIA HEALTH SERVICES OF MICHIGAN, INC.
ARCADIA HEALTH SERVICES, INC.
CREDIT AGREEMENT
DATED AS OF MAY 7, 2004
COMERICA BANK
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Execution Copy
CREDIT AGREEMENT
THIS LOAN AGREEMENT, made as of the 7th day of May, 2004, by and among
ARCADIA SERVICES, INC., a Michigan corporation ("Arcadia"), ARCADIA HEALTH
SERVICES, INC., a Michigan corporation ("Arcadia Health Services"), GRAYROSE,
INC., a Michigan corporation ("Grayrose") and ARCADIA HEALTH SERVICES OF
MICHIGAN, INC., a Michigan corporation ("Arcadia Health" and together with
Arcadia, Arcadia Health Services and Grayrose, being collectively identified as
"Companies" and individually as a "Company") and Comerica Bank, a Michigan
banking corporation, of Detroit, Michigan (herein called "Bank");
RECITALS:
A. Companies desire to obtain certain credit facilities from Bank.
B. Bank is willing to extend such credit facilities to Companies, but only
on the terms and conditions provided below.
NOW, THEREFORE, Bank and Companies agree as follows:
WITNESSETH:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Advance" shall mean a borrowing requested by Companies and made by Bank
under Section 2 of this Agreement, including any refunding or conversions of
such borrowings pursuant to Section 3.3 hereof, and shall include a
Eurodollar-based Advance and a Prime-based Advance.
"Advance Formula Agreement" shall mean the Advance Formula Agreement in the
form of Exhibit "A" to this Agreement, as may be amended, restated, supplemented
or replaced from time to time.
"Addus" shall mean Addus HealthCare, Inc., an Illinois corporation.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation for the purposes of this definition if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such corporation
or (ii) to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise.
"Alternate Base Rate" shall mean for any day a rate per annum (rounded
upwards, if necessary, to the next higher 1/16 of 1%) equal to the Federal Funds
Effective Rate in effect on such day plus one percent (1%).
"Applicable Interest Rate" shall mean the Eurodollar-based Rate and/or the
Prime-based Rate.
"Business Day" shall mean any day on which commercial banks are open for
domestic and international business (including dealings in foreign exchange) in
Detroit, London and New York.
"Capital Expenditure" shall mean, without duplication, any payment made
directly or indirectly for the purpose of acquiring or constructing fixed
assets, real property or equipment which in accordance with GAAP would be added
as a debit to the fixed asset account of the person making such expenditure,
including, without limitation, amounts paid or payable under any conditional
sale or other title retention agreement or under any lease or other periodic
payment arrangement which is of such a nature that payment obligations of the
lessee or obligor thereunder would be required by generally accepted accounting
principles to be capitalized and shown as liabilities on the balance sheet of
such lessee or obligor.
"Capital Lease" shall mean any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP, is, or
is required to be accounted for as a capital lease on the balance sheet of such
Person, together with any renewals of such leases (or entry into new leases) on
substantially similar terms.
"Consolidated" or "Consolidating" shall, when used with reference to any
financial information pertaining to (or when used as a part of any defined term
or statement pertaining to the financial condition of) Arcadia and its
Subsidiaries, mean the accounts of Arcadia and its Subsidiaries determined on a
consolidated or consolidating basis, as the case may be, all determined as to
principles of consolidation and, except as otherwise specifically required by
the definition of such term or by such statements, as to such accounts, in
accordance with generally accepted accounting principles applied on a consistent
basis and consistent with the financial statements, if any, as at and for the
fiscal year ended December 31, 2003.
"Debt" shall mean as of any applicable time of determination thereof, the
total liabilities of a Person at such time, as determined in accordance with
GAAP.
"Default" shall mean an event which with the giving of notice or passage of
time or both would constitute an Event of Default.
"Environmental Laws" shall mean all federal, state and local laws including
statutes, regulations, ordinances, codes, rules, and other governmental
restrictions and requirements, relating to environmental pollution,
contamination or other impairment of the environment or any hazardous or toxic
substances of any nature. These Environmental Laws shall include but not be
limited to the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of
1976, the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, and the Federal Superfund Amendments and Reauthorization
Act of 1986.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code.
"Eurodollar-based Advance" shall mean an Advance which bears interest at
the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean a per annum interest rate which is equal
to the sum of three percent (3%) plus the quotient of:
(a) the per annum interest rate at which Bank's Eurodollar Lending Office
offers deposits to prime banks in the eurodollar market in an amount
comparable to the relevant Eurodollar-based Advance or relevant
principal portion of the Term Loan and for a period equal to the
relevant Interest Period at approximately 11:00 a.m. Detroit time two
(2) Business Days prior to the first day of such Interest Period;
divided by
(b) a percentage equal to 100% minus the maximum rate on such date at
which Bank is required to maintain reserves on "Euro-currency
Liabilities" as defined in and pursuant to Regulation D of the Board
of Governors of the Federal Reserve System or, if such regulation or
definition is modified, and as long as Bank is required to maintain
reserves against a category of liabilities which includes eurodollar
deposits or includes a category of assets which includes eurodollar
loans, the rate at which such reserves are required to be maintained
on such category;
all as conclusively determined by Bank, such sum to be rounded upward, if
necessary, to the nearest whole multiple of 1/16th of 1%.
"Eurodollar Lending Office" shall mean Bank's office located at Grand
Cayman, British West Indies or such other branch of Bank, domestic or foreign,
as it may hereafter designate as its Eurodollar Lending Office by notice to
Companies.
"Event of Default" shall mean any of the Events of Default specified in
Section 10 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Bank from three Federal funds brokers of recognized standing
selected by it.
"Fixed Charge Coverage Ratio" shall mean as of any date of determination, a
ratio, the numerator which shall be Net Income of the Companies for the four
quarter period ending on such date, plus Companies' consolidated non-cash
expenses for such period, and the denominator of which shall be the sum of the
aggregate principal and interest payments paid or due and payable by Companies
or any of them within such period, plus Companies' Capital Expenditures (but
excluding any capital expenditure funded with the proceeds of cash equity
contributions) during such period, all as determined on a consolidated basis in
accordance with GAAP.
"GAAP" shall mean, as of any applicable date of determination, generally
accepted accounting principles consistently applied, as in effect on the date of
this Agreement.
"Guarantors" shall mean the Individual Guarantors, the Parent Guarantor and
each other Person who/which on or after the date hereof executes a Guaranty in
favor of Bank and "Guarantor" shall mean any of them.
"Guaranty" shall mean any Guaranty by a Guarantor of the Indebtedness in
form and substance acceptable to Bank, as amended from time to time and
"Guaranties" means all of them.
"Indebtedness" shall mean all loans, advances, indebtedness, obligations
and liabilities of Companies to Bank under this Agreement, together with all
other indebtedness, obligations and liabilities whatsoever of Companies to Bank
whether or not arising under or in connection with the Loan Documents, whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, joint or several, due or to become due, now existing or hereafter
arising.
"Individual Guarantors" shall mean Xxxx X. Xxxxxxx XX, Xxxxxxxx X. Xxxxxxx
and each other individual which hereafter executes a Guaranty in favor of Bank.
"Interest Period" shall mean with respect to any Eurodollar-based Advance
or election of a Eurodollar-based Rate, a period of two (2) months (or any other
period of time agreed to by Companies and Bank) as selected by Companies
pursuant to the provisions of this Agreement commencing on the day a
Eurodollar-based Advance is made, or on the effective date of an election of the
Eurodollar-based Rate made under Section 3.
"Loan Documents" shall mean collectively, this Agreement, the Note, the
Guaranties, the Security Agreements, the Stock Pledge, the Advance Formula
Agreement, the Subordination Agreement and any other instruments or agreements
executed at any time pursuant to or in connection with any such documents.
"Net Income" shall mean, as of any date of determination, the net income
(or loss) of a Person for the four quarter period ending on the date of
determination, as determined in accordance with GAAP.
"Note" shall mean the Revolving Credit Note.
"Ordinary Course Liens" shall mean with respect to any Person:
(a) liens for taxes not yet due and payable or which are being contested
in good faith by appropriate proceedings diligently pursued, provided
that provision for the payment of all such taxes has been made on the
books of such Person as may be required by GAAP;
(b) mechanics', materialmen's, banker's, carriers', warehousemen's and
similar liens and encumbrances arising in the ordinary course of
business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the
enforcement of such liens and encumbrances shall have been duly
suspended; and (ii) such provision for the payment of such liens and
encumbrances has been made on the books of such Person as may be
required by GAAP;
(c) liens arising in connection with worker's compensation, unemployment
insurance, old age pensions and social security benefits and similar
statutory obligations which are not overdue or are being contested in
good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings commenced for
the enforcement of such liens shall have been duly suspended; and (ii)
such provision for the payment of such liens has been made on the
books of such Person as may be required by GAAP;
(d) (i) liens incurred in the ordinary course of business to secure the
performance of statutory obligations arising in connection with
progress payments or advance payments due under contracts with the
United States government or any agency thereof entered into in the
ordinary course of business and (ii) liens incurred or deposits made
in the ordinary course of business to secure the performance of
statutory obligations, bids, leases, fee and expense arrangements with
trustees and fiscal agents and other similar obligations (exclusive of
obligations incurred in connection with the borrowing of money, any
lease-purchase arrangements or the payment of the deferred purchase
price of property), provided that full provision for the payment of
all such obligations set forth in clauses (i) and (ii) has been made
on the books of such Person as may be required by GAAP; and
(e) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which do not materially interfere with the
business of such Person.
"Overformula Amount" is defined in the Advance Formula Agreement.
"Parent Guarantor" shall mean RKDA, Inc., a Michigan corporation, and its
successors and assigns.
"Person" or "person" shall mean any individual, corporation, partnership,
joint venture, limited liability company, association, trust, unincorporated
association, joint stock company, government, municipality, political
subdivision or agency, or other entity.
"Prime Rate" shall mean the per annum interest rate established by Bank as
its prime rate for its borrowers as such rate may vary from time to time, which
rate is not necessarily the lowest rate on loans made by Bank at any such time.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean for any day a per annum interest rate which
is the greater of (i) the Prime Rate or (ii) the Alternate Base Rate.
"Request for Advance" shall mean a Request for Advance issued by Company
under this Agreement in the form annexed to this Agreement as Exhibit "B".
"Revolving Credit" shall mean the revolving credit facility described in
Section 2 of this Agreement.
"Revolving Credit Commitment Amount" shall mean Twelve Million Dollars
($12,000,000).
"Revolving Credit Maturity Date" shall mean May 7, 2006.
"Revolving Credit Note" shall mean the Note described in Section 2.1 hereof
made by Companies to Bank in the form annexed to this Agreement as Exhibit "C".
"Security Agreements" is defined in Section 5.2.
"Stock Pledge" shall mean the Security Agreement (Negotiable Collateral) in
the form annexed hereto as Exhibit "E" under which the Parent Guarantor and each
other Person which becomes a holder of capital stock of Arcadia, grants Bank a
first priority security interest in all of the issued and outstanding capital
stock of Arcadia, as may be amended, restated, supplemented or replaced from
time to time.
"Stock Purchase Agreement" shall mean that certain Stock Purchase Agreement
dated May 7, 2004, among Parent Guarantor, Arcadia, Addus and W. Xxxxxx Xxxxxx,
without taking into account any amendments thereto not approved in writing by
Bank.
"Subordinated Debt" shall mean, as of any applicable time of determination,
any Debt of Companies (or any of them) which is subordinated in priority of
payment or other terms to any of the indebtedness of Companies (or any of them)
to Bank, in each case, pursuant to a Subordination Agreement.
"Subordination Agreement" shall mean a written agreement executed and
delivered by the holder of Subordinated Debt to, and in form and detail
satisfactory to, Bank.
"Subsidiary" shall mean a corporation or other entity of which more than
fifty percent (50%) of the outstanding voting stock or other equity interests is
owned by a Company, either directly or indirectly, through one or more
intermediaries.
"Tangible Effective Net Worth" shall mean, as of any applicable date of
determination, Tangible Net Worth as of such date plus an amount equal to the
outstanding principal amount of the Subordinated Debt as of such date.
"Tangible Net Worth" shall mean as of any applicable time of determination
thereof, the excess of (i) the net book value of the assets of Companies at such
time (excluding receivables from officers, directors, employees or affiliates
and excluding patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, goodwill and all other intangible assets of Companies at
such time), after all appropriate deductions in accordance with GAAP (including,
without limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization), over (ii) the sum of the total Debt of Companies
at such time, all as determined in accordance with GAAP.
2. THE INDEBTEDNESS: Revolving Credit; Fees
2.1 Bank agrees to make Advances to Companies from time to time from the
effective date hereof until the Revolving Credit Maturity Date, not to exceed
the lesser of the Revolving Credit Commitment Amount, as in effect from time to
time, or the amount of indebtedness permitted under the Advance Formula
Agreement in aggregate principal amount at any one time outstanding. All of the
Advances under the Revolving Credit shall be evidenced by the Revolving Credit
Note under which advances, repayments and readvances may be made, subject to the
terms and conditions of this Agreement.
2.2 The Revolving Credit Note shall mature on the Revolving Credit Maturity
Date and each Advance from time to time outstanding thereunder shall bear
interest at its Applicable Interest Rate. The amount and date of each Advance,
its Applicable Interest Rate, its Interest Period, if applicable, and the amount
and date of any repayment shall be noted on Bank's records, which records will
be conclusive evidence thereof absent manifest error.
2.3 Companies may request an Advance under the Revolving Credit upon the
delivery to Bank of a Request for Advance executed by an authorized officer of
Arcadia, subject to the following:
(a) each such Request for Advance shall set forth the information required
on the Request for Advance form annexed hereto as Exhibit "B";
(b) each such Request for Advance shall be delivered to Bank by 11:00 a.m.
Detroit time on the proposed date of Advance in the case of a
Prime-based Advance and by 11:00 a.m. Detroit time on the third
Business Day preceding the proposed date of Advance in the case of a
Eurodollar-based Advance;
(c) the principal amount of such Advance, plus the amount of any
outstanding indebtedness to be then combined therewith having the same
Applicable Interest Rate and Interest Period, if any, shall be in the
case of a Eurodollar-based Advance at least $1,000,000 or any larger
amount in $500,000 increments;
(d) a Request for Advance, once delivered to Bank, shall not, without
Bank's consent, be revocable by Companies;
(e) no more than five (5) Interest Periods may be in effect at any one
time for Eurodollar-based Advances.
Bank may, at its option, lend under this Section 2 upon the telephone
request of an authorized officer of Arcadia and, in the event Bank makes any
such advance upon a telephone request, the requesting officer shall, if so
requested by Bank, mail to Bank, on the same day as such telephone request, a
Request for Advance in the form attached as Exhibit "B". Companies hereby
authorize Bank to disburse advances under this Section 2 pursuant to the
telephone instructions of any person purporting to be an authorized officer of
Arcadia and Companies shall bear all risk of loss resulting from disbursements
made upon any telephone request. Each telephone request for an Advance shall
constitute a certification of the matters set forth in the Request for Advance
form as of the date of such requested Advance.
2.4 The initial Advance shall be in the amount of $11,500,000 and shall be
used to make a dividend or distribution to the Parent Guarantor to finance or
refinance the acquisition of the stock of Arcadia from Addus. The proceeds of
all other Advances under the Revolving Credit Note shall be used solely for
working capital purposes.
2.5 The aggregate principal amount at any one time outstanding under the
Revolving Credit Note shall never exceed the formula set forth in the Advance
Formula Agreement or in any Advance Formula Agreement delivered by Companies to
Bank in substitution therefor. Companies shall immediately make all payments
necessary to comply with this provision.
2.6 In consideration of the Revolving Credit, Companies shall pay Bank an
annual, non-refundable, commitment fee which fee for the first year shall be
deemed fully earned by Bank upon execution of this Agreement by Companies and
Bank. The commitment fee for the first year of the loan shall be in the amount
of $50,000 and shall be payable in twelve monthly installments of $4,166.67
each, commencing on the date of this Agreement and on the first Business Day of
each month thereafter. The commitment fee for each subsequent year of the loan
shall be earned at the commencement of such subsequent year and shall be in the
amount of $10,000 and shall be due and payable on May 7 of each year commencing
May 7, 2005, until the Revolving Credit Maturity Date.
2.7 Companies agree to pay Bank a non-refundable, unused fee on the average
daily balance of the unused portion of the Revolving Credit at the rate per
annum equal to one eighth of one percent (.125%) of the Revolving Credit
Commitment Amount for the average number of days elapsed using a year of 360
days. The commitment fee shall be payable quarterly in arrears on the first
Business Day of each March, June, September and December, commencing June 1,
2004, and on the Revolving Credit Maturity Date.
2.8 Companies shall pay Bank a non-refundable Overformula fee of $22,500,
payable in twelve monthly installments of $1,875 each, commencing on the date of
this Agreement and on the first Business Day of each month thereafter, which fee
shall be deemed fully earned by Bank upon execution of this Agreement by
Companies and Bank.
3. INTEREST, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS.
3.1 Advances under the Revolving Credit shall bear interest from the date
thereof on the unpaid principal balance thereof from time to time outstanding,
at a rate per annum equal to the Prime-based Rate or the Eurodollar-based Rate,
as the Companies may elect subject to the provisions of this Agreement. With
respect to Prime-based Advances, interest shall be payable monthly in arrears on
the first Business Day of each month, commencing on April 1, 2004, and at
maturity. With respect to Eurodollar-based Advances, interest shall be payable
in arrears on the last day of each Interest Period applicable thereto, provided,
however, if such Interest Period is longer than three months, interest shall be
payable three months following the first day of such Interest Period and on the
last day of such Interest Period. Notwithstanding the foregoing, from and after
the occurrence of any Event of Default and solely during the continuation
thereof, the Advances shall bear interest, payable on demand, at a rate per
annum equal to: (i) in the case of Prime-based Advances, three percent (3%)
above the Prime-based Rate; and (ii) in the case of Eurodollar-based Advances,
three percent (3%) above the rate which would otherwise be applicable under this
Section 3.1 until the end of the then current Interest Period, at which time
such Advance shall bear interest at the rate provided for in clause (i) of this
Section 3.1. Interest on all Advances shall be calculated on the basis of a 360
day year for the actual number of days elapsed, except that interest accruing at
the Eurodollar-based Rate shall be assessed for the actual number of days
elapsed from the first day of the Interest Period applicable thereto but not
including the last day thereof. The interest rate with respect to any
Prime-based Advance shall change on the effective date of any change in the
Prime-based Rate.
3.2 Each Interest Period for a Eurodollar-based Advance shall commence on
the date such Eurodollar-based Advance is made or is converted from an Advance
of another type pursuant to Section 3.3 hereof or on the last day of the
immediately preceding Interest Period for such Eurodollar-based Advance, and
shall end on the date one, two or three months thereafter (or any other date
agreed to by Companies and Bank), as the Companies may elect as set forth below,
subject to the following:
(i) no Interest Period shall extend beyond the Revolving Credit Maturity
Date; and
(ii) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day
unless the next succeeding Business Day falls in another calendar
month, in which case, such Interest Period shall end on the
immediately preceding Business Day and when an Interest Period begins
on a day which has no numerically corresponding day in the calendar
month during which such Interest Period is to end, it shall end on the
last Business Day of such calendar month.
The Companies shall elect the initial Interest Period applicable to a
Eurodollar-based Advance by its Request for Advance given to the Bank pursuant
to Section 2.3 or by its notice of conversion given to the Bank pursuant to
Section 3.3, as the case may be. Provided that no Event of Default shall have
occurred and be continuing, the Companies may elect to continue an Advance as a
Eurodollar-based Advance by giving irrevocable written, telephonic or
telegraphic notice thereof to the Bank, before 11:00 a.m. on the third Business
Day immediately preceding the last day of the then current Interest Period
applicable to such Eurodollar-based Advance, specifying the duration of the
succeeding Interest Period therefor. If the Bank does not receive timely notice
of the election and the Interest Period elected by the Companies, the Companies
shall be deemed to have elected to convert such Eurodollar-based Advance to a
Prime-based Advance at the end of the then current Interest Period.
3.3 Provided that no Event of Default shall have occurred and be
continuing, the Companies may, on any Business Day, convert any outstanding
Advance into an Advance of another type in the same aggregate principal amount,
provided that any conversion of a Eurodollar-based Advance shall be made only on
the last Business Day of the then current Interest Period applicable to such
Advance. If the Companies desire to convert an Advance, it shall give the Bank
written, telephonic or telegraphic notice, specifying the date of such
conversion, the Advances to be converted, the type of Advance elected and, if
the conversion is into a Eurodollar-based Advance, the duration of the first
Interest Period therefor, which notice shall be given not later than 11:00 a.m.
Detroit time on the applicable date of conversion in the case of conversion to a
Prime-based Advance and not later than 11:00 a.m. Detroit time on the third
Business Day immediately preceding the date of conversion in the case of
conversion to a Eurodollar-based Advance.
3.4 Companies may prepay all or part of the outstanding balance of the
Prime-based Advance(s) under the Note at any time without premium or penalty.
Upon three (3) Business Days' prior notice to Bank, Companies may prepay all or
part of any Eurodollar-based Advance, provided that the amount of any such
partial prepayment shall be at least $250,000 and the unpaid portion of such
Advance which is refunded or converted under Section 3.3 shall be subject to the
limitations of Section 2.3(c). Any prepayment of a Prime-based Advance or any
prepayment of a Eurodollar-based Advance on the last day of the Interest Period
therefor made in accordance with this Section shall be without premium, penalty
or prejudice to Companies' right to reborrow under the terms of this Agreement.
Any other prepayment shall be subject to the provisions of Section 4.1 hereof.
4. SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD PROTECTION.
4.1 If Companies make any payment of principal with respect to any
Eurodollar-based Advance on any day other than the last day of the Interest
Period applicable thereto (whether voluntarily, by acceleration, or otherwise),
or if Companies fail to borrow any Eurodollar-based Advance after notice has
been given by Companies to Bank in accordance with the terms hereof requesting
such Advance, or if Companies fail to make any payment of principal or interest
when due in respect of a Eurodollar-based Advances, Companies shall reimburse
Bank on demand for any resulting loss, cost or expense incurred by Bank as a
result thereof, including, without limitation, any such loss, cost or expense
incurred in obtaining, liquidating, employing or redeploying deposits from third
parties, whether or not Bank shall have funded or committed to fund such
Advance. Such amount payable by Companies to Bank may include, without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert, through the last day of the relevant Interest
Period, at the applicable rate of interest for said Advance(s) provided under
this Agreement, over (b) the amount of interest (as reasonably determined by
Bank) which would have accrued to Bank on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. Calculation of any amounts payable to Bank under this paragraph shall be
made as though Bank shall have actually funded or committed to fund the relevant
Eurodollar-based Advance through the purchase of an underlying deposit in an
amount equal to the amount of such Advance and having a maturity comparable to
the relevant Interest Period; provided, however, that Bank may fund any
Eurodollar-based Advance in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Companies, Bank shall
deliver to Companies a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
4.2 For any Interest Period for which the Applicable Interest Rate is the
Eurodollar-based Rate, if Bank shall designate a Eurodollar Lending Office which
maintains books separate from those of the rest of Bank, Bank shall have the
option of maintaining and carrying the relevant Advance on the books of such
Eurodollar Lending Office.
4.3 If with respect to any Interest Period, Bank reasonably determines
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in Eurodollars in the applicable amounts are not
being offered to the Bank for such Interest Period, then Bank shall forthwith
give notice thereof to the Companies. Thereafter, until Bank notifies Companies
that such circumstances no longer exist, the obligation of Bank to make
Eurodollar-based Advances, and the right of Companies to convert an Advance to
or refund an Advance as a Eurodollar-based Advance shall be suspended.
4.4 If, after the date hereof, the introduction or implementation of, or
any change in, any applicable law, rule or regulation or in the interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for the Bank (or its Eurodollar Lending Office) to honor its obligations
hereunder to make or maintain any Advance, Bank shall forthwith give written
notice thereof to Companies. Thereafter (a) the obligations of Bank to make
Eurodollar-based Advances and the right of Companies to convert an Advance or
refund an Advance as a Eurodollar-based Advance shall be suspended and
thereafter Companies may select as Applicable Interest Rates only those which
remain available, and (b) if Bank may not lawfully continue to maintain an
Advance to the end of the then current Interest Period applicable thereto, the
Prime-based Rate shall be the Applicable Interest Rate for the remainder of such
Interest Period.
4.5 If the adoption or implementation after the date hereof of, or any
change after the date hereof in, any applicable law, rule or regulation of any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) made by any such authority, central bank or comparable agency
after the date hereof:
(a) shall subject Bank (or its Eurodollar Lending Office) to any tax, duty
or other charge with respect to any Advance or the Note or shall
change the basis of taxation of payments to Bank (or its Eurodollar
Lending Office) of the principal of or interest on any Advance or the
Note or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net income of
Bank or its Eurodollar Lending Office imposed by any jurisdiction in
which Bank is organized or engaged in business); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by Bank (or its Eurodollar Lending Office) or shall impose on
Bank (or its Eurodollar Lending Office) or the foreign exchange and
interbank markets any other condition affecting any Advance or the
Note;
and the result of any of the foregoing is to increase the costs to Bank of
maintaining any part of the indebtedness hereunder or to reduce the amount of
any sum received or receivable by Bank under this Agreement or under the Note,
by an amount deemed by the Bank to be material, then Bank shall promptly notify
Companies of such fact and demand compensation therefor and, within fifteen days
after demand by Bank in writing, Companies agree to pay to Bank such additional
amount or amounts as will compensate Bank for such increased cost or reduction.
Bank will promptly notify Companies of any event of which it has knowledge which
will entitle Bank to compensation pursuant to this Section. A certificate of
Bank setting forth the basis for determining such additional amount or amounts
necessary to compensate Bank shall be conclusively presumed to be correct save
for manifest error. Bank agrees that, as promptly as practical after it becomes
aware of the occurrence of any event or the existence of a condition that will
cause Bank to be entitled to compensation under this Section, it will, to the
extent not inconsistent with Bank's internal policies, use reasonable efforts to
make, fund or maintain any affected Eurodollar-based Advance through another
lending office of Bank if as a result thereof the additional monies which would
otherwise be required to be paid in respect of such Eurodollar-based Advance
would be materially reduced and if, as determined by Bank, in its reasonable
discretion, the making, funding or maintaining of such Eurodollar-based Advance
through such other lending office would not materially adversely affect such
Advance or portion of a loan or Bank. Companies shall pay all reasonable
expenses incurred by Bank in utilizing another lending office pursuant to this
Section.
4.6 In the event that at any time after the date of this Agreement any
change in law such as described in Section 4.5, hereof, shall, in the reasonable
opinion of Bank require that the credit provided under this Agreement be treated
as an asset or otherwise be included for purposes of calculating the appropriate
amount of capital to be maintained by Bank or any corporation controlling Bank
and such change has or would have the effect of reducing the rate of return on
Bank's or Bank's parent's capital or assets as a consequence of the Bank's
obligations hereunder to a level below that which Bank or Bank's parent would
have achieved but for such change, then Bank shall notify Companies in writing
and demand compensation therefor and, within fifteen days after demand by Bank,
Companies agree to pay to Bank such additional amount or amounts as will
compensate Bank for such reduction. Bank will promptly notify Companies in
writing of any event of which it has knowledge which will entitle Bank to
compensation pursuant to this Section. A certificate of Bank setting forth the
basis for determining such additional amount or amounts necessary to compensate
Bank shall be conclusively presumed to be correct save for manifest error.
5. CONDITIONS
5.1 Companies agree to furnish Bank prior to the initial borrowing under
this Agreement, in form and substance to be satisfactory to Bank, with (i)
certified copies of resolutions of the Boards of Directors of Companies
evidencing approval of the borrowings and transactions contemplated hereunder;
(ii) a certificate of good standing from the state of each Company's
incorporation and from the state(s) in which each of them is required to be
qualified to do business; (iii) the other Loan Documents; (iv) a borrowing base
report and (v) such other documents, instruments and legal opinions as Bank may
require.
5.2 As security for all Indebtedness of Companies to Bank hereunder,
Companies agree to furnish, execute and deliver to Bank, or cause to be
furnished, executed and delivered to Bank, prior to or simultaneously with the
initial borrowing hereunder, in form to be satisfactory to Bank and supported by
appropriate resolution in certified form authorizing same, the following:
(a) Security Agreements granting to Bank security interests in all of each
of the Companies' tangible and intangible personal property, whether
now owned or hereafter acquired, including, without limitation, all
accounts, equipment, inventory, general intangibles and chattel paper
("Security Agreements");
(b) A Subordination Agreement from Addus whereby Addus subordinates
indebtedness of Arcadia to Arcadia's indebtedness to Bank;
(c) The Stock Pledge;
(d) The Guaranties;
(e) Financing Statements required or requested by Bank to perfect all
security interests to be conferred upon Bank under this Agreement and
to accord Bank a perfected first priority security position under the
Uniform Commercial Code (subject only to the encumbrances permitted
hereunder); and
(f) Such other documents or agreements of security and appropriate
assurances of validity and perfected first priority of lien or
security interest as Bank may reasonably request at any time.
5.3 As a condition to the initial Advance, Companies shall have provided
Bank evidence of satisfaction of conditions precedent set forth in the
commitment letter dated March 23, 2004.
6. REPRESENTATIONS AND WARRANTIES
Each of the Companies represents and warrants and such representations and
warranties shall be deemed to be continuing representations and warranties
during the entire life of this Agreement:
6.1 It is a corporation duly organized and existing in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified to do
business and in good standing in every jurisdiction in which such qualification
is material to its business and operation or the ownership or lease of its
properties; execution, delivery and performance of this Agreement and other
documents and instruments required under this Agreement, and the issuance of the
Note by Companies are within its corporate powers, have been duly authorized,
are not in contravention of law or the terms of its Articles of Incorporation or
Bylaws, and do not require the consent or approval of any governmental body,
agency or authority; and this Agreement and the other documents and instruments
required under this Agreement and the Note, when issued and delivered, will be
valid and binding in accordance with their terms.
6.2 The execution, delivery and performance of this Agreement and any other
documents and instruments required under this Agreement, and the issuance of the
Note by Companies are not in contravention of the unwaived terms of any
indenture, agreement or undertaking to which any Company is a party or by which
any Company is bound.
6.3 Except as may be set forth in Schedule 6.3, no litigation or other
proceeding before any court or administrative agency is pending, or to the
knowledge of its officers is threatened against Companies or any Subsidiary of
any of the Companies, the outcome of which could materially impair any of the
Companies' or any Subsidiary's financial condition or their ability to carry on
their businesses taken as a whole.
6.4 There are no security interests in, or liens, mortgages, or other
encumbrances on any of Companies' or any Subsidiary's assets, except to Bank, or
as permitted in this Agreement.
6.5 None of the Companies nor any Subsidiary maintains or contributes to
any employee pension benefit plan subject to title IV of the "Employee
Retirement Income Security Act of 1974" (herein called "ERISA"), except the
plans described in attached Schedule 6.5. There is no unfunded past service
liability of the pension plan and there is no accumulated funding deficiency
within the meaning of ERISA, or any existing material liability with respect to
any pension plan owed to the Pension Benefit Guaranty Corporation ("PBGC") or
any successor thereto, except any funding deficiency for which an application to
the PBGC for waiver is pending or for which a waiver has been granted by the
PBGC.
6.6 The financial statements of Companies dated January 31, 2004,
previously furnished Bank, are complete and correct in all material respects and
fairly present the financial condition of Companies and their consolidated
Subsidiaries as of their respective dates; since January 31, 2004, there has
been no material adverse change in the financial condition of any of the
Companies or any of the Subsidiaries; to the knowledge of its officers, none of
the Companies nor any of the Subsidiaries has any contingent obligations
(including any liability for taxes) not disclosed by or reserved against in said
financial statements and at the present time there are no material unrealized or
anticipated losses from any present commitment of any of the Companies or
Subsidiaries.
6.7 All tax returns and tax reports of Companies and each Subsidiary
required by law to have been filed have been duly filed or extensions obtained,
and all taxes, assessments and other governmental charges or levies (other than
those presently payable without penalty and those currently being contested in
good faith for which adequate reserves have been established) upon Companies or
any Subsidiary (or any of its properties) which are due and payable have been
paid for which the failure to pay would materially adversely affect its business
or the value of its property or assets (taken as a whole). The charges, accruals
and reserves on the books of Companies and the Subsidiaries in respect of the
Federal income tax for all periods are adequate in the opinion of Companies.
6.8 All of the issued and outstanding capital stock of Arcadia is owned by
the Parent Guarantor. Except as disclosed on Schedule 6.8 annexed hereto, there
are no Subsidiaries of any Company.
6.9 Each Company and its Subsidiaries are, in the conduct of their
business, in compliance in all material respects with all federal, state or
local laws, statutes, ordinances and regulations applicable to any of them, the
enforcement of which, if such Company or any Subsidiary were not in compliance,
would reasonably be expected to materially adversely affect its business or the
value of its property or assets (taken as a whole). Each Company and its
Subsidiaries have all approvals, authorizations, consents, licenses, orders and
other permits of all governmental agencies and authorities, whether federal,
state or local, required to permit the operation of their business as presently
conducted, except such approvals, authorizations, consents, licenses, orders and
other permits with respect to which the failure to have would reasonably be
expected to materially adversely affect its business or the value of its
property or assets (taken as a whole).
6.10 Except as may be set forth in Schedule 6.10, none of the Companies nor
any Subsidiary is party to any litigation or administrative proceeding, nor so
far as is known by it is any litigation or administrative proceeding threatened
against it or any other Company or Subsidiary, which in either case (A) asserts
or alleges that any of the Companies or any Subsidiary violated Environmental
Laws (as defined herein), (B) asserts or alleges that any of the Companies or
any Subsidiary is required to clean up, remove, or take remedial or other
response action due to the disposal, depositing, discharge, leaking or other
release of any hazardous substances or materials, or (C) asserts or alleges that
any of the Companies or any Subsidiary is required to pay all or a portion of
the cost of any past, present, or future cleanup, removal or remedial or other
response action which arises out of or is related to the disposal, depositing,
discharge, leaking or other release of any hazardous substances or materials by
any of the Companies or any Subsidiary.
6.11 To the best of its knowledge, after due inquiry, except as otherwise
previously disclosed in writing by Companies to Bank, there are no conditions
existing currently or likely to exist during the term of this Agreement which
would subject any of the Companies or any Subsidiary to material damages,
penalties, injunctive relief or cleanup costs under any applicable Environmental
Laws or which require or are likely to require material cleanup, removal,
remedial action or other response pursuant to applicable Environmental Laws by
any of the Companies or any Subsidiary.
6.12 None of the Companies nor any Subsidiary is subject to any judgment,
decree, order or citation related to or arising out of applicable Environmental
Laws and to the best of its knowledge, after due inquiry, except as otherwise
previously disclosed in writing to the Bank, neither of the Companies nor any
Subsidiary has been named or listed as a potentially responsible party by any
governmental body or agency in a matter arising under any applicable
Environmental Laws.
6.13 Each of the Companies and the Subsidiaries have all material permits,
licenses and approvals required under applicable Environmental Laws.
6.14 None of the Companies is an "Investment Company" within the meaning of
the Investment Company Act of 1940, as amended. None of the Companies is engaged
principally, or as one of its important activities, directly or indirectly, in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and none of the proceeds of any of the loans hereunder will be
used, directly or indirectly, for any purpose which would violate the provisions
of Regulation U or X of the Board of Governors of the Federal Reserve System.
Terms for which meanings are provided in Regulation U of the Board of Governors
of the Federal Reserve System or any regulations substituted therefor, as from
time to time in effect, are used in this paragraph with such meanings.
6.15 Each Company has good and valid title to the property pledged,
mortgaged or otherwise encumbered or to be encumbered by it under the Loan
Documents to which such Company is a party.
6.16 Schedule 6.16 annexed hereto is a complete list of all premises where
tangible personal property of the Companies is located.
7. AFFIRMATIVE COVENANTS
Each of the Companies covenants and agrees that it will, and it will cause
each of its Subsidiaries, so long as Bank may make any Advance under this
Agreement and thereafter so long as any Indebtedness remains outstanding under
this Agreement:
7.1 Furnish Bank:
(a) prompt notification of any condition or event which constitutes or
with the running of time and/or the giving of notice would constitute
an Event of Default under this Agreement, and promptly inform the Bank
of any material adverse change in any of the Companies' or any
Subsidiary's financial condition;
(b) as soon as available and in any event within 30 days after and as of
the end of each month, the consolidated and consolidating balance
sheets and statements of profit and loss and surplus of the Companies
and their consolidated Subsidiaries, duly certified (subject to
year-end audit adjustments) by the chief financial officer of each of
the Companies as having been prepared in accordance with GAAP
consistent with those applied in the preparation of the financial
statements referred to in Section 6.6;
(c) as soon as available and in any event within 30 days after and as of
the end of each month, the balance sheet and statements of profit and
loss and surplus of the Parent Guarantor duly certified (subject to
year-end audit adjustments) by the chief financial officer of Parent
Guarantor as having been prepared in accordance with the GAAP
consistent with those applied by Arcadia in the preparation of the
financial statements referred to in Section 6.6;
(d) as soon as available and in any event within 120 days after and as of
the end of each fiscal year of the Companies, consolidated and
consolidating audited financial statements of Companies and their
consolidated Subsidiaries, including a balance sheet, statements of
income and retained earnings and changes in financial position for
such year, prepared in accordance with GAAP and certified by
independent certified public accountants reasonably acceptable to the
Bank;
(e) as soon as available and in any event within 120 days after and as of
the end of each fiscal year of the Parent Guarantor, the financial
statements of the Parent Guarantor, including a balance sheet,
statements of income and retained earnings and changes in financial
position for such year, prepared in accordance with the GAAP and
certified by independent certified public accountants reasonably
acceptable to Bank;
(f) within ten (10) days after and as of the end of each month, a detailed
aging of Accounts and accounts payable and an inventory report in form
acceptable to Bank, certified by an officer of each of the Companies;
(g) on Thursday of each week and as of Thursday of the previous week, a
borrowing base report in form acceptable to Bank, certified by an
officer of each of the Companies;
(h) on or before April 30 of each year and as of a date not more than 60
days prior thereto, an updated personal financial statement for each
Individual Guarantor in form acceptable to Bank and certified by such
Guarantor as to accuracy and completeness;
(i) such information as required by the terms and conditions of the
Advance Formula Agreement and any security agreements referred to in
this Agreement; and
(j) from time to time, such further information regarding the business
affairs and financial condition of the Companies as the Bank may
reasonably request.
7.2 Pay and discharge, and cause its Subsidiaries to pay and discharge, all
taxes and other governmental charges and all contractual obligations calling for
the payment of money, before the same shall become overdue, unless and to the
extent only that such payment is being contested in good faith and, if required
by Bank, bonded in a manner satisfactory to Bank.
7.3 Maintain, and cause its Subsidiaries to maintain, insurance coverage on
their physical assets and against other business risks in such amounts and of
such types as are customarily carried by companies similar in size and nature,
and in the event of acquisition of additional property, real or personal, or of
incurrence of additional risks of any nature, increase such insurance coverage
in such manner and to such extent as prudent business judgment and present
practice would dictate; and in the case of all policies covering property
mortgaged or pledged to Bank or property in which Bank shall have a security
interest of any kind whatsoever, other than those policies protecting against
casualty liabilities to strangers, all such insurance policies shall provide
that the loss payable thereunder shall be payable to Companies and Bank as their
respective interests may appear; copies of all said policies, including all
endorsements thereon and those required hereunder, to be deposited with Bank.
7.4 Permit, and cause its Subsidiaries to permit, Bank, through its
authorized attorneys, accountants, and representatives, to examine each
Company's and its Subsidiaries' books, accounts, records, ledgers and assets of
every kind and description at all reasonable times upon oral or written request
of Bank, including, without limitation, collateral audits of Companies at the
expense of Companies; provided, however, so long as no Default or Event of
Default has occurred and is continuing, Companies shall not be required to
reimburse Bank for more than three (3) such audits from the date hereof through
May 7, 2005, and for more than two (2) such audits during each twelve month
period thereafter.
7.5 Promptly notify Bank of any condition or event which constitutes or
with the running of time and/or the giving of notice would constitute a default
under this Agreement, and promptly inform Bank of any material adverse change in
any Company's or any Subsidiary's financial condition.
7.6 Furnish to the Bank concurrently with the delivery of each of the
financial statements required by Section 7.1(a) and (b) hereof, a statement
prepared and certified by the chief financial officer of Arcadia (or in his
absence, a responsible senior officer of Arcadia) (a) setting forth all
computations necessary to show compliance by Companies with the financial
covenants contained in Sections 7.11 and 7.12 of this Agreement as of the date
of such financial statements, (b) stating that as of the date thereof, no
condition or event which constitutes an event of default or which with the
running of time and/or the giving of notice would constitute an event of default
has occurred and is continuing, or if any such event or condition has occurred
and is continuing or exists, specifying in detail the nature and period of
existence thereof and any action taken with respect thereto taken or
contemplated to be taken by Companies and (c) stating that the signer has
personally reviewed this Agreement and that such certificate is based on an
examination sufficient to assure that such certificate is accurate.
7.7 Maintain in good standing, and cause each Subsidiary to maintain in
good standing, all licenses required by the State of Michigan or any agency
thereof, or other governmental authority that may be necessary or required for
Companies or any Subsidiary to carry on its general business objects and
purposes.
7.8 Furnish, and cause each Subsidiary to furnish, Bank, upon Bank's
request, in form satisfactory to Bank with pledges, assignments, mortgages, lien
instruments or other security instruments covering any or all of each Company's
and each Subsidiary's real or personal property, of every nature and
description, whether now owned or hereafter acquired, to the extent that Bank
may in its sole reasonable discretion require.
7.9 Comply, and cause each Subsidiary to comply, with all requirements
imposed by ERISA as presently in effect or hereafter promulgated including, but
not limited to, the minimum funding requirements of the Pension Plans.
7.10 Promptly notify Bank after the occurrence thereof in writing of any of
the following events:
(a) the termination of any Company's or any Subsidiary's Pension Plan
pursuant to Subtitle C of Title IV of ERISA or otherwise;
(b) the appointment of a trustee by a United States District Court to
administer the Pension Plan;
(c) the commencement by the Pension Benefit Guaranty Corporation, or any
successor thereto of any proceeding to terminate any Company's or any
Subsidiary's Pension Plan;
(d) the failure of any Company's or any Subsidiary's Pension Plan to
satisfy the minimum funding requirements for any plan year as
established in Section 412 of the Internal Revenue Code of 1954, as
amended;
(e) the withdrawal of any Company or any Subsidiary from a Pension Plan;
or
(f) a reportable event, within the meaning of Title IV of ERISA.
7.11 Maintain at all times, commencing April 30, 2005, Tangible Effective
Net Worth of not less than $100,000.
7.12 Maintain as of the end of each fiscal quarter of Companies, commencing
with the fiscal quarter ending December 31, 2004, a Fixed Charge Coverage Ratio
of not less than 1.15 to 1.0.
7.13 Maintain all cash collection and general disbursement accounts with
Bank.
7.14 Furnish, and cause each Person which becomes a holder of the capital
stock of Arcadia after the date hereof to furnish, Bank contemporaneously with
the acquisition of such stock, a Stock Pledge, together with delivery of the
original stock certificate(s) and a stock assignment(s) duly executed in blank,
all in form satisfactory to Bank, supported by appropriate resolutions in
certified form authorizing same, as applicable. Nothing set forth in this
Section shall constitute Bank's consent to the acquisition by any Person of any
of the capital stock of Arcadia.
7.15 Promptly furnish Bank with notice of any merger or acquisition of the
Parent Guarantor into, with or by any other Person.
8. NEGATIVE COVENANTS
Each of the Companies covenants and agrees that, so long as Bank may make
any Advances under this Agreement and thereafter so long as any Indebtedness
remains outstanding under this Agreement, it will not, and it will not permit
its Subsidiaries to, without the prior written consent of Bank:
8.1 Purchase, acquire, issue (except as permitted in Section 8.9) or redeem
any of its capital stock or make any material change in its capital structure.
8.2 Enter into any merger or consolidation or sell, lease, transfer, or
dispose of all, substantially all, or any part of its assets, (i) except sales
of Inventory in the ordinary course of its business, (ii) dispositions of
obsolete equipment to the extent not exceeding $100,000 during any single fiscal
year, and (iii) sales, transfers and dispositions of other assets not described
in subclauses (i) and (ii) and not in excess of $100,000 during any single
fiscal year.
8.3 Guarantee, endorse, or otherwise become secondarily liable for or upon
the obligations of others, except by endorsement for deposit in the ordinary
course of business and guaranties in favor of Bank.
8.4 Purchase or otherwise acquire or become obligated for the purchase of
all or substantially all of the assets or business interests of any person, firm
or corporation or any shares of stock of any corporation, trusteeship or
association or in any other manner effectuate or attempt to effectuate an
expansion of present business by acquisition.
8.5 Become or remain obligated for any indebtedness for borrowed money, or
for any indebtedness incurred in connection with the acquisition of any
property, real or personal, tangible or intangible, except:
(a) indebtedness to Bank;
(b) current unsecured trade payables and accrued liabilities arising in
the ordinary course of any Company's business;
(c) the Subordinated Debt owed to Addus;
(d) indebtedness owing from one Company to another Company;
(e) indebtedness not to exceed $150,000 in the aggregate at any time
outstanding secured by purchase money liens permitted by Section
8.6(b); and
(f) other unsecured indebtedness not exceeding $75,000 at any time
outstanding.
8.6 Affirmatively pledge or mortgage any of its assets, whether now owned
or hereafter acquired, or create, suffer or permit to exist any lien, security
interest in, or encumbrance thereon, except (collectively, the "Permitted
Liens"):
(a) to Bank;
(b) liens and security interests upon fixed assets acquired by a Company
after the date of this Agreement (including by virtue of a Capital
Lease) to secure the indebtedness permitted by Section 8.5(e) provided
that (i) any such lien or security interest is created solely for the
purpose of securing indebtedness representing, or incurred to finance,
the cost of the item of property subject thereto; (ii) the principal
amount of the indebtedness secured by such lien does not exceed 100%
of the fair value of the property at the time it was acquired, and
(iii) the lien or security interest does not cover any other property
other than such item of property.
(c) the Ordinary Course Liens; and
(d) liens described on Schedule 8.6 (if any).
8.7 Sell, assign, transfer or confer a security interest in any account,
contract, note, trade acceptance or other receivable, except to Bank.
8.8 Materially alter the character of its businesses from that conducted as
of the date of this Agreement.
8.9 Declare or pay any dividends or make any other distribution upon its
shares of capital stock except dividends payable in the capital stock of
Companies and dividends by a Subsidiary of a Company to a Company; provided,
however, after the Overformula Amount has been reduced to $0, and, provided that
immediately prior to and after giving effect to any such declaration or payment
no Default or Event of Default has occurred and is continuing, Arcadia may
declare or pay cash dividends or make any other distributions upon its shares of
capital stock not to exceed $500,000 in the aggregate during any fiscal year of
Arcadia.
8.10 Enter into any transaction or series of transactions with any
Affiliate other than on terms and conditions as favorable to Companies as would
be obtainable in a comparable arms-length transaction with a Person other than
an Affiliate.
8.11 Make or allow to remain outstanding any investment (whether such
investment shall be of the character of investment in shares of stock, evidences
of indebtedness or other securities or otherwise) in, or any loans or advances
to, any person, firm, corporation or other entity or association, except:
(a) advances made for expenses or purchases in the ordinary course of
business; and
(b) loans or advances made by a Company to another Company.
8.12 Allow any fact, condition or event to occur or exist with respect to
any employee pension and/or profit sharing plan of any of the Companies or any
Subsidiaries, which shall constitute grounds for termination of such plan by the
PBGC or for the appointment by a United States District Court of a trustee to
administer any such plan.
8.13 Enter into or become subject to any agreement (other than this
Agreement) (i) prohibiting the creation or assumption of any lien or encumbrance
upon the properties or assets of any Company or (ii) requiring an obligation to
become secured (or further secured) if another obligation is secured or further
secured.
8.14 Make any payment of the Subordinated Debt unless and to the extent any
such payment, redemption or conversion is permitted under the terms of the
applicable Subordination Agreement.
9. ENVIRONMENTAL PROVISIONS
9.1 For the purposes of this Agreement the term "Environmental Laws" shall
mean all federal, state and local laws including statutes, regulations,
ordinances, codes, rules, and other governmental restrictions and requirements,
relating to environmental pollution, contamination or other impairment of any
nature, any hazardous or other toxic substances of any nature, whether liquid,
solid and/or gaseous, including smoke, vapor, fumes, soot, acids, alkalis,
chemicals, wastes, by-products, and recycled materials. Environmental Laws shall
include but not be limited to the Federal Solid Waste Disposal Act, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act of 1986, regulations of the Environmental Protection Agency,
regulations of the Nuclear Regulatory Agency, regulations of any state
department of natural resources or state environmental protection agency now or
at any time hereafter in effect and local health department ordinances.
9.2 Each of the Companies shall timely comply in all material respects with
all applicable Environmental Laws.
9.3 Each of the Companies shall provide to the Bank, immediately upon
receipt, copies of any correspondence, notice, pleading, citation, indictment,
complaint, order, decree, or other document from any source asserting or
alleging a circumstance or condition which requires or may require a financial
contribution by any of the Companies or any Subsidiary or a cleanup, removal,
remedial action, or other response by or on the part of either of the Companies
or any Subsidiary under applicable Environmental Laws or which seeks damages or
civil, criminal or punitive penalties from any Company or any Subsidiary for an
alleged violation of Environmental Laws.
9.4 Each of the Companies shall promptly notify the Bank in writing as soon
as it becomes aware of any condition or circumstance which makes the
environmental warranties contained in this Agreement incomplete or inaccurate in
any material respect as of any date.
9.5 In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement incomplete or inaccurate
in any material respect as of any date, Companies shall, at their sole expense,
if reasonably requested by Bank, retain an environmental professional
consultant, reasonably acceptable to Bank, to conduct a thorough and complete
environmental audit regarding the changed condition and/or circumstance and any
environmental concerns arising from that changed condition and/or circumstance.
A copy of the environmental consultant's report will be promptly delivered to
both Bank and Companies upon completion.
9.6 At any time if any of the Companies, directly or indirectly through any
professional consultant or other representative, determines to undertake an
environmental audit, assessment or investigation, it shall promptly provide the
Bank with written notice of the initiation of the environmental audit, fully
describing the purpose and intended scope of the environmental audit. Upon
receipt, Companies will promptly provide to the Bank copies of all final
findings and conclusions of any such environmental investigation. Preliminary
findings and conclusions shall be provided if final reports have not been
completed and delivered to the Bank within 60 days following completion of the
preliminary findings and conclusions.
9.7 Each of the Companies hereby indemnifies, saves and holds the Bank and
any of its past, present and future officers, directors, shareholders,
employees, representatives and consultants harmless from any and all loss,
damages, suits, penalties, costs, liabilities and expenses (including but not
limited to reasonable investigation, environmental audit(s), and legal expenses)
arising out of any claim, loss or damage of any property, injuries to or death
of persons, contamination of or adverse affects on the environment, or any
violation of any applicable Environmental Laws, caused by or in any way related
to any property owned, leased or operated by Companies, or due to any acts of
either of the Companies, its officers, directors, shareholders, employees,
consultants and/or representatives. In no event shall either of the Companies be
liable hereunder for any loss, damages, suits, penalties, costs, liabilities or
expenses arising from any intentional wrongful act or act of gross negligence of
the Bank, or its agents or employees.
It is expressly understood and agreed that the indemnification granted
herein is intended to protect the Bank, its past, present and future officers,
directors, shareholders, employees, consultants and representatives from any
claims that may arise by reason of the security interest, liens and/or mortgages
granted to the Bank, or under any other document or agreement given to secure
repayment of any indebtedness from either of the Companies, whether or not such
claims arise before or after the Bank has foreclosed upon and/or otherwise
become the owner of any such property. All obligations of indemnity as provided
hereunder shall be secured by the collateral documents.
It is expressly agreed and understood that the provisions hereof shall and
are intended to be continuing and shall survive the repayment of any
indebtedness from Companies to the Bank.
9.8 Each of the Companies and its Subsidiaries have and shall maintain all
permits, licenses and approvals required under applicable Environmental Laws.
10. EVENTS OF DEFAULT
10.1 Upon occurrence of any of the following events of default:
(a) non-payment of any installment of the principal or interest on the
Note when due, or non-payment of any other outstanding Indebtedness
when due, and (in each case) continuance thereof for five (5) Business
Days;
(b) default in the observance or performance of any of the conditions,
covenants or agreements of Companies set forth in Sections 7.1, 7.3,
7.4, 7.5, 7.6, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15 or 8 (in its
entirety);
(c) default in observance or performance of any of the other conditions,
covenants or agreements of any Company herein set forth, and
continuance thereof for thirty (30) days after written notice to
Companies by Bank;
(d) any material representation or warranty made by any Company herein or
in any instrument submitted pursuant hereto proves untrue in any
material respect when made or deemed made;
(e) default in the observance or performance of any of the conditions,
covenants or agreements of any Company set forth in any collateral
document of security which may be given to secure the indebtedness
hereunder or in any other document related to or connected with this
Agreement or the indebtedness hereunder, and lapse of any applicable
grace or cure period;
(f) default in the payment of any other obligation of any Company, any of
its Subsidiaries or any Guarantor for borrowed money in an aggregate
amount in excess of Twenty Thousand Dollars ($20,000), or in the
observance or performance of any conditions, covenants or agreements
related or given with respect to any obligations for borrowed money in
an aggregate amount in excess of Twenty Thousand Dollars ($20,000)
sufficient to permit the holder thereof to accelerate the maturity of
such obligation;
(g) judgments for the payment of money in excess of the sum of Twenty
Thousand Dollars ($20,000) in the aggregate shall be rendered against
any Company, any of its Subsidiaries or any Guarantor and such
judgments shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) consecutive days from
the date of its entry and such judgment is not covered by insurance
from a solvent insurer who is defending such action without
reservation of rights;
(h) the occurrence of any "reportable event", as defined in the Employee
Retirement Income Security Act of 1974 and any amendments thereto,
which is determined to constitute grounds for termination by the
Pension Benefit Guaranty Corporation of any employee pension benefit
plan maintained by or on behalf of any Company for the benefit of any
of its employees or for the appointment by the appropriate United
States District Court of a trustee to administer such plan and is
reasonably likely that the occurrence of such event would result in a
material adverse effect on Companies, and such reportable event is not
corrected and such determination is not revoked within sixty (60) days
after notice thereof has been given to the plan administrator or
Companies; or the institution of proceedings by the Pension Benefit
Guaranty Corporation to terminate any such employee benefit pension
plan or to appoint a trustee to administer such plan; or the
appointment of a trustee by the appropriate United States District
Court to administer any such employee benefit pension plan;
(i) Xxxx X. Xxxxxxx XX and/or Xxxxxxxx X. Xxxxxxx shall fail, for any
reason, to directly or indirectly own and control 25% or more of the
issued and outstanding capital stock of Arcadia in the aggregate;
(j) if at any time, Xxxx X. Xxxxxxx XX and Xxxxxxxx X. Xxxxxxx shall fail,
for any reason, to serve as Directors of Arcadia, holding, in the
aggregate, more than 50% of the voting power of the Board of Directors
of Arcadia;
(k) if there shall be any other change for any reason whatsoever in the
management, ownership or control of any of the Companies, which shall
in the reasonable judgment of Bank materially adversely affect future
prospects for the successful operation of any Company or any
Subsidiary;
(l) if any Guaranty or Subordination Agreement is revoked in whole or in
part or if any Individual Guarantor shall die; or if there occurs any
default under the terms of any Guaranty;
(m) If Arcadia or the Parent Guarantor shall make, or Addus shall accept,
any payment or distribution of the Subordinated Debt in violation of
the Subordination Agreement; or if there occurs any other default by
Addus under the terms of the Subordination Agreement, and such default
shall continue for twenty (20) days after written notice to Companies
and Addus by Bank;
(n) if either Xxxx X. Xxxxxxx XX or Xxxxxxxx X. Xxxxxxx guaranties,
endorses or otherwise becomes secondarily liable for or upon the
obligations of others except (1) by endorsement for deposit in the
ordinary course, (2) guaranties in favor of Bank and (3) other
guaranties not to exceed $250,000 in aggregate principal liability
(for each of Xxxx X. Xxxxxxx XX and Xxxxxxxx X. Xxxxxxx); or
(o) if Bank shall for any reason deem itself to be insecure, believing in
good faith that the prospect of payment of or performance of the
Indebtedness is materially impaired.
then, or at any time thereafter, unless such default is remedied, Bank may give
written notice to Companies declaring all outstanding Indebtedness hereunder and
under the Note to be due and payable, whereupon all Indebtedness then
outstanding hereunder and under the Note shall immediately become due and
payable without further notice and demand, and Bank's shall not be obligated to
make further Advances hereunder.
10.2 If a creditors' committee shall have been appointed for the business
of any Company or any of its Subsidiaries or any Guarantor in connection with
any bankruptcy or insolvency; or if any Company or any of its Subsidiaries or
any Guarantor shall have made a general assignment for the benefit of creditors
or shall have been adjudicated bankrupt, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to effect a plan or arrangement
with creditors; or shall file an answer to a creditor's petition or other
petition filed against it, admitting the material allegations thereof for an
adjudication in bankruptcy or for reorganization; or shall have applied for or
permitted the appointment of a receiver, or trustee or custodian for any of its
property or assets; or such receiver, trustee or custodian shall have been
appointed for any of its property or assets (otherwise than upon application or
consent of applicable Company, Subsidiary or Guarantor, as applicable), and such
receiver, trustee or custodian so appointed shall not have been discharged
within sixty (60) days after the date of his appointment or if an order shall be
entered and shall not be dismissed or stayed within sixty (60) days from its
entry, approving any petition for reorganization of any Company or any of its
Subsidiaries or any Guarantor; then the Note and all indebtedness then
outstanding hereunder shall automatically become immediately due and payable and
Bank shall not be obligated to make further Advances under this Agreement.
10.3 Upon the occurrence and during the continuance of an Event of Default,
unless all of the Indebtedness is then immediately fully paid, Bank shall have
and may exercise any one or more of the rights and remedies for which provision
is made for a secured party under the Michigan Uniform Commercial Code ("UCC"),
under the Security Agreements or under any other document contemplated hereby or
for which provision is provided by law or in equity, including, without
limitation, the right to take possession and sell, lease or otherwise dispose of
any or all of the collateral and to set off against the Indebtedness any amount
owing by Bank to a Company and/or any property of a Company in possession of
Bank. Companies agree, upon request of Bank, to assemble the collateral and make
it available to Bank at any place designated by Bank which is reasonably
convenient to Bank and Companies.
10.4 All of the Indebtedness shall constitute one loan secured by Bank's
security interest in the collateral and by all other security interests,
mortgages, liens, claims, and encumbrances now and from time to time hereafter
granted from Companies to Bank. Upon the occurrence and during the continuance
of an Event of Default which is not cured within the cure period, if any,
provided hereunder, Bank may in its sole discretion apply the collateral to any
portion of the Indebtedness. The proceeds of any sale or other disposition of
the Collateral authorized by this Agreement shall be applied by Bank, first upon
all expenses authorized by the UCC (or other applicable law) or otherwise in
connection with the sale and all reasonable attorneys' fees and legal expenses
incurred by Bank; the balance of the proceeds of such sale or other disposition
shall be applied in the payment of the Indebtedness, first to interest, then to
principal, then to other Indebtedness and the surplus, if any, shall be paid
over to Companies or to such other Person or Persons as may be entitled thereto
under applicable law. Companies shall remain liable for any deficiency, which
Companies shall pay to Bank immediately upon demand.
10.5 The remedies provided for herein are cumulative to the remedies for
collection of the Indebtedness as provided by law, in equity or by any mortgage,
security agreement or other document contemplated hereby. Nothing herein
contained is intended, nor shall it be construed, to preclude Bank from pursuing
any other remedy for the recovery of any other sum to which Bank may be or
become entitled for the breach of this Agreement by Companies.
10.6 The remedies provided for herein are cumulative to the remedies for
collection of the Indebtedness as provided by law, in equity or by any mortgage,
security agreement or other document contemplated hereby. Nothing herein
contained is intended, nor shall it be construed, to preclude Bank from pursuing
any other remedy for the recovery of any other sum to which Bank may be or
become entitled for the breach of this Agreement by Companies.
10.7 Upon the occurrence and during the continuance of any Event of
Default, Companies shall immediately upon demand by Bank deposit with Bank cash
collateral in the amount equal to the maximum amount available to be drawn at
any time under any Letter of Credit then outstanding.
11. MISCELLANEOUS
11.1 This Agreement shall be binding upon and shall inure to the benefit of
Companies and Bank and their respective successors and assigns, except that the
credit provided for under this Agreement and no part thereof and no obligation
of Bank hereunder shall be assignable or otherwise transferable by any
Companies.
11.2 Companies shall pay all closing costs and expenses, including, by way
of description and not limitation, reasonable outside attorney fees, lien search
fees, and title policy fees incurred by Bank in connection with the commitment,
consummation and closing of this Agreement. All costs, including reasonable
attorney fees incurred by Bank in protecting or enforcing any of its or any of
the Bank's rights against Companies or any collateral or in defending Bank from
any claims or liabilities by any party or otherwise incurred by Bank in
connection with an event of default or the enforcement of this Agreement or the
related documents, including by way of description and not limitation, such
charges in any court or bankruptcy proceedings or arising out of any claim or
action by any person against Bank which would not have been asserted were it not
for Bank's relationship with Companies hereunder, shall also be paid by
Companies.
11.3 Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP, consistently applied.
11.4 No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the
exercise of any other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have.
11.5 All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given (i) if
physically delivered, (ii) three (3) business days after having been deposited
in the United States Mail, as certified mail with return receipt requested and
with postage prepaid, or (iii) one (1) business day after having been
transmitted to a third party providing delivery services in the ordinary course
of business which guarantees delivery on the next business day after such
transmittal (e.g., via Federal Express), all of which notices or other
communications shall be addressed to the recipient as follows:
To Companies:
Arcadia Services, Inc.
00000 Xxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, XX
To Bank:
Comerica Bank
000 XX Xxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attention: MMBI-Florida; Xxxxxx X. Xxxxxxxxx
11.6 This Agreement and the Note have been delivered at Detroit, Michigan,
and shall be governed by and construed and enforced in accordance with the laws
of the State of Michigan. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
11.7 No amendments or waiver of any provisions of this Agreement nor
consent to any departure by Companies therefrom shall in any event be effective
unless the same shall be in writing and signed by the Bank and Companies, and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No amendment, waiver or
consent with respect to any provision of this Agreement shall affect any other
provision of this Agreement.
11.8 All sums payable by Companies to Bank under this Agreement or the
other documents contemplated hereby shall be paid directly to Bank at its
principal office set forth in Section 11.5 hereof in immediately available
United States funds, without set off, deduction or counterclaim. In its sole
discretion, Bank may charge any and all deposit or other accounts (including
without limit an account evidenced by a certificate of deposit) of each Company
with Bank for all or a part of any Indebtedness then due; provided, however,
that this authorization shall not affect Companies' obligation to pay, when due,
any Indebtedness whether or not account balances are sufficient to pay amounts
due.
11.9 Any payment of the Indebtedness made by mail will be deemed tendered
and received only upon actual receipt by Bank at the address designated for such
payment, whether or not Bank has authorized payment by mail or any other manner,
and (subject to any grace period in Section 10.1(a)) shall not be deemed to have
been made in a timely manner unless received on the date due for such payment,
time being of the essence. Companies expressly assume all risks of loss or
liability resulting from non-delivery or delay of delivery of any item of
payment transmitted by mail or in any other manner. Acceptance by Bank of any
payment in an amount less than the amount then due shall be deemed an acceptance
on account only, and the failure to pay the entire amount then due shall be and
continue to be an Event of Default, and at any time thereafter and until the
entire amount then due has been paid, Bank shall be entitled to exercise any and
all rights conferred upon it herein upon the occurrence of an Event of Default.
Upon the occurrence and during the continuance of an Event of Default, Companies
waive the right to direct the application of any and all payments at any time or
times hereafter received by Bank from or on behalf of Companies. Upon the
occurrence and during the continuance of an Event of Default, Companies agree
that Bank shall have the continuing exclusive right to apply and to reapply any
and all payments received at any time or times hereafter against the
Indebtedness in such manner as Bank may deem advisable, consistent with the
terms hereof, notwithstanding any entry by Bank upon any of its books and
records. Companies expressly agree that to the extent that Bank receives any
payment or benefit and such payment or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other party under any
bankruptcy act, state or federal law, common law or equitable cause, then to the
extent of such payment or benefit, the Indebtedness or part thereof intended to
be satisfied shall be revived and continued in full force and effect as if such
payment or benefit had not been made and, further, any such repayment by Bank,
to the extent that Bank did not directly receive a corresponding cash payment,
shall be added to and be additional Indebtedness payable upon demand by Bank.
11.10 In the event Companies' obligation to pay interest on the principal
balance of the Note is or becomes in excess of the maximum interest rate which
Companies are permitted by law to contract or agree to pay, giving due
consideration to the execution date of this Agreement, then, in that event, the
rate of interest applicable shall be deemed to be immediately reduced to such
maximum rate and all previous payments in excess of such maximum rate shall be
deemed to have been payments in reduction of principal and not of interest.
11.11 This Agreement shall become effective upon the execution hereof by
Bank and Companies.
11.12 COMPANIES AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT, THE NOTES OR THE INDEBTEDNESS.
11.13 When used in this Agreement, the term "Companies" shall mean all or
any of them. The obligations and liabilities of Companies under this Agreement
are joint and several.
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK ARCADIA SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx _ By: /s/Xxxx X. Xxxxxxx, XX
------------------- ----------------------
Its:Senior Vice President Its: President
GRAYROSE, INC.
By: /s/Xxxx X. Xxxxxxx, XX
----------------------
Its: President
ARCADIA HEALTH SERVICES OF
MICHIGAN, INC.
By: /s/Xxxx X. Xxxxxxx, XX
----------------------
Its: President
ARCADIA HEALTH SERVICES, INC.
By: /s/Xxxx X. Xxxxxxx, XX
----------------------
Its: President
EXHIBIT "A"
REQUEST FOR ADVANCE
Pursuant to the Credit Agreement dated as of May 7, 2004 (herein called
"Agreement"), the undersigned, on behalf of the Companies, hereby requests
COMERICA BANK ("Bank") to make a(an) __________1 Advance to the Companies on
____________, 200_, in the amount of _________________________________ DOLLARS
($________) under the Revolving Credit Note dated May __, 2004 issued by the
Companies to Bank (herein called "Note"). The Interest Period for the requested
Advance, if applicable, shall be ___________2 months. The last day of the
Interest Period for the amounts being converted or refunded hereunder, if
applicable, is ________, 200_.
The undersigned, on behalf of the Companies, certifies that no event has
occurred or condition exists which constitutes, or with the passage of time
and/or giving of notice would constitute, a default under the Agreement or the
Note, and none will exist upon the making of the Advance requested hereunder.
The undersigned further certifies, on behalf of the Companies, that upon
advancing the sum requested hereunder, the aggregate principal amount
outstanding under the Note will not exceed the face amount thereof or any
advance formula applicable to Advances under such Note. If the amount advanced
to the Companies under the Note shall at any time exceed the face amount thereof
or any advance formula applicable to Advances under such Note, the Companies
will pay such excess amount on demand.
The undersigned, on behalf of the Companies, hereby authorizes said Bank to
disburse the proceeds of this Request for Advance by crediting the account of
with Bank separately designated by the Companies or as the undersigned, as agent
for the Companies, may otherwise direct, unless this Request for Advance is
being submitted for a conversion or refunding, in which case it shall refund or
convert that portion stated above of the existing outstandings under the Note.
Dated this ___day of ___________, 200_.
ARCADIA SERVICES, INC.
By: _____________________________________________________
Its: _____________________________________________________
EXHIBIT "B"
REVOLVING CREDIT NOTE
Detroit, Michigan
$12,000,000 May __, 2004
On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED,
Arcadia Services, Inc., a Michigan corporation, Arcadia Health Services, Inc., a
___________ corporation, Grayrose, Inc., a Michigan corporation, and Arcadia
Health Services of Michigan, Inc., a Michigan corporation (individually, a
"Company" and, collectively, the "Companies"), jointly and severally promise to
pay to the order of COMERICA BANK, a Michigan banking corporation (herein called
"Bank") at its Main Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, in lawful
money of the United States of America the indebtedness or so much of the sum of
Twelve Million Dollars ($12,000,000) as may from time to time have been advanced
and then be outstanding hereunder pursuant to the Credit Agreement dated as of
May 7, 2004, made by and between Companies and Bank (herein called "Agreement"),
together with interest thereon as hereinafter set forth.
Each of the Advances hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may be
made from time to time, subject to the terms and conditions of the Agreement.
This Note evidences borrowing under, is subject to, is secured in accordance
with, and may be matured under, the terms of the Agreement, to which reference
is hereby made. As additional security for this Note, Company grants Bank a lien
on all property and assets including deposits and other credits of the Company,
at any time in possession or control of or owing by Bank for any purpose.
Companies hereby waive presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agree that no obligation hereunder
shall be discharged by reason of any extension, indulgence, or forbearance
granted by any holder of this Note to any party now or hereafter liable hereon.
Any transferees of, or endorser, guarantor or surety paying this Note in full
shall succeed to all rights of Bank, and Bank shall be under no further
responsibility for the exercise thereof or the loan evidenced hereby. Nothing
herein shall limit any right granted Bank by other instrument or by law.
All capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Agreement.
ARCADIA SERVICES, INC.
By: _____________________________________
Its: _____________________________________
GRAYROSE, INC.
By: _____________________________________
Its: _____________________________________
ARCADIA HEALTH SERVICES OF MICHIGAN, INC.
By:_______________________________________
Its:
ARCADIA HEALTH SERVICES, INC.
By: _____________________________________
Its: _____________________________________
SCHEDULE 6.3
LITIGATION
Xxxxxx Xxxxxx filed a Charge of Discrimination on 6/10/03 with the St.
Petersburg Community Affairs Department based on discrimination for sex, female
and race, black. The case is being handled by Xxxxx X. Xxxxx of Xxxxx, Scham,
Saretsky, P.C. Xx. Xxxxx believes the claim is completely lacking in merit
(complainant was replaced by an Afro-American female).
SCHEDULE 6.5
ERISA PLANS
None
SCHEDULE 6.8
SUBSIDIARIES
Arcadia Services, Inc. is the parent to the following wholly owned subsidiaries:
Arcadia Health Services, Inc.
Arcadia Health Services of Michigan, Inc.
Grayrose, Inc.
Arcadia Staff Resources, Inc.
ASR Staffing, Inc.
Arcadia Employee Services, Inc.
Arcadia Medical Products, Inc.
SCHEDULE 6.16
LOCATIONS OF TANGIBLE PERSONAL PROPERTY
----------------------- ------------------------------------ -------------- ---------------------------------------
Company Locations of Tangible Owned or If Leased, Name of Lessor
Personal Property Leased?
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Services, Inc. 00000 Xxxxxxx Xxxx Xxxx., Xxxxx 000 Leased Gateway Office Associates Limited
Xxxxxxxxxx, XX 00000 Partnership
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc. 000 Xxxxx Xxxxxxxx Xxxx, Xxxxx Leased JFC Sales Company, LP
125,
Xxxxxx Xxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc. 0000 Xxxxx Xxxxx, Xxxxx X Leased Xxxxxxxxxx Real Properties
Xxxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc. 00000 Xxxxxxxx Xxxx, Xxxxx 000, Leased Xxxxxxx Partnership II
Xxxxxxx Xxx., XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Staff 000 Xxxxx Xxxxxxx Xxxxxx, Complex Leased The City of Xxxxxxx and Enterprise
Resources, Inc. 8718 Group of Jackson, Inc.
Xxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc. 000 Xxxxx Xxxxxxx, Xxxxx 0 Leased DTN Management
Xxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Staff 0000 X. Xxxxxxxx, Xxxxx X Leased M.R. Management Company
Resources, Inc. Xxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Xxxxx Block to Provide 00000 Xxxxxxxxxx Xxxx Leased Xxxxx Block to Provide
Xxxxxxx Xxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Staff 00000 Xxxxxxxxxx Xxxx Leased Watershed LLC
Resources, Inc. Xxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc. 00000 Xxxxxx Xxxx Leased BGM Properties, LLC
Xxxxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health 000 Xxxx Xxxx., Xxxxx 000X Leased Mart/Hotel Limited Partnership
Services, Inc. Xxxxxxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health 0000 XxXxxxxx Xxxx, Xxxxx 000, Leased XxXxxxx Northland, LLC
Services, Inc. Xxxxxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health 0000 Xxxxx Xxxx, Xxxxx 0 Leased Xxxxxx Xxxx and Bartlett Realty
Services, Inc. Xxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health 0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Leased Yarico, Inc.
Services, Inc. Xxxxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health 000 Xxxxxxxxxxxx Xxxx., Xxxxx 000, Leased Horizon Investment Co.
Services, Inc. Xxxxxxxx Xxxxx, XX 00000
----------------------- ------------------------------------ -------------- ---------------------------------------
SCHEDULE 8.6
LIENS
None
SCHEDULE 6.10
ENVIRONMENTAL MATTERS
None
