EXHIBIT 10.44
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of May 1, 1998
Between
HEALTH RISK MANAGEMENT, INC.
and
U.S. BANK NATIONAL ASSOCIATION
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT
(this "Agreement"), dated as of May 1, 1998, is by and between HEALTH RISK
MANAGEMENT, INC., a Minnesota corporation (the "Borrower"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association (the "Bank"). This document
amends and restates in its entirety a Revolving Credit and Term Loan Agreement
dated as of June 24, 1994, as thereafter amended (the "Existing Agreement").
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. In addition to the terms defined elsewhere
in this Agreement, the following terms shall have the following respective
meanings (and such meanings shall be equally applicable to both the singular and
plural form of the terms defined, as the context may require):
"Advance": The portion of the outstanding Loans bearing interest at an
identical rate for an identical Interest Period, provided that all Reference
Rate Advances shall be deemed a single Advance. An Advance of the Term Loans may
be a "Quoted Rate Advance" or a "Reference Rate Advance" (each, a "type" of
Advance). The Revolving Credit Loans shall be Reference Rate Advances at all
times. Subject to the further agreement of the Bank and the Borrower as
described in Section 2.2(f), the Revolving Credit Loans and Term Loans may be
"CD Rate Advances" and "Eurodollar Advances".
"Adverse Event": The occurrence of any event that could have a material
adverse effect on the business, operations, property, assets or condition
(financial or otherwise) of the Borrower and the Subsidiaries as a consolidated
enterprise or on the ability of the Borrower or any other party obligated
thereunder to perform its obligations under the Loan Documents.
"Agreement": This Amended and Restated Revolving Credit and Term Loan
Agreement, as it may be amended, modified, supplemented, restated or replaced
from time to time.
"Average Maturity Period": The weighted average time to scheduled
maturity of all Term Loan principal prepaid at any one time. Average Maturity
Period shall be computed by multiplying the dollar amount of each installment of
Term Loan principal prepaid by the number of days until the scheduled maturity
of that installment, adding together the resulting products and dividing the
resulting sum by the total dollar amount of the principal being prepaid.
"Business Day": Any day (other than a Saturday, Sunday or legal holiday
in the State of Minnesota) on which national banks are permitted to be open in
Minneapolis, Minnesota and, with respect to Eurodollar Advances, a day on which
dealings in Dollars may be carried on by the Bank in the interbank eurodollar
market.
"Capital Expenditure": Any amount debited to the fixed asset account on
the consolidated balance sheet of the Borrower in respect of (a) the acquisition
(including, without limitation, acquisition by entry into a Capitalized Lease),
construction, improvement, replacement or betterment of land, buildings,
machinery, equipment or of any other fixed assets or leaseholds, and (b) to the
extent related to and not included in (a) above, materials, contract labor and
direct labor (excluding expenditures properly chargeable to repairs or
maintenance in accordance with GAAP).
"Capitalized Lease": Any lease which is or should be capitalized on the
books of the lessee in accordance with GAAP.
"CD Assessment Rate": The annual assessment rate (rounded upward, if
necessary, to the nearest 1/100th of 1%) actually incurred by the Bank during a
given Interest Period to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's insuring of time deposits at offices of the
Bank in the United States, as adjusted as hereinafter provided. If the annual
assessment rate for the Federal Deposit Insurance Corporation's (or any
successor's) insuring such time deposits is scheduled to change during such
Interest Period, the CD Assessment Rate for such Interest Period shall be the
weighted average (rounded upward, if necessary, to the nearest 1/100th of 1%) of
the annual assessment rates in effect at the beginning and as of such change.
"CD Rate": The rate of interest determined by the Bank for the relevant
Interest Period to be the average (rounded upward, if necessary, to the nearest
1/100th of 1%) of the rates quoted to the Bank at approximately 8:00 a.m.,
Minneapolis time (or as soon thereafter as practicable), or at the option of the
Bank at approximately the time of the request for a CD Rate Advance if such
request is made later than 8:00 a.m., Minneapolis time, in each case on the
first day of the applicable Interest Period by certificate of deposit dealers
selected by the Bank, in its sole discretion, for the purchase from the Bank, at
face value, of certificates of deposit issued by the Bank in an amount and
maturity comparable to the amount and maturity of the requested CD Rate Advance,
or at the option of the Bank determined for such amount and maturity based on
published composite quotations of certificate of deposit rates.
"CD Rate Advance": An Advance designated as such in a notice of
borrowing under Section 2.2(f)(iii) or a notice of continuation or conversion
under Section 2.2(f)(iv).
"CD Rate (Reserve Adjusted)": A rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) calculated for the Interest Period of a
CD Rate Advance in accordance with the following formula:
CDRA = CD Rate + CDAR
------------
1.00 - CDRR
In such formula, "CDAR" means "CD Assessment Rate", "CDRA" means "CD Rate
(Reserve Adjusted)" and "CDRR" means "CD Reserve Rate", in each instance
determined by the Bank for the applicable Interest Period. The Bank's
determination of all such rates for any Interest Period shall be conclusive in
the absence of manifest error.
"CD Reserve Rate": A percentage equal to the daily average during such
Interest Period of the aggregate maximum reserve requirements (including all
basic, supplemental, marginal and other reserves), as specified under Regulation
D of the Federal Reserve Board, or any other applicable regulation that
prescribes reserve requirements applicable to non-personal time deposits (as
presently defined in Regulation D) with the Bank or applicable to extensions of
credit by the Bank the rate of interest on which is determined with regard to
rates applicable to non-personal time deposits. Without limiting the generality
of the foregoing, the CD Reserve Requirement shall reflect any reserves required
to be maintained by the Bank against (i) any category of liabilities that
includes deposits by reference to which the CD Rate is to be determined, or (ii)
any category of extensions of credit or other assets that includes CD Advances.
"Code": The Internal Revenue Code of 1986, as amended, or any successor
statute, together with regulations thereunder.
"Commitment": The agreement of the Bank to make Loans to the Borrower
subject to the terms and conditions of this Agreement.
"Consolidated Fixed Charge Coverage Ratio": For any period of
determination, the ratio of:
(a) the remainder of (i) EBITDA for such period, less (ii) 50% of
consolidated Capital Expenditures during such period, and less (iii)
cash taxes paid during such period;
to
(b) the sum of (i) consolidated interest expense during such period,
plus (ii) scheduled payments of principal of interest-bearing
Indebtedness during such period.
"Consolidated Operating Income": For any period of determination, the
consolidated net income of the Borrower and its Subsidiaries as determined in
accordance with GAAP, excluding therefrom (to the extent included): (a)
non-operating gains (including, without limitation, extraordinary or
nonrecurring gains, gains from the discontinuance of operations and gains
arising from the sale of assets other than inventory) during the applicable
period; and (b) similar non-operating losses during such period.
"Consolidated Tangible Net Worth": As of any date of determination, the
sum of the amounts set forth on the consolidated balance sheet of the Borrower
as the sum of the common stocks, preferred stock, additional paid-in capital and
retained earnings of the Borrower (excluding treasury stock), less the book
value of all assets of the Borrower and its Subsidiaries that would be treated
as intangibles under GAAP, including, without limitation, all such items as
goodwill, trademarks, trade names, service marks, copyrights, patents, licenses,
unamortized debt discount and unamortized deferred charges.
"Default": Any event which, with the giving of notice to the Borrower
or lapse of time, or both, would constitute an Event of Default.
"EBITDA": For any period of determination, the consolidated net income
of the Borrower and its Subsidiaries before provision for income taxes, interest
expense (including, without limitation, implicit interest expense on Capitalized
Leases), depreciation and amortization, all as determined in accordance with
GAAP, excluding therefrom (to the extent included): (a) non-operating gains
(including, without limitation, extraordinary or nonrecurring gains, gains from
the discontinuance of operations and gains arising from the sale of assets other
than inventory) during the applicable period; and (b) similar non-operating
losses during such period.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended, and any successor statute, together with regulations thereunder.
"ERISA Affiliate": Any trade or business (whether or not incorporated)
that is a member of a group of which the Borrower is a member and which is
treated as a single employer under Section 414 of the Code.
"Eurodollar Advance": An Advance designated as such in a notice of
borrowing under Section 2.2(f)(iii) or a notice of continuation or conversion
under Section 2.2(f)(iv).
"Eurodollar Interbank Rate": The average offered rate for deposits in
United States Dollars (rounded upwards, if necessary, to the nearest 1/16 of 1%)
for delivery of such deposits on the first day of an Interest Period of a
Eurodollar Advance, for the number of days comprised therein, which appears on
the Reuters Screen LIBO Page as of 11:00 a.m., London time (or such other time
as of which such rate appears) on the day that is two Business Days preceding
the first day of the Interest Period or the rate for such deposits determined by
the Bank at such time based on such other published service of general
application as shall be selected by the Bank for such purpose; provided, that in
lieu of determining the rate in the foregoing manner, the Bank may determine the
rate based on rates offered to the Bank for deposits in United States Dollars
(rounded upwards, if necessary, to the nearest 1/16 of 1%) in the interbank
eurodollar market at such time for delivery on the first day of the Interest
Period for the number of days comprised therein. "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuter Monitor Money Rates
Service (or such other page as may replace the LIBO Page on that service for the
purpose of displaying London interbank offered rates of major banks for United
States Dollar deposits).
"Eurodollar Rate (Reserve Adjusted)": A rate per annum (rounded upward,
if necessary, to the nearest 1/16th of 1%) calculated for the Interest Period of
a Eurodollar Advance in accordance with the following formula:
ERRA = Eurodollar Interbank Rate
---------------------------
1.00 - ERR
In such formula, "ERR" means "Eurodollar Reserve Rate" and "ERRA" means
"Eurodollar Rate (Reserve Adjusted)", in each instance determined by the Bank
for the applicable Interest Period. The Bank's determination of all such rates
for any Interest Period shall be conclusive in the absence of manifest error.
"Eurodollar Reserve Rate": A percentage equal to the daily average
during such Interest Period of the aggregate maximum reserve requirements
(including all basic, supplemental, marginal and other reserves), as specified
under Regulation D of the Federal Reserve Board, or any other applicable
regulation that prescribes reserve requirements applicable to Eurocurrency
liabilities (as presently defined in Regulation D) or applicable to extensions
of credit by the Bank the rate of interest on which is determined with regard to
rates applicable to Eurocurrency liabilities. Without limiting the generality of
the foregoing, the Eurocurrency Reserve Requirement shall reflect any reserves
required to be maintained by the Bank against (i) any category of liabilities
that includes deposits by reference to which the Eurodollar Interbank Rate is to
be determined, or (ii) any category of extensions of credit or other assets that
includes Eurodollar Advances.
"Event of Default": Any event described in Section 9.1.
"Federal Reserve Board": The Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP": Generally accepted accounting principles as applied in the
preparation of the audited financial statements of the Borrower referred to in
Section 6.5.
"Government Yield": As of any date of determination, the yield
(converted as necessary to the equivalent semi-annual compound rate) on U.S.
Treasury securities having a maturity date closest to the Average Maturity
Period, as published in The Wall Street Journal (or, if not so published, as
determined by the Bank by using the average of quotes obtained by the Bank from
three primary dealers that market U.S. Treasury securities in the secondary
market). "U.S. Treasury securities" means actively traded U.S. Treasury bonds,
bills and notes and, if more than one issue of U.S. Treasury securities is
scheduled to mature at or about the time of the scheduled maturity of the
applicable Term Note, then to the extent possible the U.S. Treasury security
issued most recently prior to the date of determination will be chosen as the
basis of the Government Yield.
"Indebtedness": Without duplication, all obligations, contingent or
otherwise, which in accordance with GAAP should be classified upon the obligor's
balance sheet as liabilities, but in any event including the following (whether
or not they should be classified as liabilities upon such balance sheet): (a)
obligations secured by any mortgage, pledge, security interest, lien, charge or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the obligation secured thereby shall have been assumed and
whether or not the obligation secured is the obligation of the owner or another
party; (b) any obligation on account of deposits or advances; (c) any obligation
for the deferred purchase price of any property or services, except trade
accounts payable not due more than 90 days after invoice and not evidenced by a
note, (d) any obligation as lessee under any Capitalized Lease; (e) all
guaranties, endorsements and other contingent obligations in respect to
Indebtedness of others; and (f) undertakings or agreements to reimburse or
indemnify issuers of letters of credit. For all purposes of this Agreement, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer.
"Interest Differential": As of the date of any full or partial
prepayment of a Term Loan, the Note Rate minus the sum of the Government Yield
as of the date of prepayment and the Issuance Spread.
"Interest Period" Either (a) for any Eurodollar Advance, the period
commencing on the borrowing date of such Eurodollar Advance or the date a CD
Rate Advance or a Reference Rate Advance is converted into such Eurodollar
Advance, or the last day of the preceding Interest Period for such Eurodollar
Advance, as the case may be, and ending on the numerically corresponding day
one, two, three or six months thereafter, as selected by the Borrower pursuant
to Section 2.2(f)(iii) or Section 2.2(f)(iv); provided, that:
(i) any Interest Period which would otherwise end on a day which is not
a Business Day shall end on the next succeeding Business Day unless
such next succeeding Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding
Business Day;
(ii) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period;
(iii) no Interest Period shall extend beyond the Revolving Termination
Date; and
(iv) Interest Periods shall not be chosen for Advances under the Term
Loan that would require payment of any amount of any Advance prior to
the last day of the Interest Period in order to pay an installment of
the Term Loan when due; and
(b) for any CD Rate Advance, the period commencing on the borrowing date of such
CD Rate Advance or the date a Eurodollar Advance or a Reference Rate Advance is
converted into such CD Rate Advance, or the last day of the preceding Interest
Period for such CD Rate Advance, as the case may be, and ending 30, 60, 90 or
180 days thereafter, as selected by the Borrower pursuant to Section 2.2(f)(iii)
or Section 2.2(f)(iv); provided, that:
(i) any Interest Period which would otherwise end on a day which is not
a Business Day shall end on the next succeeding Business Day;
(ii) no Interest Period shall extend beyond the Revolving Termination
Date; and
(iv) Interest Periods shall not be chosen for Advances under the Term
Loan that would require payment of any amount of any Advance prior to
the last day of the Interest Period in order to pay an installment of
the Term Loan when due.
"Investment": The acquisition, purchase, making or holding of any stock
or other security, any loan, advance, contribution to capital, extension of
credit (except for trade and customer accounts receivable for inventory sold or
services rendered in the ordinary course of business and payable in accordance
with customary trade terms), any acquisitions of real or personal property
(other than real and personal property acquired in the ordinary course of
business) and any purchase or commitment or option to purchase stock or other
debt or equity securities of or any interest in another Person or any integral
part of any business or the assets comprising such business or part thereof.
"Issuance Spread": the percent per annum by which the Bank's cost of
funds exceeds the Government Yield as of the date of the applicable Term Note as
determined by the Bank in its sole discretion.
"Lien": Any security interest, mortgage, pledge, lien, hypothecation,
judgment lien or similar legal process, charge, encumbrance, title retention
agreement or analogous instrument or device (including, without limitation, the
interest of the lessors under Capitalized Leases and the interest of a vendor
under any conditional sale or other title retention agreement).
"Loan Documents": This Agreement, the Notes, the Security Agreement and
each other instrument, document, guaranty, security agreement, mortgage, or
other agreement executed and delivered by the Borrower or any guarantor or party
granting security interests in connection with this Agreement, the Loans or any
collateral for the Loans.
"Loans": The Revolving Loans and the Term Loans.
"Notes": The Revolving Note and the Term Notes.
"Payment Date": (a) The last day of each month for interest on the
Loans that are Reference Rate Advances or Quoted Rate Advances; (b) the last day
of each Interest Period for each CD Rate Advance and Eurodollar Advance and, if
such Interest Period is in excess of 90 days (in the case of a CD Rate Advance)
or three months (in the case of a Eurodollar Advance), the day 90 days or three
months, as the case may be, after the first day of such Interest Period; and (c)
the last day of each March, June, September and December for Commitment Fees.
"PBGC": The Pension Benefit Guaranty Corporation, established pursuant
to Subtitle A of Title IV of ERISA, and any successor thereto or to the
functions thereof.
"Person": Any natural person, corporation, partnership, joint venture,
firm, association, trust, unincorporated organization, government or
governmental agency or political subdivision or any other entity, whether acting
in an individual, fiduciary or other capacity.
"Plan": An employee benefit plan or other plan, maintained for
employees of the Borrower or of any ERISA Affiliate, and subject to Title IV of
ERISA or Section 412 of the Code.
"Quoted Rate": The fixed rate of interest offered by the Bank and
accepted by the Borrower for a particular Term Loan, as provided in Section 2.2.
The Bank shall, at its discretion, determine the offered rate with reference to
the amount and amortization schedule of the applicable Term Loan, funding rates
available to the Bank, reserve requirements, premiums, insurance costs, profit
margin and other factors deemed relevant by the Bank.
"Quoted Rate Advance": A particular Term Loan agreed by the Borrower
and the Bank to be a Quoted Rate Advance, as described in Section 2.2(e).
"Reference Rate": The rate of interest from time to time publicly
announced by the Bank as its "reference rate." The Bank may lend to its
customers at rates that are at, above or below the Reference Rate. For purposes
of determining any interest rate which is based on the Reference Rate, such
interest rate shall change on the effective date of any change in the Reference
Rate.
"Reference Rate Advance": An Advance described as such in a notice of
borrowing under Section 2.1(d) or Section 2.2(e).
"Related Party": Any Person (other than a Subsidiary): (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Borrower, (b) which
beneficially owns or holds 5% or more of the equity interest of the Borrower; or
(c) 5% or more of the equity interest of which is beneficially owned or held by
the Borrower or a Subsidiary. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Reportable Event": A reportable event as defined in Section 4043 of
ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation has waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and Section 302 of ERISA shall be a
reportable event regardless of the issuance of any such waivers in accordance
with Section 412(d) of the Code.
"Revolving Credit Commitment": The maximum unpaid principal amount of
Loans which may from time to time be outstanding hereunder, being initially
$10,000,000, as the same may be reduced from time to time pursuant to Section
2.2(a) and Section 4.3 and, as the context may require, the agreement of the
Bank to make Revolving Loans to the Borrower subject to the terms and conditions
of this Agreement.
"Revolving Loans": The Loans described in Section 2.1(a).
"Revolving Note": The promissory notes of the Borrower described in
Section 2.1(b), substantially in the form of Exhibit A, as such promissory notes
may be amended, modified or supplemented from time to time, and such term shall
include any substitutions for, or renewals of, such promissory notes.
"Revolving Termination Date": The earliest of (a) January 31, 1999; (b)
the date on which the Revolving Loan Commitment is terminated pursuant to
Section 9.2 hereof; (c) the date on which the Revolving Loan Commitment is
reduced to zero pursuant to Section 4.3 hereof; or (d) the date on which any
Revolving Loan or any Term Loan is accelerated.
"Subsidiary": Any Person of which or in which the Borrower and its
other Subsidiaries own directly or indirectly 50% or more of: (a) the combined
voting power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such Person, if
it is a corporation, (b) the capital interest or profit interest of such Person,
if it is a partnership, joint venture or similar entity, or (c) the beneficial
interest of such Person, if it is a trust, association or other unincorporated
organization.
"Term Loans": The Tranche A Term Loans, Tranche B Term Loan and Tranche
C Term Loan.
"Term Notes": Each promissory note of the Borrower described in Section
2.2(b), substantially in the form of Exhibit ▇-▇, ▇-▇ and B-3, as such
promissory notes may be amended, modified or supplemented from time to time, and
such term shall include any substitutions for, or renewals of, such promissory
notes.
"Tranche A Term Loans": The Loans described in Section 2.2(a)(i).
"Tranche B Term Loan": The Loan described in Section 2.2(a)(ii).
"Tranche C Term Loan": The Loan described in Section 2.2(a)(iii).
Section 1.2 Accounting Terms and Calculations. Except as may be
expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder (including,
without limitation, determination of compliance with financial ratios and
restrictions in Articles VIII and IX hereof) shall be made in accordance with
GAAP consistently applied. Any reference to "consolidated" financial terms shall
be deemed to refer to those financial terms as applied to the Borrower and its
Subsidiaries in accordance with GAAP.
Section 1.3 Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until" each means "to but excluding."
Section 1.4 Other Definitional Terms. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, schedules and like references are
to this Agreement unless otherwise expressly provided.
ARTICLE II TERMS OF LENDING
Subject to the terms and conditions hereof and in reliance upon the
warranties of the Borrower herein, the Bank agrees:
2.1 The Revolving Loans.
(a) Revolving Loans. To make a loan or loans (each, a
"Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower from time to time from the date hereof until the Revolving
Termination Date, during which period the Borrower may repay and
reborrow in accordance with the provisions hereof, provided, that the
aggregate unpaid principal amount of all outstanding Revolving Loans
shall not exceed the amount of the Revolving Credit Commitment at any
time.
(b) Revolving Note. The Revolving Loans shall be evidenced by
a promissory note of the Borrower (the "Revolving Note"), substantially
in the form of Exhibit A hereto, in the amount of the Revolving
Commitment originally in effect. The Bank shall enter in its records
the amount of the Advance comprising the Revolving Loan, the rate of
interest borne by such Advance and the payments of each Revolving Note,
and such records shall be conclusive evidence of the subject matter
thereof, absent manifest error.
(c) Advance Options and Increment. The Revolving Loan shall at
all times be Reference Rate Advances, subject to the agreement of the
Bank and the Borrower to permit CD Rate Advances and Eurodollar
Advances, as described in Section 2.2(f). Each Revolving Loan shall be
in a minimum amount of $100,000 and in an integral multiple of $50,000.
(d) Borrowing Procedures for Revolving Loans. Any request by
the Borrower for a Revolving Loan shall be in writing, or by telephone
promptly confirmed in writing, and must be given so as to be received
by the Bank not later than 12:00 noon, Minneapolis time, on the date of
the requested Loan. Unless the Bank determines that any applicable
condition specified in Article VI has not been satisfied, the Bank will
make the amount of the requested Revolving Loan available to the
Borrower at the Bank's principal office in Minneapolis, Minnesota on
the date requested.
Section 2.2. The Term Loans.
(a) Term Loans. To make:
(i) the Tranche A Term Loans to the Borrower from time to time
from the date hereof until the Revolving Termination Date,
which Tranche A Term Loans shall be applied to reduce
outstanding Revolving Loans. The amount of any Tranche A Term
Loan shall permanently reduce the Revolving Credit Commitment.
Each Tranche A Term Loan shall be in a minimum amount of
$250,000 and in an integral multiple thereof. The aggregate
amount of all Tranche A Term Loans made by the Bank shall not
exceed $5,000,000. Up to 3 total Tranche A Term Loans may be
made, and the Bank shall establish separate amortization
schedules for each Tranche A Term Loan, as described in
Section 4.1(b).
(ii) to continue the Term Loan made under the Existing Credit
Agreement, currently in the principal amount of $654,999.85,
as the Tranche B Term Loan hereunder.
(iii) to continue an amount of $2,566,666.66 of the Revolving
Loans made under the Existing Credit Agreement as the Tranche
C Term Loan hereunder.
(b) Term Notes. The Tranche A Term Loans, Tranche B Term Loan and
Tranche C Term Loan shall be evidenced by promissory notes of the
Borrower (the "Term Notes"), substantially in the form of Exhibits ▇-▇,
▇-▇ and B-3 respectively.
(c) Advance Options. Each Term Loan shall be constituted of either a
Quoted Rate Advance or a Term Reference Rate Advance, Advances, subject
to the agreement of the Bank and the Borrower to permit CD Rate
Advances and Eurodollar Advances, as described in Section 2.2(f), as
shall be selected by the Borrower, and shall not be convertible into
another type of Advance except as otherwise provided herein.
(d) Borrowing Procedures for Tranche A Term Loans. Any request by the
Borrower for a Tranche A Term Loan shall be in writing, or by telephone
promptly confirmed in writing, and must be given so as to be received
by the Bank not later than 12:00 noon, Minneapolis time, on the date of
the requested Loan. Each request for a Tranche A Term Loan shall
specify (i) the borrowing date (which shall be a Business Day), (ii)
the amount of such Tranche A Term Loan and whether the Borrower
requests the Bank to offer a Quoted Rate for such Tranche A Term Loan.
Unless the Bank determines that any applicable condition specified in
Article VI has not been satisfied, the Bank will apply the amount of
the requested Tranche A Term Loan to the outstanding Revolving Credit
Loans.
(e) Additional Procedures for Quoted Rate Advances. The Borrower may
from time to time request rate quotations from the Bank for a Quoted
Rate to apply to any Term Loan, The Borrower shall have a one-time
option to convert any Term Loan to a Quoted Rate Advance (in its
entirety), based on the Bank's quotation of an applicable Quoted Rate
and the Borrower's acceptance of such Quoted Rate for such Term Loan.
The Bank's records concerning the applicable Quoted Rate, and
concerning whether a Term Loan shall be a Quoted Rate Advance shall be
conclusive. In the absence of mutual agreement to a Quoted Rate to
apply to any Term Loan, such Term Loan shall be a Reference Rate
Advance (except as provided in Section 2.2(f) below).
(f) Eurodollar and CD Advances.
(i) Upon request of the Borrower, the Bank may agree, at its sole
discretion, to make CD Rate Advances and Eurodollar Advances available
hereunder, and upon written notice by the Bank to the Borrower, the
Borrower may elect to have the Revolving Loans and Term Loans made as
such Advance or converted into such Advances. The definitions and other
provisions pertaining to CD Rate Advances and Eurodollar Advances shall
not be given effect hereunder unless and until the Bank shall provide
such written notice. Notwithstanding this Section 2.2(f), if any Term
Loan is converted into a Quoted Rate Advance as provided in Section
2.2(e), it may not thereafter be converted into a CD Rate Advance or
Eurodollar Advance. Upon agreement to make such Advance available, the
Bank and the Borrower shall also agree upon an interest margin to apply
to the CD Rate Advance and the Eurodollar Advances, and such margin
(the "Applicable Margin") shall be set forth in the written notice by
the Bank contemplated hereby.
(ii) The total of outstanding CD Rate Advances and Eurodollar Advances
shall not exceed 10 at any one time. Each CD Rate Advance or Eurodollar
Advance shall be in a minimum amount of $100,000 or in an integral
multiple of $100,000 above such amount.
(iii) Any request by the Borrower for a CD Rate Advance or Eurodollar
Advance must be given so as to be received by the Bank not later than:
(1) 10:00 a.m., Minneapolis time, on the date of the requested
Loan, if the Revolving Loan shall be comprised of CD Rate
Advances; or
(2) 10:00 a.m., Minneapolis time, two Business days prior to
the date of the requested Revolving Loan, if the Loan shall
be, or shall include, a Eurodollar Advance.
Each such request shall specify (i) the borrowing date (which shall be
a Business Day), (ii) the amount of such Loan and the type or types of
Advances comprising such Loan, and (iii) the initial Interest Periods
for such Advances.
(iv) The Borrower may elect to (i) continue any outstanding CD Rate
Advance or Eurodollar Advance from one Interest Period into a
subsequent Interest Period to begin on the last day of the earlier
Interest Period, or (ii) convert any outstanding Advance into another
type of Advance (on the last day of an Interest Period only, in the
instance of a CD Rate Advance or Eurodollar Advance), by giving the
Bank notice in writing, or by telephone promptly confirmed in writing,
given so as to be received by the Bank not later than:
(1) 10:00 a.m., Minneapolis time, on the date of the requested
continuation or conversion, if the continuing or converted
Advance shall be a CD Rate Advance; or
(b) 10:00 a.m., Minneapolis time, two Business days prior to
the date of the requested continuation or conversion, if the
continuing or converted Advance shall be a Eurodollar Advance.
Each notice of continuation or conversion of an Advance shall specify
(i) the effective date of the continuation or conversion date (which
shall be a Business Day), (ii) the amount and the type or types of
Advances following such continuation or conversion, and (iii) the
Interest Periods for such Advances. Absent timely notice of
continuation or conversion, each CD Rate Advance and Eurodollar Advance
shall automatically convert into a Reference Rate Advance on the last
day of an applicable Interest Period, unless paid in full on such last
day. No Advance shall be continued as, or converted into, a CD Rate
Advance or a Eurodollar Advance if the shortest Interest Period for
such Advance may not transpire prior to the Revolving Termination Date
(for a Revolving Loan) or the date due (for the Term Loan) or if a
Default or Event of Default shall exist.
Section 2.3 Funding Losses. The Borrower will indemnify the Bank upon
demand against any loss or expense which the Bank may sustain or incur
(including, without limitation, any loss or expense sustained or incurred in
obtaining, liquidating or employing deposits or other funds acquired to effect,
fund, or maintain any Advance) as a consequence of any payment (including,
without limitation, any payment pursuant to Section 4.2 or 9.2) of a Quoted Rate
Advance or any portion thereof on a date other than the date the Quoted Rate
Advance, or such portion, shall be due. For purposes of calculating the funding
loss applicable to any Quoted Rate Advance, if at the time of any prepayment of
a Quoted Rate Advance (whether voluntary or involuntary, and specifically
including but not limited to any payment prior to scheduled maturity following
acceleration of any Term Note), the Interest Differential is greater than zero,
the Borrower shall pay to the Bank a prepayment premium equal to the present
value (determined in accordance with standard financial practice) of the product
of the Interest Differential times the amount prepaid times the Average Maturity
Period. The amount of the prepayment premium shall be calculated as follows: The
amount prepaid shall be multiplied by (a) the Interest Differential, times (b) a
fraction, the numerator of which is the number of days in the Average Maturity
Period and the denominator of which is 360. The resulting product shall then be
divided by the number of whole months (using a thirty-day month) in the Average
Maturity Period, yielding a quotient (the "Quotient"). The amount of the
prepayment premium shall be the present value (determined in accordance with
standard financial practice) on the date of prepayment (using the Government
Yield as of the date of such prepayment as the discount factor) of a stream of
equal monthly payments in number equal to the number of whole months (using a
thirty-day month) in the Average Maturity Period, with the amount of each
hypothetical monthly payment equal to the Quotient and with the first payment
payable thirty days after the date of prepayment. Because there is no readily
available index of rates payable on Quoted Rate Advances, nor any assurance that
the Bank could replace Quoted Rate Advances with a similar loan, the Borrower
and the Bank agree that changes in the yields on U.S. government securities
provide a reasonable approximation for changes in interest rates generally.
Determinations by the Bank for purposes of this Section 2.3 of the amount
required to indemnify the Bank shall be conclusive in the absence of manifest
error.
Section 2.4 Funding Losses - CD and Eurodollar Advances. The Borrower
will indemnify the Bank upon demand against any loss or expense which the Bank
may sustain or incur (including, without limitation, any loss or expense
sustained or incurred in obtaining, liquidating or employing deposits or other
funds acquired to effect, fund, or maintain any Advance) as a consequence of (i)
any failure of the Borrower to borrow, continue or convert a CD Rate Advance or
Eurodollar Advance on a date specified therefor in a notice thereof, or (iii)
any payment (including, without limitation, any payment pursuant to Section 4.2
or 9.2) of a CD Rate Advance or a Eurodollar Advance or any portion thereof on a
date other than the last day of the Interest Period for such Advance.
Determinations by the Bank for purposes of this Section 2.4 of the amount
required to indemnify the Bank shall be conclusive in the absence of manifest
error.
ARTICLE III INTEREST AND FEES
Section 3.1 Interest.
(a) Quoted Rate Advances. The unpaid principal amount of each Term Loan
that is a Quoted Rate Advance shall bear interest prior to maturity at
the Quoted Rate applicable to such Term Loan.
(b) Revolving Reference Rate Advances. The unpaid principal amount of
each Revolving Loan and each Term Loan that is not a Quoted Rate
Advance shall bear interest prior to maturity at a variable rate per
annum equal to the Reference Rate plus .375% per annum.
(c) CD Rate Advances. The unpaid principal amount of each CD Rate
Advance shall bear interest prior to maturity at a rate per annum equal
to the CD Rate (Reserve Adjusted) in effect for each Interest Period
for such CD Rate Advance plus the Applicable Margin.
(d) Eurodollar Advances. The unpaid principal amount of each Eurodollar
Advance shall bear interest prior to maturity at a rate per annum equal
to the Eurodollar Rate (Reserve Adjusted) in effect for each Interest
Period for such Eurodollar Advance plus the Applicable Margin.
(e) Past Due. Any amount of any Loan not paid when due, whether at the
date scheduled therefor or earlier upon acceleration, shall bear
interest until paid in full at a rate per annum equal to the sum of the
Reference Rate plus 2.375%, but not less than the rate applicable to
the Loan immediately before it became due.
Section 3.2 Commitment Fees. The Borrower shall pay to the Bank fees
(the "Commitment Fees") in an amount determined by applying a rate of 0.375% per
annum to the average daily unused amount of the Revolving Credit Commitment for
the period from the date hereof to the Revolving Termination Date. The
Commitment Fees shall be payable quarterly in arrears on the last day of each
quarter of the Borrower's fiscal year.
Section 3.3 Computation. Interest and Commitment Fees shall be computed
on the basis of actual days elapsed and a year of 360 days.
Section 3.4 Payment Dates. Accrued interest under Section 3.1 (a), (b),
(c) and (d) and Commitment Fees under Section 3.2 shall be payable on the
Payment Dates. Accrued interest under Section 3.1(e) shall be payable on demand.
Section 3.5 One-Time Fee. The Borrower shall, upon signing this
Agreement, pay to the Bank a one-time fee of $22,313.
ARTICLE IV PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION
OF THE CREDIT AND SETOFF
Section 4.1 Repayment.
(a) Revolving Loans. The Revolving Loans shall be due and payable on
the Revolving Termination Date.
(b) Tranche A Term Loans. Each Tranche A Term Loan shall be payable in
sixty installments of principal, each equal to 1/60th of the initial
principal amount of such Tranche A Term Loan, payable on the last day
of each month of each year, commencing on the first such day after the
making of the relevant Tranche A Term Loan, with the final such payment
equal to all outstanding principal.
(c) Tranche B Term Loan. The Tranche B Term Loan shall be payable in
installments of $43,667.67, payable on the last day of each month of
each year, commencing on the first such day after the date hereof, and
a final payment equal to all outstanding principal on June 30, 1999.
(d) Tranche C Term Loan. The Tranche C Term Loan shall be payable in
installments of $54,166.67, payable on the last day of each month of
each year, commencing on the first such day after the date hereof, and
a final payment equal to all outstanding principal on December 31,
2002.
Section 4.2 Optional Prepayments. The Borrower may, upon written or
telephonic notice received by the Bank, prepay the Loans, in whole or in part,
at any time subject to the provisions of Section 2.3 and 2.4, without any other
premium or penalty. Any such prepayment must be accompanied by accrued and
unpaid interest on the amount prepaid. Each partial prepayment shall be in a
minimum amount of $100,000. Each prepayment of a Term Loan shall be applied to
the unpaid installments of such Term Loan in the inverse order of its maturity.
Section 4.3 Optional Reduction or Termination of the Commitment. The
Borrower may, at any time, upon no less than 30 Business Days prior written or
telephonic notice received by the Bank, reduce the Revolving Credit Commitment,
with any such reduction in a minimum amount of $100,000 or an integral multiple
thereof. Upon any reduction in the Revolving Credit Commitment pursuant to this
Section, the Borrower shall pay to the Bank the amount, if any, by which the
aggregate unpaid principal amount of outstanding Loans exceeds the Revolving
Credit Commitment as so reduced, together with accrued and unpaid interest
thereon. Amounts so paid cannot be reborrowed. The Borrower may, at any time,
upon not less than 30 Business Days prior written notice to the Bank, terminate
the Revolving Credit Commitment in its entirety. Upon termination of the
Revolving Credit Commitment pursuant to this Section, the Borrower shall pay to
the Bank the full amount of all outstanding Revolving Loans, all accrued and
unpaid interest thereon, all unpaid Commitment Fees accrued to the date of such
termination and all other unpaid obligations of the Borrower to the Bank
hereunder. All payments described in this Section are subject to the provisions
of Section 2.3 and 2.4.
Section 4.4 Payments. Payments and prepayments of principal of, and
interest on, the Notes and all fees, expenses and other obligations under the
Loan Documents shall be made without set-off or counterclaim in immediately
available funds not later than 2:00 p.m., Minneapolis time, on the dates due at
the main office of the Bank in Minneapolis, Minnesota. Funds received on any day
after such time shall be deemed to have been received on the next Business Day.
Subject to the definition of the term "Interest Period", whenever any payment to
be made hereunder or on the Notes shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of any
interest or fees.
ARTICLE IVA ADDITIONAL PROVISIONS RELATING TO LOANS
Section 4A.1 Increased Costs. If, as a result of any law, rule,
regulation, treaty or directive, or any change therein or in the interpretation
or administration thereof, or compliance by the Bank with any request or
directive (whether or not having the force of law) from any court, central bank,
governmental authority, agency or instrumentality, or comparable agency:
(a) any tax, duty or other charge with respect to any Loan, the Notes
or the Commitment is imposed, modified or deemed applicable, or the
basis of taxation of payments to the Bank of interest or principal of
the Loans or of the Commitment Fees (other than taxes imposed on the
overall net income of the Bank by the jurisdiction in which the Bank
has its principal office) is changed;
(b) any reserve, special deposit, special assessment or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, the Bank is imposed, modified or deemed applicable;
(c) any increase in the amount of capital required or expected to be
maintained by the Bank or any Person controlling the Bank is imposed,
modified or deemed applicable; or
(d) any other condition affecting this Agreement or the Commitment is
imposed on the Bank or the relevant funding markets;
and the Bank determines that, by reason thereof, the cost to the Bank of making
or maintaining the Loans or the Commitment is increased, or the amount of any
sum receivable by the Bank hereunder or under the Notes in respect of any Loan
is reduced;
then, the Borrower shall pay to the Bank upon demand such additional amount or
amounts as will compensate the Bank (or the controlling Person in the instance
of (c) above) for such additional costs or reduction (provided that the Bank has
not been compensated for such additional cost or reduction in the calculation of
the CD Reserve Rate, the Eurodollar Reserve Rate or the CD Assessment Rate).
Determinations by the Bank for purposes of this Section 4A.1 of the additional
amounts required to compensate the Bank shall be conclusive in the absence of
manifest error. In determining such amounts, the Bank may use any reasonable
averaging, attribution and allocation methods.
Section 4A.2 Deposits Unavailable or Interest Rate Unascertainable or
Inadequate; Impracticability. If the Bank determines (which determination shall
be conclusive and binding on the parties hereto) that:
(a) deposits of the necessary amount for the relevant Interest Period
for any CD Rate Advance or Eurodollar Advance are not available to the
Bank in the relevant markets or that, by reason of circumstances
affecting such market, adequate and reasonable means do not exist for
ascertaining the CD Rate or Eurodollar Interbank Rate, as the case may
be, for such Interest Period;
(b) the CD Rate (Reserve Adjusted) or the Eurodollar Rate (Reserve
Adjusted), as the case may be, will not adequately and fairly reflect
the cost to the Bank of making or funding the CD Rate Advances or
Eurodollar Advances, as the case may be, for a relevant Interest
Period; or
(c) the making or funding of CD Rate Advances or Eurodollar Advances,
as the case may be, has become impracticable as a result of any event
occurring after the date of this Agreement which, in the opinion of the
Bank, materially and adversely affects such Advances or the Bank's
Commitment to make such Advances or the relevant market;
the Bank shall promptly give notice of such determination to the Borrower, and
(i) any notice of a new CD Rate Advance or Eurodollar Advance, as the case may
be, previously given by the Borrower and not yet borrowed or converted shall be
deemed to be a notice to make an Advance of another type, as selected by the
Borrower, and (ii) the Borrower shall be obligated to either prepay in full any
outstanding CD Rate Advances or Eurodollar Advances, as the case may be, without
premium or penalty on the last day of the current Interest Period with respect
thereto or convert any such Advance to an Advance of another type, as selected
by the Borrower, on such last day.
Section 4A.3 Changes in Law Rendering CD Rate Advances or Eurodollar
Advances Unlawful. If at any time due to the adoption of any law, rule,
regulation, treaty or directive, or any change therein or in the interpretation
or administration thereof by any court, central bank, governmental authority,
agency or instrumentality, or comparable agency charged with the interpretation
or administration thereof, or for any other reason arising subsequent to the
date of this Agreement, it shall become unlawful or impossible for the Bank to
make or fund any CD Rate Advance or Eurodollar Advance, the obligation of the
Bank to provide such Advance shall, upon the happening of such event, forthwith
be suspended for the duration of such illegality or impossibility. If any such
event shall make it unlawful or impossible for the Bank to continue any CD Rate
Advance or Eurodollar Advance previously made by it hereunder, the Bank shall,
upon the happening of such event, notify the Borrower thereof in writing, and
the Borrower shall, at the time notified by the Bank, either convert each such
unlawful Advance to an Advance of another type or repay such Advance in full,
together with accrued interest thereon, subject to the provisions of Section
2.4.
Section 4A.4 Discretion of the Bank as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, the Bank shall
be entitled to fund and maintain its funding of all or any part of the Loans in
any manner it elects; it being understood, however, that for purposes of this
Agreement, all determinations hereunder shall be made as if the Bank had
actually funded and maintained each CD Rate Advance and each Eurodollar Advance
during the Interest Period for such Advance through the purchase of deposits
having a term corresponding to such Interest Period and bearing an interest rate
equal, in the case of CD Rate Advances, to the CD Rate for such Interest Period
or, in the case of Eurodollar Advances, to the Eurodollar Interbank Rate for
such Interest Period (whether or not the Bank shall have granted any
participations in such Advances).
ARTICLE V CONDITIONS PRECEDENT
Section 5.1 Conditions of Initial Loan. The obligation of the Bank to
make the initial Revolving Loan and any Terms Loans hereunder shall be subject
to the satisfaction of the conditions precedent, in addition to the applicable
conditions precedent set forth in Section 5.2 below, that the Bank shall have
received all of the following, in form and substance satisfactory to the Bank,
each duly executed and certified or dated the date of the initial Revolving Loan
and such initial Term Loan or such other date as is satisfactory to the Bank:
(a) The Revolving Note executed by a duly authorized officer (or
officers) of the Borrower.
(b) The Term Notes executed by a duly authorized officer of the
Borrower.
(c) A copy of the corporate resolution of the Borrower authorizing the
execution, delivery and performance of the Loan Documents, certified by
the Secretary or an Assistant Secretary of the Borrower.
(d) An incumbency certificate showing the names and titles, and bearing
the signatures of, the officers of the Borrower authorized to execute
the Loan Documents and to request Loans hereunder, certified by the
Secretary or an Assistant Secretary of the Borrower, together with
certified copies of the Borrower's Articles of Incorporation and
Bylaws.
(e) A Certificate of Good Standing for the Borrower in the jurisdiction
of its incorporation, certified by the appropriate governmental
official.
(f) An opinion of counsel to the Borrower, addressed to the Bank, in
substantially the form of Exhibit C.
(g) Confirmations of Security Agreements by HRM Claim Management, Inc.,
Institute for Healthcare Quality, Inc. and Health resource Management,
Ltd.
Section 5.2 Conditions Precedent to all Loans. The obligation of the
Bank to make any Loan hereunder (including the initial Loans) shall be subject
to the satisfaction of the following conditions precedent (and the request for a
Loan shall be deemed a representation that the following have been satisfied):
(a) Before and after giving effect to such Loan, the representation and
warranties contained in Article VI shall be true and correct, as though
made on the date of such Loan.
(b) Before and after giving effect to such Loan, no Default or Event of
Default shall have occurred and be continuing.
(c) For any Tranche A Term Loan, the Borrower shall have executed and
delivered a Tranche A Term Note.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement, to grant the
Commitment and to make Loans hereunder, the Borrower represents and warrants to
the Bank:
Section 6.1 Organization, Standing, Etc. The Borrower and each of its
corporate Subsidiaries are corporations duly incorporated and validly existing
and in good standing under the laws of the jurisdiction of their respective
incorporation and have all requisite corporate power and authority to carry on
their respective businesses as now conducted, to (in the instance of the
Borrower) enter into the Loan Documents and to perform its obligations under the
Loan Documents. The Borrower and each of its Subsidiaries are duly qualified and
in good standing as a foreign corporation in each jurisdiction in which the
character of the properties owned, leased or operated by it or the business
conducted by it makes such qualification necessary.
Section 6.2 Authorization and Validity. The execution, delivery and
performance by the Borrower of the Loan Documents have been duly authorized by
all necessary corporate action by the Borrower, and the Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, subject to
limitations as to enforceability which might result from bankruptcy, insolvency,
moratorium and other similar laws affecting creditors' rights generally and
subject to limitations on the availability of equitable remedies.
Section 6.3 No Conflict; No Default. The execution, delivery and
performance by the Borrower of the Loan Documents will not (a) violate any
provision of any law, statute, rule or regulation or any order, writ, judgment,
injunction, decree, determination or award of any court, governmental agency or
arbitrator presently in effect having applicability to the Borrower, (b) violate
or contravene any provisions of the Articles (or Certificate) of Incorporation
of the Borrower, or (c) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which the Borrower is a party or by which it or any of its properties may be
bound or result in the creation of any Lien on any asset of the Borrower or any
Subsidiary. Neither the Borrower nor any Subsidiary is in default under or in
violation of any such law, statute, rule or regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture, loan or credit
agreement or other agreement, lease or instrument in any case in which the
consequences of such default or violation could constitute an Adverse Event.
Section 6.4 Government Consent. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority is required on the
part of the Borrower to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Loan Documents.
Section 6.5 Financial Statements and Condition. The Borrower's audited
consolidated and consolidating financial statements as at June 30, 1997 and its
unaudited consolidated and consolidating financial statements as at December 31,
1997, as heretofore furnished to the Bank, have been prepared in accordance with
GAAP on a consistent basis and fairly present the financial condition of the
Borrower and its Subsidiaries as at such dates and the results of their
operations and changes in financial position for the respective periods then
ended. As of the dates of such financial statements, neither the Borrower nor
any Subsidiary had any material obligation, contingent liability, liability for
taxes or long-term lease obligation which is not reflected in such financial
statements or in the notes thereto. Since June 30, 1997, no Adverse Event has
occurred.
Section 6.6 Litigation and Contingent Liabilities. Except as described
in Exhibit D, there are no actions, suits or proceedings pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any of their properties before any court or arbitrator, or any
governmental department, board, agency or other instrumentality which, if
determined adversely to the Borrower or such Subsidiary, could constitute an
Adverse Event. Except as described in Exhibit E, neither the Borrower nor any
Subsidiary has any contingent liabilities which are material to the Borrower and
the Subsidiaries as a consolidated enterprise.
Section 6.7 Compliance. The Borrower and its Subsidiaries are in
material compliance with all statutes and governmental rules and regulations
applicable to them.
Section 6.8 Environmental, Health and Safety Laws. There does not exist
any violation by the Borrower or any Subsidiary of any applicable federal, state
or local law, rule or regulation or order of any government, governmental
department, board, agency or other instrumentality relating to environmental,
pollution, health or safety matters which will or threatens to impose a material
liability on the Borrower or a Subsidiary or which would require a material
expenditure by the Borrower or such Subsidiary to cure. Neither the Borrower nor
any Subsidiary has received any notice to the effect that any part of its
operations or properties is not in material compliance with any such law, rule,
regulation or order or notice that it or its property is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to any release of any toxic or hazardous waste or substance into the
environment, the consequences of which non-compliance or remedial action could
constitute an Adverse Event.
Section 6.9 ERISA. Each Plan complies with all material applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Code setting forth
those requirements. No Reportable Event, other than a Reportable Event for which
the reporting requirements have been waived by regulations of the PBGC, has
occurred and is continuing with respect to any Plan. All of the minimum funding
standards applicable to such Plans have been satisfied and there exists no event
or condition which would permit the institution of proceedings to terminate any
Plan under Section 4042 of ERISA. The current value of the Plans' benefits
guaranteed under Title IV or ERISA does not exceed the current value of the
Plans' assets allocable to such benefits.
Section 6.10 Regulation U. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
and no part of the proceeds of any Loan will be used to purchase or carry margin
stock or for any other purpose which would violate any of the margin
requirements of the Board of Governors of the Federal Reserve System.
Section 6.11 Ownership of Property; Liens. Each of the Borrower and the
Subsidiaries has good and marketable title to its real properties and good and
sufficient title to its other properties, including all properties and assets
referred to as owned by the Borrower and its Subsidiaries in the audited
financial statement of the Borrower referred to in Section 6.5 (other than
property disposed of since the date of such financial statement in the ordinary
course of business). None of the properties, revenues or assets of the Borrower
or any of its Subsidiaries is subject to a Lien, except for (a) Liens listed on
Exhibit F, or (b) Liens allowed under Section 8.11.
Section 6.12 Taxes. Each of the Borrower and the Subsidiaries has filed
all federal, state and local tax returns required to be filed and has paid or
made provision for the payment of all taxes due and payable pursuant to such
returns and pursuant to any assessments made against it or any of its property
and all other taxes, fees and other charges imposed on it or any of its property
by any governmental authority (other than taxes, fees or charges the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of the Borrower). No tax Liens have been filed and no
material claims are being asserted with respect to any such taxes, fees or
charges. The charges, accruals and reserves on the books of the Borrower in
respect of taxes and other governmental charges are adequate.
Section 6.13 Trademarks, Patents. Each of the Borrower and the
Subsidiaries possesses or has the right to use all of the patents, trademarks,
trade names, service marks and copyrights, and applications therefor, and all
technology, know-how, processes, methods and designs used in or necessary for
the conduct of its business, without known conflict with the rights of others.
Section 6.14 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended.
Section 6.15 Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" of a holding company or of a subsidiary company of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 6.16 Subsidiaries. Exhibit G sets forth as of the date of this
Agreement a list of all Subsidiaries and the number and percentage of the shares
of each class of capital stock owned beneficially or of record by the Borrower
or any Subsidiary therein, and the jurisdiction of incorporation of each
Subsidiary.
Section 6.17 Partnerships and Joint Ventures. Exhibit H sets forth as
of the date of this Agreement a list of all partnerships or joint ventures in
which the Borrower or any Subsidiary is a partner (limited or general) or joint
venturer.
ARTICLE VII AFFIRMATIVE COVENANTS
From the date of this Agreement and thereafter until the Commitment is
terminated or expires and the Loans and all other liabilities of the Borrower to
the Bank hereunder and under the Notes have been paid in full, unless the Bank
shall otherwise expressly consent in writing, the Borrower will do, and will
cause each Subsidiary (except in the instance of Section 7.1) to do, all of the
following:
Section 7.1 Financial Statements and Reports. Furnish to the Bank:
(a) As soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower, the annual audit report of the
Borrower and its Subsidiaries prepared on a consolidating and
consolidated basis and in conformity with GAAP, consisting of at least
statements of income, cash flow, changes in financial position and
stockholders' equity, and a consolidated balance sheet as at the end of
such year, setting forth in each case in comparative form corresponding
figures from the previous annual audit, certified without qualification
by independent certified public accountants of recognized standing
selected by the Borrower and acceptable to the Bank, together with any
management letters, management reports or other supplementary comments
or reports to the Borrower or its board of directors furnished by such
accountants.
(b) As soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year, a copy
of the unaudited financial statement of the Borrower and its
subsidiaries prepared in the same manner as the audit report referred
to in Section 7.1(a), signed by the Borrower's chief financial officer,
consisting of at least consolidated statements of income, cash flow,
changes in financial position and stockholders' equity for the Borrower
and the Subsidiaries for such quarter and for the period from the
beginning of such fiscal year to the end of such quarter, and a
consolidated balance sheet of the Borrower as at the end of such
quarter.
(c) Together with the financial statements furnished by the Borrower
under Sections 7.1(a) and 7.1(b), a Compliance Certificate in
substantially the form of Exhibit I, signed by the chief financial
officer of the Borrower demonstrating in reasonable detail compliance
(or noncompliance, as the case may be) with each of the financial
ratios and restrictions contained in Article VIII and stating that as
at the date of each such financial statement, there did not exist any
Default or Event of Default or, if such Default or Event of Default
existed, specifying the nature and period of existence thereof and what
action the Borrower proposes to take with respect thereto.
(d) Together with the audited financial statements required under
Section 7.1(a) and the unaudited financial statements required under
Section 7.1(b), a projection of the income and expenses of the Borrower
for the following one-year period.
(e) Immediately upon becoming aware of any Default or Event of Default,
a notice describing the nature thereof and what action the Borrower
proposes to take with respect thereto.
(f) Immediately upon becoming aware of the occurrence, with respect to
any Plan, of any Reportable Event (other than a Reportable Event for
which the reporting requirements have been waived by PBGC regulations)
or any "prohibited transaction" (as defined in Section 4975 of the
Code), a notice specifying the nature thereof and what action the
Borrower proposes to take with respect thereto, and, when received,
copies of any notice from PBGC of intention to terminate or have a
trustee appointed for any Plan.
(g) Promptly upon the mailing or filing thereof, copies of all
financial statements, reports and proxy statements mailed to the
Borrower's shareholders, and copies of all registration statements,
periodic reports and other documents filed with the Securities and
Exchange Commission (or any successor thereto) or any national
securities exchange.
(h) Immediately upon becoming aware of the occurrence thereof, notice
of the institution of any litigation, arbitration or governmental
proceeding, or the rendering of a judgment or decision in such
litigation or proceeding, which could constitute an Adverse Event, and
the steps being taken by the Person(s) affected by such proceeding.
(i) Immediately upon becoming aware of the occurrence thereof, notice
of any violation as to any environmental matter by the Borrower or any
Subsidiary and of the commencement of any judicial or administrative
proceeding relating to health, safety or environmental matters (i) in
which an adverse determination or result could result in the revocation
of or have a material adverse effect on any operating permits, air
emission permits, water discharge permits, hazardous waste permits or
other permits held by the Borrower or any Subsidiary which are material
to the operations of the Borrower or such Subsidiary, or (ii) which
will or threatens to impose a material liability on the Borrower or
such Subsidiary to any Person or which will require a material
expenditure by the Borrower or such Subsidiary to cure any alleged
problem or violation.
(j) From time to time, such other information regarding the business,
operation and financial condition of the Borrower and the Subsidiaries
as the Bank may reasonably request.
Section 7.2 Corporate Existence. Subject to Section 8.1 in the instance
of a Subsidiary, maintain its corporate existence in good standing under the
laws of its jurisdiction of incorporation and its qualification to transact
business in each jurisdiction in which the character of the properties owned,
leased or operated by it or the business conducted by it makes such
qualification necessary.
Section 7.3 Insurance. Maintain with financially sound and reputable
insurance companies such insurance as may be required by law and such other
insurance in such amounts and against such hazards as is customary in the case
of reputable corporations engaged in the same or similar business and similarly
situated.
Section 7.4 Payment of Taxes and Claims. File all tax returns and
reports which are required by law to be filed by it and pay before they become
delinquent all taxes, assessments and governmental charges and levies imposed
upon it or its property and all claims or demands of any kind (including,
without limitation, those of suppliers, mechanics, carriers, warehouses,
landlords and other like Persons) which, if unpaid, might result in the creation
of a Lien upon its property; provided that the foregoing items need not be paid
if they are being contested in good faith by appropriate proceedings, and as
long as the Borrower's or such Subsidiary's title to its property is not
materially adversely affected, its use of such property in the ordinary course
of its business is not materially interfered with and adequate reserves with
respect thereto have been set aside on the Borrower's or such Subsidiary's books
in accordance with GAAP.
Section 7.5 Inspection. Permit any Person designated by the Bank to
visit and inspect any of its properties, corporate books and financial records,
to examine and to make copies of its books of accounts and other financial
records, and to discuss the affairs, finances and accounts of the Borrower and
the Subsidiaries with, and to be advised as to the same by, its officers at such
reasonable times and intervals as the Bank may designate. So long as no Event of
Default exists, the expenses of the Bank for such visits, inspections and
examinations shall be at the expense of the Bank, but any such visits,
inspections, and examinations made while any Event of Default is continuing
shall be at the reasonable expense of the Borrower.
Section 7.6 Maintenance of Properties. Maintain its properties used or
useful in the conduct of its business in good condition, repair and working
order, and supplied with all necessary equipment, and make all necessary
repairs, renewals, replacements, betterments and improvements thereto, all as
may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
Section 7.7 Books and Records. Keep adequate and proper records and
books of account in which full and correct entries will be made of its dealings,
business and affairs.
Section 7.8 Compliance. Comply in all material respect with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject.
Section 7.9 ERISA. Maintain each Plan in compliance with all material
applicable requirements of ERISA and of the Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and of
the Code.
Section 7.10 Environmental Matters. Observe and comply with all laws,
rules, regulations and orders of any government or government agency relating to
health, safety, pollution, hazardous materials or other environmental matters to
the extent non-compliance could result in a material liability or otherwise
constitute an Adverse Event.
ARTICLE VIII NEGATIVE COVENANTS
From the date of this Agreement and thereafter until the Commitment is
terminated or expires and the Loans and all other liabilities of the Borrower to
the Bank hereunder and under the Notes have been paid in full, unless the Bank
shall otherwise expressly consent in writing, the Borrower will not, and will
not permit any Subsidiary to, do any of the following:
Section 8.1 Merger. Merge or consolidate or enter into any analogous
reorganization or transaction with any Person; provided, however, any
wholly-owned Subsidiary may be merged with or liquidated into the Borrower (if
the Borrower is the surviving corporation) or any other wholly-owned Subsidiary.
Section 8.2 Sale of Assets. Sell, transfer, lease or otherwise convey
all or any substantial part of its assets except for sales and leases of
inventory in the ordinary course of business and except for sales or other
transfers by a wholly-owned Subsidiary to the Borrower or another wholly-owned
Subsidiary.
Section 8.3 Purchase of Assets. Purchase or lease or otherwise acquire
all or substantially all of the assets of any Person (except for purchases or
other transfers by the Borrower or a wholly-owned Subsidiary from a wholly-owned
Subsidiary) in an amount not in excess of $1,000,000 for any such acquisition,
and in an aggregate amount which, together with Investments permitted under
Section 8.9, plus Capital Expenditures permitted under Section 8.16, would not
exceed $12,000,000; provided, that any such acquisition would not cause an
Adverse Event.
Section 8.4 Plans. Permit any condition to exist in connection with any
Plan which might constitute grounds for the PBGC to institute proceedings to
have such Plan terminated or a trustee appointed to administer such Plan, permit
any Plan to terminate under any circumstances which would cause the lien
provided for in Section 4068 of ERISA to attach to any property, revenue or
asset of the Borrower or any Subsidiary or permit the underfunded amount of Plan
benefits guaranteed under Title IV of ERISA to exceed $50,000.
Section 8.5 Change in Nature of Business. Make any material change in
the nature of the business of the Borrower or such Subsidiary, as carried on at
the date hereof.
Section 8.6 Subsidiaries, Partnerships, Joint Ventures and Ownership of
Stock. Do any of the following: (a) form or acquire any corporation which would
thereby become a Subsidiary; (b) form or enter into any partnership as a limited
or general partner or into any joint venture; (c) permit any Subsidiary to
purchase or otherwise acquire any shares of the stock of the Borrower; or (d)
take any action, or permit any Subsidiary to take any action, which would result
in a decrease in the Borrower's or any Subsidiary's ownership interest in any
Subsidiary (including, without limitation, decrease in the percentage of the
shares of any class of stock owned).
Section 8.7 Other Agreements. Enter into any agreement, bond, note or
other instrument with or for the benefit of any Person other than the Bank which
would: (a) prohibit the Borrower or such Subsidiary from granting, or otherwise
limit the ability of the Borrower or such Subsidiary to grant, to the Bank any
Lien on any assets or properties of the Borrower or such Subsidiary; or (b) be
violated or breached by the Borrower's performance of its obligations under the
Loan Documents.
Section 8.8 Restricted Payments. Either: (a) purchase or redeem or
otherwise acquire for value any shares of the Borrower's or any Subsidiary's
stock, declare or pay any dividends thereon (other than stock dividends and
dividends payable solely to the Borrower), make any distribution on, or payment
on account of the purchase, redemption, defeasance or other acquisition or
retirement for value of, any shares of the Borrower's or any Subsidiary's stock
or set aside any funds for any such purpose (other than payment to, or on
account of or for the benefit of, the Borrower only); or (b) directly or
indirectly make any payment on, or redeem, repurchase, defease, or make any
sinking fund payment on account of, or any other provision for, or otherwise
pay, acquire or retire for value, any Indebtedness of the Borrower or any
Subsidiary that is subordinated in right of payment to the Loans (whether
pursuant to its terms or by operation of law), except for regularly-scheduled
payments of interest and principal (which shall not include payments
contingently required upon occurrence of a change of control or other event)
that are not otherwise prohibited hereunder or under the document or agreement
stating the terms of such subordination.
Section 8.9 Investments. Acquire for value, make, have or hold any
Investments, except:
(a) Investments outstanding on the date hereof and listed on Exhibit J;
(b) Travel advances to officers and employees in the ordinary course of
business;
(c) Investments in readily marketable direct obligations of the United
States of America having maturities of one year or less from the date
of acquisition;
(d) Certificates of deposit or bankers' acceptances, each maturing
within one year from the date of acquisition, issued by any commercial
bank organized under the laws of the United States or any State thereof
which has (i)(1) combined capital, surplus and undivided profits of at
least $100,000,000, and (2) a credit rating with respect to its
unsecured indebtedness from a nationally recognized rating service that
is satisfactory to the Bank, or (ii) certificate of deposits issued by,
or savings accounts or demand deposit accounts held with, Riverside
Bank, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or First
of America Bank - Michigan, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in an amount not in excess of $500,000 in each such
bank, provided, that such banks can meet the credit rating requirement
set forth in clause (i)(2) above;
(e) Commercial paper maturing within 270 days from the date of issuance
and given the highest rating by a nationally recognized rating service;
(f) Repurchase agreements relating to securities issued or guaranteed
as to principal and interest by the United States of America;
(g) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale of goods and services in the ordinary
course of business;
(h) shares of stock, obligations or other securities received in
settlement of claims arising in the ordinary course of business; and
(i) Investments outstanding on the date hereof in Subsidiaries by the
Borrower and other Subsidiaries; and
(j) Investments (other than Investments allowed in clauses (a) through
(i) above) in an aggregate amount not in excess of $500,000.
Section 8.10 Indebtedness. Incur, create, issue, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness under this Agreement;
(b) Current liabilities, other than for borrowed money, incurred in the
ordinary course of business;
(c) Indebtedness existing on the date of this Agreement and disclosed
on Exhibit K hereto;
(d) Indebtedness secured by Liens permitted under Section 8.11 hereof;
and
(e) Indebtedness consisting of endorsements for collection, deposit or
negotiation and warranties of products or services, in each case
incurred in the ordinary course of business.
Section 8.11 Liens. Create, incur, assume or suffer to exist any Lien
with respect to any property, revenues or assets now owned or hereafter arising
or acquired, except:
(a) Liens in connection with the acquisition of property after the date
hereof by way of purchase money mortgage, conditional sale or other
title retention agreement, Capitalized Lease or other deferred payment
contract, and attaching only to the property being acquired if the
Indebtedness secured thereby does not exceed 100% of the fair market
value of such property at the time of acquisition thereof;
(b) Liens existing on the date of this Agreement and disclosed on
Exhibit F hereto;
(c) Deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of the Borrower or a
Subsidiary;
(d) Liens for taxes, fees, assessments and governmental charges not
delinquent or to the extent that payments therefor shall not at the
time be required to be made in accordance with the provisions of
Section 8.4;
(e) Liens of carriers, warehousemen, mechanics and materialmen, and
other like Liens arising in the ordinary course of business, for sums
not due or to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 8.4;
and
(f) Deposits to secure the performance of bids, trade contracts,
leases, statutory obligations and other obligations of a like nature
incurred in the ordinary course of business.
Section 8.12 Contingent Liabilities. Either: (i) endorse, guarantee,
contingently agree to purchase or to provide funds for the payment of, or
otherwise become contingently liable upon, any obligation of any other Person,
except by the endorsement of negotiable instruments for deposit or collection
(or similar transactions) in the ordinary course of business, or (ii) agree to
maintain the net worth or working capital of, or provide funds to satisfy any
other financial test applicable to, any other Person.
Section 8.13 Unconditional Purchase Obligations. Enter into or be a
party to any contract for the purchase or lease of materials, supplies or other
property or services if such contract requires that payment be made by it
regardless of whether or not delivery is ever made of such materials, supplies
or other property or services.
Section 8.14 Transactions with Related Parties. Enter into or be a
party to any transaction or arrangement, including, without limitation, the
purchase, sale lease or exchange of property or the rendering of any service,
with any Related Party, except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or the applicable Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person not a Related Party.
Section 8.15 Use of Proceeds. Permit any proceeds of the Loans to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying any margin stock" within the
meaning of Regulation U of the Federal Reserve Board, as amended from time to
time, and furnish to the Bank, upon its request, a statement in conformity with
the requirements of Federal Reserve Form U-1 referred to in Regulation U.
Section 8.16 Capital Expenditures. Make aggregate consolidated Capital
Expenditures in an amount in excess of (a) $10,000,00 during any fiscal year for
software development expenditures, or (b) $12,000,000 during any fiscal year for
all Capital Expenditures (including without limitation software development
expenditures).
Section 8.17 Consolidated Tangible Net Worth. At any time permit
Consolidated Tangible Net Worth to be less than the greater of (a) $9,500,000,
or (b) 0.85 times the actual Consolidated Tangible Net Worth as of the last day
of the most recently-ended fiscal year of the Borrower.
Section 8.18 Consolidated Leverage Ratio. At any time permit the ratio
of consolidated total liabilities (as determined in accordance with GAAP) to
Consolidated Tangible Net Worth to be greater than 2.50 to 1.00.
Section 8.19 Operating Cash Flow Leverage. At any time permit the ratio
of the Borrower's consolidated interest-bearing Indebtedness as of the last day
of any quarter to its Consolidated Operating Income for the period of four
consecutive fiscal quarters then ending to be greater than 3.00 to 1.00.
Section 8.20 Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio for any period of four consecutive fiscal quarters to be
less than 1.50 to 1.00.
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES
Section 9.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:
(a) The Borrower shall fail to make when due, whether by acceleration
or otherwise, any payment of principal of or interest on the Notes or
any fee or other amount required to be made to the Bank pursuant to the
Loan Documents;
(b) The Borrower shall fail to make when due, whether by acceleration
or otherwise, any payment on any other obligations to the Bank or an
affiliate thereof;
(c) Any representation or warranty made or deemed to have been made by
or on behalf of the Borrower or any Subsidiary in the Loan Documents or
on behalf of the Borrower or any Subsidiary in any certificate,
statement, report or other writing furnished by or on behalf of the
Borrower to the Bank or any affiliate of the Bank pursuant to the Loan
Documents or any other instrument, document or agreement shall prove to
have been false or misleading in any material respect on the date as of
which the facts set forth are stated or certified or deemed to have
been stated or certified;
(d) The Borrower shall fail to comply with Section 7.2 hereof or any
Section of Article VIII hereof;
(e) The Borrower shall fail to comply with any agreement, covenant,
condition, provision or term contained in the Loan Documents (and such
failure shall not constitute an Event of Default under any of the other
provisions of this Section 9.1) or in any other instrument, document or
agreement with an affiliate of the Bank, including FBS Business Finance
Corporation.
(f) The Borrower or any Subsidiary shall become insolvent or shall
generally not pay its debts as they mature or shall apply for, shall
consent to, or shall acquiesce in the appointment of a custodian,
trustee or receiver of the Borrower or such Subsidiary or for a
substantial part of the property thereof or, in the absence of such
application, consent or acquiescence, a custodian, trustee or receiver
shall be appointed for the Borrower or a Subsidiary or for a
substantial part of the property thereof and shall not be discharged
within 30 days;
(g) Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted
by or against the Borrower or a Subsidiary, and, if instituted against
the Borrower or a Subsidiary, shall have been consented to or
acquiesced in by the Borrower or such Subsidiary, or shall remain
undismissed for 30 days, or an order for relief shall have been entered
against the Borrower or such Subsidiary, or the Borrower or any
Subsidiary shall take any corporate action to approve institution of,
or acquiescence in, such a proceeding;
(h) Any dissolution or liquidation proceeding shall be instituted by or
against the Borrower or a Subsidiary and, if instituted against the
Borrower or such Subsidiary, shall be consented to or acquiesced in by
the Borrower or such Subsidiary or shall remain for 30 days
undismissed, or the Borrower or any Subsidiary shall take any corporate
action to approve institution of, or acquiescence in, such a
proceeding;
(i) A judgment or judgments for the payment of money in excess of the
sum of $50,000 in the aggregate shall be rendered against the Borrower
or a Subsidiary and the Borrower or such Subsidiary shall not discharge
the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, prior to any execution on such
judgments by such judgment creditor, within 30 days from the date of
entry thereof, and within said period of 30 days, or such longer period
during which execution of such judgment shall be stayed, appeal
therefrom and cause the execution thereof to be stayed during such
appeal;
(j) The institution by the Borrower or any ERISA Affiliate of steps to
terminate any Plan if in order to effectuate such termination, the
Borrower or any ERISA Affiliate would be required to make a
contribution to such Plan, or would incur a liability or obligation to
such Plan, and (ii) immediately after giving effect to the payment of
satisfaction of such contribution, liability or obligation (if made or
undertaken by the Borrower or any Subsidiary) a Default or Event of
Default would exist and be continuing, or the institution by the PBGC
of steps to terminate any Plan;
(k) The maturity of any Indebtedness of the Borrower (other than
Indebtedness covered under Sections 9.1(a) and (b) hereof) or a
Subsidiary shall be accelerated, or the Borrower or a Subsidiary shall
fail to pay any such Indebtedness when due or, in the case of such
Indebtedness payable on demand, when demanded, or any event shall occur
or condition shall exist and shall continue for more than the period of
grace, if any, applicable thereto and shall have the effect of causing,
or permitting (any required notice having been given and grace period
having expired) the holder of any such Indebtedness or any trustee or
other Person acting on behalf of such holder to cause such Indebtedness
to become due prior to its stated maturity or to realize upon any
collateral given as security therefor; or
(l) The Bank shall have determined in good faith (which determination
shall be conclusive) that an Adverse Event has occurred and that the
prospect of payment or performance by the Borrower of any of its
obligations to the Bank, hereunder or under any other instrument,
document or agreement, is materially impaired and the condition giving
rise to such determination continues for 10 days after notice to the
Borrower by the Bank.
Section 9.2 Remedies. If (a) any Event of Default described in Sections
9.1(f), 9.1(g) or 9.1(h) shall occur with respect to the Borrower, the
Commitment shall automatically terminate and the outstanding unpaid principal
balance of the Notes, the accrued interest thereon and all other obligations of
the Borrower to the Bank under the Loan Documents shall automatically become
immediately due and payable; or (b) any other Event of Default shall occur and
be continuing, then the Bank may take any or all of the following actions: (i)
declare the Commitment terminated, whereupon the Commitment shall terminate,
(ii) declare that the outstanding unpaid principal balance of the Notes, the
accrued and unpaid interest thereon and all other obligations of the Borrower to
the Bank under the Loan Documents to be forthwith due and payable, whereupon the
Notes, all accrued and unpaid interest thereon and all such obligations shall
immediately become due and payable, in each case without demand or notice of any
kind, all of which are hereby expressly waived, anything in this Agreement or in
the Notes to the contrary notwithstanding, (iii) exercise all rights and
remedies under any other instrument, document or agreement between the Borrower
and the Bank, and (iv) enforce all rights and remedies under any applicable law.
Section 9.3 Offset. In addition to the remedies set forth in Section
9.2, upon the occurrence of any Event of Default or at any time thereafter while
such Event of Default continues, the Bank or any other holder of the Notes may
offset any and all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or monies of the Borrower then or
thereafter with the Bank or such other holder, or any obligations of the Bank or
such other holder of the Notes, against the Indebtedness then owed by the
Borrower to the Bank.
ARTICLE X MISCELLANEOUS
Section 10.1 Waiver and Amendment. No failure on the part of the Bank
or the holder of the Notes to exercise and no delay in exercising any power or
right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The remedies herein and in any other instrument, document or agreement
delivered or to be delivered to the Bank hereunder or in connection herewith are
cumulative and not exclusive of any remedies provided by law. No notice to or
demand on the Borrower not required hereunder or under the Notes shall in any
event entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the right of the Bank or the
holder of the Notes to any other or further action in any circumstances without
notice or demand. No amendment, modification or waiver of any provision of this
Agreement or consent to any departure by the Borrower therefrom shall be
effective unless the same shall be in writing and signed by the Bank, and then
such amendment, modifications, waiver or consent shall be effective only in the
specific instances and for the specific purpose for which given.
Section 10.2 Expenses and Indemnities. Whether or not any Loan is made
hereunder, the Borrower agrees to reimburse the Bank upon demand for all
reasonable expenses paid or incurred by the Bank (including filing and recording
costs and fees and expenses of legal counsel, who may be employees of the Bank)
in connection with the preparation, review, execution, delivery, amendment,
modification, interpretation, collection and enforcement of the Loan Documents.
The Borrower agrees to pay, and save the Bank harmless from all liability for,
any stamp or other taxes which may be payable with respect to the execution or
delivery of the Loan Documents. The Borrower agrees to indemnify and hold the
Bank harmless from any loss or expense which may arise or be created by the
acceptance of telephonic or other instructions for making Loans or disbursing
the proceeds thereof. The obligations of the Borrower under this Section 10.2
shall survive any termination of this Agreement.
Section 10.3 Notices. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by facsimile transmission, from the first Business
Day after the date of sending if sent by overnight courier, or from four days
after the date of mailing if mailed; provided, however, that any notice to the
Bank under Article II hereof shall be deemed to have been given only when
received by the Bank.
Section 10.4 Successors. This Agreement shall be binding upon the
Borrower and the Bank and their respective successors and assigns, and shall
inure to the benefit of the Borrower and the Bank and the successors and assigns
of the Bank. The Borrower shall not assign its rights or duties hereunder
without the written consent of the Bank.
Section 10.5 Participations and Information. The Bank may sell
participation interests in any or all of the Loans and in all or any portion of
the Commitment to any Person. The Bank may furnish any information concerning
the Borrower in the possession of the Bank from time to time to participants and
prospective participants and may furnish information in response to credit
inquiries consistent with general banking practice.
Section 10.6 Severability. Any provision of the Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 10.7 Subsidiary References. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Borrower has
one or more Subsidiaries.
Section 10.8 Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, limit or describe
the scope or intent of any provision of this Agreement.
Section 10.9 Entire Agreement. This Agreement and the Notes embody the
entire agreement and understanding between the Borrower and the Bank with
respect to the subject matter hereof and thereof. This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.
Section 10.10 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.11 Existing Security Agreement. The Borrower hereby
reaffirms the Security Agreement, dated as of June 24, 1994 (the "Security
Agreement") and acknowledges and agrees that the Security Agreement secures all
of its obligations to the Bank, including obligations under this Agreement, and
that this Agreement shall be deemed the "Credit Agreement" for purposes of
references thereto in the Security Agreement.
Section 10.12 Waiver. The Borrower has informed the Bank that it was
not in compliance with Section 9.16 ("Capital Expenditures") of this Agreement
as in effect prior to this amendment and restatement for the periods ending
September 30, 1997 through April 30, 1998. The Bank waives the Borrower's
non-compliance with such Section of this Agreement as in effect prior to this
amendment and restatement as applied to such period and waives any Default or
Event of Default arising from such non-compliance. This waiver shall not apply
to any other or subsequent failure to comply with such Section or any other
provision of this Agreement.
Section 10.13 Governing Law. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS.
Section 10.14 Consent to Jurisdiction. AT THE OPTION OF THE BANK, THIS
AGREEMENT AND THE NOTES MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE
COURT SITTING IN MINNEAPOLIS OR ST. ▇▇▇▇, MINNESOTA; AND THE BORROWER CONSENTS
TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT
VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT,
THE BANK AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
Section 10.15 Waiver of Jury Trial. THE BORROWER WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a)
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (b)
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above.
HEALTH RISK MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Title: CFO
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Title: Vice President
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The following exhibits to the Amended and Restated Revolving Credit and
Term Loan Agreement are not being filed herewith but will be provided to the
Commission upon request:
Exhibit A - Form of Revolving Note
Exhibits ▇-▇, ▇-▇, ▇-▇ - Form of Term Notes
Exhibit C - Form of Legal Opinion
Exhibit D - Litigation
Exhibit E - Contingent Liabilities
Exhibit F - Existing Liens
Exhibit G - Subsidiaries
Exhibit H - Partnerships/Joint Ventures
Exhibit I - Compliance Certificate
Exhibit J - Investments
Exhibit K - Existing Indebtedness