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EXHIBIT 10.16
CREDIT AGREEMENT
DATED AS OF
MARCH 28, 1997
BETWEEN
MEDIRISK, INC., AS BORROWER
AND
NATIONSBANK, N.A. (SOUTH), AS LENDER
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MEDIRISK, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
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ARTICLE 1. THE LOANS
Section 1.1 Extension of Credit ............................. 1
Section 1.2 Revolving Loan Borrowing Mechanics .............. 2
Section 1.3 Interest ........................................ 4
Section 1.4 Fees ............................................ 5
Section 1.5 Repayment and Prepayment ........................ 6
Section 1.6 Notes and Loan Account .......................... 6
Section 1.7 Manner of Payment ............................... 6
Section 1.8 Reimbursement ................................... 7
Section 1.9 Acquisition Advances ............................ 7
Section 1.10 Collateral ...................................... 9
ARTICLE 2. CONDITIONS PRECEDENT
Section 2.1 Conditions Precedent to Initial Advance ......... 9
Section 2.2 Conditions Precedent to Each Advance
Subsequent to the Agreement Date ................ 12
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties .................. 13
Section 3.2 Survival of Representations and Warranties ...... 19
ARTICLE 4. GENERAL COVENANTS
Section 4.1 Preservation of Existence and Similar Matters ... 19
Section 4.2 Compliance with Applicable Law .................. 19
Section 4.3 Maintenance of Properties ....................... 19
Section 4.4 Insurance ....................................... 19
Section 4.5 Payment of Taxes and Claims ..................... 20
Section 4.6 Visits and Inspections .......................... 20
Section 4.7 ERISA ........................................... 20
Section 4.8 Further Assurances .............................. 21
Section 4.9 Covenants Regarding Formation of New
Subsidiaries and Acquisitions ................... 21
Section 4.10 Indemnity ....................................... 24
Section 4.11 Use of Proceeds ................................. 24
ARTICLE 5. INFORMATION COVENANTS
Section 5.1 Quarterly Financial Statements and Information .. 24
Section 5.2 Audited Annual Financial Statements and
Information: Certificate of No Default .......... 25
Section 5.3 Covenant Compliance Certificates ................ 25
Section 5.4 Copies of Other Reports ......................... 26
Section 5.5 Notice of Litigation and Other Matters .......... 26
ARTICLE 6. NEGATIVE COVENANTS
Section 6.1 Indebtedness .................................... 27
Section 6.2 Guaranties ...................................... 28
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Section 6.3 Liens ........................................... 28
Section 6.4 Restricted Payments and Purchases ............... 28
Section 6.5 Investments ..................................... 29
Section 6.6 Liquidation; Disposition or Acquisition of Assets 29
Section 6.7 Change of Name or Year .......................... 29
Section 6.8 Affiliate Transactions .......................... 30
Section 6.9 Debt/Capitalization Ratio ....................... 30
Section 6.10 Cash Flow Leverage Ratio ........................ 30
Section 6.11 Debt Service Coverage Ratio ..................... 30
Section 6.12 Restricted Payments ............................. 30
Section 6.13 Minimum Net Worth ............................... 30
ARTICLE 7. DEFAULT
Section 7.1 Events of Default ............................... 31
Section 7.2 Remedies ........................................ 33
ARTICLE 8. MISCELLANEOUS
Section 8.1 Notices ......................................... 33
Section 8.2 Expenses ........................................ 34
Section 8.3 Waivers ......................................... 35
Section 8.4 Set-Off ......................................... 35
Section 8.5 Assignment ...................................... 36
Section 8.6 Counterparts .................................... 36
Section 8.7 Governing Law ................................... 36
Section 8.8 Severability .................................... 36
Section 8.9 Interest and Charges ............................ 37
Section 8.10 Headings ........................................ 37
Section 8.11 Pronouns ........................................ 37
Section 8.12 Entire Agreement; Amendments .................... 37
ARTICLE 9. YIELD PROTECTION
Section 9.1 LIBOR Rate Basis Determination .................. 37
Section 9.2 Illegality ...................................... 37
Section 9.3 Increased Costs ................................. 38
Section 9.4 Effect On Other Advances ........................ 39
Section 9.5 Capital Adequacy ................................ 39
ARTICLE 10. DEFINITIONS
ARTICLE 11. WAIVER OF JURY TRIAL, ETC ...................................... 52
Section 11.1 Consent to Venue ................................ 52
Section 11.2 Waiver of Jury Trial ............................ 52
ARTICLE 12. ARBITRATION
Section 12.1 Arbitration ..................................... 52
Section 12.2 Special Rules ................................... 53
Section 12.3 Reservation of Rights ........................... 53
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EXHIBITS
Exhibit A - Form of Borrower's Loan Certificate
Exhibit B - Form of Subsidiary Loan Certificate
Exhibit C - Form of Trademark Security Agreement
Exhibit D - Form of Opinion of Counsel
Exhibit E - Form of Compliance Certificate
Exhibit F-1 - Form of Request for Acquisition Advance
Exhibit F-2 - Form of Request for Advance
Exhibit G - Form of Revolving Note
Exhibit H - Form of Security Agreement
Exhibit I - Form of Stock Pledge Agreement
Exhibit J - Form of Subsidiary Guaranty
Exhibit K - Form of Subsidiary Security Agreement
SCHEDULES
Schedule 1.9(c)(ii) Due Diligence Checklist
Schedule 1.9(c)(iv) Acquisition Financial Information
Schedule 3.1(a) States Not Qualified In
Schedule 3.1(c) Subsidiaries
Schedule 3.1(d) Capital Stock and Shareholders
Schedule 3.1(f) Leased Real Property
Schedule 3.1(h) Owned Real Property
Schedule 3.1(i) Tax Issues
Schedule 3.1(k) Materially Adverse Events
Schedule 3.1(l) Litigation
Schedule 3.1(p) Customer Contracts
Schedule 3.1(t) Name Changes
Schedule 3.1(u) Environmental Matters
Schedule 3.1(v) Patents/Trademarks/Copyrights
Schedule 6.4 Restricted Purchases and Restricted Payments
Schedule 9A Liens of Record
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CREDIT AGREEMENT
DATED AS OF
MARCH 28, 1997
BETWEEN
MEDIRISK, INC., AS BORROWER
AND
NATIONSBANK, N.A. (SOUTH), AS LENDER
This Credit Agreement is dated as of March 28, 1997 and is entered into
by and between Medirisk, Inc. a Delaware corporation (the "Company") and
NationsBank, N.A. (South) (the "Lender").
RECITALS
WHEREAS, the Company desires that the Lender extend a credit facility
to the Company in the aggregate principal amount of $10,000,000 which will be
used to fund acquisitions, for working capital needs and for general corporate
purposes; and
WHEREAS, the Lender has agreed to extend the above credit facility to
the Company subject to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
the Lender agree as follows:
ARTICLE 1.
THE LOANS
Section 1.1 Extension of Credit.
(a) Revolving Loans. Subject to the terms and conditions of,
and in reliance upon the representations and warranties made in, this Agreement
and the other Loan Documents, the Lender agrees to lend and relend to the
Company, prior
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to the Maturity Date, amounts which in the aggregate at any one time outstanding
do not exceed the lesser of (i) the Advance Rate and (ii) the Commitment.
Subject to the terms and conditions hereof and prior to the Maturity Date,
Advances under the Commitment may be repaid and reborrowed from time to time on
a revolving basis.
(b) Overadvances. If at any time, the Revolving Loans exceed
the Advance Rate, the Commitment or any other applicable limitation set forth in
this Agreement, such Revolving Loans shall nevertheless constitute Obligations
that are secured by the Collateral and are entitled to all benefits thereof. In
no event, however, shall the Company have the right whatsoever to receive any
Revolving Loan if, before or after giving effect thereto, there shall exist a
Default or an overadvance. In the event that the Lender, in its sole and
absolute discretion, shall make any Revolving Loan which in such case gives rise
to an overadvance, the Revolving Loans in an aggregate principal amount equal to
such overadvance shall be payable on demand.
(c) Extension of Maturity Date. The Company may request the
Lender to extend the Maturity Date for an additional one year period by giving
notice of such request to the Lender in writing, not less than sixty (60) days
prior to the Maturity Date. The Lender shall respond to the Company as to its
approval or refusal to agree to so extend the Maturity Date not later than
thirty (30) days prior to the Maturity Date. The Lender is entitled to exercise
its sole, absolute and unconditional discretion in deciding whether or not to
agree to extend the Maturity Date.
Section 1.2 Revolving Loan Borrowing Mechanics and Disbursement.
(a) Choice of Interest Rate, etc. Any Advance under the
Commitment shall, at the option of the Company, be made as a Base Rate Advance
or a LIBOR Advance; provided, however, that (i) at such time as there shall have
occurred and be continuing a Default or an Event of Default hereunder, the
Company shall not have the right to reborrow any LIBOR Advance, and all
subsequent Advances during the period such Default or Event of Default continues
shall be made as Base Rate Advances and (ii) if the Company fails to give the
Lender written notice specifying whether an Advance is to be repaid or
reborrowed on a Payment Date, such Advance shall be deemed to be repaid and then
reborrowed as a Base Rate Advance on the Payment Date. Any notice given to the
Lender in connection with a requested Advance hereunder shall be given to the
Lender prior to 11:00 a.m. (Atlanta, Georgia time) in order for such Business
Day to count toward the minimum number of Business Days required. The Lender
shall, upon the reasonable request of the Company from time to time, provide to
the Company such information with regard to the LIBOR Basis as may be so
requested.
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(b) Base Rate Advances.
(i) Initial and Subsequent Advances. The Company
shall give the Lender in the case of Base Rate Advances not later than 11:00
a.m. (Atlanta, Georgia time) on the Business Day of the date of a proposed
Advance, irrevocable prior notice by telephone or telecopy and shall confirm any
notice by telephone or telecopy with a written Request for Advance or, as
applicable, a written Request for Acquisition Advance.
(ii) Repayments and Reborrowings. The Company may
repay or prepay a Base Rate Advance and (a) at any time reborrow all or a
portion of the principal amount thereof as one or more Base Rate Advances, (b)
upon at least two (2) Business Days' irrevocable prior written notice to the
Lender, reborrow all or a portion of the principal thereof as one or more LIBOR
Advances, or (c) not reborrow all or any portion of such Base Rate Advance. Upon
the date indicated by the Company, such Base Rate Advance shall be so repaid
and, as applicable, reborrowed.
(iii) Miscellaneous. Notwithstanding any term or
provision of this Agreement which may be construed to the contrary, each Base
Rate Advance shall be in a principal amount of not less than $250,000 and in an
integral multiple of $50,000.
(c) LIBOR Advances.
(i) Initial and Subsequent Advances. The Company
shall give the Lender in the case of LIBOR Advances at least two (2) Business
Days' irrevocable prior notice by telephone or telecopy and shall immediately
confirm any such notice with a written Request for Advance or, as applicable, a
written Request for Acquisition Advance.
(ii) Repayments and Reborrowings. At least two (2)
days prior to each Payment Date for a LIBOR Advance, the Company shall give the
Lender written notice specifying whether all or a portion of any LIBOR Advance
outstanding on the Payment Date (a) is to be repaid and then reborrowed in whole
or in part as a new LIBOR Advance, in which case such notice shall also specify
the LIBOR Advance Period which the Company shall have selected for such new
LIBOR Advance, (b) is to be repaid and then reborrowed in whole or in part as a
Base Rate Advance or (c) is to be repaid and not reborrowed. Upon such Payment
Date, such LIBOR Advance will, subject to the provisions hereof, be so repaid
and, as applicable, reborrowed.
(iii) Miscellaneous. Notwithstanding any term or
provision of this Agreement which may be construed to the contrary, (a) each
LIBOR Advance shall be in a principal amount of not less than $500,000 and in an
integral multiple of
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$100,000 and (b) at no time shall the aggregate number of all LIBOR Advances
then outstanding exceed five (5).
(d) Telephonic Notice. The failure by the Company to confirm
any notice by telephone or telecopy with a Request for Advance, or a Request for
Acquisition Advance, as applicable, shall not invalidate any notice so given.
The Lender may rely upon telephonic instructions reasonably believed given by
any Authorized Signatory of the Company and shall have no obligation to inquire
into the propriety of any such instructions.
(e) Disbursement. Prior to 3:00 p.m. (Atlanta, Georgia time)
on the date of an Advance hereunder, the Lender shall, subject to the
satisfaction of the conditions set forth in Section 2.2 hereof disburse the
Advance by depositing such amount in same day funds into the Company's account
maintained with the Lender or by wire transfer pursuant to the Company's
instructions.
Section 1.3 Interest. Interest on Advances under the Revolving Loans
shall be payable as follows:
(a) On Base Rate Advances. Interest on Base Rate Advances
shall be computed for the actual number of days elapsed on the basis of a
hypothetical year of 360 days and shall be payable in arrears on the first day
of each calendar month, commencing on May 1, 1997. Interest on Base Rate
Advances outstanding on the Maturity Date shall also be due and payable on the
Maturity Date. Interest shall accrue and be payable on each Base Rate Advance at
the simple per annum interest rate equal to the sum of (A) the Base Rate, plus
(B) the Applicable Interest Rate Margin in effect from time to time and as more
fully set forth in Section 1.3(c) below.
(b) On LIBOR Advances. Interest on each LIBOR Advance shall be
computed on the basis of a hypothetical year of 360 days for the actual number
of days elapsed and shall be payable in arrears on (x) the Payment Date for such
Advance, and (y) if the LIBOR Advance Period for such Advance is greater than
three (3) months, each three month anniversary of such Advance. Interest on
LIBOR Advances outstanding on the Maturity Date shall also be due and payable on
the Maturity Date. Interest shall accrue and be payable on each LIBOR Advance at
the per annum interest rate equal to (A) the LIBOR Basis applicable to such
LIBOR Advance, plus (B) the Applicable Interest Rate Margin in effect from time
to time and as more fully set forth in Section 1.3(c) below.
(c) Applicable Interest Rate Margin. The Applicable Interest
Rate Margin for Base Rate Advances shall be zero (0) percent per annum. The
Applicable Interest Rate Margin for LIBOR Advances shall be the interest rate
margin determined by the Lender based upon the Company's Total Funded Debt to
EBITDA ratio for the four quarter period ending on the last day of the most
recent fiscal
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quarter end, effective as of the second Business Day after the financial
statements referred to in Section 5.1 hereof, and an accompanying certificate of
an Authorized Signatory certifying the calculations of such ratio as set forth
in Section 5.3 hereof, are delivered by the Company to the Lender for the fiscal
quarter most recently ended, expressed as a per annum rate of interest as
follows:
======================================================================
TOTAL FUNDED DEBT/EBITDA APPLICABLE INTEREST RATE
RATIO MARGIN
======================================================================
Less than or equal to 1.65%
1.00:1.00
----------------------------------------------------------------------
Less than or equal to 1.90%
2.00:1.00 and greater
than 1.00:1.00
----------------------------------------------------------------------
Less than or equal to 2.25%
3.00:1.00 and greater
than 2.00:1.00
----------------------------------------------------------------------
In the event that the Company fails to timely provide the financial statements
and certificate referred to above in accordance with the terms of Sections 5.1
and 5.3 hereof, and without prejudice to any additional rights under Section 7.2
hereof, no downward adjustment of the Applicable Interest Rate Margin in effect
for the preceding fiscal quarter shall occur until the actual delivery of such
financial statements and certificate.
(d) Upon Default. Upon the occurrence of an Event of Default,
interest on the outstanding Obligations shall accrue at the Default Rate from
the date of such Event of Default. Interest accruing at the Default Rate shall
be payable on demand and in any event on the Maturity Date and shall accrue
until the earliest to occur of (i) waiver in writing by the Lender of the
applicable Event of Default, (ii) agreement by the Lender to rescind the
charging of interest at the Default Rate or (iii) payment in full of the
Obligations. The Lender shall not be required to (i) accelerate the maturity of
the Revolving Loans or (ii) exercise any other rights or remedies under the Loan
Documents in order to charge interest hereunder at the Default Rate.
(e) Computation of Interest. In computing interest on any
Advance, the date of making the Advance shall be included and the date of
payment shall be excluded; provided, however, that if an Advance is repaid on
the date that it is made, one (1) day's interest shall be due with respect to
such Advance.
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Section 1.4 Fees.
(a) Loan Fee. The Company shall cause to be paid to the Lender
on or before the Agreement Date a fee with respect to the Revolving Loans in
amount equal to $20,000. Such fee shall be fully earned when due and
non-refundable when paid.
(b) Commitment Fee. The Company shall pay an unused line fee
to the Lender for the period beginning on the Agreement Date to and including
the Maturity Date at a rate equal to two fifths of one percent (2/5%) per annum
on the amount by which the Commitment exceeds the aggregate outstanding
principal amount of the Revolving Loans. Such fees shall accrue daily but shall
be payable monthly in arrears on the last Business Day of each month and on the
Maturity Date. Such fee shall be fully earned when due and non-refundable when
paid.
Section 1.5 Repayment and Prepayment.
(a) Prepayment. The principal amount of any Base Rate Advance
may be prepaid in full or in part at any time, upon written notice to the Lender
on the date of such prepayment, without penalty. LIBOR Advances may be prepaid
prior to the applicable Payment Date, upon at least three (3) Business Days'
prior written notice to the Lender, provided that the Company shall reimburse
the Lender, on the earlier of demand or the Maturity Date, for any loss
(excluding loss of anticipated profit other than loss resulting from any
interest rate differential) or out-of-pocket expense incurred by the Lender in
connection with such prepayment, as set forth in Section 1.8 hereof. Each notice
of prepayment shall be irrevocable, and all amounts prepaid on the Revolving
Loans shall be applied first to interest and fees and other amounts due and
payable hereunder as of such date, and then to principal.
(b) Repayment. The principal balance of all Revolving Loans
then outstanding shall be due and payable in full on the Maturity Date.
Notwithstanding the foregoing, however, in the event that at any time and for
any reason there shall exist an overadvance, the Company shall immediately pay
to the Lender an amount equal to such overadvance pursuant to Section 1.1(b)
hereof, which payment shall constitute a mandatory payment of the Revolving
Loans hereunder.
Section 1.6 Notes and Loan Accounts.
(a) The Revolving Loans shall be payable in accordance with
the terms and provisions of this Agreement and shall be evidenced by the
Revolving Note. The Revolving Note shall be issued by the Company to the Lender
and shall be duly executed and delivered by the Authorized Signatories.
(b) The Lender shall open and maintain on its books in the
name of the Company a loan account with respect to the Revolving Loans and
interest thereon. The Lender shall debit such loan account for the principal
amount of each Advance
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and accrued interest thereon, and shall credit such loan account for each
payment on account of principal of or interest on the Revolving Loans. The
records of the Lender with respect to the loan account shall be prima facie
evidence of the Revolving Loans and accrued interest thereon but the failure to
maintain such records shall not impair the obligation of the Company to repay
Indebtedness hereunder.
Section 1.7 Manner of Payment.
(a) Each payment (including any prepayment) by the Company on
account of the principal of or interest on the Revolving Loans and any other
amount owed to the Lender under this Agreement or the Revolving Note shall be
made not later than 1:00 p.m. (Atlanta, Georgia time) on the date specified for
payment under this Agreement to the Lender in lawful money of the United States
of America in immediately available funds. Any payment received by the Lender
after 1:00 p.m. (Atlanta, Georgia time) shall be deemed received on the next
Business Day.
(b) If any payment under this Agreement or the Revolving Note
shall be specified to be made upon a day which is not a Business Day, it shall
be deemed made on the next succeeding day which is a Business Day, and such
extension of time shall in such case be included in computing interest and fees,
if any, in connection with such payment.
(c) The Company agrees to pay principal, interest, fees and
all other amounts due hereunder or under the Revolving Note without set-off or
counterclaim or any deduction whatsoever.
Section 1.8 Reimbursement. Whenever the Lender shall sustain or incur
any losses (excluding loss of anticipated profit other than loss resulting from
any interest rate differential) or out-of-pocket expenses in connection with (i)
failure by the Company to borrow or reborrow any LIBOR Advance, or reborrow any
Advance as a LIBOR Advance, in each case, after having given notice of its
intention to borrow in accordance with Section 1.2 hereof (whether by reason of
the election of the Company not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3), or (ii) prepayment of any LIBOR Advance in
whole or in part, or (iii) the failure by the Company to prepay any Advance
after notice of prepayment has been given by the Company to the Lender in
accordance with Section 1.5(a) hereof, the Company agrees to pay to the Lender,
upon the earlier of the Lender's demand or the Maturity Date, an amount
sufficient to compensate the Lender for all such losses and out-of-pocket
expenses. The Lender's good faith determination of the amount of such losses and
out-of-pocket expenses, absent manifest error, shall be binding and conclusive.
The obligations of the Company under this Section shall survive the termination
of this Agreement and the payment of the Revolving Note.
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Section 1.9 Acquisition Advances.
(a) Acquisition Advance. An Acquisition Advance shall be
available only to finance a Material Acquisition pursuant to the terms and
conditions of this Section 1.9. The proceeds of any Acquisition Advance shall be
limited to an amount not to exceed one hundred percent (100%) of the cash
portion of the purchase price of the Acquisition to be financed thereby. An
Acquisition Advance may be made either as a Base Rate Advance or a LIBOR Advance
in accordance with the terms and conditions of Section 1.2 hereof with respect
to such Advances.
(b) Consent of the Lender. In the event that (i) the aggregate
amount of Revolving Loans then outstanding shall exceed $1,500,000, or (ii) the
aggregate purchase price of all Acquisitions made during the immediately
preceding twelve (12) calendar months shall exceed $5,000,000 after giving
effect to such Acquisition Advance, the consent of the Lender shall be required
in connection with an Acquisition Advance. Such consent shall be within the sole
discretion of the Lender.
(c) Request for Acquisition Advance. In connection with any
Acquisition Advance requiring the consent of the Lender pursuant to Section
1.9(b), the Company shall submit to the Lender not later than ten (10) days
prior to the date of such Acquisition, a duly executed Request for Acquisition
Advance which shall be accompanied by:
(i) a summary overview of the Counterparty proposed to be
acquired, which shall include (i) the location of
such Counterparty, (ii) the number of employees of
such Counterparty, (iii) a description of such
Counterparty's business; (iv) the number of customers
of such Counterparty; (v) a list and description of
such Counterparty's products; (vi) a description of
the type of Acquisition (acquisition of assets or
stock, merger or other); (vii) a description of the
ownership of such Counterparty; (viii) a description
of the Company's consolidation plan; and (ix) a
description of any synergy opportunities identified
by the Company;
(ii) copies of the following documents, if then in
existence, with respect to the Acquisition: (x) all
letters of intent, or similar agreements between the
Company and each Counterparty; (y) due diligence
checklists provided by the Company to each
Counterparty, the current form of which is attached
hereto as Schedule 1.9(c)(ii); and (z) the most
current draft of the acquisition agreement, or
similar agreement, governing the Acquisition,
together with all schedules and exhibits thereto;
(iii) summary of findings with respect to the information
received by the Company in response to each diligence
checklist provided by the Company, which summary
shall set forth a complete
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description of any findings which, in the reasonable
business judgment of the Company, warrant senior
management concern and which might have a materially
adverse effect on the business or operations (x) of
the Counterparty proposed to be acquired or (y) of
the Company its Subsidiaries on a consolidated basis,
as a result of the Acquisition, and which summary the
Lender agrees to return to the Company upon written
notice that the Company does not intend to proceed
with the subject Acquisition;
(iv) financial information relating to each Counterparty
proposed to be acquired by the Acquisition, which
information shall include, without limitation, that
information which is more fully described on Schedule
1.9(c)(iv) attached hereto; and
(v) a statement (v) that Company is in compliance with
Sections 6.9, 6.10, 6.11, 6.12 and 6.13 hereof before
and after giving effect to the transactions
contemplated by such Acquisition, (w) that no Default
or Event of Default then exists or would be caused
thereby, or is reasonably foreseeable as a result of
the transactions contemplated in connection with such
Acquisition; (x) that any documents provided to the
Lender in connection with such Request for Advance
shall be in substantially final form and shall not be
subject to subsequent material revisions without the
prior consent of the Lender; (y) of the total
purchase price with respect to the Acquisition, both
in terms of cash and other consideration paid and
other indebtedness and liabilities assumed; and (z)
of the full name, state of organization, federal tax
identification number and chief business address of
any new Subsidiary created for the purpose of
effecting such Acquisition or resulting therefrom.
In addition to the foregoing, upon the reasonable request of the
Lender, the Company shall make available to the Lender for review, at the
Company's offices located in Atlanta, Georgia, copies of all information
provided by each Counterparty in response to the due diligence checklist, or any
other diligence request, of the Company.
The Company understands that the purpose of delivering a Request for
Acquisition Advance hereunder and making information available hereunder is to
provide the Lender with a full, complete and correct set of information
regarding the Acquisition so that the Lender may provide its informed consent
pursuant to Section 1.9(b) hereof.
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To request any Acquisition Advance not requiring the consent of the
Lender under Section 1.9(b), the Company shall submit a Request for Advance.
Section 1.10 Collateral. The Revolving Loans shall be secured by a
perfected first priority security interest, subject only to Permitted Liens, in
substantially all of the assets of the Company and its Subsidiaries and any
assets acquired in connection with an Acquisition, including, without
limitation, accounts, inventory, equipment, furniture, fixtures and intangibles,
as more fully set forth in the Security Documents.
ARTICLE 2.
CONDITIONS PRECEDENT
Section 2.1 Conditions Precedent to Initial Advance. The obligation of
the Lender to make the initial Advance under the Commitment is subject to the
fulfillment of each of the following conditions prior to or contemporaneously
with the making of the initial Advance:
(a) The Lender shall have received each of the following, in
form and substance satisfactory to the Lender and its counsel:
(i) a loan certificate of the Company signed by an
Authorized Signatory of the Company in substantially the form
of Exhibit A attached hereto, including a certificate of
incumbency with respect to each Authorized Signatory of the
Company, together with appropriate attachments which shall
include, without limitation, the following: (A) a copy of the
Certificate of Incorporation of the Company certified to be
true, complete and correct by the Secretary of State for the
State of Delaware, (B) a true, complete and correct copy of
the By-Laws of the Company, (C) a true, complete and correct
copy of the resolutions of the Company authorizing the
borrowing hereunder and the execution, delivery and
performance by the Company of the Loan Documents, (D)
certificates of good standing, or the equivalent thereof, from
each jurisdiction in which the Company does business, (E)
copies of employment contracts for key management level
employees of the Company, and (F) a copy of any shareholders'
or voting trust or other similar agreement among the
shareholders of the Company certified to be true, complete and
correct by an Authorized Signatory of the Company;
(ii) a loan certificate of each Subsidiary of the
Company on the Agreement Date, in substantially the form of
Exhibit B attached hereto, including a certificate of
incumbency with respect to each Authorized Signatory, together
with appropriate attachments which shall include, without
limitation, the following: (A) a copy of the Certificate of
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Incorporation of the Subsidiary certified to be true, complete
and correct by the Secretary of State of its state of
incorporation, (B) a true, complete and correct copy of the
By-Laws of such Subsidiary, (C) a true, complete and correct
copy of the resolutions of such Subsidiary authorizing such
Subsidiary with respect to the execution, delivery and
performance by such Subsidiary of each of the Loan Documents
to which it is a party and (D) certificates of good standing,
or the equivalent thereof, from each jurisdiction in which
such Subsidiary does business;
(iii) the duly executed Revolving Note;
(iv) the duly executed Security Agreement;
(v) the duly executed Stock Pledge Agreement;
(vi) the duly executed Subsidiary Security
Agreement;
(vii) the duly executed Subsidiary Guaranty;
(viii) a duly executed Trademark Security Agreement
in substantially the form of Exhibit C attached hereto from
each of the Company and Medirisk-MO;
(ix) the opinion of ▇▇▇▇▇▇ & Bird LLP, counsel to
the Company, addressed to the Lender, in substantially the
form of Exhibit D attached hereto;
(x) a duly executed Request for Advance, or
Request for Acquisition Advance, as applicable, covering the
initial Advances on the Revolving Loans;
(xi) copies of a lien search and report conducted
with respect to the Company and its Subsidiaries, which search
and report shall include a review of all Uniform Commercial
Code indices, tax lien records, general execution dockets and
plaintiff/defendant pending case tables as filed and recorded
in the records of all appropriate jurisdictions;
(xii) acknowledgment copies evidencing the
appropriate filing of all Uniform Commercial Code financing
statements required to be filed in connection with the
perfection of the Lender's security interest in and security
title to the Collateral;
(xiii) copies of insurance binders or certificates
covering the Collateral, naming the Lender as loss payee and
meeting the requirements of Section 4.4 hereof;
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(xiv) audited financial statements for the Company
for the most recently ended fiscal year for which audited
financial statements are available, and unaudited financial
statements for the Company for the fiscal period ended
September 30, 1996;
(xv) a waiver agreement executed in favor of the
Lender by each landlord, warehouseman, bailee, tenant or owner
of premises used by the Company or its Subsidiaries; and
(xvi) evidence reasonably satisfactory to the Lender
that all Necessary Authorizations have been obtained or made,
are in full force and effect, and are not subject to any
pending or threatened reversal or cancellation.
(b) All of the representations and warranties of the Company
under this Agreement shall be true and correct in all material
respects, both before and after giving effect to the application of the
proceeds of the initial Advance.
(c) The Lender shall have received, evidence, satisfactory to
the Lender and its counsel, with respect to the initial public offering
of the capital stock of the Company showing that the net proceeds of
the Company from such offering shall have been at least $22,500,000.
(d) The Lender shall have received evidence, satisfactory to
the Lender and its counsel, of the payment in full and complete
satisfaction of the Senior Subordinated Notes and the Acquisition
Notes, which evidence shall include, without limitation, a copy of each
cancelled note.
(e) The Lender shall have received all such other
certificates, reports, statements, opinions of counsel or other
documents, and shall have performed such additional diligence,
including, without limitation, discussions with customers of the
Company, as the Lender may reasonably deem necessary.
Section 2.2 Conditions Precedent to Each Advance Subsequent to the
Agreement Date. The obligation of the Lender to make each Advance which will
increase the principal amount of the Revolving Loans outstanding is subject to
the fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Advance:
(a) All of the representations and warranties of the Company
under this Agreement, which, pursuant to Section 3.2 hereof (as the
same shall have been amended by a report delivered to the Lender
pursuant to Section 5.5(e) hereof which report shall not contain any
information of a materially adverse nature with respect to the Company
or any of its Subsidiaries) are made at and as of the time of such
Advance, shall be true and correct at such time, both before
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and after giving effect to the Advance, and the Lender shall have
received a certificate to that effect from an Authorized Signatory of
the Company;
(b) The incumbency of the Authorized Signatories shall be as
stated in the Request for Advance, or Request for Acquisition Advance,
as applicable, delivered pursuant to Section 1.2 or as subsequently
modified and reflected in a more recent Request for Advance or Request
for Acquisition Advance;
(c) There shall not exist, as of the date of the making of the
Advance and after giving effect thereto, a Default or an Event of
Default hereunder, and the Lender shall have received a Request for
Advance, or Request for Acquisition Advance, as applicable, so stating;
(d) With respect to an Acquisition Advance, the Company shall
have complied with the terms and conditions of Sections 1.9 and 4.9
hereof, and the Lender shall have given its prior consent to the
Acquisition, as applicable;
(e) The Lender shall have received all other reports,
certificates, statements or opinions in connection with the Advance as
the Lender may reasonably request.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES.
Section 3.1 Representations and Warranties. The Company hereby
represents and warrants as follows and agrees that the following representations
and warranties shall survive the execution and delivery hereof by the Lender or
the making of the Revolving Loans under this Agreement:
(a) Organization: Power: Qualification.
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, has the power and authority, to own or
lease and operate its properties and to carry on its business
as now being and hereafter proposed to be conducted, and,
except as set forth on Schedule 3.1(a), is duly qualified and
is in good standing as a foreign corporation and authorized to
do business in each jurisdiction in which the character of its
properties or the nature of its business requires such
qualification or authorization.
(ii) Each Subsidiary of the Company is a corporation
duly organized, validly existing and in good standing under
the laws of its state of incorporation, having the Company as
its sole shareholder. Each Subsidiary of
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the Company has the power and authority, to own or lease and
operate its properties and to carry on its business as now
being and hereafter proposed to be conducted, and, except as
set forth on Schedule 3.1(a), is duly qualified and is in good
standing as a foreign corporation and authorized to do
business in each jurisdiction in which the character of its
properties or the nature of its business requires such
qualification or authorization.
(b) Authorization: Enforceability. Each of the Company and its
Subsidiaries has the power and has taken all necessary action to authorize it to
execute, deliver and perform this Agreement and each of the other Loan Documents
to which it is a party in accordance with the terms thereof and to consummate
the transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by the Company, and is, and each of the other Loan
Documents to which the Company or any of its Subsidiaries is a party is, a
legal, valid and binding obligation of the Company or such Subsidiary,
enforceable in accordance with its terms.
(c) Subsidiaries. Except as set forth on Schedule 3.1(c)
attached hereto, the Company has no Subsidiaries. With respect to each
Subsidiary of the Company, Schedule 3.1(c) also sets forth (i) the state of its
incorporation, (ii) all jurisdictions in which the Subsidiary is qualified to do
business as a foreign corporation and (iii) the address of the principal place
of business of such Subsidiary.
(d) Capital Stock and Related Matters. The authorized capital
stock of the Company together with the number of shares that are currently
issued and outstanding is as set forth on Schedule 3.1(d) attached hereto and
all such shares are fully paid and non-assessable. All Persons known to the
Company to be the holders of more than five percent (5%) of such capital stock,
together with a description of such capital stock held by such Person, are
listed on Schedule 3.1(d) attached hereto.
(e) Compliance with Laws, Other Loan Documents and
Contemplated Transactions. The execution, delivery and performance of this
Agreement and each of the other Loan Documents in accordance with their
respective terms and the consummation of the transactions contemplated hereby
and thereby do not and will not (i) violate any Applicable Law, (ii) conflict
with, result in a breach of or constitute a default under the Articles of
Incorporation or By-Laws of the Company, or under any indenture, agreement or
other instrument to which the Company or any of its Subsidiaries is a party or
by which it or any of its properties may be bound or (iii) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Company except Permitted Liens.
(f) Real Property. All real property presently leased by the
Company and its Subsidiaries and the name of the lessor of such real property,
is set forth in Schedule 3.1(f). The leases of the Company and each of its
Subsidiaries are valid,
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enforceable and in full force and effect, and have not been modified or amended,
except as otherwise set forth in Schedule 3.1(f). The Company, or the
appropriate Subsidiary, is the sole holder of the lessee's interests under each
such lease, and has the right to pledge and assign the same except as qualified
in Schedule 3.1(f). Neither the Company or any of its Subsidiaries has made any
pledge or assignment (other than to the Lender) of any of its rights under such
leases except as set forth in Schedule 3.1(f) and, so far as is known to the
Company, except as set forth in Schedule 3.1(f), there is no default or
condition which, with the passage of time or the giving of notice, or both,
would constitute a material default on the part of any party under such leases.
All real property presently owned by the Company is set forth in Schedule
3.1(h). The Company presently does not own, lease or use any real property other
than as set forth on Schedule 3.1(f) or Schedule 3.1(h).
(g) Necessary Authorizations. The Company has secured all
Necessary Authorizations, and all such Necessary Authorizations are in full
force and effect and not subject to any pending attack or revocation.
(h) Title to Properties. Each of the Company and its
Subsidiaries has good, marketable and legal title to, or a valid leasehold
interest in, all of their respective material properties and assets (including,
without limitation, the Accounts), and none of such properties or assets is
subject to any Liens, other than Permitted Liens, which materially detract from
the value of such properties or assets or materially interferes with the
respective business or operations of the Company and its Subsidiaries as
presently conducted or proposed to be conducted. Neither Company nor any of its
Subsidiaries owns any real property other than that listed on Schedule 3.1(h)
attached hereto.
(i) Taxes. Except as detailed on Schedule 3.1(i) attached
hereto, all federal, state and other tax returns of the Company and each of its
Subsidiaries required by law to be filed have been duly filed, and all federal,
state and other taxes, assessments and other governmental charges or levies upon
the Company and each of its Subsidiaries and any of their respective properties,
income, profits and assets, which are due and payable, have been paid, except
any such sums the payment of which the Company or its Subsidiary is contesting
in good faith by appropriate proceedings and for which adequate reserves have
been provided on the books of the Company or its Subsidiary, as applicable.
(j) Financial Statements. The Company has furnished, or caused
to be furnished, to the Lender financial statements for the Company and its
Subsidiaries which are complete and correct in all material respects and present
fairly in accordance with GAAP the financial position of the Company as at
September 30, 1996, and the results of operations for the period then ended.
Except as disclosed in such financial statements, the Company has had no
material liabilities required to be reflected in financial statements prepared
in accordance with GAAP, contingent or
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otherwise, and there are no material unrealized or anticipated losses of the
Company which have not been heretofore disclosed in writing to the Lender.
(k) No Adverse Change. Except as set forth on Schedule 3.1(k),
since June 30, 1996, there has occurred no event which would have a Materially
Adverse Effect.
(l) Liabilities, Litigation, etc. Except for liabilities
incurred in the normal course of business, neither the Company nor any of its
Subsidiaries has had any material (individually or in the aggregate)
liabilities, direct or contingent, nor any litigation (pending or threatened)
except as disclosed or referred to in the financial statements referred to in
Section 3.1(j) above. Except as disclosed on Schedule 3.1(l), there is no
litigation, legal or administrative proceeding, investigation or other action of
any nature pending or, to the knowledge of the Company, threatened against or
affecting the Company, any of its Subsidiaries or any of its or their respective
properties which involves the possibility of any judgment or liability not fully
covered by insurance that, singly or in the aggregate, could reasonably be
expected to have a Materially Adverse Effect.
(m) ERISA. The Company and each ERISA Affiliate and each of
their respective Plans are in substantial compliance with ERISA and the Code,
and neither the Company nor any of its ERISA Affiliates has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. The Company and each of its ERISA Affiliates have complied
with all requirements of ERISA Sections 601 through 608 and Code Section 4980B.
Neither the Company nor any of its ERISA Affiliates has made any promises of
retirement or other benefits to employees, except as set forth in the Plans. The
Company has not incurred any material liability to the Pension Benefit Guaranty
Corporation in connection with any such Plan. The assets of each such Plan which
is subject to Title IV of ERISA are sufficient to provide the benefits under
such Plan, the payment of which the Pension Benefit Guaranty Corporation would
guarantee if such Plan were terminated, and such assets are also sufficient to
provide all other "benefit liabilities" (as defined in ERISA Section 4001(a)(16)
due under the Plan upon termination. No Reportable Event has occurred and is
continuing with respect to any such Plan. No such Plan or trust created
thereunder, or party in interest (as defined in Section 3(14) of ERISA), or any
fiduciary (as defined in Section 3(21) of ERISA), has engaged in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) which would subject such Plan or any other Plan of the Company or any
of its ERISA Affiliates, any trust created thereunder, or any such party in
interest or fiduciary, or any party dealing with any such Plan or any such trust
to the penalty or tax on "prohibited transactions" imposed by Section 502 of
ERISA or Section 4975 of the Code. Neither the Company nor any of its ERISA
Affiliates is a participant in or is obligated to make any payment to a
Multiemployer Plan.
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(n) Compliance with Law; Absence of Default. The Company and
each of its Subsidiaries is in compliance with all Applicable Laws the
non-compliance with which would have a Materially Adverse Effect, and no event
has occurred or has failed to occur which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes (i) a Default or (ii) a
default by the Company or any of its Subsidiaries under any other indenture,
agreement or other instrument, or any judgment, decree or order to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of its or their properties may be bound, which default
could reasonably be considered to have a Materially Adverse Effect.
(o) Casualties; Taking of Properties, etc. Since the date of
the most recent financial statements provided to the Lender by the Company,
neither the business nor the properties of the Company has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces, or acts of God or of any public enemy.
(p) Accuracy and Completeness of Information. None of the
financial statements or any written statements delivered to the Lender pursuant
to this Agreement contains, as at the date of delivery thereof, any untrue
statement of material fact nor do such financial statements, and such written
statements, taken as a whole, omit to state a material fact or any fact
necessary to make the statements contained therein not misleading. As of the
Agreement Date, and as supplemented by the Company from time to time pursuant to
Section 5.4(6), Schedule 3.1(p) hereto lists each Material Customer Contract to
which the Company or any of its Subsidiaries is a party.
(q) Compliance with Regulations G, T, U and X. Neither the
Company nor any of its Subsidiaries is engaged principally or as one of its
important activities in the business of extending credit for the purpose of
purchasing or carrying, and neither the Company nor any of its Subsidiaries own
or presently intend to acquire, any "margin security" or "margin stock" as
defined in Regulations G, T, U, and X (12 C.F.R. Parts 221 and 224) of the Board
of Governors of the Federal Reserve System (herein called "margin stock"). None
of the proceeds of the Revolving Loans will be used, directly or indirectly, for
the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of said Regulations G, T, U
and X.
(r) Solvency. The Company and each of its Subsidiaries is
Solvent.
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(s) Business. The Company's business includes providing
proprietary databases and related decision-support software and analytical
services to the United States healthcare industry.
(t) Name of the Company and its Subsidiaries; Principal Place
of Business. Neither the Company nor any of its Subsidiaries has changed its
name, or transacted business under any other name or trade name, within the five
(5) years preceding the Agreement Date, except as disclosed on Schedule 3.1(t)
hereto. The principal place of business of the Company is as set forth in
Section 7.1 hereto.
(u) Environmental Matters. Except as would not, individually
or in the aggregate, have a Materially Adverse Effect, and except as is
described on Schedule 3.1(u) attached hereto with respect to each of the
Properties:
(i) To the knowledge of the Company, the Properties
do not contain, in, on or under, including, without
limitation, the soil and groundwater thereunder, any Hazardous
Materials in violation of Environmental Laws or in amounts
that could give rise to liability under Environmental Laws;
(ii) To the knowledge of the Company, the Properties
and all operations and facilities at the Properties are in
compliance with all Environmental Laws, and to the knowledge
of the Company, there is no contamination or violation of any
Environmental Law which could interfere with the continued
operation of any of the Properties or impair the financial
condition of the Company;
(iii) The Company has not received from any
governmental authority any complaint, notice of violation,
alleged violation, investigation or advisory action or notice
of potential liability regarding matters of environmental
protection or permit compliance under applicable Environmental
Laws with regard to the Properties, nor is the Company aware
that any governmental authority is contemplating delivering to
the Company or any of its Subsidiaries any such notice. To the
knowledge of the Company, there has been no pending or
threatened complaint, notice of violation, alleged violation,
investigation or notice of potential liability under
Environmental Laws with regard to any of the Properties;
(iv) Neither the Company nor any of its Subsidiaries
has generated, treated, stored, or disposed of any Hazardous
Materials at, on or under any of the Properties in violation
of any Environmental Laws or in a manner that could give rise
to liability under Environmental Laws nor has the Company or
any of its Subsidiaries transported or disposed of any
Hazardous Materials from any of the Properties to any other
location in violation of any
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Environmental Laws or in a manner that could give rise to
liability under Environmental Laws;
(v) There are no governmental administrative actions
or judicial proceedings pending under any Environmental Law to
which the Company or any of its Subsidiaries is a party with
respect to any of the Properties, nor to the knowledge of the
Company, are there any consent decrees or other decrees,
consent orders, administrative orders or other orders or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties; and
(vi) To the knowledge of the Company, there has been
no release or threat of release by the Company or any of its
Subsidiaries of Hazardous Materials into the environment at or
from any of the Properties, or arising from or relating to the
operations of the Company, in violation of Environmental Laws
or in amounts that could give rise to liability under
Environmental Laws.
(v) Patents, Trademarks, Franchises, etc. Except as set forth
on Schedule 3.1(v) attached hereto, neither the Company nor any of its
Subsidiaries owns any registered patents, trademarks, service marks or
registered copyrights and has no pending registration applications with respect
to patents, trademarks, service marks or copyrights. Except as set forth on
Schedule 3.1(v), no other patents, trademarks, service marks or registered
copyrights are necessary for the operation of the business of the Company or any
of its Subsidiaries.
(w) OSHA. All of the operations of each of the Company and its
Subsidiaries are conducted in material compliance with all applicable rules and
regulations promulgated by the Occupational Safety and Health Administration of
the United States Department of Labor.
(x) Investment Company Act. Neither the Company nor any of its
Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Company of this Agreement nor the issuance of the Revolving Note violates
any provision of such Act or requires any consent, approval, or authorization
of, or registration with, any governmental or public body or authority pursuant
to any of the provisions of such Act.
Section 3.2 Survival of Representations and Warranties. All
representations or warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, at and as of the Agreement Date and the
date of each Advance, except to the extent previously fulfilled in accordance
with the terms hereof and to the extent subsequently inapplicable or modified as
a result of activities of the Company
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and its Subsidiaries or changes in circumstances, in any case as permitted
hereunder or consented to in accordance with the provisions hereof.
ARTICLE 4.
GENERAL COVENANTS
So long as any of the Obligations is outstanding and unpaid, or the
Lender has an obligation to make Advances hereunder, and unless the Lender shall
otherwise consent in writing:
Section 4.1 Preservation of Existence and Similar Matters. Except as
provided in Section 6.6 hereof, the Company will, and will cause each of its
Subsidiaries to, (a) preserve and maintain its existence, licenses and
privileges in its jurisdiction of incorporation including, without limitation,
all Necessary Authorizations and (b) qualify and remain qualified and authorized
to do business in each jurisdiction in which the character of its properties or
the nature of its businesses requires such qualification or authorization.
Section 4.2 Compliance with Applicable Law. The Company will comply,
and will cause each of its Subsidiaries to comply, with the requirements of all
Applicable Laws.
Section 4.3 Maintenance of Properties. The Company will maintain, and
will cause each of its Subsidiaries to maintain, or cause to be maintained in
the ordinary course of business in good repair, working order and condition all
properties (including, without limitation, the Equipment) used or useful in its
business (whether owned or held under lease), and from time to time to make or
cause to be made all needed and appropriate repairs, renewals, replacements,
additions, betterments and improvements thereto.
Section 4.4 Insurance. The Company will:
(a) Maintain insurance including, but not limited to, public
liability, product and manufacturer's liability and fidelity coverage
insurance from responsible companies in such amounts and against such
risks as shall be generally insured against by companies engaging in
businesses similar to that of the Company;
(b) Keep the Collateral insured by insurers on terms and in a
manner based on industry standards for companies engaged in businesses
similar to that of the Company against loss or damage by fire, theft,
burglary, pilferage, loss in transit, explosions, and hazards insured
against by extended coverage, and, with respect to any properties and
assets located in a designated flood
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plain, flood insurance, all in amounts reasonably satisfactory to the
Lender and all premiums thereon to be paid by the Company; and
(c) Require that copies of each such insurance policy referred
to in Section 4.4(b) above shall be provided to the Lender, shall name
the Lender as an additional loss payee, or additional insured, if
appropriate, to the extent of the Obligations, and shall provide for at
least thirty (30) days' prior written notice to the Lender of any
default under, termination of or proposed cancellation of any such
policy and provide confirmation thereof to the Lender on each July 1
and December 31 during the term hereof. All such amounts paid in excess
of $25,000 in respect of any such policy shall be paid directly to the
Lender and shall be applied by it to the payment of any of the
Obligations at the time due and payable.
Section 4.5 Payment of Taxes and Claims. The Company will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it and all lawful
claims for labor, materials and supplies which, if unpaid, might become a Lien
upon any of its properties; except that, no such tax, assessment, charge, levy
or claim need be paid which is being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books. The Company shall timely file all information returns
required by federal, state or local tax authorities.
Section 4.6 Visits and Inspections. Upon twenty-four (24) hours'
telephonic notice, the Company shall permit, and will cause each of its
Subsidiaries to permit, representatives of the Lender to visit and inspect the
properties, books and records of the Company during normal business hours and
discuss with its principal officers its businesses, financial positions and
results of operations.
Section 4.7 ERISA. The Company shall at all times make, or cause to be
made, prompt payment of contributions required to meet the minimum funding
standards set forth in ERISA with respect to its and its ERISA Affiliates'
Plans; promptly after the filing thereof, furnish to the Lender copies of any
annual report required to be filed pursuant to ERISA in connection with each
such Plan of it and its ERISA Affiliates; notify the Lenders as soon as
practicable of any Reportable Event and of any additional act or condition
arising in connection with any such Plan which the Company believes might
constitute grounds for the termination thereof by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan; and furnish to the Lender, promptly
upon the Lender's request therefor, such additional information concerning any
such Plan as may be reasonably requested by the Lender.
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Section 4.8 Further Assurances. The Company will promptly cure, or
cause to be cured, defects in the creation and issuance of the Revolving Note
and the execution and delivery of the Loan Documents resulting from any act or
failure to act by the Company or any employee or officer thereof, including this
Agreement and the perfection of any Liens in favor of the Lender.
Section 4.9 Covenants Regarding Formation of New Subsidiaries and
Acquisitions.
(a) As soon as available, but not later than the date of
Acquisition, whether or not such Acquisition constitutes a Material Acquisition,
or the formation of any new Subsidiary of the Company or any of its
Subsidiaries, the Company and its Subsidiaries, as applicable, shall, as
applicable to the extent such formation is permitted in this Agreement, shall:
(i) provide to the Lender copies of a lien search and
report conducted with respect to each Counterparty
proposed to be acquired, which search and report
shall include a review of all Uniform Commercial Code
indices, tax lien records, general execution dockets
and plaintiff/defendant pending case tables as filed
and recorded in the records of all appropriate
jurisdictions;
(ii) execute and deliver to the Lender a certificate with
respect to each Counterparty proposed to be acquired,
or new Subsidiary, substantially in the form of
Exhibit B attached hereto, together with appropriate
attachments thereto;
(iii) with respect to each Counterparty proposed to be
acquired, or any new Subsidiary, execute or cause the
applicable Subsidiary, to execute and deliver to the
Lender such collateral documents, including, without
limitation, a security agreement, guaranty,
instruments and such financing statements and such
other documentation for such pledge and assignment
as, in the reasonable opinion of the Lender, is
appropriate, and all of which in such form and
substance as shall be acceptable to the Lender;
(iv) provide to the Lender a duly executed certificate
signed by an Authorized Signatory of the Company, or
the applicable Subsidiary, certifying that upon the
delivery and proper filing of each of the documents
contemplated under this Section, the Lender shall
have a first priority perfected security interest,
subject only to Permitted Liens, in all
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Collateral acquired as a result of the Acquisition,
or held by the new Subsidiary;
(v) provide all other documentation, including, without
limitation, to the extent available, financial
statements and information with respect to such new
Subsidiary for the most recent period ending
immediately prior to the date of such formation and
other financial information, to the extent available,
which in the reasonable opinion of the Lender is
appropriate with respect to such new Subsidiary to
confirm the Company's compliance with the terms and
conditions of this Agreement; and
(vi) at the request of the Lender, provide evidence of all
Necessary Authorizations relating to such new
Subsidiary.
(b) In addition to the requirements of Section 4.9(a), with
respect to any Material Acquisition, as soon as available, but not in any event
later than ten (10) days after the date of such Acquisition, the Company, and
its Subsidiaries, as applicable, shall:
(i) provide to the Lender a summary overview of the
Counterparty proposed to be acquired, which shall
include (i) the location of such Counterparty, (ii)
the number of employees of such Counterparty, (iii) a
description of such Counterparty's business; (iv) the
number of customers of such Counterparty; (v) a list
and description of such Counterparty's products; (vi)
a description of the type of Acquisition (acquisition
of assets or stock, merger or other); (vii) a
description of the ownership of such Counterparty;
(viii) a description of the Company's short- and
intermediate-term consolidation plan; and (ix) a
description of any synergy opportunities identified
by the Company;
(ii) provide the Lender with final, executed, if
applicable, copies of the following documents with
respect to such Acquisition: (x) all letters of
intent, if any, between the Company and each
Counterparty; (y) due diligence checklists provided
by the Company to each Counterparty substantially in
the form of Schedule 1.9(c)(ii) attached hereto; and
(z) the acquisition agreement, or similar agreement,
governing the Acquisition, together with all
schedules and exhibits thereto;
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(iii) provide to the Lender financial information relating
to each Counterparty proposed to be acquired by the
Acquisition, which information shall include that
information more fully set forth on Schedule
1.9(c)(iv) attached hereto;
(iv) execute and deliver to the Lender an assignment of
each acquisition document from the Company, or the
applicable Subsidiary, to the Lender, in such form
and substance as shall be acceptable to the Lender
and its counsel; and
(v) with respect to any Acquisition the purchase price of
which Acquisition shall be in excess of $5,000,000,
shall use its best efforts to cause the Lender to be
a co-addressee with respect to the legal opinion
delivered to the Company from the counsel for the
seller, or sellers.
(c) In addition to the requirements of Section 4.9(a), with
respect to each Acquisition which shall not constitute a Material Acquisition,
not later than ten (10) days following the date of such Acquisition, the
Company, and its Subsidiaries, as applicable, shall:
(i) provide to the Lender a summary overview of the
Counterparty proposed to be acquired, which shall
include (i) the location of such Counterparty, (ii)
the number of employees of such Counterparty, (iii) a
description of such Counterparty's business; (iv) the
number of customers of such Counterparty; (v) a list
and description of such Counterparty's products; (vi)
a description of the type of Acquisition (acquisition
of assets or stock, merger or other); (vii) a
description of the ownership of such Counterparty;
(viii) a description of the Company's short- and
intermediate-term consolidation plan; and (ix) a
description of any synergy opportunities identified
by the Company;
(ii) provide to the Lender financial information relating
to each Counterparty proposed to be acquired by the
Acquisition, which information shall include that
information more fully set forth on Schedule
1.9(c)(iv) attached hereto; and
(iii) execute and deliver to the Lender an assignment of
each acquisition documents from the Company, or the
applicable Subsidiary, to the Lender, in such form
and substance as shall be acceptable to the Lender
and its counsel together with copies of all material
documents executed in
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connection with the Acquisition certified by an
Authorized Signatory of the Company to be true,
correct and complete copies thereof.
Any document, agreement or instrument executed or issued pursuant to
this Section 4.9 shall be and constitute a "Loan Document" for purposes of this
Agreement.
The requirements of this Section 4.9 shall be separate from and in
addition to the requirements regarding certain Acquisition Advances, including,
without limitation, the requirement that a Request for Acquisition Advance,
together with appropriate attachments, be delivered to the Lender, pursuant to
Section 1.9(c) hereof.
Section 4.10 Indemnity. The Company will indemnify and hold harmless
the Lender and each of its employees, representatives, officers and directors
(collectively, the "Indemnified Parties") from and against any and all claims,
liabilities, losses, damages, actions, and demands by any party (other than with
respect to any claims, actions or demands made by other such indemnified parties
or any liabilities, losses or damages caused thereby) against the Lender,
resulting from any breach or alleged breach by the Company or any of its
Subsidiaries of any representation or warranty made hereunder, or otherwise
arising out of the Commitment or the making, administration or enforcement of
the Loan Documents and the Revolving Loans; unless, with respect to any of the
above, the Lender is finally judicially determined to have acted or failed to
act with gross negligence or willful misconduct. This Section shall survive
termination of this Agreement.
Section 4.11 Use of Proceeds. The Company shall use the proceeds of
Advances hereunder to fund Acquisitions made in compliance with the terms of
this Agreement, for working capital needs and general corporate purposes.
ARTICLE 5.
INFORMATION COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Lender has any obligation to make Advances hereunder, and unless the Lender
shall otherwise consent in writing, the Company shall furnish or cause to be
furnished to the Lender:
Section 5.1 Quarterly Financial Statements and Information. Within
sixty (60) days after the last day of each fiscal quarter of the Company, the
balance sheet of the Company as at the end of such quarter, and the related
statement of income and retained earnings and related statement of cash flows of
the Company and for such quarter and for the elapsed portion of the year ended
with the last day of such quarter, which financial statements shall set forth in
comparative form such figures
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for the same period for the prior calendar year (all of which shall be on a
consolidated basis with the Company's Subsidiaries) and certified by an
Authorized Signatory of the Company to, in his or her opinion, present fairly,
in accordance with GAAP, the financial position of the Company and its
Subsidiaries as at the end of such period, and the results of operations for
such period, and for the elapsed portion of the year ended with the last day of
such period, subject only to normal year-end adjustments, together with the Form
10-Q Quarterly Report filed by the Company with the Securities and Exchange
Commission with respect to such period.
Section 5.2 Audited Annual Financial Statements and Information:
Certificate of No Default. Within one hundred and twenty (120) days after the
end of each fiscal year of the Company, the balance sheet of the Company as at
the end of such fiscal year and the related statements of income, retained
earnings and cash flow of the Company for such fiscal year and on a consolidated
and a consolidating basis with the Company's Subsidiaries, setting forth in
comparative form the figures as at the end of and for the previous fiscal year
and certified by independent certified public accountants of recognized national
standing whose opinion shall not be qualified as to the scope of audit or as to
the status of the Company or any of the Subsidiaries as a going concern,
together in any event with a certificate of such accounting firm stating that in
the course of its regular audit of the business of the Company and the
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge of any
Default or Event of Default relating to Sections 6.9, 6.10, 6.11, 6.12 and 6.13
that has occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof, and who shall have authorized the Company to
deliver such financial statements and opinion thereon to the Lender pursuant to
this Agreement.
Section 5.3 Covenant Compliance Certificates. At the time financial
statements are required to be provided under Sections 5.1 and 5.2, a
certificate, substantially in the form of Exhibit E attached hereto, of an
Authorized Signatory of the Company (i) setting forth as at the end of such
quarter or calendar year, as the case may be, the arithmetical calculations
required to establish whether or not the Company was in compliance with the
requirements of Sections 6.9, 6.10, 6.11, 6.12 and 6.13 hereof, (ii) setting
forth as at the end of such quarter the arithmetical calculations required to
establish the Advance Rate of the Company to be applied with respect to Advances
made during the succeeding quarter; (iii) stating that, to the best of his or
her knowledge, no Default or Event of Default has occurred as at the end of such
quarter or year, as the case may be, or, if a Default or an Event of Default has
occurred, disclosing each such Default or Event of Default and its nature, when
it occurred, whether it is continuing, and the steps being taken by the Company
with respect to such Default or Event of Default and (iv) setting forth a list
and description
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of, together with applicable financial statements, if available, with respect to
each Acquisition by the Company or any of its Subsidiaries during the period for
which such Compliance Certificate is being given.
Section 5.4 Copies of Other Reports. The Company shall deliver, or
cause to be delivered, to the Lender:
(1) As soon as available, but not in any event, without the
prior written consent of the Lender, later than March 31 of each fiscal year of
the Company, an annual business and financial plan with respect to the Company's
business for the current fiscal year;
(2) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Company by the Company's independent public accountants
regarding the Company, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 5.2 hereof;
(3) Promptly after the sending thereof, copies of all
statements, reports and other material financial information which the Company
or any of its Subsidiaries shall send to its respective shareholders;
(4) Promptly after the preparation of the same, copies of all
material reports or financial information filed with any governmental agency,
department, bureau, division or other governmental authority or regulatory body,
or evidencing facts or containing information which could have a Materially
Adverse Effect; and
(5) At the time financial statements are required to be
provided under Section 5.1, a written list of each Material Customer Contract
then in effect (noting any Material Customer Contracts that have been either
added or deleted with respect to the prior quarter).
(6) From time to time and promptly upon each request, such
data, certificates, reports, statements, opinions of counsel, documents, or
further information regarding the Collateral or the business, assets,
liabilities, financial position, projections, results of operations or business
prospects of the Company and its Subsidiaries, as the Lender reasonably may
request.
Section 5.5 Notice of Litigation and Other Matters. Prompt notice of
the following events after the Company has, or in the exercise of reasonable
diligence should have, received notice thereof:
(a) The commencement of all proceedings and investigations by
or before any governmental body and all actions and proceedings in any
court or before any arbitrator (i) against, or (ii) (to the extent
known to the Company) in any other way relating adversely to, the
Company or any of its Subsidiaries
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or any of their respective assets or businesses which, if adversely
determined, would singly or when aggregated with all other such
proceedings, investigations, and actions, if adversely determined, have
a Materially Adverse Effect;
(b) Any material adverse change with respect to the business,
assets, liabilities, financial position, results of operations or
business prospects of the Company or any of its Subsidiaries other than
changes in the ordinary course of business the effects of which have
not had, and are not reasonably expected to have, a Materially Adverse
Effect;
(c) Any Default or Event of Default or the occurrence or
non-occurrence of any event which constitutes, or which with the
passage of time or giving of notice (or both) would constitute a
default by the Company or any of its Subsidiaries under any material
agreement other than this Agreement to which the Company or any of its
Subsidiaries is a party or by which its respective properties may be
bound, giving in each case the details thereof and specifying the
action proposed to be taken with respect thereto;
(d) The occurrence of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) with respect to any Plan of the Company or
any of its ERISA Affiliates or the institution or threatened
institution by the Pension Benefit Guaranty Corporation of proceedings
under ERISA to terminate or to partially terminate any such Plan or the
commencement or threatened commencement of any litigation regarding any
such Plan or naming it or the Trustee of any such Plan with respect to
such Plan; and
(e) The occurrence of any event subsequent to the Agreement
Date which, if such event had occurred prior to the Agreement Date,
would have constituted an exception to the representations and
warranties in Sections 3.1(c), (d), (f), (h), (i), (k), (l) or (u) of
this Agreement.
ARTICLE 6.
NEGATIVE COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Lender have an obligation to make Advances hereunder, and unless the Lender
shall otherwise consent in writing, the Company hereby agrees that:
Section 6.1 Indebtedness. The Company shall not create, assume, incur
or otherwise become or remain obligated in respect of, or permit to be
outstanding, and shall not permit any of its Subsidiaries to create, assume,
incur, or otherwise become obligated in respect of, or permit to be outstanding,
any Indebtedness except:
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(a) Indebtedness under this Agreement and the other Loan
Documents;
(b) Trade or accounts payable and/or similar obligations,
and accrued expenses, incurred in the ordinary course
of business, other than for borrowed money;
(c) Indebtedness incurred in connection with any
Acquisition in favor of any Counterparty, including,
without limitation, under any hold- back note, which
Indebtedness is expressly subordinated to
Indebtedness under this Agreement and the other Loan
Documents by language to which the Lender has given
its prior approval;
(d) Intercompany Indebtedness among the Company and its
Subsidiaries; provided, that the repayment of any
such Indebtedness owed by the Company or any of its
Subsidiary to any Subsidiary not a Credit Party
pursuant to the terms of this Agreement shall be
subordinated to the prior payment in full of the
Obligations;
(e) Indebtedness owed by any Counterparty proposed to be
acquired in an Acquisition which Indebtedness is
outstanding as at the date of such Acquisition;
provided, however, that Indebtedness for money
borrowed assumed in connection with all Acquisitions
shall not be in excess of $1,000,000 in the
aggregate; and
(f) Indebtedness secured by Permitted Liens.
Section 6.2 Guaranties. The Company shall not, and shall not permit any
of its Subsidiaries to, at any time enter into or Guaranty, or assume, be
obligated with respect to, or permit to be outstanding, any Guaranty, other than
(a) obligations under repurchase agreements of the Company entered into in
connection with the sale of products in the ordinary course of business of the
Company, (b) obligations under agreements to indemnify persons or entities which
have issued bid or performance bonds or letters of credit in the ordinary course
of business of the Company securing performance by the Company of activities
permissible hereunder, (c) obligations under agreements of the Company entered
into in connection with the acquisition of services, supplies and equipment in
the ordinary course of business of the Company, (d) obligations of any
Subsidiary under agreements entered into by such Subsidiary in the ordinary
course of business, (e) Indebtedness of the Company and any of its Subsidiaries
permitted to be incurred pursuant to Section 6.1 hereof; and (f) any Guaranty in
favor of the Lender.
Section 6.3 Liens. The Company shall not create, assume, incur, or
permit to exist or to be created, assumed, or permitted to exist, directly or
indirectly, and shall not permit any of its Subsidiaries to create, assume,
incur, or permit to exist or to be created, assumed, or permitted to exist,
directly or indirectly, any Lien on any
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of its property, real or personal, now owned or hereafter acquired, except for
Permitted Liens.
Section 6.4 Restricted Payments and Purchases. The Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly declare
or make any Restricted Payment or Restricted Purchase, or set aside any funds
for any such purpose, other than the Restricted Payments and Restricted
Purchases described on Schedule 6.4 attached hereto.
Section 6.5 Investments. Except for Acquisitions not prohibited by the
terms of this Agreement, the Company shall not, and shall not permit any of its
Subsidiaries to, make any loan, advance, or otherwise acquire for consideration
evidences of Indebtedness, capital stock, partnership interests or other
securities of or equity interests in any third party, except that the Company
and its Subsidiaries may purchase or otherwise acquire, own, (a) marketable,
direct obligations of the United States of America and its agencies maturing
within three hundred sixty-five (365) days of the date of purchase, (b)
commercial paper issued by corporations, each of which shall (i) have a
consolidated net worth of at least $250,000,000 and (ii) will mature within one
hundred eighty (180) days from the date of the original issue thereof and is
rated "P-2" or better by ▇▇▇▇▇'▇ Investors Service, Inc., or "A-2" or better by
Standard & Poor's Corporation, (c) certificates of deposit maturing within three
hundred sixty-five (365) days of the date of purchase and issued by a United
States national or state bank having deposits totaling more than $250,000,000,
and whose short-term debt is rated "P-2" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. or "A-2" or better by Standard & Poor's Corporation and (d) up to $100,000
per institution and up to $1,000,000 in the aggregate in (i) short-term
obligations issued by any local commercial bank or trust company located in
those areas where the Company or any of its Subsidiaries conducts its business,
whose deposits are insured by the Federal Deposit Insurance Corporation, or (ii)
commercial bank-insured money market funds, or any combination of investments
described in clauses (i) and (ii).
Section 6.6 Liquidation; Disposition or Acquisition of Assets. Except
with respect to Acquisitions otherwise governed by the terms of this Agreement,
the Company shall not, and shall not permit any of its Subsidiaries to, at any
time:
(a) (i) liquidate or dissolve itself (or suffer any
liquidation or dissolution) or otherwise wind up, or (ii) sell, lease,
abandon, transfer or otherwise dispose of any assets or business (other
than obsolete equipment and inventory or other property in the ordinary
course of business) or (iii) enter into any merger or consolidation,
except that Subsidiaries may merge with each other or the Company or
(iv) convey, pledge, encumber or otherwise transfer any of its shares
or issue any new shares of any existing Subsidiaries to any Person
other than the Company or any other Subsidiary;
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(b) except for Capital Expenditures in the ordinary course of
the Company's business, acquire the assets, property, stock or business
of any other Person, except that so long as no Event of Default then
exists or would be caused thereby, the Company and its Subsidiaries may
make Acquisitions subject to compliance with the terms and conditions
of Sections 1.9 and 4.9 hereof as applicable.
Section 6.7 Change of Name or Year. The Company shall not, and shall
not permit any of its Subsidiaries to, at any time:
(a) Change its corporate name without giving the Lender thirty
(30) days prior written notice of its intention to do so and
complying with all reasonable requirements of the Lender in regard
thereto; or
(b) Change its fiscal year-end for accounting purposes from a
calendar year-end.
Section 6.8 Affiliate Transactions. The Company shall not at any time
engage in any transaction with an Affiliate (except an Affiliate which
constitutes a Credit Party pursuant to the terms of this Agreement) on terms
generally less advantageous to the Company than would be the case if such
transaction had been effected with a non-Affiliate.
Section 6.9 Debt/Capitalization Ratio. The Company shall not, at any
time, permit its ratio of (i) Debt to (ii) Capitalization to exceed 1.0 to 1.0.
If, in connection with a Material Acquisition, the Company determines
that the accounting treatment for "acquired in-process research and development
expense, and similar expense," might result in a default under this Section 6.9,
the Company may request the Lender to modify the Debt/Capitalization Ratio so
that no default shall occur as a result of such acquisition and accounting
treatment. Upon such request, the Lender agrees to consider such request in the
exercise of its reasonable business and financial judgment; provided that, any
decision with respect to such request shall be in the sole and absolute
discretion of the Lender.
Section 6.10 Cash Flow Leverage Ratio. The Company shall not, at any
time, permit its ratio of (i) Total Funded Debt to (ii) EBITDA to exceed (a) 2.0
to 1.0, for calculation dates during 1997 or (ii) 3.0 to 1.0, for calculation
dates during 1998.
Section 6.11 Debt Service Coverage Ratio. The Company shall not, at any
time during the term of this Agreement, permit its Debt Service Coverage Ratio
to be less than 1.25 to 1.0.
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Section 6.12 Restricted Payments. The Company shall not apply any sums
to the redemption, retirement or purchase or any warrant, option or share of its
capital stock, or to the payment of any dividend or other distributions thereon,
if after such application shall have been made, the aggregate of the sums so
applied since the Agreement Date exceed ten percent (10%) of the Net Income of
the Company determined on a cumulative basis as of the end of each fiscal year
commencing December 31, 1996.
Section 6.13 Minimum Net Worth. The Company shall not, at any time
during the term of this Agreement, permit the sum of (i) the Company's Net Worth
plus (ii) any non-cash charges and expenses related to Acquisitions or research
and development, including, without limitation, acquired in-process research and
development expense and similar expenses, to be less than $16,000,000.
ARTICLE 7.
DEFAULT
Section 7.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement
or any other Loan Document shall prove incorrect or misleading in any
material respect when made;
(b) The Company shall default in the payment of any fees due
hereunder or of any principal or interest under the Revolving Note
within five (5) days from when any such payment is due;
(c) The Company shall default in the performance or observance
of any agreement or covenant contained in Article 6 hereof;
(d) The Company shall default in the performance or observance
of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 7.1, and such
Default shall not be cured
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to the Lender's satisfaction within a period of thirty (30) days after
notice thereof by the Lender to the Company;
(e) There shall occur any default in the performance or
observance of any agreement or covenant or breach of any representation
or warranty contained in any of the Loan Documents (other than this
Agreement), which shall not be cured within any applicable grace period
set forth therein, or the Company or any Affiliate shall in any way
challenge, or any proceedings shall in any way be brought to challenge
(and, in the case of a proceeding brought by someone other than the
Company or any Affiliate, shall continue unstayed for a period of
thirty (30) days), the prior (subject to Permitted Liens) and perfected
status of the Lender's security interest with respect to the Collateral
or the validity or enforceability of such security interest;
(f) There shall be entered a decree or order by a court having
jurisdiction in the premises constituting an order for relief in
respect of the Company or any of its Subsidiaries under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy law or other similar law,
or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of the Company or any of its
Subsidiaries or of any substantial part of the properties of the
Company and its Subsidiaries on a consolidated basis, or ordering the
winding-up or liquidation of the affairs of the Company or any of its
Subsidiaries and any such decree or order shall continue in effect for
a period of forty-five (45) consecutive days;
(g) The Company or any of its Subsidiaries shall file a
petition, answer or consent seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy law or other similar law, or the
Company or any of its Subsidiaries shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
the Company or any of its Subsidiaries or of any substantial part of
properties, or the Company or any of its Subsidiaries shall fail
generally to pay its debts as such debts become due, or the Company or
any of its Subsidiaries shall take any corporate action in furtherance
of any such action;
(h) A final judgment shall be entered by any court against the
Company for the payment of money which is not covered in whole by
insurance and exceeds $100,000, or a warrant of attachment or execution
or similar process shall be issued or levied against property of the
Company which, together with all other such property of the Company
subject to other such process, exceeds in value $100,000 in the
aggregate, and if, within thirty (30) days after the entry, issue or
levy thereof, such judgment, warrant or process shall not have
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been paid or discharged or stayed pending appeal, or if, after the
expiration of any such stay, such judgment, warrant or process shall
not have been paid or discharged;
(i) There shall occur a Change of Control;
(j) Any event shall occur which has a Materially Adverse
Effect;
(k) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with
respect to any Plan maintained by the Company or any of its ERISA
Affiliates, or to which the Company or any of its ERISA Affiliates has
any liabilities, or any trust created thereunder; or a trustee shall be
appointed by a United States District Court to administer any such
Plan; or the Pension Benefit Guaranty Corporation shall institute
proceedings to terminate any such Plan; or the Company or any of its
ERISA Affiliates shall incur any liability to the Pension Benefit
Guaranty Corporation in connection with the termination of any such
Plan; or any Plan or trust created under any Plan of the Company or any
of its ERISA Affiliates shall engage in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the
Code) which would subject any such Plan, any trust created thereunder,
any trustee or administrator thereof, or any party dealing with any
such Plan or trust to the tax or penalty on "prohibited transactions"
imposed by Section 502 of ERISA or Section 4975 of the Code; or the
Company or any of its ERISA Affiliates shall enter into or become
obligated to contribute to a Multiemployer Plan;
(l) There shall occur any default under any indenture,
agreement or instrument evidencing any Indebtedness of the Company or
any of its Subsidiaries, which default is not cured or waived within
any applicable cure period; or
(m) Any Loan Document or provision thereof shall at any time
and for any reason be declared by a court of competent jurisdiction to
be null and void, or a proceeding shall be commenced by the Company or
any Affiliate or by any governmental authority having jurisdiction over
the Company or any Affiliate seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of
any provision thereof), or the Company or any Affiliate shall deny that
it has any liability or any obligation for the payment of principal or
interest purported to be created under any Loan Document.
Section 7.2 Remedies. If an Event of Default shall have occurred and
shall be continuing, the Lender shall have the right and option, in its sole
discretion, to do any one or more of the following:
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(a) Not make any further Advances;
(b) Declare the principal of and interest on the Revolving
Loans and the Revolving Note, all other amounts owed under this
Agreement or the Revolving Note, and all other Obligations to be
forthwith due and payable, whereupon all such amounts shall immediately
become absolute and due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived, anything in this Agreement or in the Revolving Note to the
contrary notwithstanding, whereupon all such amounts shall be due;
(c) Exercise all of the post-default rights granted to it
under the Loan Documents; and
(d) Exercise all rights and remedies available to it at law or
in equity.
ARTICLE 8.
MISCELLANEOUS.
Section 8.1 Notices.
(1) Any notices required or permitted to be sent hereunder shall be
delivered personally or mailed, certified mail, return receipt requested or
delivered by overnight courier service to the following addresses, or such other
address as any party hereto designates by written notice to the Company, the
Lender, and shall be deemed to have been given upon delivery, if delivered
personally, three (3) days after mailing, if mailed, or one (1) Business Day
after delivery to the courier, if delivered by overnight courier service:
(i) If to the Company, to it at:
Two Piedmont Center, Suite 400
3565 Piedmont Road, N.E.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & Bird LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Lender, to it at:
▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
NationsBank, N.A. (South)
High Tech, 18th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any party hereto may change the address to which notices shall be
directed under this Section 8.1 by giving ten (10) days' written notice of such
change to the other parties.
Section 8.2 Expenses. The Company will promptly pay:
(a) Upon closing of this Agreement, all out-of-pocket expenses of the
Lender in connection with the preparation, negotiation, execution and delivery
of this Agreement, the Revolving Note and the other Loan Documents, including
all post-closing matters, and the transactions contemplated hereunder and
thereunder and the making of the Revolving Loans hereunder including, but not
limited to, outside auditor costs, title and other insurance premiums, recording
fees, and intangible, documentary stamp and other taxes and the reasonable
attorneys' fees and disbursements of counsel for the Lender and the reasonable,
allocated costs for services of internal counsel for the Lender;
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(b) All out-of-pocket expenses of the Lender in connection with the
administration of the Revolving Loans and the Loan Documents in accordance with
the provisions thereof, the restructuring, refinancing and "work-out" of the
transaction herein contemplated, and the preparation, negotiation, execution and
delivery of any waiver, amendment or consent by the Lender relating to this
Agreement or the other Loan Documents, including, but not limited to, the
reasonable attorneys' fees and disbursements of counsel for the Lender and the
reasonable, allocated costs for services of internal counsel for the Lender and
post-closing filing fees; and
(c) All costs and out-of-pocket expenses of obtaining performance under
this Agreement or the other Loan Documents and all costs and out-of-pocket
expenses of collection if default is made in the payment of the Revolving Note,
which in each case shall include reasonable fees and expenses of counsel for the
Lender and the reasonable allocated costs for services of internal counsel for
the Lender.
Section 8.3 Waivers. The rights and remedies of the Lender under this
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which it would otherwise have. No failure or delay by the
Lender in exercising any right shall operate as a waiver of such right. Any
waiver or indulgence granted by the Lender shall not constitute a modification
of this Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing by the Lender at variance with the
terms of this Agreement such as to require further notice by the Lender of the
Lender's intent to require strict adherence to the terms of this Agreement in
the future.
Section 8.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of a Default or an Event of Default, the Lender and any subsequent
holder of the Revolving Note are hereby authorized by the Company at any time or
from time to time, without notice to the Company, or to any other Person, any
such notice being hereby expressly waived, to set-off, to appropriate and to
apply any and all deposits (general or special, time or demand, including, but
not limited to, Indebtedness evidenced by certificates of deposit, in each case
whether matured or unmatured) and any other Indebtedness at any time held or
owing by the Lender or such holder to or for the credit or the account of the
Company, as the case may be, against and on account of the obligations and
liabilities of the Company, as the case may be, to the Lender or such holder
under this Agreement, the Revolving Note, and any other Loan Document,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Revolving Note, or any other Loan
Document, irrespective of whether or not (a) the Lender or the holder of the
Revolving Note shall have made any demand hereunder or (b) the Lender shall have
declared the principal of and interest on the Revolving Loans and the Revolving
Note and other amounts due hereunder to be due and payable as permitted by
Section 7.2 hereof and although said obligations and liabilities, or any of
them, shall be contingent or unmatured.
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Section 8.5 Assignment.
(a) The Company may not assign or transfer any of its rights or
obligations hereunder or under the Revolving Note without the prior written
consent of the Lender.
(b) The Lender may at any time grant participations in, or sell,
assign, transfer or otherwise dispose of, all or any portion of the Indebtedness
of the Company outstanding pursuant to this Agreement and the Revolving Note
upon prior written notice to the Company. The Company hereby agrees that any
holder of a participation in, and any assignee or transferee of, all or any
portion of any amount owed by the Company under this Agreement and the Revolving
Note (i) shall be entitled to the benefits of the provisions of this Agreement
as a lender hereunder and (ii) may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all amounts owed by the Company
to such assignee, transferee or holder as fully as if such assignee, transferee
or holder had made the Revolving Loans in the amount of the obligation in which
it holds a participation or which is assigned or transferred to it.
(c) Except as specifically set forth in Section 8.5(b) hereof, nothing
in this Agreement or the Revolving Note, expressed or implied, is intended to or
shall confer on any person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or the Revolving Note.
Section 8.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 8.7 Governing Law. This Agreement and the Revolving Note shall
be construed in accordance with and governed by the law of the State of Georgia.
Section 8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
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Section 8.9 Interest and Charges. The Company and the Lender hereby
agree that (a) the only charge imposed by the Lender upon the Company for the
use of money in connection with the Revolving Loans is and shall be the interest
expressed herein, as provided in the Revolving Note and the loan fees described
in Section 1.6 hereof and (b) all other charges imposed by the Lender upon the
Company in connection with the Revolving Loans, including, without limitation,
any loan fee, default and late charges and charges for taxes and reserve
requirements, are and shall be deemed to be charges made to compensate the
Lender for administrative services and costs and other services and costs
performed and incurred, and to be performed and incurred, by the Lender in
connection with the Revolving Loans, and shall under no circumstances be deemed
to be charges for the use of money. All charges referred to herein shall be
fully earned when due and non-refundable when paid.
Section 8.10 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 8.11 Pronouns. The pronouns used herein shall include, when
appropriate, either gender and both singular and plural, and the grammatical
construction of sentences shall conform thereto.
Section 8.12 Entire Agreement; Amendments. This Agreement and the other
Loan Documents represent the entire agreement between the Company and the Lender
with respect to the subject matter of this transaction. No amendment or
modification of the terms and provisions of this Agreement shall be effective
unless in writing and signed by the Lender and the Company.
ARTICLE 9.
YIELD PROTECTION
Section 9.1 LIBOR Rate Basis Determination. Notwithstanding anything
contained herein which may be construed to the contrary, if with respect to any
proposed LIBOR Rate Advance for any LIBOR Advance Period, the Lender determines
that deposits in dollars (in the applicable amount) are not being offered to the
Lender in the relevant market for such LIBOR Advance Period, the Lender shall
forthwith give notice thereof to the Company, whereupon until the Lender
notifies the Company that the circumstances giving rise to such situation no
longer exist, the obligations of the Lender to make such types of LIBOR Rate
Advances shall be suspended.
Section 9.2 Illegality. If any applicable law, rule or regulation, or
any change therein, or any interpretation or change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged
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with the interpretation or administration thereof, or compliance by the Lender
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency, shall make it unlawful or
impossible for the Lender to make, maintain or fund its LIBOR Rate Advances, the
Lender shall so notify the Company. Before giving any notice to the Company
pursuant to this Section 9.2, the Lender shall designate a different lending
office if such designation will avoid the need for giving such notice and will
not, in the judgment of the Lender, be otherwise disadvantageous to the Lender.
Upon receipt of such notice, notwithstanding anything contained in Article 1
hereof, the Company shall repay in full the then outstanding principal amount of
each affected LIBOR Rate Advance, together with accrued interest thereon, either
(a) on the last day of the then current LIBOR Advance Period applicable to such
LIBOR Rate Advance if the Lender may lawfully continue to maintain and fund such
LIBOR Rate Advance to such day or (b) immediately if the Lender may not lawfully
continue to fund and maintain such LIBOR Rate Advance to such day; provided,
however, that notwithstanding any provision contained in this Agreement to the
contrary, the Company shall not be required to compensate the Lender for any
losses, including any loss or expenses incurred by reason of the liquidation,
reemployment of deposits or other funds acquired to obtain the LIBOR Rate
Advance, incurred as a consequence of any required conversion of a LIBOR Rate
Advance to a Base Rate Advance as hereinafter provided, as a result of the
events described in this Section. Concurrently with repaying each affected LIBOR
Rate Advance, notwithstanding anything contained in Article 1 hereof, the
Company shall borrow a Base Rate Advance (or the other type of LIBOR Rate
Advance, if available) from the Lender, and the Lender shall make such Advance
in an amount such that the outstanding principal amount of the Revolving Note
shall equal the outstanding principal amount of the Revolving Note immediately
prior to such repayment.
Section 9.3 Increased Costs.
(a) If any Applicable Law, rule or regulation, or any change
therein, or any interpretation or change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by the Lender
with any request or directive (whether or not having the any such authority,
central bank or comparable agency:
(i) Shall subject the Lender to any tax, duty or other charge
with respect to its obligation to make LIBOR Rate Advances, or its
LIBOR Rate Advances, or shall change the basis of taxation of payments
to the Lender of the principal of or interest on its LIBOR Rate
Advances or in respect of any other amounts due under this Agreement in
respect of its LIBOR Rate Advances or its obligation to make LIBOR Rate
Advances (except for changes in the rate of tax on the overall net
income of the Lender imposed by the jurisdiction in which the Lender's
principal executive office is located); or
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(ii) Shall impose, modify, or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System, but excluding any included in an
applicable LIBOR Reserve Percentage), special deposit, capital
adequacy, assessment or other requirement or condition against assets
of, deposits with or for the account of, or commitments or credit
extended by the Lender, or shall impose on the Lender or the eurodollar
interbank borrowing market any other condition affecting its obligation
to make such LIBOR Rate Advances or its LIBOR Rate Advances; and the
result of any of the foregoing is to increase the cost to the Lender of
making or maintaining any such LIBOR Rate Advances, or to reduce the
amount of any sum received or receivable by the Lender under this
Agreement or under the Revolving Note with respect thereto, and such
increase is not given effect in the determination of the LIBOR Rate
then,
on the earlier of demand by the Lender or the Maturity Date, the Company agrees
to pay to the Lender such additional amount or amounts as will compensate the
Lender for such increased costs. The Lender will promptly notify the Company of
any event of which it has knowledge, occurring after the date hereof, which will
entitle the Lender to compensation pursuant to this Section 9.3 and will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
judgment of the Lender, be otherwise disadvantageous to the Lender.
(b) A certificate of the Lender claiming compensation under
this Section 11.9 and setting forth the additional amount or amounts to be paid
to it hereunder and calculations therefor shall be conclusive in the absence of
manifestror. In determining such amount, the Lender may use any reasonable
averaging and attribution methods. If the Lender demands compensation under this
Section 9.3, the Company may at any time, upon at least five (5) Business Days'
prior notice to the Lender, prepay in full the then outstanding affected LIBOR
Rate Advances of the Lender, together with accrued interest thereon to the date
of prepayment, along with any reimbursement required under Section 1.8 hereof.
Concurrently with prepaying such LIBOR Rate Advances, the Company shall borrow a
Base Rate Advance, or a LIBOR Rate Advance not so affected, from the Lender, and
the Lender shall make such Advance in an amount such that the outstanding
principal amount of the Revolving Note shall equal the outstanding principal
amount of the Revolving Note immediately prior to such prepayment.
Section 9.4 Effect On Other Advances. If notice has been given pursuant
to Section 9.1, 9.2 or 9.3 suspending the obligation of the Lender to make any
type of LIBOR Rate Advance, or requiring LIBOR Rate Advances of the Lender to be
repaid or prepaid, then, unless and until such Lender notifies the Company that
the circumstances giving rise to such repayment no longer apply, all Advances
which would otherwise be made by the Lender as to the type of LIBOR Rate
Advances affected shall, at the option of the Company, be made instead as Base
Rate Advances.
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Section 9.5 Capital Adequacy. If after the date hereof, the Lender (or
any Affiliate of the Lender) shall have reasonably determined that the adoption
of any applicable law, governmental rule, regulation or order regarding the
capital adequacy of banks or bank holding companies, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender (or any Affiliate of the
Lender) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the Lender's (or any Affiliate of the Lender) capital as a consequence of the
Lender's Commitment or Obligations hereunder to a level below that which it
could have achieved but for such adoption, change or compliance (taking into
consideration the Lender's (or any Affiliate of the Lender) policies with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming that the Lender's (or any Affiliate of the Lender)
capital was fully utilized prior to such adoption, change or compliance), then,
upon demand by the Lender, the Company shall immediately pay to the Lender such
additional amounts as shall be sufficient to compensate the Lender for any such
reduction actually suffered; provided, however, that there shall be no
duplication of amounts paid to the Lender pursuant to this sentence and Section
9.3 hereof. A certificate of the Lender setting forth the amount to be paid to
it by the Company as a result of any event referred to in this paragraph shall,
absent manifestror, be conclusive.
ARTICLE 10.
DEFINITIONS
For the purposes of this Agreement:
"Accounts" shall mean all accounts, contract rights, chattel paper,
notes receivable, drafts, acceptances, instruments and documents and similar
instruments and documents of the Company arising from the sale of goods or the
rendering of services by the Company in the ordinary course of its business,
whether secured or unsecured, and whether now existing or hereafter created or
arising.
"Acquisition" shall mean any business combination, by acquisition of
assets, stock, merger or otherwise, by the Company or any of its Subsidiaries
with any other Person, which Person shall then become part of the consolidated
group with the Company or any such Subsidiary in accordance with GAAP. The
surviving entity of any Acquisition (if not the Company or any existing
Subsidiary of the Company) shall thereafter be deemed a Subsidiary for all
purposes under this Agreement.
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"Acquisition Advance" shall mean an Advance the proceeds of which shall
be used to fund the purchase price of a Material Acquisition, in whole or in
part, and advanced subject to the terms and conditions of Section 1.9 hereof.
"Acquisition Notes" shall mean the Acquisition Notes of the Company
bearing interest at a per annum rate of ten percent (10%) and the aggregate
principal amount of which is payable thirty percent (30%) on April 1, 1997, with
the remaining principal balance due September 14, 1997.
"Advance" shall mean the amounts of the Revolving Loans advanced by the
Lender to the Company pursuant to the terms hereof on the occasion of any
borrowing, which amounts shall include, without limitation, those amounts
advanced pursuant to any Acquisition Advance subject to Section 1.9 hereof.
"Advance Rate" shall mean, at any particular time, the product of (a)
EBITDA times (b) (i) in 1997, two (2) and (ii) in 1998, three (3). The Advance
Rate in effect as of the last date of any quarter shall remain in effect until
delivery of the financial statements under Section 5.1 hereof.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by or under common control with the Company, and any Person who is a
director, officer or shareholder owning, or having the right to acquire, more
than ten percent (10%) of the issued and outstanding voting capital stock of the
Company. For purposes of this definition, "control", when used with respect to
any Person, includes, without limitation, the direct or indirect beneficial
ownership of ten percent (10%) or more of the outstanding voting securities or
voting equity of such Person or the power to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.
"Agreement" shall mean this Agreement.
"Agreement Date" shall mean the date as of which this Agreement is
dated.
"Applicable Interest Rate Margin" shall have the meaning set forth in
Section 1.3(c) hereof.
"Applicable Law" shall mean in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in question
is a party or by which it or its properties are bound.
"Authorized Signatory" shall mean such senior personnel of the Company
as may be duly authorized and designated in writing by the Company to execute
documents, agreements and instruments on behalf of the Company.
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"Base Rate" shall mean, at any time, the rate of interest adopted by
the Lender as its reference rate for the determination of interest rates for
loans of varying maturities in United States dollars to United States residents
of varying degrees of creditworthiness and being quoted at such time by the
Lender as its "prime rate". The prime rate is not necessarily the lowest rate of
interest charged to borrowers of the Lender. Each change in the Base Rate shall
take effect simultaneously with the change in the Lender's "prime rate".
"Base Rate Advance" shall mean an Advance which the Company requests to
be made as a Base Rate Advance or which is reborrowed as a Base Rate Advance, in
accordance with the provision of Section 1.2 hereof and which bears interest at
a per annum rate equal to the sum of (i) the Base Rate plus (ii) the Applicable
Interest Rate Margin in effect from time to time.
"Business Day" shall mean a day on which the Lender is open for the
transaction of the business required for this Agreement in Atlanta, Georgia.
"Capital Expenditures" shall mean, for any period, the aggregate of all
expenditures made by the Company during such period that, in conformity with
GAAP, are required to be included or reflected on the balance sheet as a capital
asset of the Company.
"Capitalization" shall mean an amount equal to the amount of the total
assets of the Company less the sum of its total liabilities, both determined in
accordance with GAAP.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of the Company as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of the Company in accordance
with GAAP.
"Change of Control" shall mean and be deemed to have occurred if (a)(i)
the persons who are stockholders of the Company on the Agreement Date shall at
any time not own, in the aggregate, directly or indirectly, beneficially and of
record, at least fifty percent (50%) of the outstanding shares of securities
which generally entitle the holder thereof to vote for the election of directors
(the "Voting Stock") of the Company (other than as the result of one or more
widely distributed offerings of common stock of the Company, in each case
whether by the Company or by one or more stockholders of the Company and/or (ii)
any Person, entity or "group" (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended) shall at any time have acquired
direct or indirect beneficial ownership of a percentage of the outstanding
Voting Stock of the Company representing in excess of thirty percent (30%) of
the Voting Stock of the Company, unless, in the case of either clause (i) or
(ii) above; and/or (b) at any time Continuing Directors shall not constitute a
majority of the Board of Directors of the Company.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean and include all real and personal property of
the Company and its Subsidiaries, whether now owned or hereafter acquired by the
Company or any of its Subsidiaries or in which the Company or such Subsidiary
has or hereafter acquires any interest with respect to which the Lender have, or
are entitled or intended to have, a security interest, assignment, lien, trust
title or security title pursuant to the terms of this Agreement, any Security
Document or any other instrument or agreement now or hereafter effective between
the Lender and the Company as security for the payment and performance of all or
any portion of the Obligations.
"Commitment" shall mean the obligation of the Lender to advance the
aggregate sum of $10,000,000 to the Company pursuant to the terms hereof.
"Company" shall mean Medirisk, Inc., a Delaware corporation.
"Continuing Director" shall mean, at any date, an individual (a) who is
a member of the Board of Directors of the Company on the date hereof, (b) who,
as at such date, has been a member of such Board of Directors for at least the
twelve (12) preceding months, (c) who has been nominated to be a member of such
Board of Directors, directly or indirectly, by management of the Company or
Persons nominated by management of the Company, (d) who has been nominated to be
a member of the Board of Directors pursuant to the terms of that certain Stock
Purchase Agreement, dated January 8, 1996, between the Company and HealthPlan
Services Corporation, or (e) who has been nominated to be a member of such Board
of Directors by a majority of the other Continuing Directors then in office.
"Counterparty" shall mean, with respect to any Acquisition, any Person
party to such Acquisition, other than the Company and any Subsidiary of the
Company.
"Credit Party" shall mean, with respect to the Company and its
Subsidiaries, each Person that is, or shall in the future, be a party to the
Loan Documents required to executed by such Person hereunder.
"Debt" shall mean all Indebtedness of the Company.
"Debt Service" shall mean, for any period, payments of principal of,
interest on and other amounts payable with respect to, Debt.
"Debt Service Coverage Ratio" shall mean, for any period, a ratio of
which the numerator is EBITDA for the previous four quarters less the sum of
taxes paid in cash, less dividends paid in cash, less Maintenance Capital
Expenditures; and the denominator is the sum of Debt Service plus Imputed
Amortization.
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"Default" shall mean any of the events specified in Section 7.1 hereof,
regardless of whether there shall have occurred any passage of time or giving of
notice, or both, that would be necessary in order to constitute such event an
Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the
sum of (i) (x) the Base Rate or the LIBOR Basis, as applicable, plus (y) the
Applicable Interest Rate Margin as then in effect, plus (ii) two percent (2%).
"EBITDA" shall mean, for any period, the Net Income of the Company for
such period, plus, without duplication and to the extent reflected as charges in
the statement of Net Income for such period, the sum of (a) taxes measured by
income, (b) interest expense, (c) depreciation and amortization expense, (d)
amortization (or accelerated amortization) of original issue discount and (e)
non-cash charges and expenses related to Acquisitions or research and
development, including, without limitation, acquired in-process research and
development expense and similar expenses, all as determined in accordance with
GAAP; provided, however, that all cash items of gain or loss for such fiscal
period which are not ordinary by GAAP shall be included in the computation of
EBITDA and; provided further, that all non-cash items of gain or loss for such
fiscal period which are not ordinary by GAAP shall be excluded from the
computation of EBITDA.
"Environmental Laws" shall mean any and all federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any governmental authority regulating, relating to or
imposing liability or standards of conduct concerning environmental protection
matters, including without limitation, Hazardous Materials, as now or may at any
time hereafter be in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect on the Agreement Date and as such Act may be amended thereafter
from time to time.
"ERISA Affiliate" shall mean any "affiliate" of the Company within the
meaning of Section 414 of the Code.
"Event of Default" shall mean any of the events specified in Section
7.1 hereof, provided that any requirement for notice or lapse of time, or both,
has been satisfied.
"Funding Date" shall mean the business day on which an Advance is to be
made by the Lender to the Company.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
of the
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Financial Accounting Standards Board in the United States on the Agreement Date
consistently applied.
"Guaranty" or "Guarantee", as applied to an obligation (each a "primary
obligation"), shall mean and include (a) any guaranty, direct or indirect, in
any manner, of any part or all of such primary obligation, and (b) any
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn down by beneficiaries of outstanding letters of credit, and any
obligation of such Person (the "primary obligor"), whether or not contingent,
(i) to purchase any such primary obligation or any property or asset
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of such primary obligation or (2) to
maintain working capital, equity capital or the net worth, cash flow, solvency
or other balance sheet or income statement condition of any other Person, (iii)
to purchase property, assets, securities or services primarily for the purpose
of assuring the owner or holder of any primary obligation of the ability of the
primary obligor with respect to such primary obligation to make payment thereof
or (iv) otherwise to assure or hold harmless the owner or holder of such primary
obligation against loss in respect thereof.
"Hazardous Materials" shall mean any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances, petroleum
products (including crude oil or any fraction thereof) or friable asbestos
containing materials defined or regulated as such in or under any Environmental
Law.
"Imputed Amortization" shall mean, for any period, the average
outstanding principal balance of the Revolving Loans during such period
calculated based on a hypothetical amortization of the Revolving Loans over a
five (5) year period.
"Indebtedness" of any Person shall mean (a) all indebtedness of such
Person for borrowed money, (b) the deferred purchase price of assets or services
that in accordance with GAAP would be shown on the liability side of the balance
sheet of such Person, (c) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (d) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, and (e) all Capitalized Lease Obligations of such Person.
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"Lender" shall mean NationsBank, N.A. (South), and its successors and
assigns.
"LIBOR" shall mean, for any LIBOR Advance Period, the average (rounded
upward to the nearest one sixteenth of one percent (1/16%)) of the interest
rates per annum which appear on Telerate Page 3750 as of approximately 11:00
a.m. (London time), or, if unavailable, any generally accepted successor rate
selected by the Lender, two (2) Business Days before the first day of such LIBOR
Advance Period, with respect to an Advance in an amount approximately equal to
the principal amount of, and for a length of time approximately equal to the
LIBOR Advance Period for, the LIBOR Advance sought by the Company.
"LIBOR Advance" shall mean an Advance which the Company requests to be
made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance
with the provisions of Section 1.2 hereof and which bears interest at a per
annum rate equal to the LIBOR Basis plus the Applicable Interest Rate Margin in
effect from time to time.
"LIBOR Advance Period" shall mean, for each LIBOR Advance, each one,
two, three or six month period, as selected by the Company and made available by
the Lender pursuant to Section 1.2 hereof, during which the applicable LIBOR
(but not the Applicable Interest Rate Margin) shall remain unchanged.
Notwithstanding the foregoing, however: (i) any applicable LIBOR Advance Period
which would otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day, unless such Business Day falls in another
calendar month, in which case such LIBOR Advance Period shall end on the next
preceding Business Day; (ii) any applicable LIBOR Advance Period which begins on
a day for which there is no numerically corresponding day in the calendar month
during which such LIBOR Advance Period is to end shall (subject to clause (i)
above) end on the last Business Day of such calendar month; and (iii) no LIBOR
Advance Period shall extend beyond the Maturity Date. Interest shall be due and
payable with respect to any LIBOR Advance as provided in Section 1.3 hereof.
"LIBOR Basis" shall mean a simple per annum interest rate equal to the
quotient of (i) LIBOR divided by (ii) one minus the LIBOR Reserve Percentage,
stated as a decimal. The LIBOR Basis shall be rounded upward to the nearest one
sixteenth of one percent (1/16%) and, once determined, shall remain unchanged
during the applicable LIBOR Advance Period, except for changes to reflect
adjustments in the LIBOR Reserve Percentage.
"LIBOR Reserve Percentage" shall mean the percentage which is in effect
from time to time under Regulation D of the Board of Governors of the Federal
Reserve System, as such regulation may be amended from time to time, as the
maximum reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), whether or not the Lender has any
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53
Eurocurrency Liabilities subject to such reserve requirement at that time. The
LIBOR Basis for any LIBOR Advance shall be adjusted as of the effective date of
any change in the LIBOR Reserve Percentage.
"Lien" shall mean, with respect to any property, any security deed,
mortgage, deed to secure debt, deed of trust, lien, pledge, assignment, charge,
security interest, title retention agreement, negative pledge, levy, execution,
seizure, attachment, garnishment or other encumbrance of any kind in respect of
such property, whether or not ▇▇▇▇▇▇, vested or perfected.
"Loan Documents" shall mean this Agreement, the Revolving Note, the
Security Documents and all other documents, agreements, certificates, reports
and instruments now or hereafter executed in connection herewith or contemplated
hereby.
"Maintenance Capital Expenditures" shall mean, for any period, the
amount equal to fifty percent (50%) of the sum of (i) depreciation plus (ii) Net
Capitalized Software, as determined in accordance with GAAP for such period.
"Material Acquisition" shall mean any Acquisition the purchase price of
which, in terms of cash and other consideration paid and Indebtedness assumed,
shall be in excess of $2,000,000.
"Material Customer Contracts" shall mean those contracts, licenses and
other agreements between the Company, or any of its Subsidiaries, and any
customer of the Company, or any of its Subsidiaries, pursuant to which the
Company, or any of its Subsidiaries, provides database and decision-support
software services and from which the Company expects to receive revenue during
any fiscal year in excess of an amount equal to five percent (5%) of the
Company's total revenue for the immediately preceding fiscal year.
"Materially Adverse Effect" shall mean any materially adverse effect
(a) upon the business, assets, liabilities, financial condition, results of
operations or business prospects of the Company, or (b) upon the ability of the
Company to perform any material obligations under this Agreement or any other
Loan Document, or (c) upon the rights, benefits or interests of the Lender in or
to this Agreement, any other Loan Document or the Collateral, in any case,
whether resulting from any single act, omission, situation, status, event or
undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
"Maturity Date" shall mean March 28, 1999, or such earlier date as
payment of the Revolving Loans shall be due (whether by acceleration or
otherwise); provided, however, that the Maturity Date may be subject to
extension pursuant to the terms of Section 1.1(c) hereof.
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54
"Medirisk-IL" shall mean Medirisk of Illinois, Inc., an Indiana
corporation, formerly known as Formations In Health Care, Inc.
"Medirisk-MO" shall mean Medirisk of Missouri, Inc., a Missouri
corporation, formerly known as PracticeMatch, Inc.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) ERISA.
"Necessary Authorizations" shall mean all authorizations, consents,
approvals, permits, licenses and exemptions of, filings and registrations with,
and reports to, all governmental and other regulatory authorities, whether
federal, state or local, and all agencies thereof (including, without
limitation, any specific authorizations, licenses, franchises, etc. that may be
required for the particular industry of the Company).
"Net Assets" shall mean, with respect to the Company and its
Subsidiaries, the aggregate amount of all items categorized as assets on the
consolidated balance sheet of the Company and its Subsidiaries under GAAP.
"Net Capitalized Software" shall mean (i) with respect to any period in
1997, (x) an amount equal to (a) capitalized software as at the last date of
such period less (b) $1,000,000, less (y) capitalized software as at the first
date of such period less (z) any capitalized software acquired during such
period, and (ii) with respect to any period in 1998, (x) capitalized software as
at the last date of such period less (y) capitalized software as at the first
date of such period less (z) any capitalized software acquired during such
period.
"Net Income" shall mean, for any period, the net income (or deficit) of
the Company and its Subsidiaries, on a consolidated basis, for such period,
determined in accordance with GAAP.
"Net Worth" shall mean, with respect to the Company and its
Subsidiaries on a consolidated basis, the excess of Net Assets over
Indebtedness.
"Obligations" shall mean all payment and performance duties,
liabilities and obligations of the Company to the Lender, whether now existing
or hereafter created, incurred or arising, and whether direct or indirect,
absolute or contingent, primary or secondary, due or to become due, including
without limitation, all liabilities now or at any time or times hereafter owing
to the Lender under this Agreement, the Revolving Note and the other Loan
Documents.
"Payment Date" shall mean the last day of each LIBOR Advance Period for
a LIBOR Advance.
"Permitted Liens" shall mean, as applied to any Person:
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a. Any Lien in favor of the Lender given to secure the
Obligations;
b. (i) Liens on real estate for real estate taxes not yet
delinquent and (ii) Liens for taxes, assessments, judgments, governmental
charges or levies, or claims the non-payment of which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves have been set aside on such Person's books;
c. Liens of landlords and liens of carriers, warehousemen,
mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary
course of business for sums not yet due or being diligently contested in good
faith, if such reserve or appropriate provision, if any, as shall be required by
GAAP shall have been made therefor;
d. Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance or other types
of social security benefits;
e. Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with any Indebtedness or other extensions
of credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
f. Purchase money security interests, provided that such Lien
attaches only to the asset so purchased by the Company and secures only
Indebtedness incurred by the Company in order to purchase such asset, so long as
the aggregate Indebtedness secured by such liens does not exceed $250,000 for
any twelve (12) month period;
g. Deposits to secure the performance of bids, trade
contracts, tenders, sales, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
h. Liens on assets of the Company on the Agreement Date as
more fully set forth on Schedule 9A, attached hereto;
i. Liens to which any asset is subject at the time of the
Company's purchase thereof, provided that such Lien is not created in
anticipation of such purchase; and
j. Judgment Liens which shall not constitute an Event of
Default;
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56
k. Interest of any lessor in property leased by the Company or
any Subsidiary; and
l. Leases and subleases granted to other Persons which shall
not, in any material respect, interfere with the business and operations of the
Company and its Subsidiaries, on a consolidated basis.
"Person" shall mean an individual, corporation, partnership, trust,
joint stock company, limited liability company or unincorporated organization,
or a government or any agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) ofISA or any other employee benefit plan maintained for employees
of any Person or any Affiliate of such Person.
"Properties" shall mean all parcels of real property owned or operated
by the Company or any of its Subsidiaries; and "Property" shall mean any of the
foregoing parcels.
"Reportable Event" shall have the meaning set forth in Title IV ofISA.
"Request for Acquisition Advance" shall mean any certificate delivered
pursuant to Section 1.9 hereof and signed by an Authorized Signatory requesting
an Acquisition Advance requiring the consent of the Lender hereunder which will
increase the aggregate amount of the Revolving Loans outstanding, which
certificate shall be denominated a "Request for Acquisition Advance", and shall
be in substantially the form of Exhibit F-1 attached hereto. Each Request for
Acquisition Advance shall, among other things, (a) specify the Funding Date of
the Acquisition Advance, which shall be a Business Day, the amount of the
Acquisition Advance and the type of Acquisition Advance, and (b) state that
there shall not exist, on the date of the requested Acquisition Advance and
after giving effect thereto, a Default or an Event of Default.
"Request for Advance" shall mean any certificate signed by an
Authorized Signatory requesting an Advance hereunder which will increase the
aggregate amount of the Revolving Loans outstanding, which certificate shall be
denominated a "Request for Advance", and shall be in substantially the form of
Exhibit F-2 attached hereto. Each Request for Advance shall, among other things,
(a) specify the Funding Date of the Advance, which shall be a Business Day, the
amount of the Advance and the type of Advance, and (b) state that there shall
not exist, on the date of the requested Advance and after giving effect thereto,
a Default or an Event of Default.
"Restricted Payment" shall mean (a) any direct or indirect
distribution, dividend or other payment to any Person on account of any shares
of capital stock or
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other securities of the Company and (b) any payment of any management,
consulting or similar fees payable by the Company and to any Affiliate.
"Restricted Purchase" shall mean any payment on account of the
purchase, redemption or other acquisition or retirement of any shares of capital
stock or other securities of the Company.
"Revolving Loans" shall mean, collectively, the amounts advanced by the
Lender to the Company under the Commitment, not to exceed the Commitment, and
evidenced by the Revolving Note, and "Revolving Loan" shall mean one of the
Revolving Loans made by the Lender.
"Revolving Note" shall mean that certain Revolving Loan Promissory Note
in the original principal amount of $10,000,000 issued to the Lender,
substantially in the form of Exhibit G attached hereto, and any amendments,
renewals or extensions thereof.
"Security Agreement" shall mean that certain Security Agreement of even
date herewith between the Company and the Lender, substantially in the form of
Exhibit H attached hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
"Security Documents" shall mean, collectively, the Security Agreement,
the Subsidiary Security Agreement, the Subsidiary Guaranty and any other
agreement, document or instrument granting collateral for the Obligations,
whether now or hereafter in existence, and any filings, instruments, agreements
and other documents related thereto or to this Agreement, and providing the
Lender with Collateral for the Obligations.
"Senior Subordinated Notes" shall mean the certain Senior Subordinated
Notes of the Company bearing interest at a nominal per annum rate of ten percent
(10%) and maturing on January 8, 2003, which are held by HeathPlan Services
Corporation ("HPSC") pursuant to a certain Securities Purchase Agreement dated
as of January 8, 1996, between the Company and HPSC.
"Solvent" shall mean, as to any Person, that such Person has capital
sufficient to carry on its business and transactions in which it is about to
engage and is able to pay its debts as they mature and owns property having a
value, both at fair valuation and at present fair salable value, greater than
the amount required to pay its debts.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which fifty percent (50%) or more of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors (or other governing body), regardless of the existence
at the time of a right of the holders of any class or classes (however
designated) of securities of such
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corporation to exercise such voting power by reason of the happening of any
contingency, or any partnership of which fifty percent (50%) or more of the
outstanding partnership interests is, at the time, owned directly or indirectly
by such Person, or by one or more Subsidiaries of such Person, or by such Person
and one or more Subsidiaries of such Person, and (b) any other entity which is
directly or indirectly controlled or capable of being controlled by such Person,
or by one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person.
"Stock Pledge Agreement" shall mean that certain Stock Pledge Agreement
of even date herewith between the Company and the Lender, substantially in the
form of Exhibit I attached hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
"Subsidiary Guaranty" shall mean that certain Subsidiary Guaranty of
even date herewith between each of the Subsidiaries of the Company and the
Lender, substantially in the form of Exhibit J attached hereto, as the same may
be amended, supplemented or otherwise modified from time to time.
"Subsidiary Security Agreement" shall mean that certain Subsidiary
Security Agreement of even date herewith between each of the Subsidiaries of the
Company and the Lender, substantially in the form of Exhibit K attached hereto,
as the same may be amended, supplemented or otherwise modified form time to
time.
"Total Funded Debt" shall mean, with respect to the Company, all Debt
issued, incurred, assumed or guaranteed by the Company of for the payment of
which the Company is otherwise liable, directly or indirectly, whether or not
such Debt now exists or shall hereafter be created, and shall include, without
duplication, all Capitalized Lease Obligations.
Each definition of a document in this Article 10 shall include such
document, as amended, modified or supplemented from time to time with the prior
consent of the Lender and, except where the context otherwise requires,
definitions imparting the singular shall include the plural and vice versa.
Except where restricted, reference to a party to a Loan Document includes that
party and its successors and permitted assigns. All accounting terms used herein
without definitions shall be used as defined under GAAP. All calculations with
respect to financial covenants and otherwise shall be made as at the end of each
calendar quarter on the basis of the previous four (4) quarters; provided that,
during the first three (3) quarters of the term hereof, the calculations shall
be based on an annualized basis of the preceding quarters.
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ARTICLE 11.
WAIVER OF JURY TRIAL, ETC.
Section 11.1 Consent to Venue. The Company (a) hereby irrevocably
waives any objection it would make now or hereafter for the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document brought in the Northern District of Georgia of the
Federal courts of the United States of America, and (b) hereby irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an incorrect forum.
Section 11.2 Waiver of Jury Trial. THE COMPANY AND THE LENDER HEREBY
AGREE TO WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR
PROCEEDING OF ANY TYPE IN WHICH THE COMPANY, THE LENDER OR ANY OF THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, THE REVOLVING NOTE OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS ARTICLE
10.
ARTICLE 12.
ARBITRATION
Section 12.1 Arbitration. Any controversy or claim between or among the
parties hereto, including but not limited to, those arising out of or relating
to this Agreement and the other Loan Documents, including any claim based on or
arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the rules of practice and procedure for the arbitration
of commercial disputes of J.A.M.S./Endispute or any successor thereof
("J.A.M.S."), and the "special rules" set forth below. In the event of any
inconsistency, the "special rules" shall control. Judgment upon any arbitration
award may be entered in any court having jurisdiction. Any party to this
instrument, agreement or document may bring an action, including a summary or
expedited proceeding, to compel arbitration of any controversy or claim to which
this Agreement and the other Loan Documents applies in any court having
jurisdiction over such action.
Section 12.2 Special Rules. The arbitration shall be conducted in
Atlanta, Georgia, and administered by J.A.M.S, who will appoint an arbitrator.
If J.A.M.S. is unable or legally precluded from administering the arbitration,
then the American Arbitration Association will serve as administrator. All
arbitration hearings will be commenced within ninety (90) days of the demand for
arbitration. Further, the
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arbitrator shall only, upon a showing of cause, be permitted to extend the
commencement of such hearing for up to an additional sixty (60) days.
Section 12.3 Reservation of Rights. Nothing in this arbitration
provision shall be deemed to (i) limit the applicability of any otherwise
applicable statutes of limitation or repose and any waivers contained in this
Agreement or the other Loan Documents; or (ii) be a waiver by the Lender of the
protection afforded to it, if applicable, by 12 U.S.C. Sec. 91 or any
substantially equivalent state law; or (iii) limit the right of the Lender (a)
to exercise self help remedies such as (but not limited to) setoff, or (b) to
foreclose against any real or personal property collateral, or (c) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver. The
Lender may exercise such self help rights, foreclose upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this Agreement.
Neither this exercise of self help remedies nor the institution or maintenance
of an action for foreclosure or provisional or ancillary remedies shall
constitute a waiver of the right of any party, including the claimant in any
such action, to arbitrate the merits of the controversy or claim occasioning
resort to such remedies.
Remainder of this page intentionally left blank
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61
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as of
the day and year first above written.
COMPANY: MEDIRISK, INC.
By: /s/
----------------------------------
Title: EVP & CFO
-----------------------------
LENDER: NATIONSBANK, N.A. (SOUTH)
By: /s/
----------------------------------
Title: ASSISTANT VICE PRESIDENT
-----------------------------
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62
EXHIBIT A
FORM OF
BORROWER'S LOAN CERTIFICATE
I, ▇▇▇▇▇ ▇. ▇▇▇▇, hereby certify that I am the duly elected
and acting Secretary of Medirisk, Inc., a Delaware corporation (the "Company"),
and in connection with the transactions described in that certain Credit
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") between the
Company and NationsBank, N.A. (South) (the "Lender"), I hereby further certify
that:
1. Attached hereto as Exhibit A is a true,
correct and complete copy of the Certificate of Incorporation of the
Company, and all amendments thereto (if any), as certified by the
Secretary of State of the State of Delaware, as in effect on the date
hereof;
2. Attached hereto as Exhibit B is a true,
correct and complete copy of the By-Laws of the Company, and all
amendments thereto (if any), as in effect on the date hereof;
3. Attached hereto as Exhibit C is a true,
correct and complete copy of resolutions duly adopted by the Board of
Directors of the Company by written consent effective March 27, 1997,
which resolutions have not been amended, rescinded or modified, are in
full force and effect on the date hereof and do not violate or
conflict with the Certificate of Incorporation or By-Laws of the
Company;
4. Attached hereto as Exhibit D is a certificate
of existence from the Secretary of State of the State of Delaware, and
the Company has taken no action which would cause it not to be in good
standing under the laws of the State Delaware as of the date of this
Certificate;
5. Attached hereto as Exhibit E is a certificate
of existence for the Company issued by the Secretary of State for the
State of Georgia;
6. Attached hereto as Exhibit F is a copy of
each employment contract with respect to key management level
employees of the Company;
7. There are no voting trust or other
shareholder agreements presently in effect with respect to the stock
of the Company except as attached hereto as
Exhibit G;
8. The following persons have been duly elected
to the offices of the Company set forth beside their names, have been
duly qualified, and as of the date of the execution of the Credit
Agreement and the Revolving Notes were, and on the date hereof are,
holding the offices set forth opposite
63
their respective names below, and the signatures set forth opposite
their respective names are their respective genuine signatures:
Name Title Signatures
---- ----- ----------
▇▇▇▇ ▇. ▇▇▇▇▇▇ President and CEO
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Executive Vice
President and CFO ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇ Treasurer ;
-----------------------------
and
9. This Certificate is given for the benefit of
the Lender, and the Lender is entitled to rely upon the certifications
hereinabove set forth in connection with extending the financial
accommodations described in the Credit Agreement and evidenced by the
Revolving Note.
WITNESS my signature and the seal of the Company this _____
day of March, 1997.
(SEAL)
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., hereby certify that (a) I am the
duly elected, qualified and acting Executive Vice President and CFO of the
Company, (b) ▇▇▇▇▇ ▇. ▇▇▇▇ is the duly elected, qualified and acting Secretary
of the Company and (c) the signature of ▇▇▇▇▇ ▇. ▇▇▇▇ set forth above is his
genuine signature.
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Executive Vice President and CFO
64
EXHIBIT B
FORM OF
SUBSIDIARY LOAN CERTIFICATE
The undersigned, who is the Secretary of _______________, a
______________ (the "Subsidiary"), does hereby certify on behalf of the
Subsidiary that the undersigned is the duly elected and qualified holder of the
office set forth below the undersigned's signature below and an Authorized
Signatory of the Subsidiary. In connection with that certain Credit Agreement
dated as of March ___, 1997 (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement") between Medirisk, Inc. (the
"Company") and NationsBank, N.A. (South) (the "Lender"), the undersigned hereby
certifies to the Lender that:
(a) Attached hereto as Exhibit A is a true, complete and
correct copy of the [Articles of Incorporation/ Certificate of Limited
Partnership/Certificate of Organization] of the Subsidiary, certified
by the Secretary of State of the state of the Subsidiary's
organization;
(b) Attached hereto as Exhibit B is a true, complete and
correct copy of the [By-Laws/Partnership Agreement/ Operating
Agreement] of the Subsidiary;
(c) Attached hereto as Exhibit C are good standing
certificates or similar certificates, as the case may be, from the
Secretary of State of the Subsidiary's organization and each other
state where the Subsidiary is authorized to do business;
(d) All of the issued and outstanding capital stock of
the Subsidiary is owned, directly or indirectly, by the Company; and
(e) The following persons are the Authorized Signatories
of the Subsidiary, each of such persons having been duly elected to
the offices set forth opposite their respective names below, and the
signatures set forth opposite their respective names below are their
respective genuine signatures:
NAME TITLE SIGNATURE
---- ----- ---------
▇▇▇▇ ▇. ▇▇▇▇▇▇ Chairman and CEO _______________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Executive Vice _______________
President and CFO
▇▇▇▇▇▇ ▇. ▇▇▇▇ Treasurer _______________
Capitalized terms used herein and not otherwise defined are
used as defined in the Credit Agreement.
65
IN WITNESS WHEREOF, I have signed this Certificate this ____
day of ________, 19__.
[ ]
-------------------------
By:
------------------------------------
Its:
------------------------------------
Secretary
Attachments
-----------
Exhibit A Certificate of Incorporation
Exhibit B By-Laws
Exhibit C Good Standing Certificates
66
EXHIBIT C
FORM OF
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), made as
of this ___ day of _________, 19__, by ___ ____________________, a
___________________, having its chief executive office at
_______________________________________________________("Assignor"), in favor of
NATIONSBANK, N.A. (SOUTH), having an office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lender", and sometimes herein "Assignee").
RECITALS
WHEREAS, Assignor and the Lender have entered into a Credit
Agreement, dated as of March ___, 1997 as the same may be amended, extended,
restated, supplemented or otherwise modified or refinanced or refunded from
time to time, being the "Credit Agreement").
WHEREAS, it is a condition precedent to the extension of
credit under the Credit Agreement that Assignor shall have granted to the
Lender, a security interest in Assignor's assets, including, without
limitation, common law and statutory trademarks, service marks, trade names,
trademark and service ▇▇▇▇ registrations, applications for trademark or service
▇▇▇▇ registrations and any other indicia of origin, and licenses thereunder, as
well as all goodwill associated therewith (all such trademarks, service marks,
trade names, registrations, applications and other indicia, licenses thereunder
and goodwill associated therewith being, collectively, the "Trademarks").
NOW, THEREFORE, in consideration of the premises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor agrees as follows:
1. Incorporation of Credit Agreement. The Credit Agreement
and the definitions, terms and provisions thereof are hereby incorporated
herein in their entirety by this reference thereto. Terms used herein which
are defined in the Credit Agreement shall have the respective meanings set
forth in the Credit Agreement unless otherwise defined herein.
2. Grant of Security. To secure the complete and timely
payment of all of the obligations of Assignor to the Lender now or hereafter
existing from time to time, Assignor hereby grants to Assignee a security
interest in, the entire right, title and interest,
67
in the United States and throughout the world, in and to the following, whether
now owned or hereafter acquired (the "Collateral"):
(a) Each of the Trademarks which are presently, or in
the future may be from time to time, owned, held (whether pursuant to
a license or otherwise) or used by Assignor, in whole or in part, in
conducting its business (including, without limitation, the United
States trademark and service ▇▇▇▇ registrations, and applications for
registration, specifically identified on Schedule A attached hereto);
(b) all proceeds of the Trademarks (such as, by way
of example and not by way of limitation, license royalties and
proceeds of infringement suits);
(c) the right (but not the obligation) to ▇▇▇ or
bring opposition or cancellation proceedings in the name of Assignor
or in the name of Assignee for past, present and future infringements
of the Trademarks and all rights (but not obligations) corresponding
thereto; and
(d) all documents and things in Assignor's
possession, or subject to its demand for possession, related to the
production and sale by Assignor, or any Subsidiary, licensee or
subcontractor of Assignor, of products or services sold by or under
the authority of Assignor in connection with the Trademarks, including
by way of example, without limitation: (i) all lists and ancillary
documents which identify and describe any of Assignor's customers, or
those of its Subsidiaries or licensees, for products sold under or in
connection with the Trademarks, including without limitation, such
existing lists and ancillary documents which contain each customer's
full name and address, the identity of the person or persons having
the principal responsibility on each customer's behalf for ordering
products or services of the kind supplied by Assignor, the credit,
payment, discount, delivery and other sale terms applicable to such
customer, together with detailed information setting forth the total
purchases, by brand, product, style and size and the patterns of such
purchases; (ii) all product and service specification documents and
production and quality control manuals used in the manufacture of
products or provision of services sold under or in connection with the
Trademarks; (iii) all documents which reveal the name and address of
all sources of supply, and all terms of purchase and delivery, for all
materials and components used in the production of products or
provision of service, sold under or in connection with the Trademarks;
and (iv) all documents constituting or concerning the then current or
proposed advertising and promotion by Assignor or its Subsidiaries or
licensees of products sold under or in connection with the Trademarks
including, by way of example and not in limitation, all documents
which reveal the media used or to be used and the cost for all such
advertising conducted within the described period or planned for such
products;
68
it being understood and agreed that the Collateral hereunder shall include,
without limitation, rights and interests pursuant to licensing or other
contracts in favor of Assignor pertaining to common law and statutory
trademarks, service marks, trade names, trademark and service ▇▇▇▇
registrations, applications for trademark or service ▇▇▇▇ registrations and any
other indicia of origin presently or in the future owned or used by third
parties, but in the case of third parties which are not Subsidiaries of
Assignor, only to the extent permitted by such licensing or other contracts
and, if not so permitted, only with the consent of such third parties.
3. Inspection Rights. Assignor hereby grants to Assignee and
all employees, representatives and agents the right to visit Assignor and any
of its Subsidiaries' or subcontractor's plants and facilities which
manufacture, inspect or store products or provide services (or which have done
so during the prior six-month period) sold under any of the Trademarks, and to
inspect the products of and services and quality control records relating
thereto upon reasonable notice to Assignor and as often as may be reasonably
requested.
4. Representations and Warranties. Assignor covenants and
warrants as follows:
(a) A true and complete list of all United States
trademark and service ▇▇▇▇ registrations and applications for
registration (the "U.S. Registrations") owned, held (whether
pursuant to a license or otherwise) or used by Assignor, in whole or
in part, in conducting its business is set forth on Schedule A hereto
as such schedule may be supplemented and amended from time to time.
(b) The Trademarks are subsisting and have not been
adjudged invalid or unenforceable and Assignor is not aware of any
claim by any third party that the Trademarks are invalid or
unenforceable.
(c) To the best of Assignor's knowledge, each of the
Trademarks is valid and enforceable.
(d) No claim has been made that the practice of any
of the Trademarks does or may violate the rights of any third person.
(e) Assignor is the legal and beneficial owner of the
Collateral free and clear of any lien, security interest, charge or
encumbrance, including, without limitation, pledges, assignments,
licenses, shop rights and covenants by Assignor not to ▇▇▇ third
persons, except for (i) the security interest and assignment created
by this Agreement and (ii) Permitted Liens. No effective financing
statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording office, except such
as may have been filed in favor of Assignee relating to
69
this Agreement or for which duly executed termination statements have
been recorded or delivered to Assignee.
(f) This Agreement will create in favor of Assignee a
valid and perfected first priority security interest in the Collateral
upon making the filings referred to in clause (g) below.
(g) Except for the filing of financing statements
with the Secretary of State of the _________ under the UCC and filings
with the United States Patent and Trademark Office, no authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for
the grant by Assignor of the security interest granted hereby or for
the execution, delivery or performance of this Agreement by Assignor
or (ii) for the perfection of or the exercise by Assignee of its
rights and remedies hereunder to the U.S. Registrations.
(h) The chief executive office of Assignor is located
at the address set forth above for Assignor.
(i) Except as disclosed on Schedule B attached
hereto, none of Assignor's Affiliates or Subsidiaries has any right,
title or interest in any Trademarks.
5. New Trademarks and Applications. If, during the term of
the Credit Agreement, Assignor shall obtain rights to any new Trademarks, the
provisions of this Agreement shall automatically apply thereto. With respect
to any new U.S. Registrations, Assignor shall give to Assignee prompt notice
thereof in writing.
6. Assignor's Covenants. On a continuing basis and at the
request of Assignee, Assignor shall make, execute, acknowledge and deliver, and
file and record in the proper filing and recording places, all such
instruments, including, without limitation, appropriate financing and
continuation statements and security agreements, and take all such action as
may be deemed necessary or advisable by Assignee to carry out the intent and
purposes of this Agreement, or for assuring and confirming to Assignee the
grant or perfection of a security interest in all Collateral. Without limiting
the generality of the foregoing sentence, Assignor (i) shall not enter into any
agreement which would or might in any way impair or conflict with Assignor's
obligations hereunder without Assignee's prior written consent; (ii) upon the
written request of Assignee, shall use its best efforts to obtain any necessary
consents of third parties to the grant or perfection of a security interest to
Assignee with respect to the Collateral; (iii) authorizes Assignee in its sole
discretion to modify this Agreement without first obtaining Assignor's approval
of or signature to such modification by amending Schedule A thereof to include
a reference to any right, title or interest in any existing U.S. Registration
and any U.S. Registration acquired by Assignor
70
after the execution hereof or to delete any reference to any right, title or
interest in any U.S. Registration in which Assignor no longer has or claims any
right, title or interest; (iv) shall, from time to time upon Assignee's
request, cause its books and records to be marked with such legends or
segregated in such manner as Assignee may reasonably specify, and take or cause
to be taken such other action and adopt such procedures as Assignee may
reasonably specify to give notice of or to perfect the security interest in the
Collateral intended to be created hereby; (v) shall at all times keep at least
one complete set of its records concerning substantially all of the Trademarks
at its chief executive office as set forth above and will not change the
location of its chief executive office or such records without giving Assignee
at least thirty (30) days' prior written notice thereof; (vi) shall promptly,
following its becoming aware thereof, notify Assignee of the institution of, or
any adverse determination in, any proceeding in the United States Patent and
Trademark Office or any United States or foreign court regarding Assignee's
claim of ownership in any of the Collateral; (vii) shall promptly notify
Assignee of the filing of an application for registration of any trademark;
(viii) shall not permit the inclusion in any contract to which it becomes a
party of any provisions which could or might in any way impair or prevent the
creation of a security interest in Assignor's rights and interest in any
property included within the definition of the Collateral acquired under such
contracts; (ix) shall properly maintain and care for the Collateral; (x) shall
not grant any security interest in any Collateral (other than Permitted Liens)
except in the name of Assignee; (xi) shall not sell, license, or contract for
sale or otherwise dispose of any Collateral except as may be permitted by the
Credit Agreement; (xii) upon any officer of Assignor obtaining knowledge
thereof, shall promptly notify Assignee of any event which materially adversely
affects the value of any Collateral, the ability of Assignor or Assignee to
dispose of any of the Trademarks or the rights and remedies of Assignee in
relation thereto including, without limitation, the levy of any legal process
against any of the Collateral; (xiii) until Assignee exercises its rights to
make collection, shall diligently keep reasonable records respecting the
Collateral; (xiv) shall promptly notify Assignee of any suspected infringement
of any of the Trademarks by any third party and of all steps, including the
commencement and course of litigation, taken to remedy such infringement; and
(xv) shall use proper statutory notice in conjunction with each of the U.S.
Registrations.
7. Amounts Payable in Respect of the Trademarks. Except as
otherwise provided in this Section 7 or in the Credit Agreement, Assignor shall
continue to collect, at its own expense, all amounts due or to become due to
Assignor in respect of the Trademarks. Upon the occurrence and during the
continuance of an Event of Default, Assignee is hereby given full power and
authority, without notice or demand, (i) to notify any and all obligors of
Assignor with respect to any Trademark obligation which Assignor, except for
the execution hereof, could ask for, and (ii) to demand, take, collect, ▇▇▇ for
and receive for its own use all amounts due or to become due Assignor in
respect of the Trademarks, and in connection therewith to enforce all rights
and remedies with respect to any Trademark which Assignor could enforce if this
Agreement had not been made; and Assignor hereby ratifies any action which
Assignee shall lawfully take to enforce Assignee's rights hereunder.
71
Whether or not Assignee shall have so notified any obligors, Assignor shall at
its expense render all reasonable assistance to Assignee in enforcing claims
against such obligors.
8. Trademark Applications, Renewal and Litigation. Assignor
shall have the duty to prosecute diligently any application for trademark
registration of the U.S. Registrations specifically identified in Schedule A
annexed hereto pending as of the date of this Agreement or thereafter during
the term of the Credit Agreement, to make U.S. application on any existing or
future unregistered but registrable Trademark (except those having negligible
commercial value) and to preserve, renew and maintain all Trademarks as to
which a security interest has been granted pursuant to this Agreement. Any
expenses incurred in connection with such an application, or in protecting,
maintaining or preserving the Trademarks, shall be borne by Assignor.
Assignor shall have the right and obligation to commence and
diligently prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, or other damage or opposition or cancellation proceedings as are
reasonable to protect any of the Trademarks. However, no such suit, proceeding
or other action shall be settled or voluntarily dismissed, nor shall any party
be released or excused of any claims of or liability for infringement, without
the prior written consent of Assignee. Assignor shall indemnify and hold
harmless Assignee for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
(including reasonable attorneys' fees) of any kind whatsoever which may be
imposed on, incurred by or asserted against Assignee in connection with or in
any way arising out of such suits, proceedings or other actions other than
actions caused by Assignee's gross negligence or willful misconduct.
9. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) Assignee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party in default under the UCC in effect in the State of
Georgia [or __________] at that time (whether or not the UCC applies
to the affected Collateral) and also may (i) require Assignor to, and
Assignor hereby agrees that it will at its expense and upon request of
Assignee forthwith, assemble all or part of the Collateral as directed
by Assignee and make it available to Assignee at a place to be
designated by Assignee which is reasonably convenient to both parties;
(ii) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at
any of Assignee's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as Assignee may deem
commercially reasonable; (iii) occupy any premises owned or leased by
Assignor where the Collateral or any part thereof is located for a
reasonable period in
72
order to effectuate its rights and remedies hereunder or under law,
without obligation to Assignor in respect of such occupation; and (iv)
exercise any and all rights and remedies of Assignor under or in
connection with the contracts related to Collateral or otherwise in
respect of the Collateral, including, without limitation, any and all
rights of Assignor to demand or otherwise require payment of any
amount under, or performance of any provision of, such contracts.
Assignor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' written notice to Assignor of the time
and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Assignee
shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Assignee may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) Any cash held by Assignee as Collateral and all
cash proceeds received by Assignee in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Assignee, be held by Assignee as
collateral for, and then or at any time thereafter applied in whole or
in part by Assignee against, all or any part of the obligations of
Assignor to the Lender in such order as is provided in the Credit
Agreement. Any surplus of such cash or cash proceeds held by Assignee
and remaining after payment in full of all such Obligations shall be
paid over to Assignor or to whomsoever may be lawfully entitled to
receive such surplus.
10. Power of Attorney. Assignor hereby authorizes and
empowers Assignee, upon the occurrence and during the continuation of an Event
of Default, to make, constitute and appoint any officer or agent of Assignee as
Assignor's true and lawful attorney-in-fact, with power (i) to endorse
Assignor's name on all applications, documents, papers and instruments
necessary for Assignee in the use or maintenance of the Collateral, (ii) to
take any other actions with respect to the Collateral, including without
limitation, commencement or continuation of any litigation or administrative
proceeding, as Assignee deems in its best interest, (iii) to grant or issue an
exclusive or non-exclusive license to the Trademarks to anyone, or (iv) to
assign, pledge, convey or otherwise transfer title in or dispose of the
Collateral to anyone.
11. Amendments, etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by Assignor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given, except as
provided in Section 6, in which case the writing need only be signed by
Assignee.
73
12. Address for Notices. All notices and other
communications to any party provided for hereunder shall be in writing
(including telecommunications) and mailed or transmitted or delivered to such
party, addressed to it at the address first stated herein for such party, or as
to either party at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall, when mailed,
telegraphed, telexed or cabled, be effective as provided in Section 8.1 of the
Credit Agreement.
13. Continuing Security Interest; Transfers by the Lender.
This Agreement shall create a continuing security interest in the Collateral
and shall (i) remain in full force and effect until the indefeasible payment in
full of all of the obligations of Assignor to the Lender, (ii) be binding upon
Assignor, its successors and assigns and (iii) inure to the benefit of
Assignee, and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), Assignee may assign or otherwise
transfer any obligations held by it, and such other benefits in respect thereof
granted to it herein or otherwise, to any other person or entity, subject,
however, to the provisions of Section 8.5 of the Credit Agreement. Upon the
indefeasible payment in full of all of the obligations of Assignor to the
Lender, the security interest granted hereby shall terminate and all rights to
the Collateral shall revert to Assignor, subject to any disposition thereof
which may have been made by Assignee pursuant hereto or pursuant to the Credit
Agreement. Upon any such termination, Assignee shall, at Assignor's expense,
execute and deliver to Assignor such documents as Assignor shall reasonably
request to evidence such termination.
14. Cumulative Remedies; Effect on Credit Agreement. All of
Assignee's rights and remedies with respect to the Collateral, whether
established hereby or by the Credit Agreement, or by any other agreements or by
law shall be cumulative and may be exercised singularly or concurrently.
Assignor hereby acknowledges and agrees that this Agreement is not intended to
limit or restrict in any way the rights and remedies of Assignee under the
Credit Agreement and the other Loan Documents, but rather is intended to
facilitate the exercise of such rights and remedies.
15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
16. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Agreement in any jurisdiction.
74
17. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA
(DETERMINED WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS).
[Remainder of this page intentionally left blank]
75
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunder duly
authorized, as of the date first above written.
----------------------------------------
By:
-------------------------------------
Name:
Title:
(CORPORATE SEAL)
ATTEST:
-------------------------------------------
Secretary
Agreed and Accepted as of
this ___ day of ___________, 19__:
NATIONSBANK, N.A. (SOUTH)
Assignee
By:
----------------------------------------
Name:
Title:
TRADEMARK SECURITY AGREEMENT
76
STATE OF __________________________________ )
) ss.:
COUNTY OF _________________________________ )
The foregoing Trademark Collateral Security Agreement was executed and
acknowledged before me this ____ day of ___________, 19___, by
______________________ and _________________________, personally known to me to
be the _______________ and Secretary, respectively, of ____________, a
___________, on behalf of such corporation.
(SEAL)
-----------------------------
Notary Public
My Commission expires:
TRADEMARK SECURITY AGREEMENT
77
SCHEDULE A
United States Trademark and Service ▇▇▇▇
Registrations and Applications for Registration
TRADEMARK SECURITY AGREEMENT
78
SCHEDULE B
Rights of Affiliates of Subsidiaries
79
ALSTON&BIRD LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Direct Dial: ▇▇▇-▇▇▇-▇▇▇▇ Internet: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
EXHIBIT D
FORM OF OPINION OF ▇▇▇▇▇▇ & BIRD LLP
March 28, 1997
NationsBank, N.A. (South)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to Medirisk, Inc., a Delaware corporation
(the "Company") in connection with the preparation and negotiation of that
certain Credit Agreement dated as of the date hereof (the "Loan Agreement") by
and between the Company and NationsBank, N.A. (South) (the "Lender") and have
participated in the closing of the credit facilities provided in the Loan
Agreement (collectively, the "Transaction"). We have also represented Medirisk
of Illinois, Inc., an Indiana corporation ("Illinois") and Medirisk of
Missouri, Inc., a Missouri corporation ("Missouri"; the Company together with
Illinois and Missouri collectively referred to as the "Credit Parties" and each
a "Credit Party"). This opinion letter is being rendered pursuant to Section
2.1 of the Loan Agreement.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal
Opinion Committee of the Corporate and Banking Law Section of the State Bar of
Georgia, which Interpretive Standards are incorporated in this opinion letter
by this reference. Capitalized terms used in this opinion letter and the
attachments hereto and not otherwise defined herein shall have the meanings
assigned to such terms in the Interpretive Standards and/or the Loan Agreement.
In the capacity described above, we have reviewed the following
documents (the "Reviewed Documents"; items (a) through (g) collectively, the
"Loan Documents"):
(a) the Loan Agreement;
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
80
NationsBank, N.A. (South)
March 28, 1997
Page 3
(b) the Revolving Note;
(c) the Security Agreement;
(d) the Stock Pledge Agreement;
(e) each Subsidiary Guaranty;
(f) each Subsidiary Security Agreement;
(g) the Trademark Security Agreement;
(h) those certain UCC-1 financing statements naming each of the Credit
Parties as debtor and the Lender as secured party to be filed the Clerk of the
Superior Court of any County in the State of Georgia, copies of which are
attached hereto as Exhibit A ( the "Financing Statements").
In addition to the foregoing, we have considered such matters of law
and of fact, including the examination of originals or copies, certified or
otherwise identified to our satisfaction, of such records and documents of the
Company, certificates of public officials and such other documents as we have
deemed appropriate as a basis for the opinions hereinafter set forth.
With respect to various questions of fact pertinent to the opinions
expressed in this letter, we have, with your permission, made no independent
investigation other than (a) examination of the Reviewed Documents, (b) review
of such corporate records of the Credit Parties as we deemed appropriate, (c)
inquiry of each of the members of the primary lawyer group which consists only
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, (d) review of a
certificate of an officer of the Credit Parties, a copy of which is attached as
Exhibit B hereto, and (e) inquiry of the officer providing such certificate. In
this connection, when used herein, the phrase "to our knowledge" means our
knowledge based solely on the examination, review and inquiry described above
in this paragraph.
For purposes of this opinion letter, in addition to the assumptions
provided for in the Interpretive Standards, we have assumed the following:
(i) (a) the Company has rights in the Collateral (as defined in
the Security Agreement) and each of Illinois and Missouri has
rights in the Collateral (as defined in the respective
Subsidiary Security Agreements); and (b) none of such
Collateral (as defined in the Security Agreement or either of
the Subsidiary Security Agreements) is fixtures, crops,
minerals or the like, or
81
NationsBank, N.A. (South)
March 28, 1997
Page 4
accounts resulting from the sale of minerals or the like, or
crops grown or to be grown.
(ii) The Lender has all requisite power and authority to enter
into and perform its obligations under the Loan Agreement and
the other Loan Documents to which it is a party, that the
Loan Agreement and such other Loan Documents have been duly
authorized, executed and delivered by the Lender, and that
the Loan Agreement and such other Loan Documents constitute
the legal, valid and binding obligations of the Lender.
(iii) The address of Lender set forth in the Financing Statement is
an address from which information concerning the security
interest evidenced by the Financing Statement may be
obtained.
In addition to the qualifications provided for in the Interpretive
Standards, our opinions expressed below are subject to the additional
qualifications that:
a. For purposes of rendering the opinion expressed in paragraph (1)
hereof with respect to the good standing of the Credit Parties, we have relied
solely upon the certificate of good standing attached hereto as Exhibit C.
b. There exist certain limitations, resulting from the operation of
the Uniform Commercial Code as in effect on this date in the State of Georgia
(the "UCC"), on the perfection of the security interests in proceeds created by
the Loan Agreement.
c. With respect to the opinion in paragraph (7) below, no opinion is
given to the validity or perfection of the Lender's security interest granted
under any of the Loan Documents in property of a type which is excluded from
the coverage of Article 8 or Article 9 of the UCC.
d. Except as expressly provided in paragraph (10) below, no opinion is
expressed herein with respect to the enforceability of the Trademark Security
Agreement.
The opinions set forth herein are limited to the laws of the State of
Georgia, the General Business Corporation Law of the State of Delaware and
applicable federal laws.
Based upon the foregoing, it is our opinion that:
(1) Each Credit Party is a corporation in good standing
under the laws of the state of its incorporation.
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NationsBank, N.A. (South)
March 28, 1997
Page 5
(2) Each Credit Party has the corporate power to execute and
deliver the Loan Documents to which it is a party, to perform its
obligations thereunder, to own and use its Assets and to conduct its
business.
(3) Each Credit Party has duly authorized the execution and
delivery of the Loan Documents to which it is a party and all
performance by such Credit Party thereunder and has duly executed and
delivered each Loan Document to which it is a party.
(4) The execution and delivery by the Credit Parties of the
Loan Documents do not, and if any Credit Party were now to perform its
obligations under the Loan Documents, such performance would not,
result in any:
(i) violation of such Credit Party's certificate or
articles of incorporation or bylaws;
(ii) violation of any existing federal or state
constitution, statute, regulation, rule, order, or law to
which such Credit Party or its Assets are subject;
(iii) breach of or default under any material
written agreements;
(iv) creation or imposition of a contractual lien or
security interest in, on or against the Assets of such Credit
Party under any material written agreements other than the
lien in favor of the Lender; or
(v) violation of any judicial or administrative
decree, writ, judgment or order to which, to our knowledge,
any Credit Party or tits respective Assets are subject.
With your permission we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above includes only those
agreements listed on Exhibit D hereto.
(5) No consent, approval, authorization or other action by,
or filing with, any governmental authority of the United States or the
State of Georgia is required for any Credit Party's execution and
delivery of any Loan Document and consummation of the Transaction,
other than the filing of the Financing Statements and the fees and
taxes associated therewith.
(6) The Loan Documents are enforceable against each Credit
Party a party thereto.
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NationsBank, N.A. (South)
March 28, 1997
Page 6
(7) Each of the Security Agreement and the Subsidiary
Security Agreements creates a valid security interest in the
Collateral (as defined therein) in favor of the Lender. Each of the
Financing Statements is in appropriate form for filing in the office
of the clerk of any Superior Court of any county in the State of
Georgia. Upon such filing of the Financing Statements, the security
interest shall, under the UCC, be perfected in such portion of the
Collateral as may be perfected by the filing of a financing statement.
(8) The Stock Pledge Agreement creates a valid security
interest in the Stock (as defined therein) in favor of the Lender.
Such security interest shall be duly perfected by the delivery of
certificates evidencing the Stock (as defined therein) to the Lender.
(9) Assuming the Company applies the proceeds of the Loans as
provided in the Loan Agreement, the consummation of the Transaction
will not violate the provisions of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve.
(10) The Trademark Security Agreement creates a valid
security interest in the interests assigned thereunder, namely, the
Trademarks.
Based upon the limitation and qualifications set forth above, we
confirm to you that:
(1) To our knowledge, except as set forth in the Schedules to the Loan
Agreement, no litigation or other proceeding against any of the Credit Parties
or any of its respective properties is pending or overtly threatened by a
written communication.
(2) The Company is qualified to transact business as a foreign
corporation in the State of Georgia. The foregoing statement is based solely
upon a certificate provided by the Secretary of State of the State of Georgia,
a copy of which is attached hereto as Exhibit C, and is limited to the meaning
ascribed to such certificate by such state agency. Illinois is qualified to
transact business as a foreign corporation in the State of Illinois. The
foregoing statement is based solely upon a certificate provided by the
Secretary of State of the State of Illinois, a copy of which is attached hereto
as Exhibit C, and is limited to the meaning ascribed to such certificate by
such state agency.
▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇,▇, (South)
March 28, 1997
Page 6
This opinion letter is provided to you for your exclusive use solely
in connection with the Transaction, and may not be relied upon by any other
person or for any other purpose without our prior written consent.
Very truly yours,
▇▇▇▇▇▇ & BIRD LLP
By:
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, A Partner
85
EXHIBIT A
to
Opinion of ▇▇▇▇▇▇ & Bird
Financing Statements
86
EXHIBIT B
to
Opinion of ▇▇▇▇▇▇ & Bird
Certificate of Officer
87
EXHIBIT C
to
Opinion of ▇▇▇▇▇▇ & Bird
Certificates of Existence
88
EXHIBIT D
to
Opinion of ▇▇▇▇▇▇ & Bird
Material Written Agreements
1. Securities Purchase Agreement dated January 8, 1996, between the Company and
HealthPlan Services Corporation ("HPSC"), as amended.
2. Employment Agreement, dated as of May 31, 1996, between the Company and ▇▇▇▇
▇. ▇▇▇▇▇▇.
3. Employment Agreement, dated as of January 9, 1996, between the Company and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
4. Employment Agreement, dated as of March 14, 1996, between the Company and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
5. Agreement for Participation in the Formations National Outcome System, dated
as of May 28, 1995, between Illinois and HEALTHSOUTH.
6. Registration Rights Agreement, dated as of January 9, 1996, between the
Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
7. Warrant Agreement dated as of January 8, 1996, between the Company and HPSC,
as amended.
8. Registration Rights Agreement, dated as of January 8, 1996, between the
Company and Health Plan Services Corporation.
9. Form of Indemnification Agreement between the Company and each of its
officers and directors.
10. Registration Agreement, dated as of October 28, 1996, between the Company,
▇▇▇▇▇▇▇▇ Venture Partners II, L.P., Chase Manhattan Bank N.A., as Trustee, and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
89
EXHIBIT E
FORM OF
COMPLIANCE CERTIFICATE
This Certificate is delivered pursuant to that certain Credit
Agreement, dated as of March ____, 1997 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and between Medirisk, Inc. (the "Company") and NationsBank, N.A. (South)
(the "Lender"). All capitalized terms used herein which are defined in the
Credit Agreement are used herein with the same meanings given such terms in the
Credit Agreement.
The undersigned ______________________________________ hereby
certifies in his/her representative capacity on behalf of the Company to the
Lender as follows:
1. ____________________________ is the duly elected and
acting ____________________ of the Company.
2. The undersigned has had prepared under his/her
supervision and has reviewed the financial statements of the Company
as of and for the quarter ending __________________, 199__, true,
complete and correct copies of which have been previously furnished to
the Lender (collectively, the "Financial Statements").
3. The Financial Statements were prepared in accordance
with GAAP and fairly present the financial position and results of
operations of the Company as of and for the quarter ending on the date
of the Financial Statements.
4. As of ______ __, 19__, after giving effect to the
transactions contemplated by the Credit Agreement:
(a) No Default or Event of Default has occurred
and is continuing;
(b) No material adverse change in the financial
condition or operations of the business of the Company has
occurred since _______________________;
(c) The representations and warranties of the
Company set forth in Article 3 of the Credit Agreement are
true and correct in all material aspects of this date; and
(d) The Company is in compliance with all of the
terms and provisions set forth in the Credit Agreement and the
other Loan Documents and their respective parts to be observed
and performed. Calculations demonstrating compliance with
Sections 6.9, 6.10, 6.11, 6.12 and 6.13 of the Credit
Agreement are set forth on the Schedule 1 attached hereto.
90
The undersigned represents the foregoing information to be
true and correct to the best of his/her knowledge and belief and executes this
Certificate in his/her representative capacity on behalf of the Company as of
this ___ day of ________, 199___.
------------------------------
[NAME]
91
SCHEDULE 1
CALCULATIONS DEMONSTRATING
COMPLIANCE WITH SECTIONS
6.9, 6.10, 6.11, 6.12 AND 6.13 OF
THE CREDIT AGREEMENT
[to be provided by Lender]
92
EXHIBIT F-1
FORM OF
REQUEST FOR ACQUISITION ADVANCE
I, ________________________________, as _______________ of Medirisk,
Inc., Delaware corporation (the "Company"), and as an Authorized Signatory, do
hereby certify, pursuant to the provisions of that certain Credit Agreement (as
the same may be amended, modified, restated or supplemented from time to time,
the "Credit Agreement") dated as of March ___, 1997, between the Company and
NationsBank, N.A. (South) (the "Lender"), that:
1. The Company hereby requests an Acquisition Advance in
the form of a LIBOR Advance in the amount of $____________ with a
LIBOR Advance Period of _____________ /a Base Rate Advance in the
amount of $______________ to be made on _________________, 199___ (the
"Funding Date"), under the Commitment. The proceeds of the Acquisition
Advance should be wired on behalf of the Company as set forth on
Schedule 1 attached hereto. The foregoing instructions shall be
irrevocable.
2. The proceeds of the Acquisition Advance requested
hereby shall be used to fund the purchase price of that certain
Acquisition more fully described on Schedule 2 attached hereto
(hereafter referred to as the "Acquisition"). Schedule 2 also sets
forth the total purchase price with respect to the Acquisition, both
in terms of cash and other consideration paid and indebtedness and
liabilities assumed. The proceeds of the Acquisition Advance
requested hereby shall not be in an amount in excess of one hundred
percent (100%) of the cash portion of such purchase price.
3. Attached hereto as Exhibit A is full, complete and
correct copy of the Letter of Intent, and each similar agreement,
entered into between the Company and the seller, or sellers, of any
interests in the Target.
4. Attached hereto as Exhibit B is a copy of each due
diligence checklist provided by the Company to the seller, or sellers,
of any interests in the Target, and all responses thereto.
5. Attached hereto as Exhibit C is a copy of the current
draft of the acquisition agreement, and each similar agreement,
governing the terms of the Acquisition, together with all schedules
and exhibits thereto.
6. Attached hereto as Exhibit D are copies of
__________________________ [describe financial information] relating
to the Acquisition. Each adjusting entry which the Company proposes
to make with respect to its books and records, and the books and
records of the Target or of any new Subsidiary of the Company formed
in connection with the Acquisition, is described in detail onSchedule
3 attached hereto.
93
7. The full name, state of organization, federal tax
identification number and chief business address of each Subsidiary
formed, or otherwise created, in connection with the Acquisition are
set forth on Schedule 4 attached hereto.
8. Except as disclosed in writing to the Lender, all
representations and warranties of the Company made in Article 3 of the
Credit Agreement are true and correct in all material respects as of
the date hereof, both before and after giving effect to the
application of the proceeds of the Advance in connection with which
this Request is given and all applicable conditions set forth in
Article 2 of the Credit Agreement have been satisfied.
9. Except as disclosed in the Compliance Certificate
most recently delivered to the Lender, as of the Funding Date, the
Company shall be in compliance with each of the covenants contained in
Sections 6.9, 6.10, 6.11, 6.12 and 6.13 of the Credit Agreement.
10. Each of the agreements and other documents relating
to the Acquisition provided by the Company hereunder are in
substantially final form and shall not subject to any material
revisions subsequent to the date hereof without the prior consent of
the Lender.
11. The incumbency of persons authorized by the Company
to sign documents is as stated in the certificate of incumbency most
recently delivered to the Lender.
12. There shall not exist, as of the Funding Date and
after giving effect to the Advance requested hereunder, any Default or
Event of Default.
Capitalized terms used in this Request for Acquisition Advance
and not otherwise defined herein are used as defined in the Credit Agreement.
[Remainder of this page intentionally left blank]
94
Dated as of this ____ day of ________________, 199__.
MEDIRISK, INC.,
a Delaware corporation
By:
-------------------------------
Title:
----------------------------
Attachments:
-----------
Exhibit A - Letter of Intent
Exhibit B - Diligence Checklists
Exhibit C - Acquisition Agreement
Exhibit D - Financial Documentation
Schedule 1 - Wiring Instructions
Schedule 2 - Proposed Acquisition and Purchase Price
Schedule 3 - Adjusting Entries
Schedule 4 - New Subsidiaries
3
95
SCHEDULE 1 - WIRING INSTRUCTIONS
4
96
SCHEDULE 2 - PROPOSED ACQUISITION AND PURCHASE PRICE
5
97
SCHEDULE 3 - ADJUSTING ENTRIES
6
98
SCHEDULE 4 - NEW SUBSIDIARIES
7
99
EXHIBIT F-2
FORM OF
REQUEST FOR ADVANCE
[LENDER CONSENT NOT REQUIRED]
I, ________________________________, as _______________ of Medirisk,
Inc., Delaware corporation (the "Company"), and as an Authorized Signatory, do
hereby certify, pursuant to the provisions of that certain Credit Agreement (as
the same may be amended, modified, restated or supplemented from time to time,
the "Credit Agreement") dated as of March ___, 1997, between the Company and
NationsBank, N.A. (South) (the "Lender"), that:
1. The Company hereby requests a LIBOR Advance in the
amount of $____________ with a LIBOR Advance Period of _____________
/a Base Rate Advance in the amount of $______________ to be made on
_________________, 199___ (the "Funding Date"), under the Commitment.
The proceeds of the Advance should be wired on behalf of the Company
as set forth on Schedule 1 attached hereto. The foregoing
instructions shall be irrevocable.
2. Except as disclosed in writing to the Lender, all
representations and warranties of the Company made in Article 3 of the
Credit Agreement are true and correct in all material respects as of
the date hereof, both before and after giving effect to the
application of the proceeds of the Advance in connection with which
this Request is given and all applicable conditions set forth in
Article 2 of the Credit Agreement have been satisfied.
3. The incumbency of persons authorized by the Company
to sign documents is as stated in the certificate of incumbency most
recently delivered to the Lender.
4. There shall not exist, as of the Funding Date and
after giving effect to the Advance requested hereunder, any Default or
Event of Default.
5. The proceeds of the Advance requested hereunder shall
not be used, in whole or in part, to fund any Acquisition requiring the consent
of the Lender pursuant to Section 1.9(d) of the Credit Agreement.
Capitalized terms used in this Request for Advance and not
otherwise defined herein are used as defined in the Credit Agreement.
100
Dated as of this ____ day of ________________, 199__.
MEDIRISK, INC.,
a Delaware corporation
By:
-------------------------------
Title:
----------------------------
101
SCHEDULE 1 - WIRING INSTRUCTIONS
3
102
EXHIBIT G
FORM OF
REVOLVING LOAN PROMISSORY NOTE
MARCH ___, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, MEDIRISK, INC., a
Delaware corporation (the "Borrower"), unconditionally promises to pay to the
order of NATIONSBANK, N.A. (SOUTH) (hereinafter, together with its successors
and assigns, called the "Lender"), at the principal office of the Lender
located in Atlanta, Georgia, or such other place as the Lender may designate in
writing to the Borrower, the principal sum of TEN MILLION AND NO/100s Dollars
($10,000,000.00), or, if less, so much thereof as may from time to time be
advanced by the Lender to the Borrower hereunder, plus interest as hereinafter
provided.
All capitalized terms used herein shall have the meanings
ascribed to them in that certain Credit Agreement (as hereafter amended from
time to time, the "Credit Agreement") of even date herewith between the
Borrower and the Lender, except to the extent such capitalized terms are
otherwise defined or limited herein.
Section 1. Manner of Borrowing Revolving Loans.
(a) Advances. Advances hereunder shall be made in
accordance with Section 1.2 of the Credit Agreement.
(b) Amount of Advance. Notwithstanding any term or
provision of this Note which may be construed to the contrary, each Base Rate
Advance shall be in a principal amount of no less than $250,000 and in integral
multiples of $50,000, and each LIBOR Advance shall be in a principal amount of
no less than $500,000 and in integral multiples of $100,000.
(c) Revolving Loans. Subject to the terms and conditions
hereof and of the Credit Agreement, the Borrower may borrow up to the maximum
principal amount above stated, repay all or any portion thereof, and reborrow
up to such amount on a revolving basis. Such borrowings, to the extent not
evidenced by other notes, shall be evidenced by this Note and shall be subject
to its terms and the terms of the Credit Agreement.
(d) Revolving Loans in Excess of Advance Rate. If at any
time the Revolving Loans outstanding exceed the Advance Rate, or any other
applicable
103
limitation set forth in the Credit Agreement, such Revolving Loans shall
nevertheless constitute Obligations that are secured by the Collateral and are
entitled to all benefits thereof.
Section 2. Repayment.
(a) The principal balance of the Revolving Loans then
outstanding shall be due and payable in full on the Maturity Date.
Notwithstanding the foregoing, however, in the event the Revolving Loans
outstanding shall at any time and for any reason exceed the Advance Rate, the
Borrower shall immediately pay to the Lender an amount equal to the difference
between the Revolving Loans and the Advance Rate, which payment shall
constitute a pro rata prepayment of the Revolving Loans evidenced by this Note.
(b) Prepayments of this Note may be made only as provided
in the Credit Agreement.
Section 3. Interest. The Borrower shall pay interest on the daily
outstanding principal balance of this Note in accordance with Section 1.3 of
the Credit Agreement. Interest on each Advance hereunder shall be calculated
on the basis of three hundred and sixty days per year for the actual number of
days elapsed, and, to the extent accrued, shall be paid in arrears by the
Borrower monthly on the last day of each month, commencing on May 1, 1997],
until the principal amount of this Note has been paid in full. The entire
principal amount hereof, together with all accrued and unpaid interest hereon,
shall be due and payable on the Maturity Date.
Section 4. Upon Default. If an Event of Default shall have occurred
and shall be continuing, the Lender shall have the option (but shall not be
required to give prior notice thereof to the Borrower, to accelerate the
maturity of this Note, or exercise any other rights or remedies hereunder in
connection with this right) to charge interest on the outstanding principal
balance of this Note at the Default Rate from the date of such Event of
Default. In addition, upon the occurrence and during the continuance of an
Event of Default, the Lender shall have all the rights and remedies set forth
in the Credit Agreement.
Section 5. Manner of Payment. The principal hereof and interest
hereon shall be payable in lawful money of the United States of America, at the
Lender's principal office in Atlanta, Georgia, or at such other place as the
Lender may designate in writing to the Borrower. All payments hereunder
received from the Borrower by the Lender shall be applied to the Obligations as
set forth in the Credit Agreement.
Section 6. Collateral. This Note is secured by Security Documents of
even date herewith between the Lender, the Borrower or its Subsidiaries.
Section 7. Fees. All parties liable for the payment of this Note
agree to pay the Lender reasonable attorneys' fees for the services of counsel
employed to collect
-2-
104
this Note, whether or not suit be brought and whether incurred in connection
with collection, trial, appeal or otherwise, and to indemnify and hold the
Lender harmless against liability for the payment of state intangible,
documentary and recording taxes, and other taxes (including interest and
penalties, if any) which may be determined to be payable with respect to this
transaction.
Section 8. Interest. In no event shall the amount of interest due or
payable hereunder exceed the maximum rate of interest allowed by Applicable
Law, and in the event any such payment is inadvertently paid by the Borrower or
inadvertently received by the Lender, then such excess sum shall be credited as
a payment of principal, unless the Borrower shall notify the Lender, in
writing, that the Borrower elects to have such excess sum returned to it
forthwith. It is the express intent hereof that the Borrower not pay and the
Lender not receive, directly or indirectly, in any manner whatsoever, interest
in excess of that which may be lawfully paid by the Borrower under Applicable
Law.
Section 9. Remedies.
(a) The remedies of the Lender as provided herein and in
any Loan Documents or other documents governing or securing repayment hereof
shall be cumulative and concurrent and may be pursued singly, successively or
together, at the sole discretion of the Lender and may be exercised as often as
occasion therefor shall arise.
(b) No act of omission or commission of the Lender,
including specifically (but without limitation) any failure to exercise any
right, remedy or recourse, shall be effective unless set forth in a written
document executed by the Lender, and then only to the extent specifically
recited therein. A waiver or release with reference to one event shall not be
construed as continuing, as a bar to, or as a waiver or release of any
subsequent right, remedy or recourse as to any subsequent event.
(c) The Borrower hereby (a) waives demand, presentment of
payment, notice of nonpayment, protest, notice of protest and all other notice,
filing of suit and diligence in collecting this Note, or in enforcing any of
its rights under any guaranties securing the repayment hereof; (b) agrees to
any substitution, addition, or release of any party or Person primarily or
secondarily liable hereon; (c) agrees that the Lender shall not be required
first to institute any suit, or to exhaust its remedies against the Borrower or
any other Person or party to become liable hereunder, or against any Collateral
in order to enforce payment of this Note; (d) consents to any extension,
rearrangement, renewal or postponement of time of payment of this Note and to
any other indulgence with respect hereto without notice, consent or
consideration to any of them; and (e) agrees that, notwithstanding the
occurrence of any of the foregoing (except with the express written release by
the Lender or any such Person), the Borrower shall be and remain directly and
primarily liable for all sums due under this Note.
-3-
105
Section 10. Borrower and Lender. Whenever used in this Note, the
words "Borrower" and "Lender" shall be deemed to include the Borrower and the
Lender named in the opening paragraph of this Note, and their respective
successors and assigns. It is expressly understood and agreed that the Lender
shall never be construed for any purpose as a partner, joint venturer,
co-principal or associate of the Borrower, or of any Person or party claiming
by, through or under the Borrower in the conduct of their respective
businesses.
Section 11. Time is of the Essence. Time is of the essence of this
Note.
Section 12. Governing Law. This Note shall be construed and enforced
in accordance with the laws of the State of Georgia.
Section 13. Loan Documents. All references herein to any document,
instrument or agreement shall be deemed to refer to such document, instrument
or agreement as the same may be amended, modified, restated, supplemented or
replaced from time to time.
IN WITNESS WHEREOF, the undersigned Borrower has executed this
instrument under seal as of the day and year first above written.
MEDIRISK, INC.
By:
------------------------------------
Title:
---------------------------
-4-
106
EXHIBIT H
TO
CREDIT AGREEMENT
FORM OF
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of March __, 1997 executed and
delivered by MEDIRISK, INC., a Delaware corporation, with an office located at
Two Piedmont Center, Suite 400, 3565 Piedmont Road, N.E., Atlanta, Georgia
30305- 1502 (the "Company"), in favor of NATIONSBANK, N.A. (SOUTH), with an
office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Lender").
RECITALS
WHEREAS, the Company and the Lender have entered into that certain
Credit Agreement dated as of even date herewith (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement") pursuant to which the Lender has agreed to extend certain financial
accommodations to the Company subject to the terms thereof; and
WHEREAS, it is a condition precedent to the Lender's extension of such
financial accommodations under the Credit Agreement that the Company execute
and deliver this Agreement;
NOW, THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the Company, the Company hereby agrees with the Lender
as follows:
SECTION 1. GRANT OF SECURITY. To secure the prompt and complete
payment, observance and performance when due (whether at stated maturity, by
acceleration or otherwise) of all of the Obligations, the Company hereby
collaterally assigns and pledges to the Lender, and grants to the Lender, a
security interest and Lien in and upon, the Collateral (as hereinafter
defined).
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to the Lender as follows:
(a) Name: Taxpayer ID Number. The exact legal name of the Company
is set forth in the introductory paragraph of this Agreement. The Company does
not conduct, and, during the five-year period immediately preceding the date of
this Agreement, has not conducted, business under any trade name or other
fictitious name other than those set forth on Schedule 2(a) attached hereto.
The Internal Revenue Service taxpayer identification number, of the Company is
▇▇-▇▇▇▇▇▇▇.
(b) Incorporation by Reference. Each representation and warranty
given by the Company as a Borrower set forth in the Credit Agreement and the
other Loan Documents, including, without limitation, Article 3 of the Credit
Agreement are hereby incorporated by reference herein as of the date hereof.
(c) Liens. None of the Collateral or other properties of the
Company is, as of the date hereof, subject to any Lien, except Permitted Liens.
No financing statement under
107
the Uniform Commercial Code of any jurisdiction which names the Company as
debtor and covers any of the Collateral or any other notice filed in the public
records indicating the existence of a Lien thereon, has been filed and is still
effective in any state or other jurisdiction, and the Company has not signed
any such financing statement or notice or any security agreement authorizing
any Person to file any such financing statement or notice.
(d) Intellectual Property. Schedule 2(d) attached hereto sets
forth a description all patents, patent rights and licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and other intellectual property and rights with respect to the
foregoing which are owned or possessed by the Company, and the same are not in
conflict with the rights of any other Person.
(e) Chief Executive Office. The chief executive office and
principal place of business of the Company and the books and records relating
to the Accounts and the other Collateral are located at the Company's office
set forth above. Schedule 2(e) sets forth the addresses of such offices and
principal place of business for the five-year period immediately preceding the
date hereof.
(f) Places of Business. The addresses (including the applicable
counties) of all of the places of business of the Company are set forth on
Schedule 2(f) attached hereto. Schedule 2(f) also sets forth a true, complete
and correct list of (i) all leases for real property in which inventory of the
Company is shared (together with the name and mailing address of each such
Lessor with respect thereto) and (ii) the name and address of each location at
which Inventory of the Company is shared with a reprocessor, warehouseman or
other bailee (together with the name and address of each such reprocessor,
warehouseman or bailee with respect thereto).
(g) Inventory. All Inventory (as hereinafter defined) is in good
condition, meets all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority over such goods,
their use or sale, and is currently either usable or salable in the normal
course of the Company's business. All Inventory is located on one or more of
the places set forth on Schedule 2(f) attached hereto or is in transit to one
of such locations.
(h) Equipment. All Equipment (as hereinafter defined) of the
Company is in good order and repair and is located on or at one or more of the
places set forth on Schedule 2(f) attached hereto.
(i) Security Interest. It is the intent of the Company that this
Agreement create a valid and perfected first priority security interest
(subject only to Permitted Liens) in the Collateral, securing the payment of
the Obligations, and all filings and other actions necessary or desirable to
perfect such security interest under the Uniform Commercial Code as enacted in
any relevant jurisdiction have been duly taken.
(j) Title to Properties. The Company has good, marketable and
legal title to its properties and assets, including, but not limited to, those
reflected on the balance sheet of the Company, as at September 30, 1996, except
those which have been disposed of by the Company subsequent to such date in the
ordinary course of business.
(k) Accounts. The originals of all chattel paper that evidence
the Accounts of the Company have been delivered to the Lender. None of the
Accounts of the Company is
2
108
evidenced by a promissory note or other instrument, other than a note or other
instrument which has been delivered to the Lender.
SECTION 3. CONTINUED PRIORITY OF SECURITY INTEREST.
(a) The Security Interest shall at all times be valid, perfected
and of first priority (subject only to Permitted Liens) and enforceable against
the Company and all other Persons, in accordance with the terms of this
Agreement, as security for the Obligations.
(b) The Company shall, at its sole cost and expense, take all
action that may be necessary or desirable, or that the Lender may reasonably
request, so as at all times to maintain the validity, perfection,
enforceability and priority of the Security Interest in conformity with the
requirements of Section 3(a), or to enable the Lender to exercise or enforce
its rights hereunder including, without limitation:
(i) Paying all taxes, assessments and other claims
lawfully levied or assessed on any of the Collateral, except to the
extent that such taxes, assessments and other claims constitute
Permitted Liens;
(ii) Obtaining landlords', mortgagees', mechanics',
bailees', warehousemen's or processors' releases, subordinations or
waivers with respect to any or all of the Collateral, in form and
substance satisfactory to the Lender;
(iii) Delivering to the Lender, endorsed or accompanied by
such instruments of assignment as the Lender may specify any and all
chattel paper, instruments, letters of credit and all other advice of
guaranty and documents evidencing or forming a part of the Collateral;
(iv) At the request of the Lender from time to time,
deliver to the Lender complete and up-to-date copies of all Collateral
comprised of the books, records, files, computer programs, data
processing records, information contained on any database maintained
by the Company, computer software, documents, correspondence and other
information at any time evidencing, describing or pertaining to or in
any way related to the business or operations of the Company or any of
its Subsidiaries;
(v) At the request of the Lender, marking conspicuously
each document included in the Collateral and marking all chattel paper
and each of its records pertaining to the Collateral, with a legend,
in form and substance satisfactory to the Lender, indicating that such
document, chattel paper or Collateral is subject to the Security
Interest; and
(vi) Executing and delivering financing statements,
designations, mortgages, deeds to secure debt, deeds of trust,
hypothecations, notices and assignments, in each case in form and
substance satisfactory to the Lender, relating to the creation,
validity, perfection, priority or continuation of the Security
Interest under the Uniform Commercial Code or other Applicable Law.
(c) The Lender is hereby authorized to execute and file in all
necessary and appropriate jurisdictions (as determined by the Lender) one or
more financing or continuation statements (or any other document or instrument
referred to in Section 3(b)(v) above) in the
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name of the Company and to sign the Company's name thereto. The Company
authorizes the Lender to file any such financing statement, document or
instrument without the signature of the Company to the extent permitted by
Applicable Law. Further, to the extent permitted by Applicable Law, a carbon,
photographic, xerographic or other reproduction of this Agreement or of any
Financing Statement is sufficient as a financing statement.
(d) The Company shall ▇▇▇▇ its books and records as may be
necessary or appropriate to evidence, protect and perfect the Security Interest
and shall cause their financial statements to reflect the Security Interest.
SECTION 4. COVENANTS REGARDING CONTRACTS.
(a) Anything herein to the contrary notwithstanding, (i) the
Company shall remain liable under all Assigned Contracts (as hereinafter
defined) to the extent set forth therein to perform its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (ii)
the exercise by the Lender of any of its rights hereunder shall not release the
Company from any of its duties or obligations under any of the Assigned
Contracts (except to the extent that such exercise prevents the Company from
satisfying such duties and obligations), and (iii) the Lender shall not have
any duties, obligations or liability under any of the Assigned Contracts or
duties by reason of this Agreement, nor shall the Lender be obligated to
perform any of the duties or obligations of the Company thereunder, to make any
payment, to make any inquiry as to the nature or sufficiency of any payment
received by the Company or the sufficiency of any performance by any party
under any such contract or agreement, or to take any action to collect or
enforce any claim for payment assigned hereunder.
(b) The Company shall at its expense:
(i) Perform and observe all the terms and provisions of
the Assigned Contracts to be performed or observed by them, maintain
the Assigned Contracts in full force and effect to the extent of the
Company's normal business practices, and enforce the Assigned
Contracts in accordance with their terms to the extent of the
Company's normal business practices; and
(ii) Furnish to the Lender promptly upon receipt thereof
copies of all notices, requests and other documents received by the
Company under or pursuant to the Assigned Contracts, and from time to
time (A) furnish to the Lender such information and reports regarding
the Assigned Contracts as the Lender may reasonably request and (B)
upon request of the Lender, make to each other party to the Assigned
Contracts such demands and request for information and reports or for
action as the Company is entitled to make under the Assigned
Contracts.
(c) Unless expressly set forth herein, all contracts and contract
rights of the Company shall constitute Assigned Contracts and shall constitute
part of the Collateral.
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SECTION 5. COVENANTS REGARDING COLLATERAL GENERALLY.
(a) Verification. The Lender shall have the right at any time and
from time to time, in the name of the Lender or in the name of the Company, to
verify the validity, amount or any other matter relating to any Accounts by
mail, telephone or otherwise.
(b) Delivery of Instruments. In the event any of the Collateral
becomes evidenced by a promissory note, trade acceptance or any other
instrument, the Company shall immediately thereafter deliver such instrument to
the Lender, appropriately endorsed to the Lender.
(c) Defense of Title. The Company shall at all times be the sole
owner of each and every item of Collateral and shall defend, at its sole cost
and expense, its title in and to, and the Security Interest of the Lender in,
the Collateral against the claims and demands of all Persons.
(d) Maintenance of Collateral. The Company shall maintain all
physical property that constitutes Collateral in good and workable condition,
with reasonable allowance for wear and tear, and shall exercise proper custody
over all such property.
(e) Insurance. The Company shall, at its own expense, maintain
insurance with respect to the Collateral in such amounts, against such risks,
in such form and with such insurers, as set forth in the Credit Agreement.
(f) Location of Office. The Company's chief executive office,
principal place of business and its books and records relating to the
Collateral shall continue to be kept at the address of the Company set forth
above, and the Company shall not change the location of such office and place
of business or such books and records without giving the Lender thirty (30)
days' prior written notice thereof.
(g) Location of Collateral. All Inventory, other than Inventory
in transit to any such location, and all Equipment shall at all times be kept
by the Company at the locations set forth on Schedule 2(f), and shall not,
without the thirty (30) days' prior written notice to the Lender, be removed
therefrom except in connection with sales thereof in the ordinary course of
business.
(h) Change of Name, Structure, Etc. Without giving the Lender
thirty (30) days' prior written notice, the Company shall not (i) change its
name, identity or structure or (ii) conduct business under any trade name or
other fictitious name other than those set forth on Schedule 2(a).
(i) Records Relating to Collateral. The Company shall at all
times keep complete and accurate records of Inventory, Equipment and other
Collateral.
(j) Inspection. The Lender (by any of its officers, employees or
agents) shall have the right, to the extent that the exercise of such right
shall be within the control of the Company, at any time or times during normal
business hours: (i) to inspect the Collateral, all files relating thereto and
the premises upon which any of the Collateral is located, (ii) to discuss the
Company's affairs and finances, insofar as the same are reasonably related to
the rights of the Lender hereunder with any Person, to verify the amount,
quantity, value and
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condition of, or any other matter relating to, any of the Collateral and (iii)
to review, audit and make extracts from all records and files related to any of
the Collateral.
(k) Other Information. The Company shall furnish to the Lender
such other information with respect to the Collateral as the Lender may
reasonably request from time to time.
(l) Payments Directly to Lender. The Lender may at any time and
from time to time following the occurrence and during the continuation of an
Event of Default notify, or request the Company to notify, in writing or
otherwise, any account debtor or other obligor with respect to any one or more
of the Accounts or Assigned Contracts to make payment to the Lender or any
agent or designee of the Lender directly, at such address as may be specified
by the Lender. If, notwithstanding the giving of any notice, any account
debtor or other such obligor shall make payment to the Company, the Company
shall hold all such payments it receives in trust for the Lender, without
commingling the same with other funds or property of or held by the Company,
and shall promptly deliver the same to the Lender, or any such agent or
designee, immediately upon receipt by the Company in the identical form
received, together with any necessary endorsements.
(m) Sale of Collateral. Except as permitted under the terms of
the Credit Agreement, the Company shall not sell, transfer, convey or dispose
of any Collateral outside the ordinary course of its business; provided,
however, that the Company may dispose of its Inventory in the ordinary course
of its business so long as no Default or Event of Default shall have occurred.
The inclusion of "proceeds" of the Collateral under the Security Interest shall
not be deemed a consent by the Lender to any other sale or other disposition of
any part or all of the Collateral.
(n) Proceeds of Collateral. The Company shall account fully and
faithfully for, and, following the occurrence and during the continuation of an
Event of Default, upon the Lender's request, promptly pay or turn over to the
Lender, proceeds in whatever form received in disposition in any manner of any
of the Collateral. To the extent practicable, the Company shall at all times
keep the Collateral and proceeds thereof separate and distinct from other
property of the Company and shall keep accurate and complete records of the
Collateral and proceeds thereof.
SECTION 6. THE LENDER APPOINTED ATTORNEY-IN-FACT. The Company hereby
irrevocably appoints the Lender the Company's attorney-in-fact, with full
authority in the place and stead of the Company and in the name of the Company
or otherwise, following the occurrence and during the continuation of an Event
of Default from time to time in the Lender's discretion, to take any action and
to execute any instrument or document which the Lender may deem necessary or
advisable to accomplish the purposes of this Agreement and to exercise any
rights and remedies the Lender may have under this Agreement or Applicable Law,
including, without limitation: (i) to obtain and adjust insurance required to
be maintained pursuant to Section 5(e) hereof; (ii) to ask, demand, collect,
▇▇▇ for, recover, compromise, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of the Collateral,
including, without limitation, any Account; (iii) to receive, endorse and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (i) or (ii) above; (iv) to sell or assign any Account
upon such terms, for such amount and at such time or times as the Lender may
deem advisable, to settle, adjust, compromise, extend or renew any Account or
to discharge and release any Account; and (v) to file any claims or take any
action or institute any proceedings which the
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Lender may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Lender with respect to any
of the Collateral. The power-of-attorney granted hereby shall be irrevocable
and coupled with an interest.
SECTION 7. THE LENDER MAY PERFORM. If the Company fails to perform
any agreement contained herein, the Lender may, without notice to the Company,
itself perform, or cause performance of, such agreement, and the expenses of
the Lender incurred in connection therewith shall be payable by the Company
under Section 12 hereof.
SECTION 8. THE LENDER'S DUTIES. The powers conferred on the Lender
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon the Lender to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Lender shall have no duty as to any
Collateral. The Lender shall be deemed to have exercised reasonable care in
the custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Lender accords its own
property; it being understood that the Lender shall be under no obligation to
take any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Company and shall be added to the Obligations.
SECTION 9. REMEDIES. The Lender may take any or all of the following
actions upon the occurrence and during the continuation of an Event of Default.
(a) Inventory and Equipment.
(i) Entry. The Lender may enter upon any premises on
which Inventory or Equipment may be located and, without resistance or
interference by the Company, take physical possession of any or all
thereof and maintain such possession on such premises or move the same
or any part thereof to such other place or places as the Lender shall
choose, without being liable to the Company on account of any loss,
damage or depreciation that may occur as a result thereof, other than
for actions that were not taken in good faith.
(ii) Assembly. The Company shall, upon request of and
without charge to the Lender, assemble the Inventory and Equipment and
maintain or deliver it into the possession of the Lender or any agent
or representative of the Lender at such place or places as the Lender
may reasonably designate.
(iii) Warehousing. The Lender may, at the expense of the
Company, cause any of the Inventory and Equipment to be placed in a
public or field warehouse, and the Lender shall not be liable to the
Company on account of any loss, damage or depreciation that may occur
as a result thereof, other than for actions that were not taken in
good faith.
(b) Use of Premises and Intellectual Property. The Lender may:
(i) without notice, demand or other process, and without
payment of any rent or any other charge enter any of the Company's
premises and, without breach of the peace, until the Lender completes
the enforcement of its rights in the Collateral, take possession of
such premises or place custodians in exclusive
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control thereof, remain on such premises and use the same and any of
the Company's equipment; and
(ii) in the exercise of the rights of the Lender under
this Agreement, without payment or compensation of any kind, use any
and all trademarks, trade styles, trade names, patents, patent
applications, licenses, franchises and the like to the extent of the
rights of the Company therein, and the Company hereby grants a license
to the Lender for this purpose.
(c) Lock Boxes. The Lender may establish or cause to be
established one or more lock boxes or other arrangement for the deposit of
proceeds of Accounts, and, in such case, the Company shall cause to be
forwarded to the Lender at the Lender's office set forth above, on a daily
basis, collection reports in form and substance satisfactory to the Lender.
(d) Rights as a Secured Creditor. The Lender may exercise all of
the rights and remedies of a secured party under the Uniform Commercial Code
and under any other Applicable Law, including, without limitation, the right,
without notice except as specified below and with or without taking possession
thereof, to sell the Collateral or any part thereof in one or more parcels at
public or private sale at any location chosen by the Lender, for cash, on
credit or for future delivery, and at such price or prices and upon such other
terms as the Lender may deem commercially reasonable. The Company agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days'
notice to the Company of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification, but notice given in any other reasonable manner or at any other
reasonable time shall constitute reasonable notification. The Lender shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. The Lender may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. The Lender may bid all or any portion of the Obligations at any
such sale.
(e) Waiver of Marshaling. The Company hereby waives any right to
require any marshaling of assets and any similar right.
(f) Appointment of Receiver. The Lender shall be entitled to the
appointment of a receiver, without notice of any kind whatsoever and without
regard to the adequacy of any security for the Obligations or the solvency of
any party bound for its payment, to take possession of all or any portion of
the Collateral and the business operations of the Company and to exercise such
power as the court shall confer upon such receiver.
(g) Accounts/Assigned Contracts. The Lender shall have the
exclusive right to assert, either directly or on behalf of the Company, any and
all rights and claims the Company may have under any Accounts and any of the
Assigned Contracts as the Lender may deem proper and to receive and collect any
and all Accounts and Assigned Contracts and any and all rent, fees, damages,
awards and other monies arising thereunder or resulting therefrom and to apply
the same on account of any of the Obligations.
SECTION 10. APPLICATION OF PROCEEDS. All proceeds from each sale of,
or other realization upon, all or any part of the Collateral following an Event
of Default, and all insurance proceeds payable by reason of any damage or
destruction of any of the Collateral, shall be applied or paid over as follows:
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(a) First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including reasonable attorneys'
fees if the Lender endeavored to collect the Obligations by or through an
attorney at law;
(b) Second: to the payment of the accrued interest upon the
Revolving Loans as provided in the Credit Agreement;
(c) Third: to the payment of the outstanding principal of the
Revolving Loans as provided in the Credit Agreement;
(d) Fourth: to the payment of the remaining outstanding
Obligations as provided in the Credit Agreement; and
(e) Fifth: the balance (if any) of such proceeds shall be paid to
the Company or to whomsoever may be legally entitled thereto.
The Company shall remain liable and shall pay, on demand, any deficiency
remaining in respect of the Obligations, together with interest thereon at a
rate per annum equal to the highest rate then payable under the Credit
Agreement on such Obligations, which interest shall constitute part of the
Obligations.
SECTION 11. RIGHTS CUMULATIVE. The rights and remedies of the Lender
under this Agreement, the Credit Agreement and the other Loan Documents shall
be cumulative and not exclusive of any rights or remedies which it would
otherwise have, including, but not limited to, those rights afforded by the
Uniform Commercial Code and other Applicable Laws. In exercising its rights and
remedies the Lender may be selective, and no failure or delay by the Lender in
exercising any right shall operate as a waiver of it, nor shall any single or
partial exercise of any power or right preclude its other or further exercise
or the exercise of any other power or right.
SECTION 12. EXPENSES. The Company shall pay, on demand, all
reasonable out-of-pocket expenses incurred by the Lender in connection with:
(a) the negotiation, preparation, execution, delivery and administration of
this Agreement and any document or instrument evidencing any of the Obligations
whenever the same shall be executed and delivered, including all appraisers'
fees, search fees, recording fees, intangibles and stamp taxes payable by the
Lender with respect to the Obligations and this Agreement and the Security
Interest created hereby and the fees and disbursements of counsel for the
Lender, and of each local counsel retained by the Lender; (b) the
restructuring, refinancing or "workout" of the transactions contemplated hereby
and of the Obligations, and the preparation, negotiation, execution and
delivery of any waiver, amendment or consent by the Lender relating to this
Agreement or the Obligations, including, without limitation, the fees,
out-of-pocket expenses and other disbursements of counsel to the Lender; (c)
the collection or enforcement of the Obligations including reasonable fees and
disbursements of counsel to the Lender if such collection or enforcement is
done through or by an attorney; and (d) the exercise by the Lender of any right
or remedy granted to it under this Agreement whether or not a Default or Event
of Default has occurred, including, without limitation, the expenses incurred
by the Lender in connection with the collection of Accounts directly from
account debtors.
SECTION 13. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Company here from shall
in any event be
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effective unless the same shall be in writing and signed by the parties hereto,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 14. NOTICES. Unless otherwise provided herein,
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered, to each party at the address specified for such party
in the Credit Agreement. All such notices and other communications to the
Company shall be effective upon satisfaction of the conditions set forth for
similar notices in the Credit Agreement.
SECTION 15. CONTINUING SECURITY INTEREST. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until indefeasible payment in full of the Obligations,
(ii) be binding upon the Company, its successors and assigns and (iii) inure
the benefit of the Lender, and its successors and assigns. The Company's
successors and assigns shall include, without limitation, a receiver, trustee
or debtor-in- possession thereof or therefor. Upon the indefeasible payment in
full of all of the Obligations, the Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Company. Upon
any such termination, the Lender shall at the Company's expense, execute and
deliver to the Company such documents as the Company shall reasonably request
to evidence such termination.
SECTION 16. APPLICABLE LAW; SEVERABILITY. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PROVISIONS THAT INDICATE THE
APPLICABILITY OF ANY OTHER LAWS). Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under Applicable Law, but if any provision of this Agreement shall be
prohibited by or invalid under Applicable Law, such provisions shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
SECTION 17. LITIGATION/WAIVERS. (a) THE LENDER AND THE COMPANY BOTH
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT
OR THE RELATIONSHIP OF THE COMPANY AND THE LENDER ESTABLISHED HEREBY AND THE
DOCUMENTS AND INSTRUMENTS EVIDENCING THE OBLIGATIONS WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES. ACCORDINGLY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE LENDER AND THE COMPANY HEREBY WAIVES ITS RESPECTIVE
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN
ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST THE
COMPANY OR THE LENDER ARISING OUT OF THIS AGREEMENT, THE OBLIGATIONS OR ANY
OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR IN
CONNECTION WITH THE COLLATERAL OR THE SECURITY INTEREST THEREIN OR BY REASON OF
ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE COMPANY AND THE LENDER OF ANY
KIND OR NATURE.
(b) THE COMPANY AND THE LENDER EACH HEREBY AGREE THAT THE FEDERAL
COURT OF THE NORTHERN DISTRICT OF GEORGIA, OR AT THE
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OPTION OF LENDER, ANY STATE COURT LOCATED IN ▇▇▇▇▇▇ COUNTY, GEORGIA, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY
AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE
OBLIGATIONS OR TO ANY MATTER ARISING THEREFROM, THE COLLATERAL OR THE SECURITY
INTEREST THEREIN OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION
HEREWITH OR THEREWITH. THE COMPANY EXPRESSLY SUBMIT AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. THE
CHOICE OF FORUM SET FORTH IN THIS PARAGRAPH SHALL NOT BE DEEMED TO PRECLUDE THE
BRINGING OF ANY ACTION BY THE LENDER OR THE ENFORCEMENT BY THE LENDER OF ANY
JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c) FURTHER, THE COMPANY WAIVES (I) ANY NOTICE PRIOR TO THE TAKING
POSSESSION OR CONTROL OF THE COLLATERAL OR ANY POSTING OF ANY BOND OR SECURITY
WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING THE LENDER TO EXERCISE
ANY OF THE LENDER'S REMEDIES SET FORTH HEREIN, INCLUDING THE ISSUANCE OF AN
IMMEDIATE WRIT OF POSSESSION AND (II) THE BENEFIT OF ALL VALUATION,
APPRAISEMENT AND EXEMPTION LAWS.
(d) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF
COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF.
SECTION 18. INDEMNIFICATION. The Company agrees to indemnify the
Lender, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against the Lender in any way relating to or arising out of the
operation of the Company's business, any action taken by the Lender with
respect to any Account or Assigned Contract pursuant to this Agreement or any
other action taken by the Lender pursuant to the terms of this Agreement;
provided, however, that the Company shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Lender's
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, the Company agrees to reimburse the Lender promptly upon demand for
any out-of-pocket expenses (including counsel fees of the counsel(s) of the
Lender's own choosing) incurred by the Lender in connection with the
preparation, execution, administration, or enforcement of, or legal advice with
respect to the rights or responsibilities of the parties under, this Agreement,
any suit or action brought by the Lender to enforce the terms of this
Agreement, any "lender liability" suit or claim brought against the Lender, and
any claim or suit brought against the Lender arising under any Federal or state
environmental statute, rule or regulation including, without limitation, the
Superfund Act, or the Federal Resource Conservation and Recovery Act of 1976,
as amended. Such out-of-pocket expenses (including counsel fees) shall be
advanced by the Company on the request of the Lender notwithstanding any claim
or assertion that the Lender is not entitled to indemnification hereunder upon
receipt of an undertaking by the Lender that the Lender will reimburse the
Company if it is actually and finally determined by a court of competent
jurisdiction that the Lender is not so entitled to indemnification. The
agreements in this Section shall survive the termination of this Agreement.
The Lender agrees to give the
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Company prompt notice of any suit or cause of action brought against the Lender
which is covered by this Section.
SECTION 19. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which, taken
together, shall constitute but one and the same instrument.
SECTION 20. DEFINITIONS. (a) For the purposes of this Agreement:
"Accounts" means all accounts and any and all rights to the payment of
money or other forms of consideration of any kind (whether classified under the
Uniform Commercial Code as accounts, chattel paper, general intangibles, or
otherwise) for goods sold or leased or for services rendered including, but not
limited to, accounts receivable, proceeds of any letters of credit naming the
Company as beneficiary, all contract rights, notes, drafts, instruments,
documents, acceptances in favor of the Company, and all other debts,
obligations and liabilities in whatever form owing by any Person to the
Company.
"Agreement" means this Security Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Assigned Contract" means any contract or agreement to which the
Company is a party or which runs in favor of the Company and which constitutes
part of the Collateral.
"Collateral" means all of the Company's right, title and interest in
and to each of the following, wherever located and whether now or hereafter
existing, or now owned or hereafter acquired or arising:
(a) all Accounts;
(b) all Inventory;
(c) all Equipment;
(d) all general intangibles and investment property of the Company
of every kind and nature including, but not limited to, all contract rights,
rights under warranties and service contracts, choses in action and causes of
action of the Company against any Person or property, all tax refunds owing to
the Company, all insurance policies of the Company and all rights of the
Company to receive monies thereunder and all licenses, franchises, trademarks,
trade names, trade secrets, patents, copyrights and any and all other
intellectual property of the Company;
(e) all rights of the Company as an unpaid vendor or lienor
(including, without limitation, stoppage in transit, replevin and reclamation)
with respect to any Inventory or other properties of the Company;
(f) all chattel paper, documents and instruments of the Company
including all documents of title and certificates of insurance;
(g) all books, records, files, computer programs, data processing
records, information contained within any database maintained by the Company,
computer software, documents, correspondence and other information at any time
evidencing, describing or
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pertaining to or in any way related to any of the foregoing or otherwise
pertaining or relating to the business or operations of the Company;
(h) any and all balances, credits, deposits, accounts, items and
monies of the Company now or hereafter with the Lender or any affiliate of the
Lender or deposited with the Lender or any financial institution selected by
the Lender pursuant to any lock box, deposit, escrow or other collection
agreement or otherwise, and all property of the Company of every kind and
description now or hereafter in the possession or control of the Lender or any
Lender for any reason; and
(i) any and all products and proceeds of any of the foregoing
(including, but not limited to, any claims to any items referred to in this
definition, and any claims of the Company against third parties for loss of,
damage to or destruction of, any or all of the Collateral or for proceeds
payable under, or unearned premiums with respect to, policies of insurance) in
whatever form, including, but not limited to, cash, instruments, general
intangibles, accounts, equipment, inventory, farm products, other goods,
documents and chattel paper and all proceeds of such proceeds.
"Company" has the meaning set forth in the first paragraph hereof.
"Default" means any of the events specified in the definition of Event
of Default, whether or not there has been satisfied any requirement for giving
of notice, lapse of time or the happening of any other condition.
"Equipment" means all equipment, machinery, apparatus, fittings,
fixtures, furniture, signage and other tangible personal property (other than
Inventory) of every kind and description used in the Company's business
operations or owned by the Company or in which the Company may have an
interest, and all parts, accessories and special tools and all increases and
accessions thereto and substitutions and replacements therefor.
"Financing Statements" means any and all financing statements executed
and delivered by or on behalf of the Company in connection with the perfection
of the Security Interest, together with any amendments thereto and any
continuations thereof.
"Inventory" means (a) all inventory of the Company and all goods
intended for sale or lease by the Company, or for display or demonstration; (b)
all work-in-process; (c) all raw materials and other materials and supplies of
every nature and description used or which might be used in connection with the
manufacture, packing, shipping, advertising, selling, leasing or furnishing of
such goods or otherwise used or consumed in the Company's business; and (d) all
documents relating to any of the foregoing.
"Lender" has the meaning set forth in the first paragraph hereof.
"Lien", as applied to the property of any Person, means any security
interest, lien, encumbrance, mortgage, deed to secure debt, deed of trust,
pledge, charge, conditional sale or other title retention agreement, or other
encumbrance of any kind covering any property of such Person, or upon the
income or profits therefrom or any agreement to convey any of the foregoing or
any other agreement or interest covering the property of a Person which is
intended to provide collateral security for the obligation of such Person.
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"Security Interest" means the Lien of the Lender on behalf of the
Lenders upon, and the collateral assignments to the Lender of, the Collateral
effected hereby or pursuant to the terms hereof.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect in the State of Georgia, as the same may be amended from time to time.
(b) Unless otherwise set forth herein to the contrary, all terms
not otherwise defined herein and which are defined in the Uniform Commercial
Code are used herein with the meanings ascribed to them in the Uniform
Commercial Code.
(c) Capitalized terms used herein and not defined herein are used
herein with the meaning ascribed to them in the Credit Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered under seal by its duly authorized officers as of the day
first above written.
COMPANY:
MEDIRISK, INC.
By:
-------------------------------------
Title:
-------------------------------
Agreed and accepted as of the
date first written above.
NATIONSBANK, N.A. (SOUTH)
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
SECURITY AGREEMENT
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EXHIBIT I
TO
CREDIT AGREEMENT
FORM OF
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement"), dated as of
March ___, 1997, between Medirisk, Inc., a Delaware corporation (the "Pledgor")
and NationsBank, N.A. (South) (the "Lender").
RECITALS :
WHEREAS, the Pledgor and the Lender have entered into that
certain Credit Agreement dated as of March [___], 1997, (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") pursuant to which the Lender has agreed to extend certain financial
accommodations to the Pledgor subject to the terms thereof; and
WHEREAS, to secure the due and punctual payment and
performance of all Obligations of the Pledgor under the Credit Agreement and
the Loan Documents, the Pledgor wishes to pledge and assign to the Lender all
of its right, title and interest in and to all of the shares of capital stock
(the "Stock") set forth on Schedule 1 hereto issued by the Subsidiaries of the
Pledgor named therein and all shares of capital stock (the "Additional Stock")
issued by future Subsidiaries of the Pledgor which shares are required pursuant
to the Credit Agreement to be pledged to the Lender; and
WHEREAS, the Pledgor has delivered certificates for the Stock to the Lender;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and other agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Capitalized Terms. All capitalized terms used herein
without definition shall have the meanings ascribed to such terms in the Credit
Agreement.
2. Warranty. The Pledgor hereby warrants to the Lender
that: (a) except for the security interest created hereby and for Permitted
Liens, the Pledgor owns the Stock free and clear of all liens, charges and
encumbrances, (b) the Stock is duly issued, fully paid and non-assessable, (c)
the Pledgor has the unencumbered right to pledge the Stock and (d) no
Governmental Approval which has not been obtained was or is necessary to the
validity of this pledge.
3. Security Interest. The Pledgor hereby grants,
conveys and pledges to the Lender a security interest in and security title to
all of the Pledgor's right, title and
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interest in and to the Stock and has transferred to the Lender, all of the
Pledgor's right, title and interest in and to the Stock presently held by the
Pledgor, together with all proceeds and products thereof and all dividends paid
with respect thereto, as security for the Obligations of the Pledgor to the
Lender under the Credit Agreement, this Agreement and the other Loan Documents.
The Pledgor has, on this date delivered the Stock to and
deposited the Stock with the Lender, together with stock powers endorsed in
blank by the Pledgor.
The Pledgor agrees that at any time and from time to time, at
the expense of the Pledgor, the Pledgor shall promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary, or that the Lender may reasonably request, in order to perfect and
protect the security interest granted hereby or to enable the Lender to
exercise and enforce its rights and remedies hereunder with respect to all or
any portion of the Stock.
The Pledgor hereby appoints the Lender as the Pledgor's true
and lawful attorney-in-fact to execute such documents (including, without
limitation, a stock power) upon the occurrence and during the continuance of a
Default, or Event of Default, as shall be necessary to effect a transfer of the
Stock in connection with any permitted disposition of the Stock by the Lender
(which power of attorney is coupled with an interest and is irrevocable so long
as any of the Obligations are outstanding or the Lender have any obligation to
make Advances under the Credit Agreement).
4. Additional Shares; Dividends. In the event that,
during the term of this Agreement:
(a) Any stock dividend, stock split,
reclassification, readjustment or other change is declared or made in
the capital structure of any Subsidiary, all new, substituted and
additional shares or other securities, issued by reason of any such
change and received by the Pledgor, or to which the Pledgor shall be
entitled, shall be immediately transferred to the Lender, by delivery,
together with stock powers endorsed in blank by the Pledgor, and shall
thereupon constitute Stock to be held by the Lender under the terms of
this Agreement; and
(b) Subscriptions, warrants or any other rights
or options shall be issued in connection with the Stock, all new stock
or other securities acquired through such subscriptions, warrants,
rights or options by the Pledgor shall be immediately transferred by
delivery to the Lender and shall thereupon constitute Stock to be held
by the Lender under the terms of this Agreement.
(c) Notwithstanding anything herein to the
contrary, so long as no Event of Default exists or is continuing, the
Pledgor shall be entitled to retain all dividends paid on account of
the Stock other than such dividends paid as Additional Stock and
pledged to the Lender pursuant to Section 3.
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5. Default. Upon the occurrence and during the
continuation of a Default, or an Event of Default, under the Credit Agreement,
or a default by the Pledgor under the terms of this Agreement, the Lender may
transfer, sell or otherwise dispose of the Stock or any portion of the Stock at
a public or private sale or make other commercially reasonable disposition of
the Stock or any portion thereof after ten (10) days' notice to the Pledgor,
and the Lender may purchase the Stock or any portion thereof at any public or
private sale.
The proceeds of the public or private sale or other
disposition shall be applied to the costs incurred in connection with the sale,
expressly including, without limitation, any costs under Section 7(a) hereof,
and to the other Obligations, in such order as the Lender may determine, and
any remaining proceeds shall be paid over to the Pledgor or others as by law
provided.
In the event the proceeds of the sale or other disposition of
the Stock are insufficient to pay such expenses, interest, principal of the
Obligations and damages, the Pledgor shall remain liable to the Lender for any
such deficiency. All costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, incurred by the Lender in obtaining
performance of or in collecting any payments due under this Agreement shall be
deemed part of the Obligations secured hereunder.
6. Additional Rights of Secured Party. In addition to
its rights and privileges under this Agreement, the Lender shall have all the
rights, powers and privileges of a secured party under the Uniform Commercial
Code of the State of Georgia and other Applicable Law. All rights of the
Lender shall be cumulative and not exclusive.
7. Disposition of Stock by the Lender. If the Stock or
any portion thereof is not registered under the various United States federal
or state securities acts, the disposition thereof hereunder may be restricted
to one or more private (instead of public) sales in view of the lack of such
registration. The Pledgor understands that upon such disposition, the Lender
may approach only a restricted number of potential purchasers and further
understand that a sale under such circumstances may yield a lower price for the
Stock than if the Stock were registered pursuant to federal and state
securities acts and sold on the open market.
The Pledgor, therefore, agrees that:
(a) if the Lender shall, pursuant to the terms of
this Agreement, sell or cause the Stock or any portion thereof to be
sold at a private sale, the Lender shall have the right to rely upon
the advice and opinion of any national brokerage or investment firm
having recognized expertise and experience in connection with shares
of companies similar to the Stock (but shall not be obligated to seek
such advice and the failure to do so shall not be considered in
determining the commercial reasonableness of the Lender's action) as
to the best manner in which to expose the Stock for sale and as to the
best price reasonably obtainable at the private sale thereof; and
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124
(b) that such reliance shall be conclusive
evidence that the Lender have handled such disposition in a
commercially reasonable manner.
8. Pledgor's Obligations Absolute. The obligations of
the Pledgor under this Agreement shall be direct and immediate and not
conditional or contingent upon the pursuit of any remedies against any other
Person, nor against other security or liens or encumbrances available to the
Lender, or any of its successors, assigns or agents. The Pledgor hereby waives
any right to require that an action be brought against any other Person or to
require that resort be had to any security or to any balance of any deposit
account or credit on the books of the Lender in favor of any other person or
entity prior to any exercise of rights or remedies hereunder.
9. Voting Rights.
(a) After the occurrence and during the
continuation of a Default, or an Event of Default, or default under
this Agreement, and for so long as any of the Obligations shall remain
unpaid, (i) the Lender may, upon fifteen (15) days' prior written
notice to the Pledgor of its intention to do so, exercise all voting
rights and all other ownership or consensual rights of the Stock, but
under no circumstances shall the Lender be obligated by the terms of
this Agreement to exercise such rights and (ii) the Pledgor hereby
appoints the Lender the Pledgor's true and lawful attorney-in-fact and
IRREVOCABLE PROXY to vote the Stock in any manner the Lender may
reasonably deem advisable for or against all matters submitted or
which may be submitted to a vote of shareholders. The power of
attorney granted hereby is coupled with an interest and shall be
irrevocable for so long as any of the Obligations remain unpaid and
until the Lender's obligation to make Advances to the Pledgor under
the Credit Agreement has been terminated; and,
(b) For so long as the Pledgor shall have the
right to vote the Stock, the Pledgor covenants and agrees that it will
not, without the prior written consent of the Lender, vote or take any
consensual action with respect to the Stock which would constitute a
Default, or Event of Default, under the Credit Agreement, or a default
under the terms of this Agreement.
10. Termination. This Agreement, and the security
interest hereunder granted to the Lender in the Stock, shall terminate on the
later of the date on which (a) all Obligations of the Pledgor to the Lender
under the Credit Agreement and the other Loan Documents and any other
agreements have been fully satisfied and (b) the Lender's obligation to make
Advances to the Pledgor under the provisions of the Credit Agreement and any
other agreement has been terminated. Thereafter, upon written demand from the
Pledgor, the Lender, by its acceptance hereof, agrees that it shall promptly
release the Stock by delivery of the Stock to the Pledgor, unless and except to
the extent the Stock has been sold, liquidated or otherwise disposed of
pursuant to Section 7 hereof and execute any other document reasonably
requested by the Pledgor to evidence such termination.
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EXHIBIT J
TO
CREDIT AGREEMENT
FORM OR
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY (this "Guaranty") is made as of this
___ day of __________, 19__, as follows:
RECITALS
WHEREAS, Medirisk, Inc., a Delaware corporation (the
"Company") and NationsBank, N.A. (South) (the "Lender") have entered into that
certain Credit Agreement dated as of March [28], 1997 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") pursuant to which the Lender has agreed to make certain financial
accommodations to the Company in an aggregate principal amount not to exceed
$10,000,000 (the "Revolving Loans"), as evidenced by that certain Revolving
Loan Promissory Note issued by the Company to the order of the Lender (as such
note may be amended, modified, extended or renewed from time to time being
hereinafter referred to as the "Revolving Note"); and
WHEREAS, ______________, a _________ corporation (the
"Guarantor") is a Subsidiary of the Company; and
WHEREAS, the Company and the Guarantor are mutually dependent
on each other in the conduct of their respective businesses as an integrated
operation; and
WHEREAS, the Guarantor has determined that its execution,
delivery and performance of this Guaranty directly benefit, and are within the
corporate purposes and in the best interests of the Guarantor; and
WHEREAS, as a condition to the closing of the Credit
Agreement, the Guarantor has agreed to execute this Subsidiary Guaranty (the
"Guaranty") guaranteeing the payment and performance by the Subsidiary of its
Obligations (as defined in the Loan Agreement) under the Revolving Note, the
Credit Agreement and the other Loan Documents executed by the Company
(collectively, as such may be amended, modified or extended from time to time,
hereinafter referred to as the "Guaranteed Agreements");
NOW, THEREFORE, in consideration of the above premises, Ten
Dollars ($10.00) in hand paid and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby
guarantees to the Lender: (i) the full and prompt payment and performance of
all obligations of the Company to the Lender under the Guaranteed Agreements
(including, without limitation, any interest fees and other charges in respect
of the Guaranteed Agreements that would accrue but for the filing of a
bankruptcy action with respect to the Company, whether or not such claim is
allowed in such bankruptcy action); (ii) payment of any and all damages which
the Lender may suffer by reason of a breach
126
of any obligation, covenant or undertaking with respect to this Guaranty or any
of the Guaranteed Agreements; (iii) payment and performance of all of the
obligations of any obligor to the Lender under this Guaranty and the Guaranteed
Agreements, or as a result of making the Revolving Loans; and (iv) any
extensions, renewals or amendments of any of the foregoing, however created,
acquired, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, including any
interest thereon, plus reasonable attorneys' fees and expenses if the
obligations represented by this Guaranty are collected by law, through an
attorney-at-law, or under advice therefrom (all of the foregoing obligations
(i), (ii), (iii) and (iv) being hereinafter collectively referred to as the
"Obligations").
Each of the Guarantor and the Lender hereby further agree
that:
1. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Credit Agreement.
2. Regardless of whether any proposed guarantor or any
other Person or Persons is or are or shall become in any other way responsible
to the Lender for or in respect of the Obligations or any part thereof, and
regardless of whether or not any Person or Persons now or hereafter responsible
to the Lender for the Obligations or any part thereof, whether under this
Guaranty or otherwise, shall cease to be so liable, the Guarantor hereby
declares and agrees that this Guaranty shall be a several obligation, shall be
a continuing guaranty and shall be operative and binding until the earlier of
such time as (i) the Obligations shall have been paid or performed in full and
the Commitment shall have terminated or (ii) the Guarantor shall have satisfied
all of its obligations under this Guaranty.
3. Upon the execution and delivery of this Guaranty to
the Lender, this Guaranty shall be deemed to be finally executed and delivered
by the Guarantor and shall not be subject to or affected by any promise or
condition affecting or limiting the Guarantor's liability, and no statement,
representation, agreement or promise on the part of the Lender or the Company,
or either of them, or any officer, employee or agent thereof, unless contained
herein, forms any part of this Guaranty or has induced the making thereof or
shall be deemed in any way to affect the Guarantor's liability hereunder.
4. No alteration or waiver of this Guaranty or of any of
its terms, provisions or conditions shall be binding upon the parties against
whom enforcement is sought unless made in writing and signed by an authorized
officer of such party.
5. The Lender may from time to time, without exonerating
or releasing the Guarantor in any way under this Guaranty, (i) take such
further or other security or securities for the Obligations or any part thereof
as the Lender may deem proper, (ii) release, discharge, abandon or otherwise
deal with or fail to deal with any guarantor of the Obligations or any security
or securities therefor or any part thereof now or hereafter held by the Lender
or (iii) amend, modify, extend, accelerate or waive in any manner any of the
provisions, terms, or conditions of the Guaranteed Agreements, all as the
Lender may consider expedient or appropriate in its sole discretion. Without
limiting the generality of the foregoing, or of Paragraph 6 hereof, it is
understood that the Lender may, without exonerating or releasing the
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Guarantor, give up, modify or abstain from perfecting or taking advantage of
any security for the Obligations and accept or make any compositions or
arrangements, and realize upon any security for the Obligations when, and in
such manner, and with or without notice, all as the Lender may deem expedient.
6. The Guarantor acknowledges and agrees that no change
in the nature or terms of the Obligations or any of the Guaranteed Agreements,
or other agreements, instruments or contracts evidencing, related to or
attendant with the Obligations (including any novation), shall discharge all or
any part of the liabilities and obligations of the Guarantor pursuant to this
Guaranty; it being the purpose and intent of the Guarantor and the Lender that
the covenants, agreements and all liabilities and obligations of the Guarantor
hereunder are absolute, unconditional and irrevocable under any and all
circumstances. Without limiting the generality of the foregoing, the Guarantor
agrees that until each and every one of the covenants and agreements of this
Guaranty is fully performed, the Guarantor's undertakings hereunder shall not
be released, in whole or in part, by any action or thing which might, but for
this paragraph of this Guaranty, be deemed a legal or equitable discharge of a
surety or guarantor, or by reason of any waiver, omission of the Lender or its
failure to proceed promptly or otherwise, or by reason of any action taken or
omitted by the Lender whether or not such action or failure to act varies or
increases the risk of, or affects the rights or remedies of, the Guarantor or
by reason of any further dealings between the Company on the one hand and the
Lender on the other hand or any other guarantor or surety, and the Guarantor
hereby expressly waives and surrenders any defense to its liability hereunder
based upon, and shall be deemed to have consented to, any of the foregoing
acts, omissions, things, agreements or waivers.
7. The Lender, without demand or notice of any kind upon
or to the Guarantor, at any time or from time to time when any amount shall be
due and payable hereunder by the Guarantor, if the Company shall not have
timely paid any of the Obligations after the lapse of any applicable cure
period, shall appropriate and apply to any portion of the Obligations hereby
guaranteed, and in such order of application as provided for in the Credit
Agreement, any property, balances, credit accounts or moneys of the Guarantor
in the possession of the Lender, or any affiliate of the Lender, or under its
control for any purpose.
8. The creation or existence from time to time of
Obligations in excess of the amount committed to or outstanding on the date of
this Guaranty is hereby authorized, without notice to the Guarantor, and shall
in no way impair or affect this Guaranty or the rights of the Lender herein.
It is the intention of the Guarantor and the Lender that the Guarantor's
obligations hereunder shall be equal to, but not in excess of, the maximum
amount permitted by applicable Federal or state bankruptcy, insolvency,
fraudulent conveyance or transfer, or other Applicable Laws. To that end, but
only to the extent such obligations would otherwise be subject to avoidance
under the Applicable Laws if the Guarantor is not deemed to have received
valuable consideration, fair value or reasonably equivalent value for its
obligations under this Guaranty, the Guarantor's obligations under this
Guaranty shall be reduced to that amount which, after giving effect hereto,
would not render the Guarantor insolvent, or leave the Guarantor with
unreasonably small capital to conduct its business or cause the Guarantor to
have incurred debts (or intended to have incurred
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debts) beyond its ability to pay such debts as they mature, at the time such
obligations are deemed to have been incurred under the Applicable Laws. As
used herein, the terms "insolvent" and "unreasonably small capital" shall
likewise be determined in accordance with the Applicable Laws.
9. Upon the bankruptcy or winding up or other
distribution of assets of the Company or of any surety or guarantor, other than
the Guarantor, for any Obligations of the Company to the Lender, the Lender's
rights against the Guarantor shall not be affected or impaired by the Lender's
omission to prove its claim, as appropriate, or to prove its full claim, as
appropriate, and the Lender may prove such claims as it sees fit, and may
refrain from proving any claim and, in its sole discretion, may value as it
sees fit or refrain from valuing any security held by it, without in any way
releasing, reducing or otherwise affecting the liability of the Guarantor
hereunder.
10. Any amount received by the Lender from whatsoever
source and applied toward the payment of the Obligations shall be applied as
provided for in the Credit Agreement.
11. The Guarantor hereby expressly waives: (a) notice of
acceptance of this Guaranty; (b) notice of any liabilities, indebtedness or
Obligations to which it may apply, presentment, demand for payment, protest,
notice of dishonor or nonpayment of any liabilities; (c) notice of intent to
accelerate, notice of acceleration and notice of any suit or the taking of
other action by the Lender against the Company, Guarantor or any other person,
any applicable statute of limitations and any other notice to any party liable
on any Loan Document (including Guarantor); (d) any claim, right or remedy
which the Guarantor may now have or hereafter acquire against the Company that
arises hereunder or from the performance by any other guarantor, including,
without limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim,
right or remedy of the Lender against the Company or against any security which
the Lender now has or hereafter acquires, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under common law or
otherwise; and (e) the benefits of any provision of law requiring that the
Lender exhaust any right or remedy, or take any action, against the Company,
any other guarantor, any other person or property.
The Lender may at any time and from time to time (whether
before or after revocation or termination of this Guaranty) without notice to
the Guarantor (except as required by law), without incurring responsibility to
the Guarantor, without impairing, releasing or otherwise affecting the
obligations of the Guarantor, in whole or in part, and without the indorsement
or execution by the Guarantor of any additional consent, waiver or guaranty:
(a) change the manner, place or terms of payment, or change or extend the time
of or renew, or change any interest rate or alter any liability or Obligation
or installment thereof, or any security therefor; (b) loan additional monies or
extend additional credit to the Company, with or without security, thereby
creating new Obligations the payment or performance of which shall be
guaranteed hereunder, and the Guaranty herein made shall apply to the
Obligations as so changed, extended, surrendered, realized upon or otherwise
altered; (c) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and
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in any order any property at any time pledged or mortgaged to secure the
Obligations and any offset there against; (d) exercise or refrain from
exercising any rights against the Company or others (including the Guarantor)
or act or refrain from acting in any other manner; (e) settle or compromise any
Obligation or any security therefor and subordinate the payment of all or any
part thereof to the payment of any Obligation of any other parties primarily or
secondarily liable on any of the Obligations; (f) release or compromise any
liability of the Guarantor hereunder or any liability or obligation of any
other parties primarily or secondarily liable on any of the Obligations; or (g)
apply any sums from any sources to any liability without regard to any
liabilities remaining unpaid.
12. The Lender may, to the extent permitted under the
Credit Agreement, sell, assign or transfer all or any part of the Obligations,
and in such event each and every immediate and successive assignee, transferee
or holder of all or any of the Obligations, shall have the right to enforce
this Guaranty, by suit or otherwise, for the benefit of such assignee,
transferee or holder as fully as if such assignee, transferee or holder were
herein by name specifically given such rights, powers and benefits, but the
Lender shall have an unimpaired right, prior and superior to that of any such
assignee, transferee or holder, to enforce this Guaranty for the benefit of the
Lender, as to so much of the Obligations as the Lender shall have not sold,
assigned or transferred.
13. No failure to exercise, and no delay in exercising,
any right hereunder or under any of the other Loan Documents held by the Lender
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other or future exercise thereof or the exercise of
any other right. The rights and remedies of the Lender provided herein and in
the other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights and remedies
of the Lender hereunder or under any other Loan Documents against any party
thereto are not conditional or contingent on any attempt by the Lender to
exercise any of its rights under any other Loan Document against such party or
against any other Person.
14. This Guaranty shall be binding upon the Guarantor,
its successors and assigns and inure to the benefit of the successors and
assigns of the Lender. The Guarantor shall not assign its rights or
obligations under this Guaranty without the prior written consent of the
Lender.
15. This is a guaranty of payment not of collection. In
the event the Lender makes a demand upon the Guarantor under this Guaranty, the
Guarantor shall be held and bound to the Lender directly as debtor in respect
of the payment of the amounts hereby guaranteed. All costs and expenses,
including reasonable attorneys' fees and expenses, incurred by the Lender in
obtaining performance of or collecting payments due under this Guaranty to the
extent permitted by the Credit Agreement, shall be deemed part of the
Obligations guaranteed hereby. Any notice or demand which the Lender may wish
to give shall be served upon the Guarantor in the fashion prescribed for
notices in Section 8.1 of the Credit Agreement, and the notice so sent shall be
deemed to be served as set forth in Section 8.1 of the Credit Agreement, to the
following address:
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___________________________
___________________________
___________________________
Attn:______________________
Telecopy:__________________
16. The Guarantor expressly represents and acknowledges
that any financial accommodations by the Lender to the Company, including,
without limitation, the extension of the Revolving Loans, are and will be of
direct interest, benefit and advantage to the Guarantor.
17. The Guarantor covenants and agrees that so long as
any amount is owing on account of the Revolving Loans, the Revolving Note or
otherwise pursuant to this Guaranty, the Guarantor shall permit, as provided in
the Credit Agreement with respect to the Company, representatives of the Lender
to visit and inspect properties of the Guarantor, inspect the Guarantor's books
and records and discuss with the principal officers of the Guarantor its
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
18. This Guaranty shall be construed in accordance with
and governed by the internal laws of the State of Georgia applicable to
contracts made and to be performed wholly within such state. This Guaranty,
together with all documents referred to herein, constitutes the entire
agreement between the Guarantor and the Lender with respect to the subject
matter hereof and may not be modified except by a writing executed by the
Guarantor and the Lender, and no waiver of any provision of this Guaranty, and
no consent to any departure by the Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Lender and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. This Guaranty shall be binding upon the
Guarantor and its successors and assigns, and shall inure to the benefit of the
Lender and its successors and assigns.
19. In the event any term or condition contained herein
is inconsistent with the terms and conditions contained in the Credit
Agreement, the terms and conditions of the Credit Agreement shall control.
20. Whenever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited or
invalid under such law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision of this Guaranty.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and sealed as of the date first above written.
GUARANTOR:
-----------------------------
By:
--------------------------
Its:
-----------------------
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11. Security Agreement. This Agreement shall constitute
a security agreement under the Uniform Commercial Code as in effect in the
State of Georgia.
12. General.
(a) As to the Pledgor, time is of the essence of this Agreement.
No waiver by the Lender of any power or right
hereunder, or of any default by the Pledgor hereunder, shall be
binding upon the Lender unless in writing signed by the Lender. No
failure or delay by the Lender to exercise any power or right
hereunder, nor any binding waiver of any default hereunder, shall
operate as a waiver of any other or further exercise of such power or
any other default hereunder or under any of the other Loan Documents.
This Agreement, together with all documents referred
to herein, represents the entire agreement between the Pledgor and the
Lender with respect to the subject matter hereof. No amendment or
modification of the terms and provisions of this Agreement shall be
effective unless in writing and signed by the Lender.
(b) Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective
to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity of enforceability of such provision in any
other jurisdiction.
(c) All representations and warranties made and
given herein by the Pledgor shall survive the execution and delivery
of this Agreement and shall remain in full force and effect until such
time as this Agreement is terminated as provided in Section 10 hereof.
(d) The rights and obligations of the parties
hereunder shall inure to the benefit of and bind their respective
heirs, executors, administrators, legal representatives, successors
and assigns.
(e) This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia
applicable to agreements made and to be performed entirely within such
State (without regard to any conflicts of law principles thereof).
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EXHIBIT K
FORM OF
SUBSIDIARY SECURITY AGREEMENT
THIS SUBSIDIARY SECURITY AGREEMENT dated as of March __, 1997
is executed and delivered by _______________________, a _____________________
(the "Guarantor"), with an office located at _________________________________,
in favor of NationsBank, N.A. (South) (the "Lender") with an office located at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
RECITALS
WHEREAS, Medirisk, Inc., a Delaware corporation (the
"Company") and the Lender have entered into that certain Credit Agreement dated
as of even date herewith (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement") pursuant to which
the Lender has agreed to extend certain financial accommodations to the Company
subject to the terms thereof; and
WHEREAS, the Guarantor has entered into a Subsidiary Guaranty
of even date herewith (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the "Guaranty") with the Lender; and
WHEREAS, the Guaranty secures all of the Obligations of the
Company under the Credit Agreement; and
WHEREAS, it is a condition precedent to the Lender's extension
of financial accommodations under the Credit Agreement that the Guarantor
grant, as additional security for all obligations of the Guarantor to the
Lender, a security interest in and to the Collateral (as hereinafter defined);
NOW, THEREFORE, in consideration of the above premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the Guarantor, the Guarantor hereby agrees with the
Lender as follows:
SECTION 1. GRANT OF SECURITY. To secure the prompt and
complete payment, observance and performance of all of the obligations of the
Guarantor to the Lender under this Agreement and the Guaranty, the Guarantor
hereby collaterally assigns and pledges to the Lender, and grants to the
Lender, a security interest and Lien in and upon, the Collateral.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The
Guarantor hereby represents and warrants to the Lender as follows:
134
(a) Name: Taxpayer ID Number. The exact legal name of
the Guarantor is set forth in the introductory paragraph of this Agreement.
The Guarantor does not conduct, and, during the five-year period immediately
preceding the date of this Agreement, has not conducted, business under any
trade name or other fictitious name other than those set forth on Schedule 2(a)
attached hereto. The Internal Revenue Service taxpayer identification number,
of the Guarantor is ___________.
(b) Incorporation by Reference. Each representation and
warranty given by the Company as a Borrower on behalf of the Guarantor, as a
Subsidiary of the Company, as set forth in the Credit Agreement and the other
Loan Documents, including, without limitation, Article 3 of the Credit
Agreement, are hereby incorporated by reference herein as of the date hereof.
(c) Liens. None of the Collateral or other properties of
the Guarantor is, as of the date hereof, subject to any Lien, except Permitted
Liens. No financing statement under the Uniform Commercial Code of any
jurisdiction which names the Guarantor as debtor and covers any of the
Collateral or any other notice filed in the public records indicating the
existence of a Lien thereon, has been filed and is still effective in any state
or other jurisdiction, and the Guarantor has not signed any such financing
statement or notice or any security agreement authorizing any Person to file
any such financing statement or notice.
(d) Intellectual Property. Schedule 2(d) attached hereto
sets forth a description all patents, patent rights and licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and other intellectual property and rights with respect to the
foregoing which are owned or possessed by the Guarantor, and the same are not
in conflict with the rights of any other Person.
(e) Chief Executive Office. The chief executive office
and principal place of business of the Guarantor and the books and records
relating to the Accounts and the other Collateral are located at the
Guarantor's office set forth above. Schedule 2(e) sets forth the addresses of
such offices and principal place of business for the five-year period
immediately preceding the date hereof.
(f) Places of Business. The addresses (including the
applicable counties) of all of the places of business of the Guarantor are set
forth on Schedule 2(f) attached hereto. Schedule 2(f) also sets forth a true,
complete and correct list of (i) all leases for real property in which
inventory of the Guarantor is shared (together with the name and mailing
address of each such Lessor with respect thereto) and (ii) the name and address
of each location at which Inventory of the Guarantor is shared with a
reprocessor, warehouseman or other bailee (together with the name and address
of each such reprocessor, warehouseman or bailee with respect thereto).
(g) Inventory. All Inventory (as hereinafter defined) is
in good condition, meets all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority over such goods,
their use or sale, and is currently either usable or salable in the normal
course of the Guarantor's business. All Inventory is located on one or more of
the places set forth on Schedule 2(f) attached hereto or is in transit to one
of such locations.
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(h) Equipment. All Equipment (as hereinafter defined) of
the Guarantor is in good order and repair and is located on or at one or more
of the places set forth on Schedule 2(f) attached hereto.
(i) Security Interest. It is the intent of the Guarantor
that this Agreement create a valid and perfected first priority security
interest in the Collateral (subject only to Permitted Liens), securing the
payment of all of the obligations of the Guarantor to the Lender under this
Agreement and the Guaranty, and all filings and other actions necessary or
desirable to perfect such security interest under the Uniform Commercial Code
as enacted in any relevant jurisdiction have been duly taken.
(j) Title to Properties. The Guarantor has good,
marketable and legal title to its properties and assets except those which have
been disposed of by the Guarantor in the ordinary course of business.
(k) Accounts. The originals of all chattel paper that
evidence the Accounts of the Guarantor have been delivered to the Lender. None
of the Accounts of the Guarantor is evidenced by a promissory note or other
instrument, other than a note or other instrument which has been delivered to
the Lender.
SECTION 3. CONTINUED PRIORITY OF SECURITY INTEREST.
(a) The Security Interest shall at all times be valid,
perfected and of first priority (subject only to Permitted Liens) and
enforceable against the Guarantor and all other Persons, in accordance with the
terms of this Agreement, as security for all of the obligations of the
Guarantor to the Lender under this Agreement and the Guaranty.
(b) The Guarantor shall, at its sole cost and expense,
take all action that may be necessary or desirable, or that the Lender may
reasonably request, so as at all times to maintain the validity, perfection,
enforceability and priority of the Security Interest in conformity with the
requirements of Section 3(a), or to enable the Lender to exercise or enforce
its rights hereunder including, without limitation:
(i) Paying all taxes, assessments and other
claims lawfully levied or assessed on any of the Collateral,
except to the extent that such taxes, assessments and other
claims constitute Permitted Liens;
(ii) Obtaining landlords', mortgagees',
mechanics', bailees', warehousemen's or processors' releases,
subordinations or waivers with respect to any or all of the
Collateral, in form and substance satisfactory to the Lender;
(iii) Delivering to the Lender, endorsed or
accompanied by such instruments of assignment as the Lender
may specify any and all chattel paper, instruments, letters of
credit and all other advice of guaranty and documents
evidencing or forming a part of the Collateral;
(iv) At the request of the Lender from time to
time, deliver to the Lender complete and up- to-date copies of
all Collateral
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comprised of the books, records, files, computer programs, data
processing records, information contained on any database maintained
by the Guarantor, computer software, documents, correspondence and
other information at any time evidencing, describing or pertaining to
or in any way related to the business or operations of the Guarantor
or any of its Subsidiaries;
(v) At the request of the Lender, marking
conspicuously each document included in the Collateral and
marking all chattel paper and each of its records pertaining
to the Collateral, with a legend, in form and substance
satisfactory to the Lender, indicating that such document,
chattel paper or Collateral is subject to the Security
Interest; and
(vi) Executing and delivering financing
statements, designations, mortgages, deeds to secure debt,
deeds of trust, hypothecations, notices and assignments, in
each case in form and substance satisfactory to the Lender,
relating to the creation, validity, perfection, priority or
continuation of the Security Interest under the Uniform
Commercial Code or other Applicable Law.
(c) The Lender is hereby authorized to execute and file
in all necessary and appropriate jurisdictions (as determined by the Lender)
one or more financing or continuation statements (or any other document or
instrument referred to in Section 3(b)(v) above) in the name of the Guarantor
and to sign the Guarantor's name thereto. The Guarantor authorizes the Lender
to file any such financing statement, document or instrument without the
signature of the Guarantor to the extent permitted by Applicable Law. Further,
to the extent permitted by Applicable Law, a carbon, photographic, xerographic
or other reproduction of this Agreement or of any Financing Statement is
sufficient as a financing statement.
(d) The Guarantor shall ▇▇▇▇ its books and records as may
be necessary or appropriate to evidence, protect and perfect the Security
Interest and shall cause their financial statements to reflect the Security
Interest.
SECTION 4. COVENANTS REGARDING CONTRACTS.
(a) Anything herein to the contrary notwithstanding, (i)
the Guarantor shall remain liable under all Assigned Contracts (as hereinafter
defined) to the extent set forth therein to perform its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (ii)
the exercise by the Lender of any of its rights hereunder shall not release the
Guarantor from any of its duties or obligations under any of the Assigned
Contracts (except to the extent that such exercise prevents the Guarantor from
satisfying such duties and obligations), and (iii) the Lender shall not have
any duties, obligations or liability under any of the Assigned Contracts or
duties by reason of this Agreement, nor shall the Lender be obligated to
perform any of the duties or obligations of the Guarantor thereunder, to make
any payment, to make any inquiry as to the nature or sufficiency of any payment
received by the Guarantor or the sufficiency of any performance by any party
under any such contract or agreement, or to take any action to collect or
enforce any claim for payment assigned hereunder.
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(b) The Guarantor shall at its expense:
(i) Perform and observe all the terms and
provisions of the Assigned Contracts to be performed or
observed by them, maintain the Assigned Contracts in full
force and effect to the extent of the Guarantor's normal
business practices, and enforce the Assigned Contracts in
accordance with their terms to the extent of the Guarantor's
normal business practices; and
(ii) Furnish to the Lender promptly upon receipt
thereof copies of all notices, requests and other documents
received by the Guarantor under or pursuant to the Assigned
Contracts, and from time to time (A) furnish to the Lender
such information and reports regarding the Assigned Contracts
as the Lender may reasonably request and (B) upon request of
the Lender, make to each other party to the Assigned Contracts
such demands and request for information and reports or for
action as the Guarantor is entitled to make under the Assigned
Contracts.
(c) Unless expressly set forth herein, all contracts and
contract rights of the Guarantor shall constitute Assigned Contracts and shall
constitute part of the Collateral.
SECTION 5. COVENANTS REGARDING COLLATERAL GENERALLY.
(a) Verification. The Lender shall have the right at any
time and from time to time, in the name of the Lender or in the name of the
Guarantor, to verify the validity, amount or any other matter relating to any
Accounts by mail, telephone or otherwise.
(b) Delivery of Instruments. In the event any of the
Collateral becomes evidenced by a promissory note, trade acceptance or any
other instrument, the Guarantor shall immediately thereafter deliver such
instrument to the Lender, appropriately endorsed to the Lender.
(c) Defense of Title. The Guarantor shall at all times
be the sole owner of each and every item of Collateral and shall defend, at its
sole cost and expense, its title in and to, and the Security Interest of the
Lender in, the Collateral against the claims and demands of all Persons.
(d) Maintenance of Collateral. The Guarantor shall
maintain all physical property that constitutes Collateral in good and workable
condition, with reasonable allowance for wear and tear, and shall exercise
proper custody over all such property.
(e) Insurance. The Guarantor shall maintain in force
with reputable insurers acceptable to the Lender such insurance with respect to
the Collateral as is required with respect to the Company under the Credit
Agreement. Each such insurance policy shall name the Lender as additional
named loss payee to the extent of the Guarantor's obligations hereunder and
shall provide for at least thirty (30) days'
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prior written notice to the Lender of any expiration of, termination of or
proposed cancellation of such policy.
(f) Location of Office. The Guarantor's chief executive
office, principal place of business and its books and records relating to the
Collateral shall continue to be kept at the address of the Guarantor set forth
above, and the Guarantor shall not change the location of such office and place
of business or such books and records without giving the Lender thirty (30)
days' prior written notice thereof.
(g) Location of Collateral. All Inventory, other than
Inventory in transit to any such location, and all Equipment shall at all times
be kept by the Guarantor at the locations set forth on Schedule 2(f), and shall
not, without the thirty (30) days' prior written notice to the Lender, be
removed therefrom except in connection with sales thereof in the ordinary
course of business.
(h) Change of Name, Structure, Etc. Without giving the
Lender thirty (30) days' prior written notice, the Guarantor shall not (i)
change its name, identity or structure or (ii) conduct business under any trade
name or other fictitious name other than those set forth on Schedule 2(a).
(i) Records Relating to Collateral. The Guarantor shall
at all times keep complete and accurate records of Inventory, Equipment and
other Collateral.
(j) Inspection. The Lender (by any of its officers,
employees or agents) shall have the right, to the extent that the exercise of
such right shall be within the control of the Guarantor, at any time or times
during normal business hours: (i) to inspect the Collateral, all files relating
thereto and the premises upon which any of the Collateral is located, (ii) to
discuss the Guarantor's affairs and finances, insofar as the same are
reasonably related to the rights of the Lender hereunder with any Person, to
verify the amount, quantity, value and condition of, or any other matter
relating to, any of the Collateral and (iii) to review, audit and make extracts
from all records and files related to any of the Collateral.
(k) Other Information. The Guarantor shall furnish to
the Lender such other information with respect to the Collateral as the Lender
may reasonably request from time to time.
(l) Payments Directly to Lender. Upon the occurrence,
and during the continuation, of an Event of Default, the Lender may at any time
and from time to time notify, or request the Guarantor to notify, in writing or
otherwise, any account debtor or other obligor with respect to any one or more
of the Accounts or Assigned Contracts to make payment to the Lender or any
agent or designee of the Lender directly, at such address as may be specified
by the Lender. If, notwithstanding the giving of any notice, any account
debtor or other such obligor shall make payment to the Guarantor, the Guarantor
shall hold all such payments it receives in trust for the Lender, without
commingling the same with other funds or property of or held by the Guarantor,
and shall promptly deliver the same to the Lender, or any such agent or
designee, immediately upon receipt by the Guarantor in the identical form
received, together with any necessary endorsements.
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(m) Sale of Collateral. Except as permitted under the
terms of the Credit Agreement, the Guarantor shall not sell, transfer, convey
or dispose of any Collateral outside the ordinary course of its business;
provided, however, that the Guarantor may dispose of its Inventory in the
ordinary course of its business so long as no Default or Event of Default shall
have occurred. The inclusion of "proceeds" of the Collateral under the
Security Interest shall not be deemed a consent by the Lender to any other sale
or other disposition of any part or all of the Collateral.
(n) Proceeds of Collateral. The Guarantor shall account
fully and faithfully for, and, following the occurrence and during the
continuation of an Event of Default, upon the Lender's request, promptly pay or
turn over to the Lender, proceeds in whatever form received in disposition in
any manner of any of the Collateral. To the extent practicable, the Guarantor
shall at all times keep the Collateral and proceeds thereof separate and
distinct from other property of the Guarantor and shall keep accurate and
complete records of the Collateral and proceeds thereof.
SECTION 6. THE LENDER APPOINTED ATTORNEY-IN-FACT. The
Guarantor hereby irrevocably appoints the Lender the Guarantor's
attorney-in-fact, with full authority in the place and stead of the Guarantor
and in the name of the Guarantor or otherwise, following the occurrence and
during the continuation of an Event of Default from time to time in the
Lender's discretion, to take any action and to execute any instrument or
document which the Lender may deem necessary or advisable to accomplish the
purposes of this Agreement and to exercise any rights and remedies the Lender
may have under this Agreement or Applicable Law, including, without limitation:
(i) to obtain and adjust insurance required to be maintained pursuant to
Section 5(e) hereof; (ii) to ask, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral, including, without
limitation, any Account; (iii) to receive, endorse and collect any drafts or
other instruments, documents and chattel paper, in connection with clause (i)
or (ii) above; (iv) to sell or assign any Account upon such terms, for such
amount and at such time or times as the Lender may deem advisable, to settle,
adjust, compromise, extend or renew any Account or to discharge and release any
Account; and (v) to file any claims or take any action or institute any
proceedings which the Lender may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Lender with
respect to any of the Collateral. The power-of-attorney granted hereby shall
be irrevocable and coupled with an interest.
SECTION 7. THE LENDER MAY PERFORM. If the Guarantor fails to
perform any agreement contained herein, the Lender may, without notice to the
Guarantor, itself perform, or cause performance of, such agreement, and the
expenses of the Lender incurred in connection therewith shall be payable by the
Guarantor under Section 12 hereof.
SECTION 8. THE LENDER'S DUTIES. The powers conferred on the
Lender hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon the Lender to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Lender shall have no duty as to
any Collateral. The Lender shall be deemed to have exercised reasonable care
in the custody of the
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Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Lender accords its own property; it being
understood that the Lender shall be under no obligation to take any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral, but may do so at its option, and all reasonable expenses
incurred in connection therewith shall be for the sole account of the Guarantor
and shall be added to the obligations of the Guarantor secured hereunder.
SECTION 9. REMEDIES. The Lender may take any or all of the
following actions upon the occurrence and during the continuation of an Event
of Default.
(a) Inventory and Equipment.
(i) Entry. The Lender may enter upon any
premises on which Inventory or Equipment may be located and,
without resistance or interference by the Guarantor, take
physical possession of any or all thereof and maintain such
possession on such premises or move the same or any part
thereof to such other place or places as the Lender shall
choose, without being liable to the Guarantor on account of
any loss, damage or depreciation that may occur as a result
thereof, other than for actions that were not taken in good
faith.
(ii) Assembly. The Guarantor shall, upon request
of and without charge to the Lender, assemble the Inventory
and Equipment and maintain or deliver it into the possession
of the Lender or any agent or representative of the Lender at
such place or places as the Lender may reasonably designate.
(iii) Warehousing. The Lender may, at the expense
of the Guarantor, cause any of the Inventory and Equipment to
be placed in a public or field warehouse, and the Lender shall
not be liable to the Guarantor on account of any loss, damage
or depreciation that may occur as a result thereof, other than
for actions that were not taken in good faith.
(b) Use of Premises and Intellectual Property. The
Lender may:
(i) without notice, demand or other process, and
without payment of any rent or any other charge enter any of
the Guarantor's premises and, without breach of the peace,
until the Lender completes the enforcement of its rights in
the Collateral, take possession of such premises or place
custodians in exclusive control thereof, remain on such
premises and use the same and any of the Guarantor's
equipment; and
(ii) in the exercise of the rights of the Lender
under this Agreement, without payment or compensation of any
kind, use any and all trademarks, trade styles, trade names,
patents, patent applications, licenses, franchises and the
like to the extent of the rights of the
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Guarantor therein, and the Guarantor hereby grants a license
to the Lender for this purpose.
(c) Lock Boxes. The Lender may establish or cause to be
established one or more lock boxes or other arrangement for the deposit of
proceeds of Accounts, and, in such case, the Guarantor shall cause to be
forwarded to the Lender at the Lender's office set forth above, on a daily
basis, collection reports in form and substance satisfactory to the Lender.
(d) Rights as a Secured Creditor. The Lender may
exercise all of the rights and remedies of a secured party under the Uniform
Commercial Code and under any other Applicable Law, including, without
limitation, the right, without notice except as specified below and with or
without taking possession thereof, to sell the Collateral or any part thereof
in one or more parcels at public or private sale at any location chosen by the
Lender, for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Lender may deem commercially reasonable. The
Guarantor agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days' notice to the Guarantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification, but notice given in any other reasonable
manner or at any other reasonable time shall constitute reasonable
notification. The Lender shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Lender may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. The Lender may bid all or any portion
of the obligations of the Guarantor to the Lender secured hereunder at any such
sale.
(e) Waiver of Marshaling. The Guarantor hereby waives
any right to require any marshaling of assets and any similar right.
(f) Appointment of Receiver. The Lender shall be
entitled to the appointment of a receiver, without notice of any kind
whatsoever and without regard to the adequacy of any security for all of the
obligations of the Guarantor to the Lender or the solvency of any party bound
for its payment, to take possession of all or any portion of the Collateral and
the business operations of the Guarantor and to exercise such power as the
court shall confer upon such receiver.
(g) Accounts/Assigned Contracts. The Lender shall have
the exclusive right to assert, either directly or on behalf of the Guarantor,
any and all rights and claims the Guarantor may have under any Accounts and any
of the Assigned Contracts as the Lender may deem proper and to receive and
collect any and all Accounts and Assigned Contracts and any and all rent, fees,
damages, awards and other monies arising thereunder or resulting therefrom and
to apply the same on account of any of the obligations of the Guarantor secured
hereunder.
SECTION 10. APPLICATION OF PROCEEDS. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral following
an Event of Default, and all insurance proceeds payable by reason of any damage
or destruction of any of the Collateral, shall be applied or paid over as
follows:
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(a) First: to the payment of all costs and expenses
incurred in connection with such sale or other realization, including
reasonable attorneys' fees if the Lender endeavored to collect the Obligations
by or through an attorney at law;
(b) Second: to the payment of the accrued interest upon
the Revolving Loans as provided in the Credit Agreement;
(c) Third: to the payment of the outstanding principal of
the Revolving Loans as provided in the Credit Agreement;
(d) Fourth: to the payment of the remaining outstanding
Obligations as provided in the Credit Agreement; and
(e) Fifth: the balance (if any) of such proceeds shall be
paid to the Guarantor or to whomsoever may be legally entitled thereto.
The Guarantor shall remain liable and shall pay, on demand, any deficiency
remaining in respect of the Obligations, together with interest thereon at a
rate per annum equal to the highest rate then payable under the Credit
Agreement on such Obligations, which interest shall constitute part of the
Obligations.
SECTION 11. RIGHTS CUMULATIVE. The rights and remedies of
the Lender under this Agreement, the Credit Agreement and the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have, including, but not limited to, those rights afforded
by the Uniform Commercial Code and other Applicable Laws. In exercising its
rights and remedies the Lender may be selective, and no failure or delay by the
Lender in exercising any right shall operate as a waiver of it, nor shall any
single or partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.
SECTION 12. EXPENSES. The Guarantor shall pay, on demand,
all reasonable out-of-pocket expenses incurred by the Lender in connection
with: (a) the negotiation, preparation, execution, delivery and administration
of this Agreement and any document or instrument evidencing any of the
Obligations whenever the same shall be executed and delivered, including all
appraisers' fees, search fees, recording fees, intangibles and stamp taxes
payable by the Lender with respect to the Obligations and this Agreement and
the Security Interest created hereby and the fees and disbursements of counsel
for the Lender, and of each local counsel retained by the Lender; (b) the
restructuring, refinancing or "workout" of the transactions contemplated hereby
and of the Obligations, and the preparation, negotiation, execution and
delivery of any waiver, amendment or consent by the Lender relating to this
Agreement or the Obligations, including, without limitation, the fees,
out-of-pocket expenses and other disbursements of counsel to the Lender; (c)
the collection or enforcement of the Obligations including reasonable fees and
disbursements of counsel to the Lender if such collection or enforcement is
done through or by an attorney; and (d) the exercise by the Lender of any right
or remedy granted to it under this Agreement whether or not a Default or Event
of Default has occurred, including, without limitation, the expenses incurred
by the Lender in connection with the collection of Accounts directly from
account debtors.
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SECTION 13. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Guarantor here
from shall in any event be effective unless the same shall be in writing and
signed by the parties hereto, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 14. NOTICES. Unless otherwise provided herein,
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered, to each party at the address specified for such party
above. All such notices and other communications shall be effective upon
satisfaction of the conditions set forth for similar notices in Section 8.1 of
the Credit Agreement.
SECTION 15. CONTINUING SECURITY INTEREST. This Agreement
shall create a continuing security interest in the Collateral and shall (i)
remain in full force and effect until indefeasible payment in full of the
Obligations, (ii) be binding upon the Guarantor, its successors and assigns and
(iii) inure the benefit of the Lender, and its successors and assigns. The
Guarantor's successors and assigns shall include, without limitation, a
receiver, trustee or debtor-in-possession thereof or therefor. Upon the
indefeasible payment in full of all of the Obligations, the Security Interest
granted hereby shall terminate and all rights to the Collateral shall revert to
the Company. Upon any such termination, the Lender shall at the Company's
expense, execute and deliver to the Company such documents as the Company shall
reasonably request to evidence such termination.
SECTION 16. APPLICABLE LAW; SEVERABILITY. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE (WITHOUT REGARD TO ANY CONFLICT OF LAWS PROVISIONS THAT INDICATE THE
APPLICABILITY OF ANY OTHER LAWS). Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under Applicable Law, but if any provision of this Agreement shall be
prohibited by or invalid under Applicable Law, such provisions shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
SECTION 17. LITIGATION/WAIVERS. (a) THE LENDER AND THE
GUARANTOR BOTH ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT OR THE RELATIONSHIP OF THE GUARANTOR AND THE LENDER
ESTABLISHED HEREBY AND THE DOCUMENTS AND INSTRUMENTS EVIDENCING THE OBLIGATIONS
WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES. ACCORDINGLY, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDER AND THE GUARANTOR HEREBY
WAIVES ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF
ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED
BY OR AGAINST THE GUARANTOR OR THE LENDER ARISING OUT OF THIS AGREEMENT, THE
OBLIGATIONS OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH
OR THEREWITH OR IN CONNECTION WITH THE COLLATERAL OR THE SECURITY INTEREST
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144
THEREIN OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE
GUARANTOR AND THE LENDER OF ANY KIND OR NATURE.
(b) THE GUARANTOR AND THE LENDER EACH HEREBY AGREE THAT
THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA, OR AT THE OPTION OF
LENDER, ANY STATE COURT LOCATED IN ▇▇▇▇▇▇ COUNTY, GEORGIA, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE GUARANTOR
AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE
OBLIGATIONS OR TO ANY MATTER ARISING THEREFROM, THE COLLATERAL OR THE SECURITY
INTEREST THEREIN OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION
HEREWITH OR THEREWITH. THE GUARANTOR EXPRESSLY SUBMIT AND CONSENTS IN ADVANCE
TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. THE
CHOICE OF FORUM SET FORTH IN THIS PARAGRAPH SHALL NOT BE DEEMED TO PRECLUDE THE
BRINGING OF ANY ACTION BY THE LENDER OR THE ENFORCEMENT BY THE LENDER OF ANY
JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c) FURTHER, THE GUARANTOR WAIVES (I) ANY NOTICE PRIOR TO
THE TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY POSTING OF ANY BOND
OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING THE LENDER
TO EXERCISE ANY OF THE LENDER'S REMEDIES SET FORTH HEREIN, INCLUDING THE
ISSUANCE OF AN IMMEDIATE WRIT OF POSSESSION AND (II) THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS.
(d) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE
OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF.
SECTION 18. INDEMNIFICATION. The Guarantor agrees to
indemnify the Lender, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at any time be imposed
on, incurred by or asserted against the Lender in any way relating to or
arising out of the operation of the Guarantor's business, any action taken by
the Lender with respect to any Account or Assigned Contract pursuant to this
Agreement or any other action taken by the Lender pursuant to the terms of this
Agreement; provided, however, that the Guarantor shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Lender's gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Guarantor agrees to reimburse the Lender
promptly upon demand for any out-of-pocket expenses (including counsel fees of
the counsel(s) of the Lender's own choosing) incurred by the Lender in
connection with the preparation, execution, administration, or enforcement of,
or legal advice with respect to the rights or responsibilities of the parties
under, this Agreement, any suit or action brought by the Lender to enforce the
terms of this Agreement, any "lender liability"
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145
suit or claim brought against the Lender, and any claim or suit brought against
the Lender arising under any Federal or state environmental statute, rule or
regulation including, without limitation, the Superfund Act, or the Federal
Resource Conservation and Recovery Act of 1976, as amended. Such out-of-pocket
expenses (including counsel fees) shall be advanced by the Guarantor on the
request of the Lender notwithstanding any claim or assertion that the Lender is
not entitled to indemnification hereunder upon receipt of an undertaking by the
Lender that the Lender will reimburse the Guarantor if it is actually and
finally determined by a court of competent jurisdiction that the Lender is not
so entitled to indemnification. The agreements in this Section shall survive
the termination of this Agreement. The Lender agrees to give the Guarantor
prompt notice of any suit or cause of action brought against the Lender which
is covered by this Section.
SECTION 19. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which,
taken together, shall constitute but one and the same instrument.
SECTION 20. DEFINITIONS. (a) For the purposes of this
Agreement:
"Accounts" means all accounts and any and all rights to the
payment of money or other forms of consideration of any kind (whether
classified under the Uniform Commercial Code as accounts, chattel paper,
general intangibles, or otherwise) for goods sold or leased or for services
rendered including, but not limited to, accounts receivable, proceeds of any
letters of credit naming the Guarantor as beneficiary, all contract rights,
notes, drafts, instruments, documents, acceptances in favor of the Guarantor,
and all other debts, obligations and liabilities in whatever form owing by any
Person to the Guarantor.
"Agreement" means this Subsidiary Security Agreement, as the
same may be amended, supplemented, restated or otherwise modified from time to
time.
"Assigned Contract" means any contract or agreement to which
the Company is a party or which runs in favor of the Guarantor and which
constitutes part of the Collateral.
"Collateral" means all of the Guarantor's right, title and
interest in and to each of the following, wherever located and whether now or
hereafter existing, or now owned or hereafter acquired or arising:
(a) all Accounts;
(b) all Inventory;
(c) all Equipment;
(d) all general intangibles and investment property of
the Guarantor of every kind and nature including, but not limited to, all
contract rights, rights under warranties and service contracts, choses in
action and causes of action of the Guarantor against any Person or property,
all tax refunds owing to the Guarantor, all insurance policies of the Guarantor
and all rights of the Guarantor to receive monies
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146
thereunder and all licenses, franchises, trademarks, trade names, trade
secrets, patents, copyrights and any and all other intellectual property of the
Guarantor;
(e) all rights of the Guarantor as an unpaid vendor or
lienor (including, without limitation, stoppage in transit, replevin and
reclamation) with respect to any Inventory or other properties of the
Guarantor;
(f) all chattel paper, documents and instruments of the
Guarantor including all documents of title and certificates of insurance;
(g) all books, records, files, computer programs, data
processing records, information contained within any database maintained by the
Guarantor, computer software, documents, correspondence and other information
at any time evidencing, describing or pertaining to or in any way related to
any of the foregoing or otherwise pertaining or relating to the business or
operations of the Guarantor;
(h) any and all balances, credits, deposits, accounts,
items and monies of the Guarantor now or hereafter with the Lender or any
affiliate of the Lender or deposited with the Lender or any financial
institution selected by the Lender pursuant to any lock box, deposit, escrow or
other collection agreement or otherwise, and all property of the Guarantor of
every kind and description now or hereafter in the possession or control of the
Lender or any Lender for any reason; and
(i) any and all products and proceeds of any of the
foregoing (including, but not limited to, any claims to any items referred to
in this definition, and any claims of the Guarantor against third parties for
loss of, damage to or destruction of, any or all of the Collateral or for
proceeds payable under, or unearned premiums with respect to, policies of
insurance) in whatever form, including, but not limited to, cash, instruments,
general intangibles, accounts, equipment, inventory, farm products, other
goods, documents and chattel paper and all proceeds of such proceeds.
"Default" means any of the events specified in the definition
of Event of Default, whether or not there has been satisfied any requirement
for giving of notice, lapse of time or the happening of any other condition.
"Equipment" means all equipment, machinery, apparatus,
fittings, fixtures, furniture, signage and other tangible personal property
(other than Inventory) of every kind and description used in the Guarantor's
business operations or owned by the Guarantor or in which the Guarantor may
have an interest, and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements therefor.
"Financing Statements" means any and all financing statements
executed and delivered by or on behalf of the Guarantor in connection with the
perfection of the Security Interest, together with any amendments thereto and
any continuations thereof.
"Guarantor" has the meaning set forth in the first paragraph
hereof.
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147
"Inventory" means (a) all inventory of the Guarantor and all
goods intended for sale or lease by the Guarantor, or for display or
demonstration; (b) all work-in-process; (c) all raw materials and other
materials and supplies of every nature and description used or which might be
used in connection with the manufacture, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
the Guarantor's business; and (d) all documents relating to any of the
foregoing.
"Lender" has the meaning set forth in the first paragraph
hereof.
"Lien", as applied to the property of any Person, means any
security interest, lien, encumbrance, mortgage, deed to secure debt, deed of
trust, pledge, charge, conditional sale or other title retention agreement, or
other encumbrance of any kind covering any property of such Person, or upon the
income or profits therefrom or any agreement to convey any of the foregoing or
any other agreement or interest covering the property of a Person which is
intended to provide collateral security for the obligation of such Person.
"Security Interest" means the Lien of the Lender on behalf of
the Lenders upon, and the collateral assignments to the Lender of, the
Collateral effected hereby or pursuant to the terms hereof.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the State of Georgia, as the same may be amended from time
to time.
(b) Unless otherwise set forth herein to the contrary,
all terms not otherwise defined herein and which are defined in the Uniform
Commercial Code are used herein with the meanings ascribed to them in the
Uniform Commercial Code.
(c) Capitalized terms used herein and not defined herein
are used herein with the meaning ascribed to them in the Credit Agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Agreement to
be duly executed and delivered under seal by its duly authorized officers as of
the day first above written.
GUARANTOR:
--------------------------------------------
By:
-----------------------------------------
Title:
----------------------------------
Agreed and accepted as of the
date first written above.
NATIONSBANK, N.A. (SOUTH)
By:
-----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
SUBSIDIARY SECURITY AGREEMENT
149
(f) All notices and demands required or permitted
hereunder or by law shall be given or made in accordance with Section
8.1 of the Credit Agreement.
If to the Lender:
c/o NationsBank, N.A. (South)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
18th Floor, High Tech
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
Telecopy No.:404/607-_____
If to the Pledgor:
Medirisk, Inc.
Two Piedmont Center, Suite 400
3565 Piedmont Road, N.E.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: 404/__________
(g) The pronouns used in this Agreement shall
include, when appropriate, either gender and both singular and plural,
and the grammatical construction of sentences shall conform thereto.
(h) Headings used in this Agreement are for
convenience only and shall not be used in connection with the
interpretation of any provision hereof.
(i) All references herein to any document,
instrument or agreement shall be deemed to refer to such document,
instrument or agreement as the same may be amended, modified,
restated, supplemented or replaced from time to time.
[Remainder of this page intentionally left blank]
6
150
IN WITNESS WHEREOF, the Pledgor has executed this Agreement by
and through its duly authorized officers, as of the day and year first above
written.
PLEDGOR:
MEDIRISK, INC.
By:___________________________
Name:_________________________
Title:________________________
LENDER:
NATIONSBANK, N.A. (SOUTH)
By:___________________________
Name:_________________________
Title:________________________
STOCK PLEDGE AGREEMENT
151
SCHEDULES TO
CREDIT AGREEMENT
DATED AS OF MARCH 28, 1997
BETWEEN
MEDIRISK, INC., AS BORROWER
AND
NATIONSBANK, N.A. (SOUTH), AS LENDER
152
SCHEDULE 3.1(A)
ORGANIZATION; POWER; QUALIFICATION
None.
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153
SCHEDULE 3.1(C)
SUBSIDIARIES
1. Medirisk of Illinois, Inc.
Incorporated in: Indiana
Qualified to do business in: Indiana and Illinois
Address: Suite ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2. Medirisk of Missouri, Inc.
Incorporated in: Missouri
Qualified to do business in: Missouri
Address: ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE 3.1(D)
CAPITAL STOCK AND RELATED MATTERS
1. The authorized capital stock of the Company consists of (i) 20,000,000
shares of Common Stock, par value $0.001 per share, of which 4,_______
shares were issued and outstanding as of March 21, 1997; and (ii)
1,000,000 shares of Preferred Stock, par value $0.001 per share, of
which no shares are issued and outstanding.
2. The following Persons are known by the Company to be the holders of
more than 5% of the issued and outstanding Common Stock of the
Company, and set forth opposite each such Person's name is, to the
knowledge of the Company, the number of shares held by such Person:
Name of Stockholder Number of Shares
▇▇▇▇▇▇▇▇ Venture Partners II, L.P. 522,745*
Sears Pension Trust 522,745*
HealthPlan Services Corporation 480,442**
▇▇▇▇ ▇. ▇▇▇▇▇▇ 289,722***
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 314,357
---------------
* Includes warrants to purchase 97,440 shares of Common Stock.
** Includes warrants to purchase 298,150 shares of Common Stock.
*** Includes exercisable options to purchase 114,330 shares of
Common Stock.
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SCHEDULE 3.1(F)
REAL PROPERTY
A. Set forth below is a list of property leased by the Company or a
Subsidiary, reflecting the name of the lessee, the name of the lessor
and the address of the property leased:
1. Lessee: Medirisk, Inc.
Lessor: Piedmont Center, I-4 LLC
Address: Suite 400
Two Piedmont Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
2. Lessee: Medirisk of Illinois, Inc. (formerly known as
Formations in Health Care, Inc.)
Lessor: New York Life Insurance Company
Address: Suite 725
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. Lessee: Medirisk of Missouri, Inc. (formerly known as
PracticeMatch, Inc.)
Lessor: WHWPP Real Estate Limited Partnership
Address: ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B. Each of the leases referred to above provides that it may not be
assigned by the lessee without the consent of the lessor.
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SCHEDULE 3.1(H)
TITLE TO PROPERTIES
None.
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157
SCHEDULE 3.1(I)
TAXES
The Company failed to file Forms 5500C for its Section 125 Cafeteria Plans for
the years 1993, 1994 and 1995.
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158
SCHEDULE 3.1(K)
NO ADVERSE CHANGE
None.
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159
SCHEDULE 3.1 (L)
LIABILITIES, LITIGATION, ETC.
None.
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160
SCHEDULE 3.1(P)
MATERIAL CUSTOMER CONTRACTS
Agreement for Participation in the Formations National Outcome System dated as
of May 28, 1995, between Medirisk-IL and HEALTHSOUTH Corporation.
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161
SCHEDULE 3.1(T)
NAME OF THE COMPANY AND ITS SUBSIDIARIES
Medirisk of Illinois, Inc. was formerly known as Formations In Health Care,
Inc., and Medirisk of Missouri, Inc. was formerly known as PracticeMatch, Inc.
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SCHEDULE 3.1(U)
ENVIRONMENTAL MATTERS
None.
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163
SCHOOLED 3.1(V)
PATENTS, TRADEMARKS, FRANCHISES, ETC.
1. Medirisk of Missouri, Inc. has registered the trademark
PracticeMatch(R)
2. Medirisk, Inc. is in the process of applying to register the name
"Medirisk" and the design used by the Company in connection therewith.
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