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EXHIBIT 10.4
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AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
BETWEEN
SILICON VALLEY BANK
AND
HIE, INC.
F/K/A HEALTHDYNE INFORMATION ENTERPRISES, INC.
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This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is entered into
as of December 31, 1999, by and between HIE, INC., formerly known as Healthdyne
Information Enterprises, Inc., a Georgia corporation ("Borrower") whose address
is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and SILICON VALLEY
BANK, a California-chartered bank ("Bank") with a loan production office located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
Borrower is indebted to Bank pursuant to, among other documents, a Loan
and Security Agreement dated August 3, 1998 by and between Borrower and Bank, as
amended by that certain Loan Modification Agreement dated November 13, 1998
between Borrower and Bank, that certain Second Loan Modification Agreement dated
May 13, 1999 between Borrower and Bank, that certain Third Loan Modification
Agreement dated August 2, 1999 between Borrower and Bank, that certain Fourth
Loan Modification Agreement dated as of September 30, 1999, that Fifth Loan
Modification Agreement dated as of November 30, 1999 between Borrower and Bank
(the "Loan Agreement"), and a Promissory Note in the principal amount of
$5,000,000 dated August 3, 1998, as amended by that certain Amended and Restated
Promissory Note dated May 13, 1999, that certain Amended and Restated Promissory
Note dated August 2, 1999, that certain Amended and Restate Promissory Note
dated September 30, 1999, that certain Amended and Restate Promissory Note dated
November 30, 1999 (the "Note"). The Loan Agreement and Note provide for, among
other things, a line of credit in the original principal amount of Five Million
Dollars ($5,000,000).
Borrower wishes to obtain additional credit from time to time from
Bank, and Bank desires to extend such additional credit to Borrower and the
parties desire to make such amendments to and modifications of the Loan
Agreement as contained herein. This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1. Definitions. As used in this Agreement, the following
terms shall have the following definitions:
"ADVANCE" OR "ADVANCES" means a loan advance under
the Revolving Line.
"AFFILIATE" means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any Person that
controls or is controlled by or is under common control with such Person, and
each of such Person's senior executive officers, directors,
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partners and, for any Person that is a limited liability company, such Persons,
managers and members.
"BANK EXPENSES" means all reasonable costs or
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the preparation, negotiation, administration, and enforcement of
the Loan Documents; and Bank's reasonable attorneys' fees and expenses incurred
in amending, enforcing or defending the Loan Documents, (including fees and
expenses of appeal or review, or those incurred in any Insolvency Proceeding)
whether or not suit is brought.
"BORROWER'S BOOKS" means all of Borrower's books and
records including, without limitation: ledgers; records concerning Borrower's
assets or liabilities, the Collateral, business operations or financial
condition; and all computer programs, or tape files, and the equipment,
containing such information.
"BORROWING BASE" means an amount equal to the lesser
of the following: (i) the Revolving Line of Credit, or (ii) one hundred percent
(100%) of the amount of Treasury Bills on deposit or assigned by Borrower with
or to the Bank, based upon the current market value of the Treasury Bills.
"BUSINESS DAY" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of Georgia are authorized or
required to close.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Georgia Uniform Commercial Code.
"COLLATERAL" means the property described on Exhibit
A attached hereto.
"CONTINGENT OBLIGATION" means, as applied to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to (i) any indebtedness, lease, dividend, letter of credit
or other obligation of another, including, without limitation, any such
obligation directly or indirectly guaranteed, endorsed, co-made or discounted or
sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable; (ii) any obligations with respect to
undrawn letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term "Contingent Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall
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not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement.
"CREDIT EXTENSION" means each Advance, or any other
extension of credit by Bank for the benefit of Borrower hereunder.
"ERISA" means the Employment Retirement Income
Security Act of 1974, as amended, and the regulations thereunder.
"GAAP" means generally accepted accounting principles
as in effect in the United States from time to time.
"INDEBTEDNESS" means (a) all indebtedness for
borrowed money or the deferred purchase price of property or services, including
without limitation reimbursement and other obligations with respect to surety
bonds and letters of credit, (b) all obligations evidenced by notes, bonds,
debentures or similar instruments, (c) all capital lease obligations and (d) all
Contingent Obligations.
"INSOLVENCY PROCEEDING" means any proceeding
commenced by or against any person or entity under any provision of the United
States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.
"INVESTMENT" means any beneficial ownership of
(including stock, partnership interest or other securities) any Person, or any
loan, advance or capital contribution to any Person.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"LETTER OF CREDIT" means a letter of credit or
similar undertaking issued by Bank pursuant to Section 2.1.2.
"LETTER OF CREDIT RESERVE" has the meaning set forth
in Section 2.1.2.
"LIEN" means any mortgage, lien, deed of trust,
charge, pledge, security interest or other encumbrance.
"LOAN DOCUMENTS" means, collectively, this Agreement,
any note or notes executed by Borrower, and any other present or future
agreement entered into by Borrower for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse
effect on (i) the business operations or condition (financial or otherwise) of
Borrower and its Subsidiaries taken
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as a whole or (ii) the ability of Borrower to repay the Obligations or
otherwise perform its obligations under the Loan Documents.
"MATURITY DATE" means the Revolving Maturity Date.
"NEGOTIABLE COLLATERAL" means all of Borrower's
present and future letters of credit of which it is a beneficiary, notes,
drafts, instruments, securities, documents of title, and chattel paper.
"OBLIGATIONS" means all debt, principal, interest,
Bank Expenses and other amounts owed to Bank by Borrower pursuant to this
Agreement or any other agreement, whether absolute or contingent, due or to
become due, now existing or hereafter arising, including any interest that
accrues after the commencement of an Insolvency Proceeding and including any
debt, liability, or obligation owing from Borrower to others that Bank may have
obtained by assignment or otherwise.
"PAYMENT DATE" means the first calendar day of each
month commencing on the first such date after the Closing Date and ending on the
Revolving Maturity Date.
"PERSON" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or governmental agency.
"PRIME RATE" means the variable rate of interest, per
annum, most recently announced by Bank, as its "prime rate," whether or not such
announced rate is the lowest rate available from Bank.
"RESPONSIBLE OFFICER" means each of the Chief
Executive Officer, the President, the Chief Financial Officer and the Controller
of Borrower.
"REVOLVING LINE OF CREDIT" means a credit extension
of up to Three Million Dollars ($3,000,000).
"REVOLVING LINE MATURITY DATE" means December 31,
2000.
"SCHEDULE" means the schedule of exceptions attached
hereto, if any.
"SUBORDINATED DEBT" means debt incurred by Borrower
subordinated to Borrower's indebtedness owed to Bank, and which is reflected in
a written agreement a manner and form acceptable to Bank and approved by Bank in
writing.
"SUBSIDIARY" means with respect to any Person,
corporation, partnership, company association, joint venture, or any other
business entity of which more than fifty percent (50%) of the voting stock or
other equity interests is owned or controlled, directly or indirectly, by such
Person or one or more Affiliates of such Person.
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1.1.1. Accounting and Other Terms. All accounting
terms not specifically defined herein shall be construed in accordance with GAAP
and all calculations and determinations made hereunder shall be made in
accordance with GAAP. When used herein, the term "financial statements" shall
include the notes and schedules thereto. The terms "including"/"includes" shall
always be read as meaning "including (or includes) without limitation", when
used herein or in any other Loan Document.
2. LOAN AND TERMS OF PAYMENT
2.1. Credit Extensions. Borrower promises to pay to the
order of Bank, in lawful money of the United States of America, the aggregate
unpaid principal amount of all Credit Extensions made by Bank to Borrower
hereunder. Borrower shall also pay interest on the unpaid principal amount of
such Advances at rates in accordance with the terms hereof.
2.1.1. Revolving Line of Credit.
(a) Subject to and upon the terms and conditions
of this Agreement, Bank agrees to make Advances to Borrower in an aggregate
outstanding amount not to exceed the Borrowing Base minus the face amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit). Subject to the terms and conditions of this Agreement, amounts borrowed
pursuant to this Section 2.1 may be repaid and reborrowed at any time during the
term of this Agreement.
(b) Whenever Borrower desires an Advance,
Borrower will notify Bank by facsimile transmission or telephone no later than
3:00 p.m. Atlanta, Georgia time, on the Business Day that the Advance is to be
made. Each such notification shall be promptly confirmed by a Payment/Advance
Form in substantially the form of Exhibit B hereto. Bank is authorized to make
Advances under this Agreement, based upon instructions received from a
Responsible Officer or a designee of a Responsible Officer, or without
instructions if in Bank's discretion such Advances are necessary to meet
Obligations which have become due and remain unpaid. Bank shall be entitled to
rely on any telephonic notice given by a person who Bank reasonably believes to
be a Responsible Officer or a designee thereof, and Borrower shall indemnify and
hold Bank harmless for any damages or loss suffered by Bank as a result of such
reliance. Bank will credit the amount of Advances made under this Section 2.1 to
Borrower's deposit account.
(a) The Revolving Line of Credit shall terminate
on the Revolving Maturity Date, at which time all Advances under this Section
2.1 and other amounts due under this Agreement (except as otherwise expressly
specified herein) shall be immediately due and payable.
2.1.2. Letters of Credit.
(a) Subject to the terms and conditions
of this Agreement, Bank agrees to issue or cause to be issued Letters of Credit
for the account of Borrower in an
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aggregate outstanding face amount not to exceed the Borrowing Base, minus the
then outstanding principal balance of the Advances; provided that the face
amount of outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit and any Letter of Credit Reserve) shall not in any case exceed
Three Million Dollars ($3,000,000). Each Letter of Credit shall have an expire
date no later than the Revolving Maturity Date. All Letters of Credit shall be,
in form and substance, acceptable to Bank in its sole discretion and shall be
subject to the terms and conditions of Bank's form of standard Application and
Letter of Credit Agreement.
(b) The obligation of Borrower to
immediately reimburse Bank for drawings made under Letters of Credit shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and such Letters of Credit, under
all circumstances whatsoever. Borrower shall indemnify, defend, protect, and
hold Bank harmless from any loss, cost, expense or liability, including, without
limitation, reasonable attorneys' fees, arising out of or in connection with any
Letters of Credit.
(c) Borrower may request that Bank
issue a Letter of Credit payable in a currency other than United States Dollars.
If a demand for payment is made under any such Letter of Credit, Bank shall
treat such demand as an Advance to Borrower of the equivalent of the amount
thereof (plus cable charges) in United States currency at the then prevailing
rate of exchange in San Francisco, California, for sales of that other currency
for cable transfer to the country of which it is the currency.
(d) Upon the issuance of any letter of
credit payable in a currency other than United States Dollars, Bank shall create
a reserve under the Revolving Line of Credit for letters of credit against
fluctuations in currency exchange rates, in an amount equal to ten percent (10%)
of the face amount of such letter of credit. The amount of such reserve may be
amended by Bank from time to time to account for fluctuations in the exchange
rate. The availability of funds under the Revolving Line of Credit shall be
reduced by the amount of such reserve for so long as such letter of credit
remains outstanding.
2.2. Overadvances. If, at any time or for any reason, the
amount of Obligations owed by Borrower to Bank pursuant to Section 2.1.1 and
2.1.2 of this Agreement is greater than the Borrowing Base, Borrower shall
immediately pay to Bank, in cash, the amount of such excess.
2.3. Interest Rates, Payments, and Calculations.
(a) Interest Rate. Except as set forth in
Section 2.3(b), any Advances shall bear interest, on the average daily balance
thereof, at a per annum rate equal to the Prime Rate.
(b) Default Rate. All Obligations shall bear
interest, from and after the occurrence of an Event of Default, at a rate equal
to five (5) percentage points above the interest rate applicable immediately
prior to the occurrence of the Event of Default.
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(c) Payments. Interest hereunder shall be due
and payable on each Payment Date. Borrower hereby authorizes Bank to debit any
accounts with Bank, including, without limitation, Account Number _____________
for payments of principal and interest due on the Obligations and any other
amounts owing by Borrower to Bank. Bank will notify Borrower of all debits which
Bank has made against Borrower's accounts. Any such debits against Borrower's
accounts in no way shall be deemed a set-off.
(d) Computation. In the event the Prime Rate is
changed from time to time hereafter, the applicable rate of interest hereunder
shall be increased or decreased effective as of 12:01 a.m. on the day the Prime
Rate is changed, by an amount equal to such change in the Prime Rate. All
interest chargeable under the Loan Documents shall be computed on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.
2.4. Crediting Payments. Prior to the occurrence of an
Event of Default, Bank shall credit a wire transfer of funds, check or other
item of payment to such deposit account or Obligation as Borrower specifies.
After the occurrence of an Event of Default, the receipt by Bank of any wire
transfer of funds, check, or other item of payment, whether directed to
Borrower's deposit account with Bank or to the Obligations or otherwise, shall
be immediately applied to conditionally reduce Obligations, but shall not be
considered a payment in respect of the Obligations unless such payment is of
immediately available federal funds or unless and until such check or other item
of payment is honored when presented for payment. Notwithstanding anything to
the contrary contained herein, any wire transfer or payment received by Bank
after 12:00 noon Pacific time shall be deemed to have been received by Bank as
of the opening of business on the immediately following Business Day. Whenever
any payment to Bank under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment shall
instead be due on the next Business Day, and additional fees or interest, as the
case may be, shall accrue and be payable for the period of such extension.
2.5. Fees. Borrower shall pay to Bank the following:
(a) Facility Fee. A Facility Fee equal to
one-half of one percent (.5%) of the $3,000,000 Revolving Line of Credit
($15,000) shall be due on the Closing Date. Such Facility Fee shall be fully
earned and non-refundable when paid.
(b) Bank Expenses. Upon demand from Bank,
including, without limitation, upon the date hereof, all Bank Expenses incurred
through the date hereof, including reasonable attorneys' fees and expenses and,
after the date hereof, all Bank Expenses, including reasonable attorneys' fees
and expenses, as and when they become due.
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2.6. Additional Costs. In case any law, regulation, treaty
or official directive or the interpretation or application thereof by any court
or any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):
(a) subjects Bank to any tax with respect to
payments of principal or interest or any other amounts payable hereunder by
Borrower or otherwise with respect to the transactions contemplated hereby
(except for taxes on the overall net income of Bank imposed by the United States
of America or any political subdivision thereof);
(b) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of, or loans by, Bank; or
(c) imposes upon Bank any other condition with
respect to its performance under this Agreement, and the result of any of the
foregoing is to increase the cost to Bank, reduce the income receivable by Bank
or impose any expense upon Bank with respect to any loans, Bank shall notify
Borrower thereof. Borrower agrees to pay to Bank the amount of such increase in
cost, reduction in income or additional expense as and when such cost, reduction
or expense is incurred or determined, upon presentation by Bank of a statement
of the amount and setting forth Bank's calculation thereof, all in reasonable
detail, which statement shall be deemed true and correct absent manifest error.
2.7. Term.
(a) Except as otherwise set forth herein, this
Agreement shall become effective on the Closing Date and, subject to Section
12.7, shall continue in full force and effect for a term ending on the Revolving
Maturity Date. Notwithstanding the foregoing, Bank shall have the right to
terminate its obligation to make Credit Extensions under this Agreement
immediately and without notice upon the occurrence and during the continuance of
an Event of Default. Notwithstanding termination of this Agreement, Bank's lien
on the Collateral shall remain in effect for so long as any Obligations are
outstanding.
(b) At such time as (i) the Bank is no longer
obligated under this Agreement (whether by the terms hereof or as a result of a
release of such obligations by Borrower) to make any further Credit Extensions,
and (ii) all obligations have been indefeasibly paid and satisfied in full, this
Agreement and the Loan Documents shall terminate and Bank shall release or cause
to be released, at the Borrower's cost and expense, all Liens granted by
Borrower to Bank under the Loan Documents as security for any of the
Obligations; provided, however, that any and all indemnity obligations of
Borrower arising under this Agreement or any other Loan Documents shall survive
the termination of this Agreement or such other Loan Documents.
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3. CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Credit Extension. The
obligation of Bank to make the initial Credit Extension is subject to the
condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower
with respect to articles, bylaws, incumbency and resolutions authorizing the
execution and delivery of this Agreement;
(c) payment of the fees and Bank Expenses then
due specified in Section 2.5 hereof;
(d) Certificate of Foreign Qualification (if
applicable);
(e) such other documents, and completion of such
other matters, as Bank may reasonably deem necessary or appropriate; and
(f) execution and delivery of each Loan Document
by Borrower.
3.2. Conditions Precedent to all Credit Extensions. The
obligation of Bank to make each Credit Extension, including the initial Credit
Extension, is further subject to the following conditions:
(a) timely receipt by Bank of the Payment/
Advance Form as provided in Section 2.1; and
(b) the representations and warranties
contained in Section 5 shall be true and correct in all material respects on and
as of the date of such Payment/Advance Form and on the effective date of each
Credit Extension as though made at and as of each such date, and no Event of
Default shall have occurred and be continuing, or would result from such Credit
Extension. The making of each Credit Extension shall be deemed to be a
representation and warranty by Borrower on the date of such Credit Extension as
to the accuracy of the facts referred to in this Section 3.2(b).
4. CREATION OF SECURITY INTEREST
4.1. Grant of Security Interest. Borrower grants to Bank a
continuing security interest in the property described in Exhibit A attached
hereto (the "Collateral") in order to secure prompt repayment of any and all
obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Agreement, as amended from time to time, and
any other agreements entered into between Bank and Borrower (the "Loan
Documents"). Such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in
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Collateral acquired after the date hereof. Borrower acknowledges that Bank may
place a hold on the deposit account pledged as Collateral.
4.2. Delivery of Additional Documentation Required.
Borrower shall from time to time execute and deliver to Bank, at the request of
Bank, all Negotiable Collateral, all financing statements and other documents
that Bank may reasonably request, in form satisfactory to Bank, to perfect and
continue perfected Bank's security interests in the Collateral and in order to
fully consummate all of the transactions contemplated under the Loan Documents.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
5.1. Due Organization and Qualification. Borrower and each
Subsidiary is a corporation duly existing and in good standing under the laws of
its state of incorporation and qualified and licensed to do business in, and is
in good standing in, any state in which the conduct of its business or its
ownership of property requires that it be so qualified.
5.2. Due Authorization; No Conflict. The execution,
delivery, and performance of the Loan Documents are within the powers of
Borrower and any Subsidiary that is a party thereto, have been duly authorized,
and are not in conflict with nor constitute a breach of any provision contained
in the Articles/Certificate of Incorporation or Bylaws of Borrower or any
Subsidiary, nor will they constitute an event of default under any material
agreement to which either Borrower or any Subsidiary is a party or by which
either Borrower or any Subsidiary is bound. Neither Borrower nor any Subsidiary
is in default under any agreement to which they are a party or by which they are
bound, which default could have a Material Adverse Effect.
5.3. No Prior Encumbrances. Borrower and its Subsidiaries
have good and indefeasible title to the Collateral, free and clear of Liens.
5.4. Name; Location of Chief Executive Office. Except as
disclosed in the Schedule, neither Borrower nor any Subsidiary has done business
and will without at least thirty (30) days prior written notice to Bank do
business under any name other than that specified on the signature page hereof.
The chief executive office of Borrower is located at the address indicated in
Section 10 hereof. The principal business addresses of each of the Subsidiaries
are located in the Schedule 5.7 hereof.
5.5. Litigation. Except as set forth in the Schedule,
there are no actions or proceedings pending, or, to Borrower's knowledge,
threatened by or against Borrower or any Subsidiary before any court or
administrative agency in which an adverse decision could have a Material Adverse
Effect or a material adverse effect on the interest of Borrower or any
Subsidiary or Bank's security interest in the Collateral
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5.6. No Material Adverse Change in Financial Statements.
All consolidated financial statements related to Borrower and any Subsidiary
that have been delivered by Borrower to Bank, fairly present in all material
respects Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
submitted to Bank on or about the Closing Date.
5.7. Solvency. The fair saleable value (including goodwill
minus disposition costs) of the assets of Borrower and its Subsidiaries exceeds
the fair value of their liabilities; the Borrower is not left with unreasonably
small capital after the transactions contemplated by this Agreement; and
Borrower and each Subsidiary are able to pay their debts (including trade debts)
as they mature.
5.8. Regulatory Compliance. Borrower and each Subsidiary
has met the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. No event has occurred resulting from the failure
of Borrower or any Subsidiary to comply with ERISA that is reasonably likely to
result in their incurring any liability that could have a Material Adverse
Effect. Neither Borrower nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940. Neither Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T and U of the Board of Governors of the Federal
Reserve System). Borrower and each Subsidiary have complied with all the
provisions of the Federal Fair Labor Standards Act. Borrower and each Subsidiary
have not violated any statutes, laws, ordinances or rules applicable to it,
violation of which could have a Material Adverse Effect.
5.9. Environmental Condition. None of Borrower's or any
Subsidiary's properties or assets has ever been used by Borrower or any
Subsidiary or, to the best of Borrower's knowledge, by previous owners or
operators, in the disposal of, or to produce, store, handle, treat, release, or
transport, any hazardous waste or hazardous substance other than in accordance
with applicable law; to the best of Borrower's knowledge, none of the properties
or assets of Borrower or any Subsidiary have ever been designated or identified
in any manner pursuant to any environmental protection statute as a hazardous
waste or hazardous substance disposal site, or a candidate for closure pursuant
to any environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the release, or other disposition of hazardous waste or
hazardous substances into the environment.
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5.10. Taxes. Borrower and each Subsidiary have filed or
caused to be filed all tax returns required to be filed on a timely basis, and
have paid, or have made adequate provision for the payment of, all taxes
reflected therein.
5.11. Subsidiaries. Neither Borrower nor any Subsidiary
owns any stock, partnership interest or other equity securities of any Person.
5.12. Government Consents. Borrower and each Subsidiary has
obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all governmental authorities that are
necessary for the continued operation of the business of Borrower and its
Subsidiaries as currently conducted.
5.13. Full Disclosure. No representation, warranty or other
statement made by Borrower or any Subsidiary in any certificate or written
statement furnished to Bank contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained in such certificates or statements not misleading.
6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:
6.1. Good Standing. Borrower shall maintain its and each
of its Subsidiaries' corporate existence and good standing in their jurisdiction
of incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, to the extent
consistent with prudent management of Borrower's business, in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.
6.2. Government Compliance. Borrower shall meet, and
shall cause each Subsidiary to meet, the minimum funding requirements of ERISA
with respect to any employee benefit plans subject to ERISA. Borrower shall
comply, and shall cause each Subsidiary to comply, with all statutes, laws,
ordinances and government rules and regulations to which it is subject,
noncompliance with which could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral.
6.3. Taxes. Borrower shall make, and shall cause each
Subsidiary to make, due and timely payment or deposit of all material federal,
state, and local taxes, assessments, or contributions required of it by law, and
will execute and deliver to Bank, on demand, appropriate certificates attesting
to the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary
-12-
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has made such payments or deposits; provided that Borrower or a Subsidiary need
not make any payment if the amount or validity of such payment is (i) contested
in good faith by appropriate proceedings , (ii) is reserved against (to the
extent required by GAAP) by Borrower and (iii) no lien other than a Permitted
Lien results.
6.4. Principal Depository. Borrower and each Subsidiary
shall maintain its principal depository and operating accounts with Bank.
6.5. Further Assurances. At any time and from time to time
Borrower or a Subsidiary shall execute and deliver such further instruments and
take such further action as may reasonably be requested by Bank to effect the
purposes of this Agreement.
7. NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any Credit Extension
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Advances,
neither Borrower nor any of its Subsidiaries will do any of the following,
without prior written Bank approval:
7.1. Changes in Business, Ownership, or Management,
Business Locations.
Engage in any business other than the businesses currently engaged in
by Borrower or a Subsidiary and any business substantially similar or related
thereto (or incidental thereto). Borrower will not, without at least thirty (30)
days prior written notification to Bank, relocate its chief executive office or
add any new offices or business locations, other than remote offices for
employees which do not include any material assets.
7.2. Compliance. Become an "investment company" or a
company controlled by an "investment company," within the meaning of the
Investment Company Act of 1940, or become principally engaged in, or undertake
as one of its important activities, the business of extending credit for the
purpose of purchasing or carrying margin stock, or use the proceeds of any
Advance for such purpose; fail to meet the minimum funding requirements of
ERISA; permit a Reportable Event or Prohibited Transaction, as defined in ERISA,
to occur; fail to comply with the Federal Fair Labor Standards Act or violate
any other law or regulation, which violation could have a Material Adverse
Effect or a material adverse effect on the Collateral or the priority of Bank's
Lien on the Collateral; or permit any of its Subsidiaries to do any of the
foregoing.
7.3. Subordinated Debt. Make or permit any payment on any
Subordinated Debt, except under the terms of the Subordinated Debt, or amend any
provision in any document relating to the Subordinated Debt, without Bank's
prior written consent.
7.4. Collateral Value.
Permit the value of the Collateral to be less than the amount of the
Borrowing Base.
-13-
15
8. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
8.1. Payment Default. If Borrower fails to pay, when due,
any of the Obligations.
8.2. Material Adverse Change. If there (i) occurs a
material adverse change in the business, operations, or condition (financial or
otherwise) of the Borrower or any Subsidiary, or (ii) is a material impairment
of the prospect of repayment of any portion of the Obligations or (iii) is a
material impairment of the value or priority of Bank's security interests in the
Collateral;
8.3. Attachment. If any material portion of Borrower's or
any Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of any trustee,
receiver or person acting in a similar capacity and such attachment, seizure,
writ or distress warrant or levy has not been removed, discharged or rescinded
within ten (10) days, or if Borrower or any Subsidiary is enjoined, restrained,
or in any way prevented by court order from continuing to conduct all or any
material part of its business affairs, or if a judgment or other claim becomes a
lien or encumbrance upon any material portion of Borrower's or any Subsidiaries'
assets, or if a notice of lien, levy, or assessment is filed of record with
respect to any of Borrower's or any Subsidiaries' assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, and the same is not paid
within ten (10) days after Borrower or any Subsidiary receives notice thereof,
provided that none of the foregoing shall constitute an Event of Default where
such action or event is stayed or an adequate bond has been posted pending a
good faith contest by Borrower or any Subsidiary (provided that no Credit
Extensions will be required to be made during such cure period);
8.4. Insolvency. If Borrower or any Subsidiary becomes
insolvent, or if an Insolvency Proceeding is commenced by Borrower or any
Subsidiary, or if an Insolvency Proceeding is commenced against Borrower or any
Subsidiary and is not dismissed or stayed within 30 days (provided that no
Advances will be made prior to the dismissal of such Insolvency Proceeding);
8.5. Other Agreements. If there is a default (which
remains uncured after a thirty (30) day grace period) in any agreement to which
Borrower or any Subsidiary is a party with a third party or parties resulting in
a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness in an amount in excess of Fifty Thousand
Dollars ($50,000) or that could have a Material Adverse Effect;
8.6. Subordinated Debt. If Borrower or any Subsidiary
makes any payment on account of Subordinated Debt, except to the extent such
payment is allowed under any subordination agreement entered into with Bank;
-14-
16
8.7. Judgments. If a judgment or judgments for the
payment of money in an amount, individually or in the aggregate, of at least
Fifty Thousand Dollars ($50,000) shall be rendered against Borrower or any
Subsidiary and shall remain unsatisfied and unstayed for a period of ten (10)
days (provided that no Credit Extensions will be made prior to the satisfaction
or stay of such judgment); or
8.8. Misrepresentations. If any material misrepresentation
or material misstatement exists now or hereafter in any warranty or
representation set forth herein or in any certificate or writing delivered to
Bank by Borrower or any Subsidiary or any Person acting on Borrower's or any
Subsidiaries' behalf pursuant to this Agreement or to induce Bank to enter into
this Agreement or any other Loan Document.
8.9. Decrease in Market Value of Collateral. If the market
value of the Collateral falls below the amount of the Borrowing Base.
9. BANK'S RIGHTS AND REMEDIES
9.1. Rights and Remedies. Upon the occurrence and during
the continuance of an Event of Default, Bank may, at its election, without
notice of its election and without demand, do any one or more of the following,
all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable (provided that upon the occurrence of an Event of Default
described in Section 8 all Obligations shall become immediately due and payable
without any action by Bank);
(b) Cease advancing money or extending credit to
or for the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank;
(c) Without notice to or demand upon
Borrower, make such payments and do such acts as Bank considers necessary or
reasonable to protect its security interest in the Collateral. Borrower agrees
to make the Collateral available to Bank, as Bank may designate.
(d) Without notice to Borrower, set off and
apply to the Obligations any and all (i) balances and deposits of Borrower or
any Subsidiary held by Bank, or (ii) indebtedness at any time owing to or for
the credit or the account of Borrower or any Subsidiary held by Bank; and
(e) Any deficiency that exists after disposition
of the Collateral as provided above will be paid immediately by Borrower.
9.2. Bank Expenses. If Borrower fails to pay any amounts
or furnish any required proof of payment due to third persons or entities, as
required under the terms of this Agreement, then Bank may do any or all of the
following: (a) make payment of the same or any part thereof; and (b) set up such
reserves under the Revolving Line of Credit as Bank deems
-15-
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necessary to protect Bank from the exposure created by such failure. Any amounts
so paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable rate
hereinabove provided, and shall be secured by the Collateral. Any payments made
by Bank shall not constitute an agreement by Bank to make similar payments in
the future or a waiver by Bank of any Event of Default under this Agreement.
9.3. Remedies Cumulative. Bank's rights and remedies under
this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Bank shall have all other rights and remedies not expressly set
forth herein as provided under the Code, by law, or in equity. No exercise by
Bank of one right or remedy shall be deemed an election, and no waiver by Bank
of any Event of Default on Borrower's part shall be deemed a continuing waiver.
No delay by Bank shall constitute a waiver, election, or acquiescence by it. No
waiver by Bank shall be effective unless made in a written document signed on
behalf of Bank and then shall be effective only in the specific instance and for
the specific purpose for which it was given.
9.4. Demand; Protest. Borrower waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments, chattel
paper, and guarantees at any time held by Bank on which Borrower may in any way
be liable.
10. NOTICES
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:
If to Borrower: HIE, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Bank Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Ms. ▇▇▇▇▇▇ ▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
11. CHOICE OF LAW AND VENUE
The Loan Documents shall be governed by, and construed in accordance
with, the internal laws of the State of Georgia, without regard to principles of
conflicts of law. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER
AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OR ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS
AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THE BORROWER AND THE BANK ALSO AGREE THAT ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
OR TO ENFORCE ANY JUDGMENT OBTAINED AGAINST THE BORROWER IN CONNECTION WITH THIS
AGREEMENT OR SUCH OTHER LOAN DOCUMENT, MAY BE BROUGHT BY THE BANK OR BORROWER IN
ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF THE STATE IN WHICH BANK'S
ADDRESS SHOWN IN SECTION 10 ABOVE IS LOCATED, OR IN ANY OTHER COURT TO THE
JURISDICTION OF WHICH SUCH BORROWER OR ANY OF ITS PROPERTY IS OR MAY BE SUBJECT.
EACH OF THE BORROWER AND THE BANK IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
AFORESAID STATE AND FEDERAL COURTS, AND IRREVOCABLY WAIVES ANY PRESENT OR FUTURE
OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM THAT ANY
SUCH COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
12. GENERAL PROVISIONS
12.1. Successors and Assigns. This Agreement shall bind
and inure to the benefit of the respective successors and permitted assigns of
each of the parties; provided, however, that neither this Agreement nor any
rights hereunder may be assigned by Borrower without Bank's prior written
consent, which consent may be granted or withheld in Bank's sole discretion.
Bank shall have the right without the consent of or notice to Borrower to sell,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank's obligations, rights and benefits hereunder.
-17-
19
12.2. Indemnification. Borrower shall indemnify, defend,
protect and hold harmless Bank and its officers, employees, and agents against:
(a) all obligations, demands, claims, and liabilities claimed or asserted by any
other party in connection with the transactions contemplated by the Loan
Documents; and (b) all losses or Bank Expenses in any way suffered, incurred, or
paid by Bank as a result of or in any way arising out of, following, or
consequential to transactions between Bank and Borrower whether under the Loan
Documents, or otherwise (including without limitation reasonable attorneys fees
and expenses), except for losses caused by Bank's gross negligence or willful
misconduct.
12.3. Time of Essence. Time is of the essence for the
performance of all obligations set forth in this Agreement.
12.4. Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
12.5. Amendments in Writing, Integration. This Agreement
cannot be amended or terminated except by a writing signed by Borrower and Bank.
All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of
this Agreement, if any, are merged into this Agreement and the Loan Documents.
12.6. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.
12.7. Survival. All covenants, representations and
warranties made in this Agreement shall continue in full force and effect so
long as any Obligations remain outstanding. The obligations of Borrower to
indemnify Bank with respect to the expenses, damages, losses, costs and
liabilities described in Section 12.2 shall survive until all applicable statute
of limitations periods with respect to actions that may be brought against Bank
have run.
12.8. Hold Collateral. Borrower agrees that, until all
outstanding Obligations under this Agreement have been paid in full, Bank may
refuse to release the Collateral to any party, including Borrower and/or
Pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
HIE, INC., f/k/a Healthdyne Information
Enterprises, Inc.
By:
----------------------------------------
Title:
-------------------------------------
[CORPORATE SEAL]
SILICON VALLEY BANK
By:
----------------------------------------
Title:
-------------------------------------
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EXHIBIT A
The Collateral consists of all of Borrower's right, title and interest
in and to the following investment property of other assets (whether now owned
or hereafter acquired or dreated and whether held directly or as a security
entitlement, securities account, commodity contract, or a commodity account
maintained with any securities intermediary or commodity intermediary):
United States Treasury Bills maturing _____________ on deposit or
assigned by Borrower with or to the Bank (the "Pledged Assets"), including any
such Pledged Assets acquired or maintained in connection with Bank's Investment
Products and Services Group and/or made, acquired or maintained pursuant to any
Directed Investment Disclosure Notice and Agreement or similar agreement entered
into between Borrower and Bank, together with all Borrower's books relating to
the foregoing and any and all claims, rights and interests in any of the above
and all substitutions for, additions and accessions to and products and proceeds
thereof in whatever form including deposit accounts, accounts, general
intangibles, cash, instruments, documents and financial assets.
21
EXHIBIT B
---------
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., E.S.T.
TO: CENTRAL CLIENT SERVICE DIVISION DATE:
-------------------
FAX#: ( ) TIME:
--- ------------ -------------------
FROM: HIE, INC.
------------------------------------------------------------------------
BORROWER'S NAME
FROM:
------------------------------------------------------------------------
AUTHORIZED SIGNER'S NAME
------------------------------------------------------------------------
AUTHORIZED SIGNATURE
PHONE:
------------------------------------------------------------------------
FROM ACCOUNT #
----------------------------------------------------------------
TO ACCOUNT #
--------------------------------------------------------------------
REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT
-------------------------- ---------------------
PRINCIPAL INCREASE (ADVANCE) $
-------------------------
PRINCIPAL PAYMENT (ONLY) $
-------------------------
INTEREST PAYMENT (ONLY) $
-------------------------
PRINCIPAL AND INTEREST (PAYMENT) $
-------------------------
OTHER INSTRUCTIONS:
---------------------------------------------------------
All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date of the telephone request for and Advance confirmed by this Advance
Request; provided, however, that those representations and warranties expressly
referring to another date shall be true, correct and complete in all material
respects as of such date.
BANK USE ONLY:
TELEPHONE REQUEST:
-----------------
The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.
-------------------------------------------------------------------------------
Authorized Requester
-----------------------------------
Authorized Signature (Bank)
Phone #
----------------------------
22
EXHIBIT C
BORROWING BASE CERTIFICATE
Borrower: Healthdyne Information Enterprises, Inc. Bank: Silicon Valley Bank
Commitment Amount: $3,000,000
BALANCES
-------------------------------------------------------------------------------
1. Maximum Loan Amount $3,000,000
2. Present balance of Treasury Bills on deposit $
3. Total Funds Available [Lesser of #1 or #2] $
4. Present balance owing on Line of Credit_______ $
5. RESERVE POSITION (#3 minus #4) $________
The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.
COMMENTS:
HIE, INC., f/k/a Healthdyne Information Enterprises, Inc. BANK USE ONLY
Rec'd By:
------------
BY: Auth. Signer
------------------------------- Date:
Authorized Signer ----------------
Verified:
------------
Auth. Signer
Date:
----------------
---------------------