Exhibit 10.1
$40,000,000 REVOLVING CREDIT LOAN
LOAN AND SECURITY AGREEMENT
by and among
IDX SYSTEMS CORPORATION,
IDX INFORMATION SYSTEMS CORPORATION,
IDX INVESTMENT CORPORATION, AND
EDIX CORPORATION
and
HELLER HEALTHCARE FINANCE, INC
Dated: June 27, 2002
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made as of June
27, 2002, by and among IDX SYSTEMS CORPORATION, a Vermont corporation, IDX
INFORMATION SYSTEMS CORPORATION, a Vermont corporation, IDX INVESTMENT
CORPORATION, a Vermont corporation, and EDIX CORPORATION, a Delaware corporation
(collectively, "BORROWER"), and HELLER HEALTHCARE FINANCE, INC., a Delaware
corporation and a GE Capital Company ("LENDER").
RECITALS
A. Borrower desires to establish certain financing arrangements with
and borrow funds from Lender, and Lender is willing to establish such
arrangements for and make loans and extensions of credit to Borrower, on the
terms and conditions set forth below.
B. The parties desire to define the terms and conditions of
their relationship and to reduce their agreements to writing.
NOW, THEREFORE, in consideration of the promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties covenant
and agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, unless otherwise specified, all references
to "Sections" shall be deemed to refer to Sections of this Agreement, and the
following terms shall have the meanings set forth below:
Section 1.1. ACCOUNT. "Account" means any right to payment of a
monetary obligation, whether or not earned by performance, including, without
limitation, the right to payment of management fees. Without limiting the
generality of the foregoing, the term "Account" shall further include any
"account" (as that term is defined in the Uniform Commercial Code now or
hereafter in effect), any accounts receivable, any "payment intangibles" (as
that term is defined in the Uniform Commercial Code now or hereafter in effect)
and all other rights to payment of every kind and description, whether or not
earned by performance.
Section 1.2. ACCOUNT DEBTOR. "Account Debtor" means any Person
obligated on any Account of Borrower.
Section 1.3. AFFILIATE. "Affiliate" means, with respect to a
specified Person, any Person directly or indirectly controlling, controlled by,
or under common control with the specified Person, including, without
limitation, their stockholders and any Affiliates thereof. A Person shall be
deemed to control a corporation or other entity if the Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and business of the corporation or other entity, whether through the
ownership of voting securities, by contract, or otherwise.
Section 1.4. AFFILIATED LOAN DOCUMENTS. "Affiliated Loan Documents"
shall mean any and all documents evidencing, securing and/or governing any
financing provided by Lender or Lender's Affiliates to Borrower, any Guarantor,
or any Affiliate of Borrower or any Guarantor, as the same may be amended,
modified, increased, renewed or restated from time to time.
Section 1.5. AGREEMENT. "Agreement" means this Loan and Security
Agreement, as it may be amended or supplemented from time to time, together with
all attachments, exhibits, schedules, riders and addenda, all of which are
incorporated herein by this reference and made a part hereof.
Section 1.6. BASE RATE. "Base Rate" means a rate of interest equal
to one quarter of one percent (.25%) per annum above the "Prime Rate of
Interest".
Section 1.7. BORROWED MONEY. "Borrowed Money" means, with respect
to any Person, without duplication, (a) all indebtedness for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) that
portion of obligations with respect to capital leases that is properly
classified as a liability on a balance sheet in conformity with GAAP, (d) any
obligations of such Person issued or assumed as the deferred purchase price of
property or services purchased by such Person (other than trade debt incurred in
the ordinary course of business and due within six (6) months of the incurrence
thereof or evidenced by a note or other instrument), (e) all Borrowed Money of
others secured by (or for which the holder of such Borrowed Money has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, any property or asset owned,
held or acquired by such Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person, (f) all guaranty obligations of such Person in respect of any
Borrowed Money of any other person, (g) the maximum amount of all standby
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (h) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product plus any accrued interest thereon,
and (i) the Borrowed Money of any partnership or unincorporated joint venture in
which such Person is a general partner or joint venturer.
Section 1.8. BORROWER. "Borrower" has the meaning set forth in
the Preamble.
Section 1.9. BORROWING BASE. "Borrowing Base" has the meaning set
forth in Section 2.1(d).
Section 1.10. BUSINESS DAY. "Business Day" means any day on which
financial institutions are open for business in the State of Maryland,
excluding Saturdays and Sundays.
Section 1.11 CLOSING; CLOSING DATE. "Closing" and "Closing Date"
have the meanings set forth in Section 5.3.
Section 1.12. COLLATERAL. "Collateral" has the meaning set forth in
Section 3.1.
Section 1.13. COLLATERAL MANAGEMENT FEE. "Collateral Management
Fee" has the meaning set forth in Section 2.4(c).
Section 1.14. COMMITMENT FEE. "Commitment Fee" has the meaning set
forth in Section 2.4(a).
Section 1.15. CONCENTRATION ACCOUNT. "Concentration Account" has
the meaning set forth in Section 2.3(a).
Section 1.16. CONTROLLED GROUP. "Controlled Group" means all
businesses that would be treated as a single employer under Section 401(b) of
ERISA.
Section 1.17. DEFAULT RATE. "Default Rate" means a rate per
annum equal to two percent (2.0%) per annum above the then applicable Base
Rate.
Section 1.18. ERISA. "ERISA" has the meaning set forth in Section
4.12.
Section 1.19. EVENT OF DEFAULT. "Event of Default" and "Events of
Default" have the meanings set forth in Section 8.1.
Section 1.20. [INTENTIONALLY DELETED.]
Section 1.21. GAAP. "GAAP" means generally accepted accounting
principles applied in a consistent manner.
Section 1.22. GOVERNMENTAL AUTHORITY. "Governmental Authority"
means and includes any federal, state, District of Columbia, county, municipal,
or other government and any department, commission, board, bureau, agency or
instrumentality thereof, whether domestic or foreign.
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Section 1.23. GUARANTOR. "Guarantor" means any Person who may
from time to time guaranty, pledge assets as security for or otherwise become
obligated in respect of the obligations of Borrower under the Loan Documents.
Section 1.24. GUARANTY. "Guaranty" means, if applicable, any
guaranty of the obligations of Borrower under the Loan Documents from time to
time outstanding, as the same may be amended, modified, or supplemented from
time to time.
Section 1.25. HAZARDOUS MATERIAL. "Hazardous Material" means any
substances defined or designated as hazardous or toxic waste, hazardous or toxic
material, hazardous or toxic substance, or similar term, by any environmental
statute, rule or regulation or any Governmental Authority applicable to Borrower
or its business, operations or assets.
Section 1.26. HIGHEST LAWFUL RATE. "Highest Lawful Rate"
means the maximum lawful rate of interest referred to in Section 2.7 that may
accrue pursuant to this Agreement.
Section 1.27. [INTENTIONALLY DELETED.]
Section 1.28. [INTENTIONALLY DELETED.]
Section 1.29. LENDER. "Lender" has the meaning set forth in the
Preamble.
Section 1.30. LIEN. "Lien" shall mean any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge or other security interest or any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
practical effect as any of the foregoing).
Section 1.31. LOAN. "Loan" has the meaning set forth in
Section 2.1(a).
Section 1.32. LOAN DOCUMENTS. "Loan Documents" means and includes
this Agreement, the Note, the Certificate of Validity, the Stock Pledge
Agreements, and each and every other document now or hereafter delivered by
Borrower or any Guarantor in connection with this Agreement, as any of them may
be amended, modified, increased, renewed or restated from time to time.
Section 1.33. LOCKBOX. "Lockbox" has the meaning set forth in
Section 2.3.
Section 1.34. LOCKBOX ACCOUNT. "Lockbox Account" means an account
or accounts maintained at the Lockbox Bank into which all collections of
Accounts are paid directly.
Section 1.35. LOCKBOX BANK. "Lockbox Bank" has the meaning set
forth in Section 2.3.
Section 1.36. MATERIAL ADVERSE EFFECT. "Material Adverse Effect"
shall mean any fact, event or circumstance that, alone or when taken with other
events or conditions occurring or existing concurrently with such event or
condition (a) has or is reasonably expected to have a material adverse effect on
the business, operations, condition (financial or otherwise), assets,
liabilities, prospects, or properties of Borrower; (b) has or is reasonably
expected to have any material adverse effect on the validity or enforceability
of this Agreement or any Loan Document; (c) materially impairs or is reasonably
expected to materially impair the ability of Borrower to pay and perform the
Obligations; (d) to the extent reasonably known to Borrower, materially impairs
or is reasonably expected to materially impair the ability of Lender to enforce
its rights and remedies under this Agreement or any of the Loan Documents; or
(e) has or is reasonably expected to have any material adverse effect on the
Collateral, the Liens of Lender in the Collateral or the priority of such Liens.
Section 1.37. MAXIMUM LOAN AMOUNT. "Maximum Loan Amount" has the
meaning set forth in Section 2.1(a).
Section 1.38. NOTE. "Note" has the meaning set forth in Section
2.1(c).
Section 1.39. OBLIGATIONS. "Obligations" has the meaning set forth
in Section 3.1.
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Section 1.40. PERMITTED LIENS. "Permitted Liens" means: (a)
deposits or pledges to secure obligations under workmen's compensation, social
security or similar laws, or under unemployment insurance; (b) deposits or
pledges to secure bids, tenders, contracts (other than contracts for the payment
of money), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the ordinary course of business; (c)
mechanic's, workmen's, materialmen's or other like Liens arising in the ordinary
course of business with respect to obligations which are not due, or which are
being contested in good faith by appropriate proceedings which suspend the
collection thereof and in respect of which adequate reserves have been made
(provided that such proceedings do not, in Lender's sole discretion, involve any
substantial risk of the sale, loss or forfeiture of such property or assets or
any interest therein); (d) Liens and encumbrances in favor of Lender; and (e)
Liens set forth on SCHEDULE 1.40.
Section 1.41. PERSON. "Person" means an individual, partnership,
corporation, trust, joint venture, joint stock company, limited liability
company, association, unincorporated organization, Governmental Authority, or
any other entity.
Section 1.42. PLAN. "Plan" has the meaning set forth in Section
4.12.
Section 1.43. PREMISES. "Premises" has the meaning set forth in
Section 4.14.
Section 1.44. PRIME RATE OF INTEREST. "Prime Rate of Interest"
means that rate of interest designated as such by Citibank, N.A., or any
successor thereto, as the same may from time to time fluctuate.
Section 1.45. PROHIBITED TRANSACTION. "Prohibited Transaction"
means a "prohibited transaction" within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Internal Revenue Code that is not exempt under Section
407 or Section 408 of ERISA or Section 4975(c)(2) or (d) of the Internal Revenue
Code or under a class exemption granted by the U.S. Department of Labor.
Section 1.46. QUALIFIED ACCOUNT. "Qualified Account" means an
Account of Borrower generated in the ordinary course of Borrower's business from
the sale of goods or rendition of services which Lender, in its sole credit
judgment, deems to be a Qualified Account. Without limiting the generality of
the foregoing, no Account shall be a Qualified Account if: (a) the Account or
any portion of the Account is payable by a commercial institution unacceptable
to Lender in its sole discretion; (b) the Account remains unpaid more than
ninety (90) days past the claim or invoice date (but in no event more than one
hundred five (105) days after the applicable services have been rendered); (c)
the Account is subject to any defense, set-off, counterclaim, deduction,
discount, credit, chargeback, freight claim, allowance, or adjustment of any
kind; (d) any part of any goods, the sale of which has given rise to the
Account, has been returned, rejected, lost or damaged; (e) if the Account arises
from the sale of goods by Borrower, (i) the sale was not an absolute sale, or
(ii) the sale was made on consignment or on approval or on a sale-or-return
basis, or (iii) the sale was made subject to any other repurchase or return
agreement, or (iv) the sale was made subject to the completion of installation
of any other ancillary product or other condition of performance, or (v) the
goods have not been shipped to the Account Debtor or its designee; (f) if the
Account arises from the Borrower's sale, licensing or other distribution of
Borrower's software, the subject software is not registered with the United
States Copyright Office and perfected by Lender's filing of a Copyright Security
Agreement with the United States Copyright Office, except to the extent
otherwise allowed by Lender in its good faith credit judgment; (g) if the
Account arises from the performance of services, the services have not actually
been performed or the services were undertaken in violation of any law; (h) the
Account is subject to a Lien other than a Permitted Lien; (i) Borrower knows or
should have known of the bankruptcy, receivership, reorganization or insolvency
of the Account Debtor; (j) the Account is evidenced by chattel paper or an
instrument of any kind, or has been reduced to judgment; (k) the Account is an
Account of an Account Debtor having its principal place of business or executive
office outside the United States; (l) the Account Debtor is an Affiliate or
subsidiary of Borrower; (m) more than ten percent (10%) of the aggregate balance
of all Accounts owing from the Account Debtor obligated on the Account are
outstanding more than one hundred twenty (120) days past their invoice date; (n)
fifty percent (50%) or more of the aggregate unpaid Accounts from any single
Account Debtor are not deemed Qualified Accounts under this Agreement; (o) the
total unpaid Accounts of the Account Debtor exceed twenty percent (20%) of the
net amount of all Qualified Accounts; (p) any covenant, representation or
warranty contained in the Loan Documents with respect to such Account has been
breached; (q) the Account has not been billed; or (r) the Account fails to meet
such other specifications and requirements which may from time to time be
established by Lender. For purposes of Section 1.46(f), "subject software" will
be deemed registered with the United States Copyright Office if an integer
revision, e.g. 1.0 or 2.0, (any version within an integer revision) of the
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"subject software" is so registered, commencing with the most current integer
revision of the "subject software" as of the Closing Date, and including
subsequent integer revisions of the "subject software" (any version within an
integer version) that are generally released after the Closing Date.
Registration of copyrights in "dot" revisions (e.g. 1.1, 1.2) within an integer
revision is not required for the purpose of satisfying the registration
requirements under Section 1.46(f) for the "subject software," nor is
registration required for any integer revision other than the most current
general release of the "subject software" on the Closing Date.
Section 1.47. REPORTABLE EVENT. "Reportable Event" means a
"reportable event" as defined in Section 4043(c) of ERISA for which the notice
requirements of Section 4043(a) of ERISA are not waived.
Section 1.48. REVOLVING CREDIT LOAN. "Revolving Credit Loan" has
the meaning set forth in Section 2.1(b).
Section 1.49. STOCK PLEDGE AGREEMENTS. "Stock Pledge Agreements"
means, collectively, all of the stock pledge agreements executed and delivered
by Borrower to Lender in connection with the Closing.
Section 1.50. TERM. "Term" has the meaning set forth in Section
2.8.
Section 1.51. TERMINATION FEE. "Termination Fee " shall mean a fee
payable upon termination of the Agreement within the first calendar year
following the Closing Date, as yield maintenance for the loss of bargain and not
as a penalty, equal to one percent (1.0%) of the Maximum Loan Amount.
ARTICLE II
LOAN
Section 2.1. TERMS.
(a) The maximum aggregate principal amount of credit extended
by Lender to Borrower under this Agreement (the "LOAN") that will be outstanding
at any time is Forty Million and No/100 Dollars ($40,000,000.00) (the "MAXIMUM
LOAN AMOUNT").
(b) The Loan shall be in the nature of a revolving line of
credit, and shall include sums advanced and other credit extended by Lender to
or for the benefit of Borrower from time to time under this Article II (each a
"REVOLVING CREDIT LOAN") up to the Maximum Loan Amount, depending upon the
availability in the Borrowing Base, the requests of Borrower pursuant to the
terms and conditions of Section 2.2, and on such other basis as Lender may
determine in its good faith credit judgment. The outstanding principal balance
of the Loan may fluctuate from time to time, to be reduced by repayments made by
Borrower (which may be made without penalty or premium), and to be increased by
future Revolving Credit Loans, advances and other extensions of credit to or for
the benefit of Borrower, and shall be due and payable in full upon the
expiration of the Term. For purposes of this Agreement, any determination as to
whether there is availability within the Borrowing Base for advances or
extensions of credit shall be made by Lender in its sole discretion and is final
and binding upon Borrower.
(c) At Closing, Borrower shall execute and deliver to Lender a
promissory note evidencing Borrower's unconditional obligation to repay Lender
for Revolving Credit Loans, advances, and other extensions of credit made under
the Loan, in the form of EXHIBIT A to this Agreement (as amended, modified,
increased, restated or replaced from time to time, the "NOTE"), dated the date
of this Agreement, payable to the order of Lender in accordance with the terms
thereof. The Note shall bear interest on the outstanding principal balance of
the Note from the date of the Note until repaid, with interest payable monthly
in arrears on the first Business Day of each month, at a rate per annum (on the
basis of the actual number of days elapsed over a year of 360 days) equal to the
Base Rate, provided that after the occurrence and during the continuance of an
Event of Default, such rate shall be equal to the Default Rate. Lender shall be
entitled to assess such fee whether or not an Event of Default is declared or
otherwise occurs. Each Revolving Credit Loan, advance and other extension of
credit shall be deemed evidenced by the Note, which is deemed incorporated into
and made a part of this Agreement by this reference.
(d) Subject to the terms and conditions of this Agreement,
advances under the Loan shall be made against a borrowing base equal to eighty
percent (80%) of Qualified Accounts due and owing from any Account Debtors (the
"BORROWING BASE"). Lender, in its sole credit judgment, may further adjust the
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Borrowing Base by applying percentages (known as "liquidity factors") to
Qualified Accounts based upon Borrower's actual recent collection history in a
manner consistent with Lender's underwriting practices and procedures. Such
liquidity factors may be adjusted by Lender throughout the Term as warranted by
Lender's underwriting practices and procedures and using its sole credit
judgment.
Section 2.2. LOAN ADMINISTRATION. Borrowings under the Loan shall
be as follows:
(a) A request for a Revolving Credit Loan shall be made, or
shall be deemed to be made, in the following manner: (i) Borrower will give
Lender notice of its intention to borrow, together with a completed Borrowing
Base certificate and all documentation associated therewith, not later than
10:30 a.m. Eastern time on the proposed borrowing date; provided, however, that
no such request may be made at a time when there exists an Event of Default; and
(ii) the becoming due of any amount required to be paid under this Agreement,
whether as interest or for any other Obligation, shall be deemed irrevocably to
be a request for a Revolving Credit Loan on the day following the due date in
the amount required to pay such interest or other Obligation if such was not
paid by Borrower on the due date.
(b) Borrower hereby irrevocably authorizes Lender to disburse
the proceeds of each Revolving Credit Loan requested, or deemed to be requested,
as follows: (i) the proceeds of each Revolving Credit Loan requested under
Section 2.2(a)(i) shall be disbursed by Lender by wire transfer to such bank
account as may be agreed upon by Borrower and Lender from time to time or
elsewhere if pursuant to written direction from Borrower; and (ii) the proceeds
of each Revolving Credit Loan deemed to be requested under Section 2.2(a)(ii)
shall be disbursed by Lender by way of direct payment of the relevant interest
or other Obligation.
(c) All Revolving Credit Loans, advances and other extensions
of credit to or for the benefit of Borrower shall constitute one general
Obligation of Borrower, and shall be secured by Lender's Lien upon all of the
Collateral.
(d) Lender shall enter all Revolving Credit Loans as debits to
a loan account in the name of Borrower and shall also record in said loan
account all payments made by Borrower on any Obligations and all proceeds of
Collateral which are indefeasibly paid to Lender, and may record therein, in
accordance with customary accounting practice, other debits and credits,
including interest and all charges and expenses properly chargeable to Borrower.
All collections into the Concentration Account pursuant to Section 2.3 shall be
applied first to fees, costs and expenses due and owing under the Loan
Documents, then to interest due and owing under the Loan Documents, and then to
principal outstanding with respect to Revolving Credit Loans.
(e) Lender will account to Borrower monthly with a statement
of Revolving Credit Loans, charges and payments made pursuant to this Agreement,
and such accounting rendered by Lender shall be deemed final, binding and
conclusive upon Borrower, absent manifest error, unless Lender is notified by
Borrower in writing to the contrary within thirty (30) days of the date each
accounting is mailed to Borrower. Such notice shall be deemed an objection to
those items specifically objected to in the notice.
Section 2.3. COLLECTIONS, DISBURSEMENTS, BORROWING AVAILABILITY,
AND LOCKBOX ACCOUNT.
(a) Lender shall establish and maintain a lockbox and a
lockbox account (the "LOCKBOX" and the "LOCKBOX ACCOUNT", respectively) with
Citizens Bank (the "LOCKBOX BANK"), and Borrower shall execute with Lender and
the Lockbox Bank a Provider Account Agreement in substantially the form attached
hereto as EXHIBIT B (the "LOCKBOX AGREEMENT"), together with any other
agreements or documents necessary to effectuate the intent of the parties as set
forth in this Section 2.3 or in the Lockbox Agreement as Lender may require.
Borrower shall ensure that all collections of Accounts are paid directly from
Account Debtors to the Lockbox for deposit into the Lockbox Account and that all
funds deposited into the Lockbox Account are immediately transferred into a
depository account maintained by Lender at Bank One, N.A., or such other
financial institution as determined by Lender in its sole discretion, by written
notice to Borrower and the Lockbox Bank (the "CONCENTRATION ACCOUNT"). Borrower
hereby irrevocably makes, constitutes and appoints Lockbox Bank (and all persons
designated by Lockbox Bank for such purpose) as Borrower's true and lawful
attorney and agent-in-fact to endorse Borrower's name on all checks, items of
payment or other cash items that are acceptable for collection through the
Federal Reserve System (collectively, "CHECKS") payable to IDX SYSTEMS
CORPORATION, IDX INFORMATION SYSTEMS CORPORATION, IDX INVESTMENT CORPORATION, or
EDIX CORPORATION (or any reasonable variation of such names) with the
endorsement "CREDIT TO THE ACCOUNT OF HELLER HEALTHCARE FINANCE, INC. -
HEALTHCARE FINANCIAL SERVICES - XXXXXXXXXXXX"). Borrower agrees not to change
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the foregoing irrevocable instructions to the Lockbox Bank without the prior
written consent of Lender.
(b) Notwithstanding anything in any lockbox agreement to the
contrary, Borrower agrees that it shall be liable for any fees and charges in
effect from time to time and charged by the Lockbox Bank in connection with the
Lockbox and the Lockbox Account, and that Lender shall have no liability
therefor. Borrower further acknowledges and agrees that, to the extent such fees
and charges are not paid by Borrower directly but are satisfied using
collections in the Lockbox Account, such fees and charges shall be deemed to be
Revolving Credit Loans made by Lender hereunder and, to the extent that the
payment of such fees or charges by Borrower as provided herein results in any
overadvance under this Agreement, Borrower agrees to immediately (upon notice)
repay to Lender the amount of such overadvance. Borrower agrees to indemnify and
hold Lender harmless from any and all liabilities, claims, losses and demands
whatsoever, including reasonable attorney's fees and expenses, arising from or
relating to actions of Lender or the Lockbox Bank pursuant to this Section 2.3
or any lockbox agreement.
(c) Lender shall apply, on a daily basis, all funds
transferred into the Concentration Account pursuant to this Section 2.3 to
reduce the outstanding indebtedness under the Loan (in accordance with Section
2.2(d)), and all future Revolving Credit Loans, advances and other extensions of
credit to be made by Lender under the conditions set forth in this Article II.
To the extent that any collections of Accounts or proceeds of other Collateral
are not sent directly to the Lockbox as required by this Section 2.3 but are
received by Borrower, such collections shall be held in trust for the benefit of
Lender and immediately remitted, in the form received, to the Lockbox Bank for
transfer to the Concentration Account immediately upon receipt by Borrower.
(d) Borrower acknowledges and agrees that its compliance with
the terms of this Section 2.3 is essential, and that Lender will suffer
immediate and irreparable injury and have no adequate remedy at law, if
Borrower, through its acts or omissions, causes or permits Account Debtors to
send payments other than to the Lockbox, or if Borrower fails to immediately
deposit collections of Accounts or proceeds of other Collateral in the Lockbox
Account as herein required.
(e) All funds transferred from the Concentration Account for
application to Borrower's indebtedness to Lender shall be applied to reduce the
Loan balance, but for purposes of calculating interest shall be subject to a
three (3) Business Day clearance period. If as the result of collections of
Accounts pursuant to the terms and conditions of this Section 2.3 a credit
balance exists with respect to the Concentration Account, such credit balance
shall not accrue interest in favor of Borrower, but shall be available to
Borrower at any time or times for so long as no Event of Default, and no fact,
event or circumstance that, with notice or the passage of time (or both), would
constitute an Event of Default, exists.
Section 2.4. FEES.
(a) By executing this Agreement, Borrower agrees
unconditionally to pay to Lender a commitment fee equal to one half of one
percent (.50%) of the Maximum Loan Amount (the "COMMITMENT FEE").
(b) For so long as the Loan is available to Borrower, Borrower
unconditionally shall pay to Lender a monthly unused line fee (the "UNUSED LINE
FEE") equal to one-fifth of one percent (0.20%) of the average amount by which
the Maximum Loan Amount exceeds the average amount of the outstanding principal
balance of the Revolving Credit Loans during the preceding month; PROVIDED,
HOWEVER, that so long as the average monthly balance of all outstanding
Revolving Credit Loans is greater than Fifteen Million ($15,000,000), then no
Unused Line Fee shall be due and owing; and PROVIDED, FURTHER, that for purposes
of calculating the Unused Line Fee in this Section 2.4 only, the term "Maximum
Loan Amount" shall mean Thirty Million Dollars ($30,000,000) for the first two
(2) months of each fiscal quarter of Borrower. The Unused Line Fee, if any,
shall be payable monthly in arrears on the first Business Day of each successive
calendar month.
(c) For so long as the Loan is available to Borrower, Borrower
unconditionally shall pay to Lender a monthly collateral management fee (the
"COLLATERAL MANAGEMENT FEE") equal to one-quarter of one percent (0.25%) per
annum (calculated on the basis of a 360-day year using the actual number of days
elapsed) of the outstanding balance of the Loan. The Collateral Management Fee
shall be payable monthly in arrears on the first Business Day of each successive
calendar month.
(d) Borrower shall pay to Lender all fees and expenses in
connection with audits and appraisals of Borrower's books and records and such
other matters as Lender shall deem appropriate, which shall be due and payable
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on the first Business Day of the month following the date of issuance by Lender
of a request for payment thereof to Borrower.
(e) Borrower shall pay to Lender, on demand, any and all fees,
costs or expenses which Lender or any participant pays to a bank or other
similar institution (including, without limitation, any fees paid by Lender to
any participant) arising out of or in connection with (i) the forwarding to
Borrower or any other Person on behalf of Borrower, by Lender, of proceeds of
Revolving Credit Loans made by Lender to Borrower pursuant to this Agreement,
and (ii) the depositing for collection, by Lender or any participant, of any
check or item of payment received or delivered to Lender or any participant on
account of Obligations.
Section 2.5. PAYMENTS. Principal payments on account of Revolving
Credit Loans shall be payable by Borrower to Lender immediately upon the
earliest of (a) the receipt by Borrower or Lender of any payments on or proceeds
from any of the Collateral, to the extent of such proceeds, (b) the occurrence
of an Event of Default if the Loan and the maturity of the payment of the
Obligations are accelerated, or (c) the termination of this Agreement pursuant
to Section 2.8 of this Agreement; PROVIDED, HOWEVER, that if the outstanding
principal balance of the Revolving Credit Loans is at any time in excess of the
Borrowing Base, Borrower shall, immediately upon demand, repay such excess.
Interest accrued on the Revolving Credit Loans shall be due on the earliest of
(x) the first Business Day of each month (for the immediately preceding month),
computed on the last calendar day of the preceding month, (y) the occurrence of
an Event of Default if the Loan and the maturity of the payment of the
Obligations are accelerated, or (z) the termination of this Agreement pursuant
to Section 2.8. Except to the extent otherwise set forth in this Agreement or
permitted by Lender, all payments of principal and of interest on the Loan, all
other charges and any other obligations of Borrower under this Agreement, shall
be made to Lender to the Concentration Account, in immediately available funds.
All payments shall be made without deduction for any set-off, recoupment,
counterclaim or defense that Borrower now has or may have in the future.
Section 2.6. USE OF PROCEEDS. The proceeds of Lender's advances
under the Loan shall be used solely for funding future capital expenditures of
Borrower and for working capital and for other costs of Borrower arising in the
ordinary course of Borrower's business.
Section 2.7. INTEREST RATE LIMITATION. The parties intend to conform
strictly to the applicable usury laws in effect from time to time during the
term of the Loan. Accordingly, if any transaction contemplated by this Agreement
would be usurious under such laws, then notwithstanding any other provision of
this Agreement: (a) the aggregate of all interest that is contracted for,
charged or received under this Agreement or under any other Loan Document shall
not exceed the maximum amount of interest allowed by applicable law (the
"HIGHEST LAWFUL RATE"), and any excess shall be promptly credited to Borrower by
Lender (or, to the extent that such consideration shall have been paid, such
excess shall be promptly refunded to Borrower by Lender); (b) neither Borrower
nor any other Person now or hereafter liable under this Agreement shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the Highest Lawful Rate; and (c) the effective rate of interest shall be
reduced to the Highest Lawful Rate. All sums paid, or agreed to be paid, to
Lender for the use, forbearance, and detention of the debt of Borrower to Lender
shall, to the extent permitted by applicable law, be allocated throughout the
full term of the Note until payment is made in full so that the actual rate of
interest does not exceed the Highest Lawful Rate in effect at any particular
time during the full term thereof. If at any time the rate of interest under the
Note exceeds the Highest Lawful Rate, the rate of interest to accrue pursuant to
this Agreement shall be limited, notwithstanding anything to the contrary in
this Agreement, to the Highest Lawful Rate, but any subsequent reductions in the
Base Rate shall not reduce the interest to accrue pursuant to this Agreement
below the Highest Lawful Rate until the total amount of interest accrued equals
the amount of interest that would have accrued if a varying rate per annum equal
to the interest rate under the Note had at all times been in effect. If the
total amount of interest paid or accrued pursuant to this Agreement under the
foregoing provisions is less than the total amount of interest that would have
accrued if a varying rate per annum equal to the interest rate under the Note
had been in effect, then Borrower agrees to pay to Lender an amount equal to the
difference between (x) the lesser of (A) the amount of interest that would have
accrued if the Highest Lawful Rate had at all times been in effect, or (B) the
amount of interest that would have accrued if a varying rate per annum equal to
the interest rate under the Note had at all times been in effect, and (y) the
amount of interest accrued in accordance with the other provisions of this
Agreement.
Section 2.8. TERM.
(a) Subject to Lender's right to cease making Revolving Credit
Loans to Borrower upon or after any Event of Default, this Agreement shall be in
effect for a period of three (3) years from the Closing Date, unless terminated
8
as provided in this Section 2.8 (the "TERM"), and this Agreement shall be
renewed for one-year periods thereafter upon the mutual written agreement of the
parties.
(b) Notwithstanding anything in this Agreement to the
contrary, Lender may terminate this Agreement without notice upon or after the
occurrence of an Event of Default.
(c) Upon at least thirty (30) days prior written notice to
Lender (the "TERMINATION NOTICE PERIOD"), Borrower may terminate this Agreement.
(d) All of the Obligations shall be immediately due and
payable upon the termination date stated in any notice of termination of this
Agreement (the "Termination Date"); provided that, notwithstanding anything in
Section 2.8(c) to the contrary, other than a termination by Lender following the
occurrence of an Event of Default, the Termination Date shall be effective no
earlier than the first Business Day of the month following the expiration of the
Termination Notice Period. All undertakings, agreements, covenants, warranties
and representations of Borrower contained in the Loan Documents shall survive
any such termination and Lender shall retain its Liens in the Collateral and all
of its rights and remedies under the Loan Documents notwithstanding such
termination until Borrower has paid the Obligations to Lender, in full, in
immediately available funds. At the effective date of any termination of this
Agreement (whether by voluntary termination by Borrower or by termination by
Lender following the occurrence of an Event of Default), Borrower shall pay to
Lender (in addition to the then outstanding principal, accrued interest and
other Obligations owing under the terms of this Agreement and any other Loan
Documents) as yield maintenance for the loss of bargain and not as a penalty, an
amount equal to the applicable Termination Fee, if such termination occurs prior
to the first annual anniversary of the Closing Date. Thereafter, no such
Termination Fee shall be due and payable upon a termination by Borrower made
pursuant to Section 2.8(c) above.
(e) Notwithstanding any provision of this Agreement which
makes reference to the continuance of an Event of Default, nothing in this
Agreement shall be construed to permit Borrower to cure an Event of Default
following the lapse of the applicable cure period, and Borrower shall have no
such right in any instance unless specifically granted in writing by Lender.
Section 2.9. JOINT AND SEVERAL LIABILITY; BINDING OBLIGATIONS. Each
entity constituting Borrower shall be jointly and severally liable for all of
the obligations of Borrower under the Note and this Agreement. Each Borrower,
individually, expressly understands, agrees and acknowledges, that the loan
would not be made available on the terms herein in the absence of the collective
credit of all of the Borrowers, the joint and several liability of all
Borrowers, and the cross collateralization of the collateral of all Borrowers.
Accordingly, each Borrower, individually acknowledges that the benefit to each
of the participants in the facility as a whole constitutes reasonably equivalent
value, regardless of the amount of the loan actually borrowed by, advanced to,
or the amount of collateral provided by, any individual Borrower. In addition,
each entity comprising Borrower hereby acknowledges and agrees that all of the
representations, warranties, covenants, obligations, conditions, agreements and
other terms contained in this Agreement shall be applicable to and shall be
binding upon each entity comprising Borrower, and shall be binding upon all such
entities when taken together.
ARTICLE III
COLLATERAL
Section 3.1. GENERALLY. As security for the payment of all
liabilities of Borrower to Lender, including, without limitation: (a)
indebtedness evidenced under the Note, repayment of Revolving Credit Loans,
advances and other extensions of credit, all fees and charges owing by Borrower,
(including, without limitation, the Termination Fee) and all other liabilities
and obligations of every kind or nature whatsoever of Borrower to Lender,
whether now existing or hereafter incurred, joint or several, matured or
unmatured, direct or indirect, primary or secondary, related or unrelated, due
or to become due, including, without limitation, any extensions, modifications,
substitutions, increases and renewals thereof, (b) the payment of all amounts
advanced by Lender to preserve, protect, defend, and enforce its rights under
this Agreement and in the following property in accordance with the terms of
this Agreement, (c) the payment of all expenses incurred by lender in connection
therewith, and (d) the payment and performance by Borrower, any Guarantor and
their respective affiliates of their respective obligations under the Affiliated
Loan Documents (collectively, the "OBLIGATIONS"), Borrower hereby assigns and
grants to Lender a continuing first priority lien on and security interest in,
upon, and to the following property whether now owned or hereafter acquired or
9
arising (the "COLLATERAL"; unless otherwise defined in this Agreement, all terms
used in the following subparagraphs shall have the meanings given them in the
uniform Commercial Code as now or hereafter in effect):
(a) All of Borrower's Accounts, and all of Borrower's money,
contract rights, chattel paper, documents, deposit accounts, securities,
investment property and instruments with respect thereto, and all of Borrower's
rights, remedies, security, Liens and supporting obligations, in, to and in
respect of the foregoing, including, without limitation, rights of stoppage in
transit, replevin, repossession and reclamation and other rights and remedies of
an unpaid vendor, lienor or secured party, guaranties or other contracts of
suretyship with respect to the Accounts, deposits or other security for the
obligation of any Account Debtor, and credit and other insurance;
(b) To the extent not listed above, all of Borrower's money,
securities, investment property, deposit accounts, instruments and other
property and the proceeds thereof that are now or hereafter held or received by,
in transit to, in possession of, or under the control of Lender or a bailee or
Affiliate of Lender, whether for safekeeping, pledge, custody, transmission,
collection or otherwise;
(c) To the extent not listed above, all of Borrower's now
owned or hereafter acquired deposit accounts into which Accounts or the proceeds
of Accounts are deposited, including the Lockbox Account;
(d) All of Borrower's right, title and interest in, to and in
respect of all goods relating to, or which by sale have resulted in, Accounts,
including, without limitation, all goods described in invoices or other
documents or instruments with respect to, or otherwise representing or
evidencing, any Account, and all returned, reclaimed or repossessed goods;
(e) All of Borrower's general intangibles (including, without
limitation, payment intangibles) and other property of every kind and
description with respect to, evidencing or relating to its Accounts, including,
without limitation, all existing and future customer lists, choses in action,
claims, books, records, ledger cards, contracts, licenses, formulae, tax and
other types of refunds, returned and unearned insurance premiums, rights and
claims under insurance policies;
(f) All of Borrower's other general intangibles (including,
without limitation, any proceeds from insurance policies after payment of prior
interests), patents, unpatented inventions, trade secrets, contract rights,
goodwill, rights to performance, rights under licenses, choses-in-action,
claims, things in action, trademarks and trademarks applied for (together with
the goodwill associated therewith) and derivatives thereof, trade names,
including the right to make, use, and vend goods utilizing any of the foregoing,
and permits, licenses, certifications, authorizations and approvals, and the
rights of Borrower thereunder, issued by any governmental, regulatory, or
private authority, agency, or entity whether now owned or hereafter acquired,
together with all cash and non-cash proceeds and products thereof;
(g) All of Borrower's copyrights, literary rights and
information contained in computer media, computer programs, information and
software, such as data bases, source and object codes, and information therein,
for the purpose of perfecting, under applicable law, Lender's security interest
in any of Borrower's Accounts, and the rights of Borrower thereunder issued by
any governmental, regulatory, or private authority, agency or entity, whether
now owned or hereafter acquired, together with all cash and non-cash proceeds
and products thereof;
(h) All of Borrower's now owned or hereafter acquired
machinery, equipment, computer equipment, tools, tooling, furniture, fixtures,
goods, supplies, materials, work-in-process, whether now owned or hereafter
acquired, together with all additions, parts, fittings, accessories, special
tools, attachments and accessions now and hereafter affixed thereto and/or used
in connection therewith, all replacements thereof and substitutions therefor,
and all cash and non-cash proceeds and products thereof; and
(i) To the extent not listed above as original collateral, the
proceeds (including, without limitation, insurance proceeds) and products of all
of the foregoing.
In addition to the foregoing Collateral, IDX Systems Corporation shall execute
and deliver to Lender at Closing the Stock Pledge Agreements, pursuant to which
IDX Systems Corporation shall pledge, assign and grant to Lender a portion of
its publicly traded common stock in Allscripts Healthcare Solutions, Inc. and
all of its common stock in several of its Affiliates, all of which shall serve
as additional collateral and security for the repayment of the Loan.
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Section 3.2. LIEN DOCUMENTS. At Closing, and thereafter as Lender
deems necessary in its sole discretion, Borrower shall execute and deliver to
Lender, or have executed and delivered (all in form and substance satisfactory
to Lender in its sole discretion) any agreements, documents, instruments and
writings deemed necessary by Lender or as Lender may otherwise request from time
to time in its sole discretion to evidence, perfect or protect Lender's Lien and
security interest in the Collateral required under this Agreement. Borrower
hereby authorizes Lender to file one or more financing statements and amendments
thereto describing the Collateral and describing any agricultural liens or other
statutory liens held by Lender, and providing any other notices deemed necessary
by Lender.
Section 3.3. COLLATERAL ADMINISTRATION.
(a) All Collateral (except deposit accounts) shall at all
times be kept by Borrower at its principal office(s) as set forth on SCHEDULE
4.15 and shall not be moved from such locations without (i) providing prior
written notice to Lender in accordance with Section 6.15, and (ii) obtaining the
prior written consent of Lender, which consent shall not be unreasonably
withheld.
(b) Borrower shall keep accurate and complete records of its
Accounts and all payments and collections thereon and shall submit to Lender on
such periodic basis as Lender shall request a sales and collections report for
the preceding period, in form satisfactory to Lender. In addition, if Accounts
in an aggregate face amount in excess of $50,000 become ineligible because they
fall within one of the specified categories of ineligibility set forth in the
definition of Qualified Accounts or otherwise, Borrower shall notify Lender of
such occurrence on the first Business Day following such occurrence and the
Borrowing Base shall thereupon be adjusted to reflect such occurrence. If
requested by Lender, Borrower shall execute and deliver to Lender formal written
assignments of all of its Accounts weekly or daily, which shall include all
Accounts that have been created since the date of the last assignment, together
with copies of claims, invoices or other information related thereto.
(c) Whether or not an Event of Default has occurred, any of
Lender's officers, employees or agents shall have the right, at any time or
times hereafter, in the name of Lender or any designee of Lender or Borrower, to
verify the validity, amount or any other matter relating to any Accounts by
mail, telephone, telegraph or otherwise. Borrower shall cooperate fully with
Lender in an effort to facilitate and promptly conclude such verification
process.
(d) To expedite collection, Borrower shall endeavor in the
first instance to make collection of its Accounts for Lender. Lender shall have
the right at any time to notify Account Debtors that Accounts have been assigned
to Lender.
(e) Borrower shall bear the risk of loss on all Collateral,
regardless of whether such Collateral is in the possession or control of
Borrower, Lender, a bailee or any other Person.
Section 3.4. OTHER ACTIONS. In addition to the foregoing, Borrower:
(a) shall direct each Account Debtor to make payments into the
Lockbox, and hereby authorizes Lender, upon any Event of Default, to send any
and all notices to each entity who either is currently an Account Debtor or
becomes an Account Debtor at any time following the date of such Event of
Default that Lender has been granted a first priority Lien and security interest
in, upon and to all Accounts applicable to such entity, and to direct such
entity to make payments into the Lockbox;
(b) shall do and hereby authorizes Lender to do anything
further that may be lawfully required by Lender to secure Lender and effectuate
the intentions and objects of this Agreement, including, without limitation, the
execution and delivery of lockbox agreements, continuation statements,
amendments to financing statements, and any other documents required under this
Agreement;
(c) at Lender's request, shall immediately deliver to
Lender all items for which Lender must receive possession to obtain a perfected
security interest;
(d) shall, on Lender's demand, deliver to Lender all notes,
certificates, and documents of title, chattel paper, warehouse receipts,
instruments, and any other similar instruments constituting Collateral;
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(e) shall, where Collateral is in the possession of a third
party, join with Lender in notifying the third party of Lender's security
interests and obtaining an acknowledgement from the third party that it is
holding the Collateral for the benefit of Lender;
(f) shall cooperate with Lender in obtaining control with
respect to Collateral consisting of deposit accounts, investment property,
letter of credit rights, electronic chattel paper and any other portion of the
Collateral for which control is required in order to perfect a security
interest; and
(g) shall not create any chattel paper without placing a
legend on the chattel paper acceptable to Lender indicating that Lender has a
security interest in the chattel paper.
Section 3.5. SEARCHES. Before Closing, and thereafter (as and when
determined by Lender in its sole discretion), Lender will perform the searches
described in clauses (a), (b) and (c) below against Borrower (the results of
which are to be consistent with Borrower's representations and warranties under
this Agreement), all at Borrower's expense:
(a) Uniform Commercial Code searches with the Secretary of
State and local filing offices of each jurisdiction where Borrower maintains its
executive offices, a place of business, or assets and the jurisdiction in which
the Borrower is organized;
(b) Judgment, federal tax lien and corporate and
partnership tax lien searches, in each jurisdiction searched under clause (a)
above; and
(c) Searches of applicable corporate, limited liability
company, partnership and related records to confirm the continued existence,
organization and good standing of Borrower and the exact legal name under which
Borrower is organized.
Section 3.6. POWER OF ATTORNEY. Each of the officers of Lender is
hereby irrevocably made, constituted and appointed the true and lawful attorney
for Borrower (without requiring any of them to act as such) with full power of
substitution to do the following: (a) endorse the name of Borrower upon any and
all checks, drafts, money orders, and other instruments for the payment of money
that are payable to Borrower and constitute collections on Borrower's Accounts;
(b) execute in the name of Borrower, if and to the extent necessary, any
financing statements, schedules, assignments, instruments, documents and
statements that Borrower is obligated to give Lender under this Agreement; (c)
take any action Borrower is required to take under Section 3.4 above; and (d) do
such other and further acts and deeds in the name of Borrower that Lender may
deem necessary or desirable to enforce any Account or other Collateral or
perfect Lender's security interest or Lien in any Collateral. In addition, if
Borrower breaches its obligation to direct payments of the proceeds of the
Collateral to the Lockbox Account, Lender, as the irrevocably made, constituted
and appointed true and lawful attorney for Borrower pursuant to this paragraph,
may, by the signature or other act of any of Lender's officers (without
requiring any of them to do so), direct any federal, state or private payor or
fiscal intermediary to pay proceeds of the Collateral to Borrower by directing
payment to the Lockbox Account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each entity comprising Borrower represents and warrants to Lender, and
shall be deemed represent and warrant to Lender in all material respects on each
day on which any Obligations shall be outstanding under this Agreement, that:
Section 4.1. SUBSIDIARIES. Except as set forth in SCHEDULE 4.1,
Borrower has no subsidiaries.
Section 4.2. ORGANIZATION AND GOOD STANDING. Borrower is a
corporation, limited liability company or limited liability partnership, as the
case may be, duly organized, validly existing, and in good standing under the
laws of its state of formation, is in good standing as a foreign corporation,
limited liability company or limited liability partnership, as the case may be,
in each jurisdiction in which the character of the properties owned or leased by
it therein or the nature of its business makes such qualification necessary, has
the corporate, limited liability company or limited liability partnership (as
12
the case may be) power and authority to own its assets and transact the business
in which it is engaged. Borrower's state of organization is listed on SCHEDULE
4.2 and its EXACT legal name is as set forth in the first paragraph of this
Agreement.
Section 4.3. AUTHORITY. Borrower has full corporate, limited
liability company or limited liability partnership (as the case may be) power
and authority to enter into, execute, and deliver this Agreement and to perform
its obligations under this Agreement, to borrow the Loan, to execute and deliver
the Note, and to incur and perform the obligations provided for in the Loan
Documents, all of which have been duly authorized by all necessary corporate,
limited liability company or limited liability partnership (as the case may be)
action. No consent or approval of shareholders, members or partners of, or
lenders to, Borrower and no consent, approval, filing or registration with any
Governmental Authority is required as a condition to the validity of the Loan
Documents or the performance by Borrower of its obligations under the Loan
Documents.
Section 4.4. BINDING AGREEMENT. This Agreement and all other Loan
Documents constitute, and the Note, when issued and delivered pursuant to this
Agreement for value received, will constitute, the valid and legally binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms.
Section 4.5. LITIGATION. Except as disclosed in SCHEDULE 4.5, there
are no actions, suits, proceedings or investigations pending or threatened
against Borrower before any court or arbitrator or before or by any Governmental
Authority which, in any one case or in the aggregate, if determined adversely to
the interests of Borrower, could have a material adverse effect on the business,
properties, condition (financial or otherwise) or operations, current or
prospective, of Borrower, or upon its ability to perform its obligations under
the Loan Documents. Borrower is not in default with respect to any order of any
court, arbitrator or Governmental Authority applicable to Borrower or its
properties.
Section 4.6. NO CONFLICTS. The execution and delivery by Borrower
of this Agreement and the other Loan Documents do not, and the performance of
its obligations under the Loan Documents will not, violate, conflict with,
constitute a default under, or result in the creation of a Lien or encumbrance
upon the property of Borrower (other than for the benefit of Lender) under: (a)
any provision of Borrower's articles of incorporation or bylaws, certificate of
formation or operating agreement, or certificate of limited liability
partnership or agreement of limited liability partnership, as the case may be,
(b) to the best of Borrower's knowledge after due inquiry, any provision of any
law, rule, or regulation applicable to Borrower, (c) any indenture or other
agreement or instrument to which Borrower is a party or by which Borrower or its
property is bound, or (d) any judgment, order or decree of any court,
arbitration tribunal, or Governmental Authority having jurisdiction over
Borrower which is applicable to Borrower.
Section 4.7. FINANCIAL CONDITION. The financial statements of
Borrower which have been delivered to Lender fairly present the financial
condition of Borrower and the results of its operations and changes in financial
condition as of the dates and for the periods referred to, and have been
prepared in accordance with GAAP. There are no material unrealized or
anticipated liabilities, direct or indirect, fixed or contingent, of Borrower as
of the dates of such financial statements which are not reflected in such
financial statements or in the notes to such financial statements. There has
been no adverse change in the business, properties, condition (financial or
otherwise) or operations (current or prospective) of Borrower since the date of
the last financial statement delivered to Lender. The federal tax identification
number and fiscal year of each entity comprising the Borrower is as described on
Schedule 4.7.
Section 4.8. NO DEFAULT. Borrower is not in default under or with
respect to any obligation in any respect which could be adverse to its business,
operations, property or financial condition, or which could adversely affect the
ability of Borrower to perform its obligations under the Loan Documents. No
Event of Default or event that, with the giving of notice or lapse of time, or
both, could become an Event of Default, has occurred and is continuing.
Section 4.9. TITLE TO PROPERTIES. Borrower has good, marketable and
indefeasible title to, rights in and the power to transfer its properties and
assets, including the Collateral and the properties and assets reflected in the
financial statements described in Section 4.7, subject to no Lien, mortgage,
pledge, encumbrance or charge of any kind, other than Permitted Liens. Borrower
has not agreed or consented to cause any of its properties or assets whether
owned now or hereafter acquired to be subject in the future (upon the happening
of a contingency or otherwise) to any Lien, mortgage, pledge, encumbrance or
charge of any kind other than Permitted Liens. All of the Collateral, and all
other property and assets of Borrower that are necessary to the conduct of
Borrower's business, is owned by Borrower or the rights to same are held by
13
Borrower in its name, and none of the Collateral, or any such property or assets
are owned or the rights thereto held in the name of any other entity.
Section 4.10. TAXES. Borrower has filed, or has obtained extensions
for the filing of, all federal, state and other tax returns which are required
to be filed, and has paid all taxes shown as due on those returns and all
assessments, fees and other amounts due as of the date of this Agreement. All
tax liabilities of Borrower are adequately provided for on Borrower's books. No
tax liability has been asserted by the Internal Revenue Service or other taxing
authority against Borrower for taxes in excess of those already paid.
Section 4.11. SECURITIES AND BANKING LAWS AND REGULATIONS.
(a) The use of the proceeds of the Loan and Borrower's
issuance of the Note will not directly or indirectly violate or result in a
violation of the Securities Act of 1933 or the Securities Exchange Act of 1934,
as amended, or any regulations issued pursuant thereto, including, without
limitation, Regulations U, T or X of the Board of Governors of the Federal
Reserve System. Borrower is not engaged in the business of extending credit for
the purpose of the purchasing or carrying "margin stock" within the meaning of
those regulations. No part of the proceeds of the Loan under this Agreement will
be used to purchase or carry any margin stock or to extend credit to others for
such purpose.
(b) Borrower is not an investment company within the meaning
of the Investment Company Act of 1940, as amended, nor is it, directly or
indirectly, controlled by or acting on behalf of any Person which is an
investment company within the meaning of that Act.
Section 4.12. ERISA. No employee benefit plan (a "PLAN") subject to
the Employee Retirement Income Security Act of 1974 ("ERISA") and regulations
issued pursuant to ERISA that is maintained by Borrower or under which Borrower
could have any material liability under ERISA (a) has failed to meet minimum
funding standards established in Section 302 of ERISA, (b) has failed to
substantially comply with all applicable requirements of ERISA and of the
Internal Revenue Code, including all applicable rulings and regulations
thereunder, or (c) has engaged in or been involved in a prohibited transaction
(as defined in ERISA) under ERISA or under the Internal Revenue Code. Neither
Borrower, nor any member of a Controlled Group that includes Borrower, has
assumed, or received notice of a claim asserted against Borrower or another
member of the Controlled Group for, withdrawal liability (as defined in the
Multi-Employer Pension Plan Amendments Act of 1980, as amended) with respect to
any multi-employer pension plan. Borrower has timely made when due all
contributions with respect to any multi-employer pension plan in which it
participates and no event has occurred triggering a material claim against
Borrower for withdrawal liability with respect to any multi-employer pension
plan in which Borrower participates.
Section 4.13. COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Except as
described in SCHEDULE 4.13, Borrower is not, to the best of its knowledge after
due inquiry, in violation of any statute, rule or regulation of any Governmental
Authority (including, without limitation, any statute, rule or regulation
relating to employment practices or to environmental, occupational and health
standards and controls). Borrower is current with all reports and documents
required to be filed with any state or federal securities commission or similar
Governmental Authority and is in full compliance with all applicable rules and
regulations of such commissions. Borrower has obtained all certificates,
licenses, permits, franchises, qualifications and other governmental
authorizations required under all laws, regulations, ordinances, or orders of
public authorities necessary for the ownership and operation of all of its
properties, the transaction of all of its business, and the generation of all of
its Accounts, except where the absence thereof would not have a Material Adverse
Effect, all of which are in the name of Borrower.
Section 4.14. ENVIRONMENTAL MATTERS. No use, exposure, release,
generation, manufacture, storage, treatment, transportation or disposal of
Hazardous Material has occurred or is occurring on or from any real property on
which the Collateral is located or which is owned, leased or otherwise occupied
by Borrower (the "PREMISES"), or off the Premises as a result of any action of
Borrower, except as described in SCHEDULE 4.14. All Hazardous Material used,
treated, stored, transported to or from, generated or handled on the Premises,
or off the Premises by Borrower, has been disposed of on or off the Premises by
or on behalf of Borrower in a lawful manner. There are no underground storage
tanks present on or under the Premises owned or leased by Borrower. No other
environmental, public health or safety hazards exist with respect to the
Premises.
Section 4.15. PLACES OF BUSINESS. As of the Closing Date, the only
places of business of Borrower, and the places where it keeps and intends to
keep the Collateral and records concerning the Collateral, are at the addresses
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set forth in SCHEDULE 4.15. SCHEDULE 4.15 also lists the owner of record of each
such property. Borrower's Chief Executive Office is located in the state and at
the address shown in SCHEDULE 4.15.
Section 4.16. INTELLECTUAL PROPERTY. Borrower exclusively owns, or
possesses sufficient licensing rights in, all the patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
franchises, licenses and rights with respect to the foregoing necessary for the
current and planned future conduct of its business, without, to the best of
Borrower's knowledge after due inquiry, any conflict with the rights of others.
A list of copyright applications and registrations, patent applications and
trademark applications and registrations owned by Borrower, developed as a
result of reasonable effort, but not necessarily a comprehensive list, is
attached as Schedule 4.16. . To the best of Borrower's knowledge after due
inquiry, Borrower is not in default of any obligation or undertaking with
respect to such intellectual property or rights. To the best of Borrower's
knowledge after due inquiry, Borrower is not infringing on any patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, franchises, licenses, any rights with respect to the foregoing, or
any other intellectual property rights of others and the Borrower is not aware
of any infringement by others of any such rights owned by Borrower.
Section 4.17. CAPITALIZATION. The authorized equity securities
(whether capital stock, partnership or membership interests or otherwise) of
each entity comprising Borrower are as set forth in SCHEDULE 4.17. All issued
and outstanding equity securities of the Borrower are duly authorized and
validly issued, fully paid, nonassessable, free and clear of all Liens or
pledges other than those in favor of Lender or for the benefit of Lender, and
such equity securities were issued in compliance with all applicable state,
federal and foreign laws concerning the issuance of securities. The identity of
the holders of equity securities in excess of five percent (5%) of all issued
and outstanding equity securities of Borrower on a percentage basis as of
December 31, 2001 and the percentage of such holder's ownership of such equity
securities are set forth on SCHEDULE 4.17. No shares of the equity securities of
Borrower, other than those described above, are issued and outstanding. Except
as provided in SCHEDULE 4.17, there are no preemptive or other outstanding
rights, options, warrants, conversion rights or similar agreements or
understandings for the purchase or acquisition from Borrower of any equity
securities of Borrower.
Section 4.18. MATERIAL FACTS. Neither this Agreement nor any other
Loan Document nor any other agreement, document, certificate, or statement
furnished to Lender by or on behalf of Borrower in connection with the
transactions contemplated by this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary to make the statements
contained in this Agreement or other Loan Document not misleading. There is no
fact known to Borrower that would result in or cause a Material Adverse Effect.
Section 4.19. INVESTMENTS, GUARANTEES AND CERTAIN CONTRACTS.
Borrower does not own or hold any equity or long-term debt investments in, have
any outstanding advances to, have any outstanding guarantees for the obligations
of, or have any outstanding borrowings from, any Person, except as described on
SCHEDULE 4.19. Borrower is not a party to any contract or agreement, or subject
to any corporate restriction, which adversely affects its business.
Section 4.20. BUSINESS INTERRUPTIONS. Within five (5) years before
the date of this Agreement, neither the business, property or assets, or
operations of Borrower has been adversely affected in any way by any casualty,
strike, lockout, combination of workers, or order of the United States of
America or other Governmental Authority, directed against Borrower. There are no
pending or threatened labor disputes, strikes, lockouts or similar occurrences
or grievances against Borrower or its business.
Section 4.21. NAMES. Within five (5) years before the date of this
Agreement, Borrower has not conducted business under or used any other name
(whether corporate, partnership or assumed) other than as shown on SCHEDULE
4.21. Borrower is the sole owner of all names listed on that Schedule and any
and all business done and invoices issued in such names are Borrower's sales,
business, and invoices. Each trade name of Borrower represents a division or
trading style of Borrower and not a separate Person or independent Affiliate.
Section 4.22 JOINT VENTURES. Borrower is not engaged in any joint
venture or partnership with any other Person, except as set forth on SCHEDULE
4.22.
Section 4.23 ACCOUNTS. Lender may rely, in determining which
Accounts are Qualified Accounts, on all statements and representations made by
Borrower with respect to any Account or Accounts. Unless otherwise indicated in
writing to Lender, with respect to each Qualified Account, Borrower represents
that:
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(a) The Account is genuine and in all respects what
it purports to be, and will represent a BONA FIDE obligation of Borrower's
Account Debtors, and is not evidenced by a judgment;
(b) The Account arises out of a completed, bona fide sale and
delivery of goods or rendition of services by Borrower in the ordinary course of
its business and in accordance with the terms and conditions of all purchase
orders, contracts, certification, participation, certificate of need, or other
documents relating thereto and forming a part of the contract between Borrower
and the Account Debtor;
(c) The Account is for a liquidated amount maturing as stated
in a duplicate claim or invoice covering such sale or rendition of services, a
copy of which has been furnished or is available to Lender;
(d) The Account, and Lender's security interest in such
Account, is not, and will not (by voluntary act or omission by Borrower), be in
the future, subject to any offset, Lien, deduction, defense, dispute,
counterclaim or any other adverse condition, and each such Account is absolutely
owing to Borrower and is not contingent in any respect or for any reason;
(e) There are no facts, events or occurrences which in any way
impair the validity or enforceability of any Accounts or tend to reduce the
amount payable thereunder from the face amount of the claim or invoice and
statements delivered to Lender with respect thereto;
(f) To the best of Borrower's knowledge, (i) the Account
Debtor under the Account had the capacity to contract at the time any contract
or other document giving rise to the Account was executed and (ii) such Account
Debtor is solvent;
(g) To the best of Borrower's knowledge, there are no
proceedings or actions which are threatened or pending against any Account
Debtor under the Account which might result in any material adverse change in
such Account Debtor's financial condition or the collectibility of such Account;
and
(h) The Account has been billed and forwarded to the Account
Debtor for payment in accordance with applicable laws and compliance and
conformance with any and requisite procedures, requirements and regulations
governing payment by such Account Debtor with respect to such Account is
properly payable directly to Borrower.
Section 4.24. SOLVENCY. Both before and after giving effect to the
transactions contemplated by the terms and provisions of this Agreement,
Borrower (taken as a whole) (a) owns assets whose fair saleable value is greater
than the amount required to pay all of Borrower's Indebtedness (as defined in
Section 7.11), (b) was and is able to pay all of its Indebtedness as such
Indebtedness matures, and (c) had and has capital sufficient to carry on its
business and transactions and all business and transactions in which it about to
engage.
ARTICLE V
CLOSING AND CONDITIONS OF LENDING
Section 5.1. CONDITIONS PRECEDENT TO AGREEMENT. The obligation
of Lender to enter into and perform this Agreement and to make Revolving Credit
Loans is subject to the following conditions precedent:
(a) Lender shall have received two (2) originals of this
Agreement, the Certificate of Validity, the Stock Pledge Agreements, and all
other Loan Documents required to be executed and delivered at or before Closing
(other than the Note, as to which Lender shall receive only one (1) original),
executed by Borrower and any other required Persons, as applicable.
(b) Lender shall have received all searches required by
Section 3.5.
(c) Borrower shall have complied and shall then be in
compliance with all the terms, covenants and conditions of the Loan Documents.
(d) There shall have occurred and be continuing no Event of
Default and no event that, with the giving of notice or the lapse of time, or
both, could constitute such an Event of Default.
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(e) The representations and warranties contained in
Article IV shall be true and correct.
(f) Lender shall have received copies of all board of
directors resolutions, consents of members and managers and consents of partners
of each Borrower, and other action taken by Borrower to authorize the execution,
delivery and performance of the Loan Documents and the borrowing of the Loan
under the Loan Documents, as well as the names and signatures of the officers
of, members and managers of and partners of Borrower authorized to execute
documents on its behalf in connection with the Loan, all as also certified as of
the date of this Agreement by Borrower's chief financial officer, or equivalent,
and such other papers as Lender may require.
(g) Lender shall have received (i) copies, certified as true,
correct and complete by the applicable state of organization of each Borrower of
the certificate of incorporation, certificate of formation or certificate of
limited liability partnership of each Borrower, with any amendments to any of
the foregoing, (ii) copies, certified as true, correct and complete by an
authorized officer, member or partner of each Borrower of all other documents
necessary for performance of the obligations of Borrower under this Agreement
and the other Loan Documents, and (iii) certificates of good standing for each
Borrower issued by the state of organization of each Borrower and by each state
in which each Borrower is doing and currently intends to do business for which
qualification is required.
(h) Lender shall have received a written opinion of counsel
for Borrower dated the date of this Agreement, substantially in the form of
EXHIBIT C.
(i) Lender shall have received such financial statements,
reports, certifications, and other operational information required to be
delivered under this Agreement, including, without limitation, an initial
borrowing base certificate calculating the Borrowing Base.
(j) Lender shall have received evidence of all of Borrower's
applications for registration of copyrights and registration numbers of the
following software products with the United States Copyright Office:
(i) IDXtend 9.0;
(ii) IDXtend 2.0 for the Web;
(iii) LASTWORD 4.0; and
(iv) CARECAST 5.0.
(k) Lender shall have received the Commitment Fee.
(l) The Lockbox, Lockbox Account and the Concentration
Account shall have been established.
(m) Lender shall have received a certificate of Borrower's
chief financial officer, dated the Closing Date, certifying that all of the
conditions specified in this Section have been fulfilled.
Section 5.2. CONDITIONS PRECEDENT TO ADVANCES. Notwithstanding any
other provision of this Agreement, no Loan proceeds, Revolving Credit Loans,
advances or other extensions of credit under the Loan shall be disbursed under
this Agreement unless the following conditions have been satisfied or waived
immediately before such disbursement:
(a) The representations and warranties on the part of Borrower
contained in Article IV of this Agreement shall be true and correct in all
material respects at and as of the date of disbursement or advance, as though
made on and as of such date (except to the extent that such representations and
warranties expressly relate solely to an earlier date and except that the
references in Section 4.7 to financial statements shall be deemed to be a
reference to the then most recent annual and interim financial statements of
Borrower furnished to Lender pursuant to Section 6.1).
(b) No Event of Default or event that, with the giving of
notice or the lapse of time, or both, could become an Event of Default shall
have occurred and be continuing or would result from the making of the
disbursement or advance.
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(c) No Material Adverse Effect has occurred or exists.
(d) All instruments and legal documents and proceedings in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Lender and its counsel, and Lender shall
have received all documents, including records of corporate proceedings and
opinions of counsel, which Lender may have requested in connection therewith.
Section 5.3. CLOSING. Subject to the conditions of this Article V,
the Loan shall be made available on the date as is mutually agreed by the
parties (the "CLOSING DATE") at such time as may be mutually agreeable to the
parties upon the execution of this Agreement (the "CLOSING") at such place as
may be requested by Lender.
Section 5.4. WAIVER OF RIGHTS. By completing the Closing under this
Agreement, or by making advances under the Loan, Lender does not waive a breach
of any representation or warranty of Borrower under this Agreement or under any
other Loan Document, and all of Lender's claims and rights resulting from any
breach or misrepresentation by Borrower are specifically reserved by Lender,
unless the Lender has specifically waived such claim and right in writing.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each entity comprising Borrower covenants and agrees that for so long
as Borrower may borrow under this Agreement and until payment in full of the
Note and performance of all other obligations of Borrower under the Loan
Documents:
Section 6.1. FINANCIAL STATEMENTS AND COLLATERAL REPORTS. Borrower
will furnish to Lender (a) a revenue and collections report and accounts
receivable aging schedule on a form acceptable to Lender within fifteen (15)
days after the end of each calendar month, which shall include, without
limitation, a listing of collections received; (b) payables aging schedules
within fifteen (15) days after the end of each calendar month; (c) internally
prepared monthly financial statements for Borrower, certified by the chief
financial officer of Borrower, within forty-five (45) days of the end of each
calendar month; (d) to the extent prepared by Borrower, annual projections,
profit and loss statements, balance sheets, and cash flow reports (prepared on a
quarterly basis) for the succeeding fiscal year, which, on a preliminary basis,
shall be delivered within thirty (30) days before the end of each of Borrower's
fiscal years, with a final version to be provided on or before February 28 of
the subject year; (e) internally prepared annual financial statements for
Borrower within sixty (60) days after the end of each of Borrower's fiscal
years, subject to annual audit adjustments; (f) annual audited financial
statements for Borrower prepared by a firm of independent public accountants
satisfactory to Lender, within one hundred thirty-five (135) days after the end
of each of Borrower's fiscal years; (g) promptly upon receipt thereof, copies of
any reports submitted to Borrower by the independent accountants in connection
with any interim audit of the books of Borrower and copies of each management
control letter provided to Borrower by independent accountants; (h) as soon as
available, and to the extent not already provided, copies of all financial
statements and notices provided by Borrower to all of its stockholders; (i) on
the last business day of every month, evidence satisfactory to Lender that all
federal and state taxes, including, without limitation, payroll taxes, that are
due have been paid in full; and (j) such additional information, reports or
statements as Lender may from time to time request. Annual financial statements
shall set forth in comparative form figures for the corresponding periods in the
prior fiscal year. All financial statements shall include a balance sheet and
statement of earnings and shall be prepared in accordance with GAAP.
Section 6.2. PAYMENTS UNDER THIS AGREEMENT. Borrower will make all
payments of principal, interest, fees, and all other payments required under
this Agreement and under the Loan, and under any other agreements with Lender to
which Borrower is a party, as and when due.
Section 6.3. EXISTENCE, GOOD STANDING AND COMPLIANCE WITH LAWS.
Borrower will do or cause to be done all things necessary (a) to obtain and keep
in full force and effect all corporate, limited liability company or limited
liability partnership existence, rights, licenses, permits, certificates of
needs, regulatory approvals, privileges, and franchises (collectively,
"PERMITS") of Borrower necessary to the ownership of its property or the conduct
of its business, and comply with all applicable current and future laws,
ordinances, rules, regulations, orders and decrees of any Governmental Authority
having or claiming jurisdiction over Borrower; (b) to maintain and protect at
18
all times all of Borrower's insurance upon its insurable property and operations
as required by law or by Section 6.7; and (c) to maintain all Permits free from
restrictions or known conflicts which could materially impair their use or
operation or cause the Permits to be provisional, probationary or restricted in
any way.
Section 6.4. LEGALITY. The making of the Loan and each
disbursement or advance under the Loan shall not be subject to any penalty or
special tax, shall not be prohibited by any governmental order or regulation
applicable to Borrower, and shall not violate any rule or regulation of any
Governmental Authority, and necessary consents, approvals and authorizations of
any Governmental Authority to or of any such disbursement or advance shall have
been obtained.
Section 6.5. REGISTRATION OF SOFTWARE PRODUCTS. Unless otherwise
provided for in SCHEDULE 6.28, Borrower shall file with the United States
Copyright Office using the expedited registration process in the United States
Copyright Office, an application for registration of the most current integer
revision, e.g., 1.0 or 2.0, in general release on the Closing Date (any version
within an integer revision) for any and all software products owned by Borrower
and, in the future, new integer revisions (any version within an integer
revision) of any software products owned by Borrower, within sixty (60) days
following the general release thereof, and Borrower shall diligently pursue
obtaining a copyright registration number for each such product. Borrower shall
provide notice to Lender of any such filing, together with copies of all
applications, filings and other registration correspondence and documents
relating thereto. Upon receipt of registration for any such copyrightable work,
Borrower shall execute and deliver to Lender a Copyright Security Agreement in
substantially the form attached hereto as EXHIBIT D, or any other document
required by Lender to be filed with the United States Copyright Office for the
purpose of perfecting Lender's security interest over such software product(s).
Section 6.6. TAXES AND CHARGES. Borrower will timely file all tax
reports and pay and discharge all taxes, assessments and governmental charges or
levies imposed upon Borrower, or its income or profits or upon its properties or
any part thereof, before the same shall be in default and before the date on
which penalties attach thereto, as well as all lawful claims for labor,
material, supplies or otherwise which, if unpaid, might become a Lien or charge
upon the properties or any part thereof of Borrower; PROVIDED, HOWEVER, that
Borrower shall not be required to pay and discharge or cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith and by appropriate
proceedings by Borrower, and Borrower shall have set aside on their books
adequate reserve therefor; and PROVIDED FURTHER, that such deferment of payment
is permissible only so long as Borrower's title to, and its right to use, the
Collateral is not adversely affected thereby and Lender's Lien and priority on
the Collateral are not adversely affected, altered or impaired thereby.
Section 6.7. INSURANCE. Borrower will carry adequate public
liability and professional liability insurance with responsible companies
reasonably satisfactory to Lender in such amounts and against such risks as is
customarily maintained by similar businesses and by owners of similar property
in the same general area.
Section 6.8. INFORMATION; VISITS AND INSPECTIONS. Borrower shall
furnish to Lender such information as Lender may, from time to time, reasonably
request with respect to the business or financial affairs of Borrower. Borrower
shall also permit any officer, employee, agent or representative of Lender, upon
at least two (2) Business Days' notice, to visit and inspect any of the
properties of Borrower, to inspect, audit and make copies of or prepare extracts
from Borrower's minute books, books of account and other records, including
management letters prepared by Borrower's auditors, of Borrower, and make copies
thereof or extracts therefrom, and to discuss the business affairs, finances and
accounts of Borrower with, and be advised as to the same by, the officers and
key employees of Borrower, and by Borrower's independent accountants (but only
in the presence of a representative of Borrower), all at such times and as often
as Lender may reasonably require.
Section 6.9. MAINTENANCE OF PROPERTY. Borrower will maintain,
keep and preserve all of its properties in good repair, working order and
condition and from time to time make all necessary repairs, renewals,
replacements, betterments and improvements thereto, so that the business carried
on in connection therewith may be properly conducted at all times.
Section 6.10. NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE
DEVELOPMENTS. Borrower promptly will notify Lender upon the occurrence of: (a)
any Event of Default; (b) any event that, with the giving of notice or lapse of
time, or both, could constitute an Event of Default; (c) any event, development
or circumstance whereby the financial statements previously furnished to Lender
fail in any material respect to present fairly, in accordance with GAAP, the
financial condition and operational results of Borrower; (d) any judicial,
administrative or arbitration proceeding pending against Borrower, and any
19
judicial or administrative proceeding known by Borrower to be threatened against
it which, if adversely decided, could adversely affect its condition (financial
or otherwise) or operations (current or prospective) or which may expose
Borrower to uninsured liability of $100,000 or more; (e) any default claimed by
any creditor other than Lender for Borrowed Money of Borrower in excess of
$100,000; and (f) any other development in the business or affairs of Borrower
which may result in a Material Adverse Effect; in each case describing the
nature of the event or development. In the case of notification under clauses
(a) and (b), Borrower should set forth the action Borrower proposes to take with
respect to such event.
Section 6.11. EMPLOYEE BENEFIT PLANS. Borrower will (a) comply
with the funding requirements of ERISA with respect to the Plans for its
employees, or will promptly satisfy any accumulated funding deficiency that
arises under Section 302 of ERISA; (b) furnish Lender, promptly after filing the
same, with copies of all reports or other statements filed with the United
States Department of Labor, the Pension Benefit Guaranty Corporation, or the
Internal Revenue Service with respect to all Plans, or which Borrower, or any
member of a Controlled Group, may receive from such Governmental Authority with
respect to any such Plans, and (c) promptly advise Lender of the occurrence of
any Reportable Event or Prohibited Transaction with respect to any such Plan and
the action which Borrower proposes to take with respect thereto. Borrower will
make all contributions when due with respect to any multi-employer pension plan
in which it participates and will promptly advise Lender: (x) upon its receipt
of notice of the assertion against Borrower of a claim for withdrawal liability;
(y) upon the occurrence of any event that could trigger the assertion of a claim
for withdrawal liability against Borrower; and (z) upon the occurrence of any
event that would place Borrower in a Controlled Group as a result of which any
member (including Borrower) thereof may be subject to a claim for withdrawal
liability, whether liquidated or contingent.
Section 6.12. FINANCING STATEMENTS. Borrower shall provide to
Lender evidence satisfactory to Lender as to the due recording of termination
statements, releases of collateral, and Forms UCC-3, and shall cause to be
recorded financing statements on Form UCC-1, duly executed by Borrower and
Lender, in all places necessary to release all existing security interests and
other Liens in the Collateral (other than as permitted by this Agreement) and to
perfect and protect Lender's first priority Lien and security interest in the
Collateral, as Lender may request.
Section 6.13. FINANCIAL RECORDS. Borrower shall keep current and
accurate books of records and accounts in which full and correct entries will be
made of all of its business transactions, and will reflect in its financial
statements adequate accruals and appropriations to reserves, all in accordance
with GAAP.
Section 6.14. COLLECTION OF ACCOUNTS. Borrower shall continue to
collect its Accounts in the ordinary course of business.
Section 6.15. PLACES OF BUSINESS. Borrower shall give thirty (30)
days' prior written notice to Lender of any change in the location of any of its
places of business, of the places where its records concerning its Accounts are
kept, of the places where the Collateral is kept, or of the establishment of any
new, or the discontinuance of any existing, places of business.
Section 6.16. BUSINESS CONDUCTED. Borrower shall continue in the
business currently conducted by it using its best efforts to maintain its
customers and goodwill. Borrower shall not engage, directly or indirectly, in
any line of business substantially different from the business conducted by it
immediately before the Closing Date, or engage in business or lines of business
which are not reasonably related thereto.
Section 6.17. LITIGATION AND OTHER PROCEEDINGS. Borrower shall give
prompt notice to Lender of any litigation, arbitration, or other proceeding
before any Governmental Authority against or affecting Borrower if the amount
claimed is more than $100,000.
Section 6.18. [INTENTIONALLY DELETED]
Section 6.19. SUBMISSION OF COLLATERAL DOCUMENTS. Borrower will, on
demand of Lender, make available to Lender copies of shipping and delivery
receipts evidencing the shipment of goods that gave rise to an Account, records,
insurance verification forms, assignment of benefits, in-take forms or other
proof of the satisfactory performance of services that gave rise to an Account,
a copy of the claim or invoice for each Account and copies of any written
contract or order from which the Account arose. Borrower shall promptly notify
Lender if an Account becomes evidenced or secured by an instrument or chattel
paper and upon request of Lender, will promptly deliver any such instrument or
chattel paper to Lender.
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Section 6.20. LICENSURE. Borrower will maintain all licenses
necessary to conduct its business as currently conducted, and take any steps
required to comply with any such new or additional requirements that may be
mposed on Borrower.
Section 6.21. OFFICER'S CERTIFICATES. Together with the monthly
financial statements delivered pursuant to clause (c) of Section 6.1, and
together with the audited annual financial statements delivered pursuant to
clause (f) of that Section, Borrower shall deliver to Lender a certificate of
its chief financial officer, in form and substance satisfactory to Lender:
(a) Setting forth the information (including detailed
calculations) required to establish whether Borrower is in compliance with the
requirements of Articles VI and VII as of the end of the period covered by the
financial statements then being furnished; and
(b) Stating that such officer has reviewed the relevant terms
of this Agreement, and has made (or caused to be made under such officer's
supervision) a review of the transactions and conditions of Borrower from the
beginning of the accounting period covered by the income statements being
delivered to the date of the certificate, and that such review has not disclosed
the existence during such period of any fact, event or circumstance that
constitutes an Event of Default or that is then, or with the passage of time or
giving of notice or both, could become an Event of Default, and if any such
condition or event existed during such period or now exists, specifying the
nature and period of existence thereof and what action Borrower has taken or
proposes to take with respect thereto.
Section 6.22. [INTENTIONALLY DELETED]
Section 6.23. TERMINATION/DEFAULT OF CONTRACTS. Borrower shall
notify Lender of any (a) default or event of default under, (b) termination of,
or (c) failure of any party to renew, any of Borrower's contracts (unless the
default or event of default under, termination of or failure to renew such
contract, as the case may be, could not reasonably be expected to have an
adverse effect on Borrower, including, without limitation, on Borrower's
business, the Collateral or the Loan hereunder) as soon as reasonably possible
(other than with respect to any notice of default, termination or failure to
renew that originates with Borrower, which notice shall be sent concurrently to
Lender). Notwithstanding anything in this Section 6.23 to the contrary, no
provision in this Section 6.23 shall modify, reduce or otherwise affect Lender's
rights hereunder or under any other Loan Document.
Section 6.24. COMPLIANCE WITH REQUIREMENTS OF PROSPECTIVE
TRANSFEREE. Borrower shall do anything reasonably necessary to comply with the
requirements of any prospective transferee or servicer of the Loan, in order to
enable Lender or such transferee to sell, transfer, deliver, assign, securitize
or grant a participation in the Loan; provided, however, that Borrower shall not
be required to do anything that has the effect of changing the essential
economic terms of this Agreement.
Section 6.25. CAPITAL ADEQUACY AND OTHER ADJUSTMENTS. In the event
that Lender shall have determined that the adoption after the date hereof of any
law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by Lender or any corporation controlling Lender with any request
or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or governmental
agency or body having jurisdiction does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by
Lender or any corporation controlling Lender and thereby reducing the rate of
return on Lender's or such corporation's capital as a consequence of its
obligations hereunder, then Borrower shall from time to time within fifteen (15)
days after notice and demand from Lender pay to Lender additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by such Lender to Borrower shall, absent manifest error, be final,
conclusive and binding for all purposes.
Section 6.26. TAXES.
(a) No Deductions. Any and all payments or reimbursements made
under the Loan Documents shall be made free and clear of and without deduction
for any and all taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto of any nature whatsoever imposed by any
taxing authority, excluding such taxes to the extent imposed on Lender's net
income by the jurisdiction in which Lender is organized. If Borrower shall be
21
required by law to deduct any such amounts from or in respect of any sum payable
hereunder to Lender, then the sum payable hereunder shall be increased as may be
necessary so that, after making all required deductions, Lender receives an
amount equal to the sum it would have received had no such deductions been made.
(b) Changes in Tax Laws. In the event that, subsequent to the
initial advance under the Loan, (1) any changes in any existing law, regulation,
treaty or directive or in the interpretation or application thereof, (2) any new
law, regulation, treaty or directive enacted or any interpretation or
application thereof, or (3) compliance by Lender with any request or directive
(whether or not having the force of law) from any governmental authority, agency
or instrumentality:
(A) does or shall subject Lender to any tax of
any kind whatsoever with respect to this Agreement or the other Loan Documents,
or change the basis of taxation of payments to Lender of principal, fees,
interest or any other amount payable hereunder (except for net income taxes, or
franchise taxes imposed in lieu of net income taxes, imposed generally by
federal, state or local taxing authorities with respect to interest or
commitment fees or other fees payable hereunder or changes in the rate of tax on
the overall net income of Lender); or
(B) does or shall impose on Lender any other
condition or increased cost in connection with the transactions
contemplated hereby or participations herein;
and the result of any of the foregoing is to increase the cost to Lender of
making or continuing the Loan hereunder, as the case may be, or to reduce any
amount receivable hereunder, then, in any such case, Borrower shall promptly pay
to Lender, upon its demand, any additional amounts necessary to compensate
Lender, on an after-tax basis, for such additional cost or reduced amount
receivable, as determined by Lender with respect to this Agreement or the other
Loan Documents. If Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify Borrower of the event by
reason of which Lender has become so entitled. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
Lender to Borrower shall, absent manifest error, be final, conclusive and
binding for all purposes.
Section 6.27. FURTHER DOCUMENTATION. In the event any further
documentation or information is (a) reasonably required by Lender or any
prospective transferee in connection with selling, transferring, delivering,
assigning, securitizing or granting a participation in the Loan (or transferring
the servicing of the Loan), or (b) deemed reasonably necessary or appropriate by
Lender in the exercise of its rights under the Loan Documents or to correct
patent mistakes in the Loan Documents, materials relating to mortgagee's land
title insurance or the funding of the Loan, Borrower shall provide, or cause to
be provided to Lender, at Borrower's cost and expense, such documentation or
information. Borrower shall execute and deliver to Lender and/or the prospective
transferee or servicer such documentation, including, without limitation, any
amendments, corrections, deletions or additions to the Loan Documents as is
required by Lender and/or the prospective transferee; provided, however, that
Borrower shall not be required to do anything that has the effect of changing
the essential economic terms of the Loan set forth in the Loan Documents.
Section 6.28. POST-CLOSING OBLIGATIONS. Borrower shall cause to be
performed and completed, to Lender's satisfaction, all of the obligations set
forth on SCHEDULE 6.28 hereto within the time periods set forth on SCHEDULE
6.28.
ARTICLE VII
NEGATIVE COVENANTS
Each entity comprising Borrower covenants and agrees that so long as
Borrower may borrow under this Agreement and until payment in full of the Note
and performance of all other obligations of Borrower under the Loan Documents:
Section 7.1. BORROWING. Borrower will not create, incur, assume or
suffer to exist any liability for Borrowed Money except: (a) indebtedness to
Lender; (b) accounts payable to trade creditors and current operating expenses
(other than for borrowed money) which are not aged more than one hundred twenty
(120) days from the billing date or more than thirty (30) days from the due
date, in each case incurred in the ordinary course of business and paid within
22
such time period, unless the same are being contested in good faith and by
appropriate and lawful proceedings, and Borrower shall have set aside such
reserves, if any, with respect thereto as are required by GAAP and deemed
adequate by Borrower and its independent accountants; (c) borrowings incurred in
the ordinary course of its business and not exceeding $1,000,000 in the
aggregate outstanding at any one time; (d) indebtedness secured by Permitted
Liens; and (e) indebtedness used by Borrower to refinance the Vermont Property
(as defined in Section 7.3(b) below), subject to the terms and conditions of
Section 7.3(b). Borrower will not make prepayments on any existing or future
indebtedness for Borrowed Money to any Person (other than Lender, to the extent
permitted by this Agreement or any subsequent agreement between Borrower and
Lender).
Section 7.2. JOINT VENTURES. Borrower will not invest directly or
indirectly in any joint venture for any purpose without the prior written notice
to, and the prior written consent of, Lender, which consent shall not be
unreasonably withheld.
Section 7.3. NO LIENS, ENCUMBRANCES OR DISPOSITION OF THE
COLLATERAL OR REAL PROPERTY.
(a) Lender does not authorize, and Borrower agrees not to: (i)
create, incur, assume or suffer to exist any mortgage, pledge, Lien or other
encumbrance of any kind (including the charge upon property purchased under a
conditional sale or other title retention agreement) upon, or any security
interest in, any of its Collateral, whether now owned or hereafter acquired,
except for Permitted Liens; (ii) make any sale or leases of any of the
Collateral; or (iii) license any of the Collateral.
(b) Lender does not authorize, and Borrower agrees not to: (i)
create, incur, assume or suffer to exist any mortgage, pledge, Lien or other
encumbrance of any kind (including the charge upon property purchased under a
conditional sale or other title retention agreement) upon, or any security
interest in the real property located in South Burlington, Vermont which serves
as the corporate headquarters of Borrower and owned by Borrower (the "VERMONT
PROPERTY"); or (ii) make any sale or leases of the Vermont Property; PROVIDED,
HOWEVER, that in the event Borrower desires to mortgage, pledge or otherwise
encumber the Vermont Property in connection with a third-party refinancing
thereof, and such refinancing terms are at arms' length and consistent with
current market terms and conditions, as determined by Lender in its commercially
reasonable discretion, and provided there is no default under any of the Loan
Documents, then Lender will execute an amendment to this Agreement terminating
all negative covenants with respect to the Vermont Property.
Section 7.4. RESTRICTION ON FUNDAMENTAL CHANGES; NO CHANGE IN
OPERATION OR CONTROL. Borrower will not: (a) enter into any transaction of
merger or consolidation, other than internal reorganizations that do not change
the beneficial ownership of Accounts or Borrower's other assets; (b) liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution); (c)
convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any of its assets, or the capital stock
of any subsidiary of Borrower, whether now owned or hereafter acquired; or (d)
acquire by purchase or otherwise all or any substantial part of the business or
assets of, or stock or other evidence of beneficial ownership of, any Person.
Borrower agrees that compliance with this Section 7.4 is a material inducement
to Lender's advancing credit under this Agreement and Borrower further agrees
that any breach of the terms of this Section 7.4 shall constitute fraud.
Borrower further agrees that in addition to all other remedies available to
Lender, Lender shall be entitled to specific enforcement of the covenants in
this Section 7.4, including injunctive relief.
Section 7.5. SALE AND LEASEBACK. Borrower will not, directly or
indirectly, enter into any arrangement whereby Borrower sells or transfers all
or any part of its assets and thereupon and within one year thereafter rents or
leases the assets so sold or transferred without prior written notice to and the
prior written consent of Lender, which consent shall not be unreasonably
withheld.
Section 7.6. DISTRIBUTIONS AND MANAGEMENT FEES. Borrower shall not
make any Distributions (as defined below) to any of its Affiliates, to any
shareholder, member, partner or other person holding an equity interest in
Borrower or to any other Person related to or affiliated with any of the
foregoing, if an Event of Default has occurred and is continuing, or if, as a
result of such Distribution, an Event of Default would occur or would be likely
to occur. "DISTRIBUTIONS" shall mean management fees, salaries or other fees or
compensation, lease or rental payments, repayments of or debt service on loans
or other indebtedness, dividends or other distributions with respect to any of
its stock, partnership or membership interests (as the case may be) now or
hereafter outstanding, the purchase, redemption or other acquisition for value
of any of its stock, partnership or membership interests (as the case may be)
now or hereafter outstanding, or the return of any capital of its stockholders,
partners or members. Notwithstanding the foregoing, whether or not an Event of
Default has occurred, Borrower may pay reasonable salaries consistent with
23
Borrower's past practices to employees, officers or directors of Borrower, and
may reimburse employees, officers or directors of Borrower for reasonable
expenses and other payments made in the ordinary course of business.
Section 7.7. LOANS. Borrower will not make loans or advances to any
Person, other than (a) trade credit extended in the ordinary course of its
business, and (b) advances for business travel and similar temporary advances
made in the ordinary course of business to officers, stockholders, directors,
and employees.
Section 7.8. CONTINGENT LIABILITIES. Borrower will not assume,
guarantee, endorse, contingently agree to purchase or otherwise become liable
upon the obligation of any Person, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
Section 7.9. SUBSIDIARIES. Borrower will not form any subsidiary,
or make any investment in or any loan in the nature of an investment to
(excluding any short-term marketable securities and cash-like equivalents), any
other Person without the written consent of Lender, which consent shall not be
unreasonably withheld.
Section 7.10. COMPLIANCE WITH ERISA. Borrower will not permit with
respect to any Plan covered by Title IV of ERISA any Prohibited Transaction or
any Reportable Event.
Section 7.11. FINANCIAL COVENANTS.
(a) Definitions. For purposes of this Section 7.11, the
following terms shall have the meanings set forth below, and all of which shall
be determined by Lender in its sole credit judgment:
"Capital Expenditures" shall mean, for any period,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during such period and excluding that portion of Capital Leases
(except any cash down payment) which is capitalized on the consolidated balance
sheet of the Borrower) net of cash amounts received by the Borrowers from other
Persons during such period in reimbursement of Capital Expenditures made by
Borrower, excluding interest capitalized during construction by Borrower during
such period, that, in conformity with GAAP, are required to be included in or
reflected by the property, plant, equipment or intangibles or similar fixed
asset accounts reflected in the consolidated balance sheet of Borrower
(including equipment which is purchased simultaneously with the trade-in of
existing equipment owned by any Borrower to the extent of the gross amount of
such purchase price less the book value of the equipment being traded in at such
time), but excluding expenditures made in connection with the replacement or
restoration of assets, to the extent reimbursed or financed from insurance
proceeds paid on account of the loss of or the damage to the assets being
replaced or restored, or from awards of compensation arising from the taking by
condemnation or eminent domain of such assets being replaced.
"Capital Lease" means any lease of any property
(whether real, personal or mixed) that, in conformity with
GAAP, should be accounted for as a capital lease.
"EBITDA" means, for any period, without
duplication, the total of the following for Borrower, on a consolidated basis,
each calculated for such period: (i) net income determined in accordance with
GAAP, PLUS (ii) to the extent included in the calculation of net income, the sum
of (A) income and franchise taxes paid or accrued, (B) interest expenses, net of
interest income, paid or accrued, (C) amortization and depreciation and (D)
other non-cash charges (excluding accruals for cash expenses made in the
ordinary course of business), LESS (iii) to the extent included in the
calculation of net income, the sum of (A) the income of any Person in which any
Borrower has a direct or indirect ownership interest, except to the extent such
income is received by such Borrower in a cash distribution during such period;
(B) gains or losses from sales or other dispositions of assets (other than
inventory in the normal course of business); and (C) extraordinary or
non-recurring gains and non-recurring losses.
"Indebtedness", as applied to any Person, means,
without duplication: (i) all indebtedness for Borrowed Money, (ii) obligations
under leases which in accordance with GAAP constitute Capital Leases, (iii)
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for Borrowed Money, (iv) any obligation owed for
all or any part of the deferred purchase price of property or services if the
purchase price is due more than six (6) months from the date the obligation is
incurred or is evidenced by a note or similar written instrument, (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person, regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is non-recourse to the credit of that Person, (vi)
obligations in respect of any letters of credit, and (vii) any advances under
24
any factoring arrangement.
"Intangible Assets" means all intangible assets
(determined in accordance with GAAP) including, without limitation, goodwill,
intellectual property, licenses, organizational costs, deferred amounts and
covenants not to compete.
"Net Cash Flow" means, for any period, (i) EBITDA,
LESS (ii) Capital Expenditures, LESS (iii) amounts owed
in respect of principal (excluding repayment of Revolving Credit Loans) and
interest payments (net of interest income) for Indebtedness. For purposes of
calculating Net Cash Flow, EBITDA shall include a prorated expense for the
accrued but unpaid Corporate Performance Incentive Bonus in each fiscal quarter.
"Tangible Net Worth" means assets (excluding
Intangible Assets) LESS liabilities.
(b) Net Worth. Borrower, on a consolidated basis and
at the end of each calendar quarter, shall not at any time during the Term
permit its Tangible Net Worth to fall below the amounts set forth below:
Quarter Amount
------- ------
Closing Date $180,000,000
June 30, 2002 $181,000,000
September 30, 2002 $184,000,000
December 31, 2002 $186,000,000
March 31, 2003 $190,000,000
June 30, 2003 $193,000,000
September 30, 2003 $197,000,000
December 31, 2003 $202,000,000
March 31, 2004 $210,000,000
June 30, 2004 $215,000,000
September 30, 2004 $224,000,000
December 31, 2004 $233,000,000
March 31, 2005 $240,000,000
(c) Indebtedness to EBITDA Ratio. Borrower, on a consolidated
basis, shall not permit the ratio of (i) Indebtedness of Borrower, on a
consolidated basis, to (ii) EBITDA of Borrower, on a consolidated basis, each
calculated as of the last day of each fiscal quarter set forth below, to be
greater than the ratio set forth below for such period:
Quarter Ratio for Rolling Twelve Months
------- -------------------------------
June 30, 2002 1.85
September 30, 2002 1.75
December 31, 2002 1.50
March 31, 2003 1.35
June 30, 2003 1.35
September 30, 2003 1.35
December 31, 2003 1.35
March 31, 2004 1.35
June 30, 2004 1.35
September 30, 2004 1.35
December 31, 2004 1.35
March 31, 2005 1.35
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(d) Minimum Net Cash Flow. Borrower, on a consolidated
basis and at the end of each calendar quarter, shall not at any time during the
Term permit its Net Cash Flow to fall below the amounts set forth below:
Quarter Amount
------- ------
June 30, 2002 ($ 750,000)
September 30, 2002 $ 750,000
December 31, 2002 $1,000,000
March 31, 2003 $5,000,000
June 30, 2003 $5,000,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
March 31, 2004 $5,000,000
June 30, 2004 $5,000,000
September 30, 2004 $5,000,000
December 31, 2004 $5,000,000
March 31, 2005 $5,000,000
(e) Capital Expenditure Limits. Borrower, on a
consolidated basis and at the end of each calendar year, shall not at any time
during the Term permit its Capital Expenditures to be greater than the amounts
set forth below:
Year Amount
---- ------
2002 $33,000,000
2003 $22,000,000
2004 $27,500,000
To the extent Borrower does not reach the Capital Expenditure limit in Year 2002
or Year 2003, Borrower shall be permitted to increase Capital Expenditures in
Year 2003 and Year 2004, respectively, by the amount of such "unused" Capital
Expenditures for the prior year. For example, if Borrower incurs Capital
Expenditures of $30,000,000 in Year 2002, then Borrower shall be permitted to
incur Capital Expenditures of $25,000,000 in Year 2003.
Section 7.12. TRANSACTIONS WITH AFFILIATES. Borrower will not enter
into any transaction, including, without limitation, the purchase, sale, or
exchange of property, or the loaning or giving of funds to any Affiliate or
subsidiary, except in the ordinary course of business and pursuant to the
reasonable requirements of Borrower's business and upon terms substantially the
same and no less favorable to Borrower as it would obtain in a comparable arm's
length transaction with any Person not an Affiliate or subsidiary, and so long
as the transaction is not otherwise prohibited under this Agreement. For
purposes of the foregoing, Lender consents to the transactions described on
SCHEDULE 7.12.
Section 7.13. USE OF LENDER'S NAME. Neither party will not use the
other party's name (or the name of any of such party's affiliates) in connection
with any of its business operations. Neither party will permit its Affiliates
to, in the future, issue any press release or other public disclosure using the
name of the other party (and for Lender, such parties shall include General
Electric Capital Corporation or any of their respective Affiliates) or referring
to this Agreement or the other Loan Documents without at least two (2) Business
Days prior written notice to such other party and without the prior written
consent of such party unless (and only to the extent that) the requesting party
or its Affiliate is required to so disclose under law and then, in any event,
such party or Affiliate will consult with the other party before issuing such
press release or other public disclosure. Borrower consents to the publication
by Lender of a tombstone or similar advertising material relating to the
financing transactions contemplated by this Agreement. Borrower may disclose to
third parties that Borrower has a borrowing relationship with Lender. Nothing
contained in this Agreement is intended to permit or authorize Borrower to make
any contract on behalf of Lender.
26
Section 7.14. CHANGE IN CAPITAL STRUCTURE. Without Lender's prior
written consent, (a) there shall occur no change in the legal or beneficial
ownership of the capital stock, partnership interests or membership interests,
or in the capital structure, of Borrower (other than IDX Systems Corporation) or
any Guarantor, from that set forth on SCHEDULE 4.17, (b) there shall occur no
pledge, assignment or hypothecation of or Lien or encumbrance on any of the
legal or beneficial equity interests in the Borrower (other than IDX Systems
Corporation) or any Guarantor, and (c) Borrower shall not consent to or
acknowledge any of the transactions described in the foregoing subparts (a) and
(b) of this sentence. IDX Systems Corporation will at all times remain a
publicly held company.
Section 7.15. CONTRACTS AND AGREEMENTS. Borrower will not become
or be a party to any contract or agreement which would breach this Agreement, or
breach any other instrument, agreement, or document to which Borrower is a party
or by which it is or may be bound.
Section 7.16. MARGIN STOCK. Borrower will not carry or purchase
any "margin security" within the meaning of Regulations U, T or X of the Board
of Governors of the Federal Reserve System.
Section 7.17. TRUTH OF STATEMENTS AND CERTIFICATES. Borrower will
not furnish to Lender any certificate or other document that contains any untrue
statement of a material fact or that omits to state a material fact necessary to
make it not misleading in light of the circumstances under which it was
furnished.
Section 7.18. CONFIDENTIALITY. Borrower will not disclose the
contents of this Loan Agreement and the other Loan Documents to any third party
(including, without limitation, any financial institution or intermediary)
without Lender's prior written consent, other than to Borrower's officers and
advisors on a need-to-know basis. Borrower agrees to inform all such persons who
receive information concerning this Agreement that such information is
confidential and may not be disclosed to any other person.
Section 7.19. Certain Fundamental Changes. Borrower will not,
without providing Lender with thirty (30) days' prior written notice, change
the state of its formation or change its legal name.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1. EVENTS OF DEFAULT. Each of the following
(individually, an "EVENT OF DEFAULT" and collectively, the "EVENTS OF
DEFAULT") shall constitute an event of default under this Agreement:
(a) A default in the payment of any principal of, or interest
upon, the Note when due and payable, whether at maturity or otherwise, or any
breach of Section 2.3, which default or breach, as applicable, shall have
continued unremedied for a period of five (5) days after written notice of the
default or breach from Lender to Borrower;
(b) A default in the payment of any other charges, fees, or
other monetary obligations in excess of $5,000 owing to Lender arising out of or
incurred in connection with this Agreement when such payment is due and payable,
which default shall have continued unremedied for a period of five (5) days
after written notice of the default from Lender to Borrower;
(c) A default in the due observance or performance by Borrower
or any Guarantor of the Obligations or any other term, covenant or agreement
contained in any of the Loan Documents, which default shall have continued
unremedied for a period of ten (10) days after written notice of the default
from Lender to Borrower;
(d) Any representation or warranty made by Borrower in this
Agreement or in any of the other Loan Documents, any financial statement, or any
statement or representation made in any other certificate, report or opinion
delivered in connection with this Agreement or the other Loan Documents proves
to have been incorrect or misleading in any material respect when made;
(e) Any obligation of Borrower (other than its Obligations
under this Agreement) for the payment of Borrowed Money in excess of $100,000 is
not paid when due or within any applicable grace period, or such obligation
becomes or is declared to be due and payable before the expressed maturity of
27
the obligation, or there shall have occurred an event that, with the giving of
notice or lapse of time, or both, would cause any such obligation to become, or
allow any such obligation to be declared to be, due and payable;
(f) Borrower makes an assignment for the benefit of creditors,
offers a composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter conducted by
Borrower;
(g) Borrower or any Guarantor (i) files a petition in
bankruptcy, (ii) is adjudicated insolvent or bankrupt, petitions or applies to
any tribunal for any receiver of or any trustee for itself or any substantial
part of its property, (iii) commences any proceeding relating to itself under
any reorganization, arrangement, readjustment or debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect, or any such proceeding is commenced against Borrower or any Guarantor
and such proceeding remains undismissed for a period of sixty (60) days, (iv) by
any act indicates its consent to, approval of, or acquiescence in, any such
proceeding or the appointment of any receiver of or any trustee for a Borrower
or any Guarantor or any substantial part of its property, or suffers any such
receivership or trusteeship to continue undischarged for a period of sixty (60)
days, or (v) admits in writing its inability to pay its debts as they become
due;
(h) One or more (i) final judgments against Borrower or
attachments against its property in excess of $100,000 shall be rendered by a
court, arbitrator, arbitration panel, mediator or any individual(s) or entity
with the authority to issue binding judgments against Borrower or (ii) final
settlements by or on behalf of Borrower of any pending litigation, arbitration
or other claim or otherwise disputed matter, in any event not fully and
unconditionally covered by insurance, shall remain unpaid, unstayed on appeal,
undischarged, unbonded and undismissed for a period of ten (10) days;
(i) A Reportable Event that might constitute grounds for
termination of any Plan covered by Title IV of ERISA or for the appointment by
the appropriate United States District Court of a trustee to administer any such
Plan or for the entry of a Lien or encumbrance to secure any deficiency, has
occurred and is continuing thirty (30) days after its occurrence, or any such
Plan is terminated, or a trustee is appointed by an appropriate United States
District Court to administer any such Plan, or the Pension Benefit Guaranty
Corporation institutes proceedings to terminate any such Plan or to appoint a
trustee to administer any such Plan, or a Lien or encumbrance is entered to
secure any deficiency or claim;
(j) There shall occur any uninsured damage to or loss,
theft or destruction of any portion of the Collateral that exceeds $100,000 in
the aggregate;
(k) Borrower breaches or violates the terms of, or a default
or any fact, event or circumstance that could, whether with notice or the
passage of time, or both, constitute a default causing a Material Adverse
Effect, occurs under any other existing or future agreement (related or
unrelated) between Borrower and Lender;
(l) Upon the issuance of any execution or distraint
process against Borrower or any of its property or assets;
(m) Borrower ceases any material portion of its business
operations as currently conducted;
(n) Any indication or evidence is received by Lender that
Borrower may have directly or indirectly been engaged in any type of activity
which, in Lender's discretion, may result in the forfeiture of any property of
Borrower to any Governmental Authority, which default shall have continued
unremedied for a period of ten (10) days after written notice from Lender;
(o) Borrower or any Affiliate of Borrower, shall challenge or
contest, in any action, suit or proceeding, the validity or enforceability of
this Agreement, or any of the other Loan Documents, the legality or the
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Lender;
(p) Borrower shall be criminally indicted or convicted
under any law that could lead to a forfeiture of any Collateral;
(r) There shall occur a material adverse change in the
financial condition or business prospects of Borrower, or if Lender in good
faith deems itself insecure as a result of acts or events bearing upon the
28
financial condition of Borrower or the repayment of the Note, which default
shall have continued unremedied for a period of ten (10) days after written
notice from Lender; or
(s) An event of default occurs under any of the
Affiliated Loan Documents.
Notwithstanding the foregoing, Borrower's failure to comply with any same
provision of this Agreement two (2) times in any twelve (12) month period shall
effect an immediate Event of Default (without the expiration of any applicable
cure period) with respect to all subsequent failures by Borrower to comply with
such provision of this Agreement, and Lender thereupon may exercise any remedy
set forth in this Article VIII without affording Borrower any opportunity to
cure such Event of Default. All cure periods provided for in this Section shall
run concurrently with any cure period provided for in any applicable Loan
Documents under which the default occurred.
If any right or privilege of the Borrower herein, or any consent of Lender
herein, is conditioned upon the absence of an Event of Default, such right,
privilege or consent shall be construed as being conditioned upon the absence of
an Event of Default as well as the absence of any fact, event or circumstance
that, with the passage of time, or the giving of notice, or both, could
constitute an Event of Default.
Section 8.2. ACCELERATION. Upon the occurrence of any of the
foregoing Events of Default, the Obligations under the Note shall become and be
immediately due and payable upon declaration to that effect delivered by Lender
to Borrower; provided that, upon the happening of any event specified in Section
8.1(g),all Obligations including, without limitation, the Termination Fee, shall
be immediately due and payable without declaration or other notice to Borrower.
Section 8.3. REMEDIES.
(a) Upon the occurrence of and during the continuance of an
Event of Default under this Agreement or the other Loan Documents, Lender, in
addition to all other rights, options, and remedies granted to Lender under this
Agreement or at law or in equity, may take any of the following steps (which
list is given by way of example and is not intended to be an exhaustive list of
all such rights and remedies):
(i) Terminate the Loan, whereupon all
outstanding Obligations (including, without limitation, the Termination
Fee) shall be immediately due and payable;
(ii) Exercise all other rights granted to it
under this Agreement and all rights under the UCC in effect in the
applicable jurisdiction(s) and under any other applicable law; and
(iii) Exercise all rights and remedies under all
Loan Documents now or hereafter in effect, including, without limitation:
(A) The right to take possession of,
send notices regarding, and collect directly the Collateral, with or
without judicial process;
(B) The right to (by its own means or
with judicial assistance) enter any of Borrower's premises and take
possession of the Collateral, or render it unusable, or dispose of the
Collateral on such premises in compliance with subsection (C) below, without any
liability for rent, storage, utilities, or other sums, and Borrower shall not
resist or interfere with such action;
(C) The right to require Borrower at
Borrower's expense to assemble all or any part of the Collateral and make it
available to Lender at any place designated by Lender;
(D) The right to reduce the Maximum
Loan Amount or to use the Collateral and/or funds in the Concentration Account
in amounts up to the Maximum Loan Amount for any reason; and
(E) The right to enforce Borrower's
rights against Account Debtors and other obligors, including, without
limitation, the right to collect Accounts directly in Lender's own name and to
charge the collection costs and expenses, including attorneys' fees, to
Borrower.
29
(b) Borrower agrees that a notice received by it at least
fifteen (15) days before the time of any intended public sale, or the time after
which any private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition. If
permitted by applicable law, any perishable Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to Borrower. At any sale or
disposition of Collateral, Lender may (to the extent permitted by applicable
law) purchase all or any part of the Collateral, free from any right of
redemption by Borrower, which right is hereby waived and released. Borrower
covenants and agrees not to interfere with or impose any obstacle to Lender's
exercise of its rights and remedies with respect to the Collateral. Lender shall
have no obligation to clean-up or otherwise prepare the Collateral for sale.
Lender may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered to adversely affect the commercial reasonableness of any sale of the
Collateral. Lender may sell the Collateral without giving any warranties as to
the Collateral. Lender may specifically disclaim any warranties of title or the
like. This procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral. If Lender sells any of the
Collateral upon credit, Borrower will be credited only with payments actually
made by the purchaser, received by Lender and applied to the indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral, Lender
may resell the Collateral and Borrower shall be credited with the proceeds of
the sale.
(c) Lender shall have no obligation to marshal any assets in
favor of Borrower, or against or in payment of the Note, any of the other
Obligations or any other obligation owed to Lender by Borrower or any other
person.
Section 8.4. NATURE OF REMEDIES. Lender shall have the right to
proceed against all or any portion of the Collateral to satisfy in any order (a)
the liabilities and Obligations of Borrower or any of its subsidiaries or
Affiliates to Lender or any Affiliate of Lender under this Agreement or any
other loan documents evidencing financings provided to Borrower or (b) the
liabilities and obligations of Borrower, any Guarantor and their respective
Affiliates to Lender under the Affiliated Loan Documents. All rights and
remedies granted Lender under this Agreement and under any agreement referred to
in this Agreement, or otherwise available at law or in equity, shall be deemed
concurrent and cumulative, and not alternative remedies, and Lender may proceed
with any number of remedies at the same time until the Loan, and all other
existing and future liabilities and obligations of Borrower to Lender, are
satisfied in full. The exercise of any one right or remedy shall not be deemed a
waiver or release of any other right or remedy, and Lender, upon the occurrence
of an Event of Default, may proceed against Borrower, and/or the Collateral, at
any time, under any agreement, with any available remedy and in any order. All
sums received from Borrower and/or the Collateral in respect of the Loan may be
applied by Lender to the any other liabilities and obligations of Borrower under
the Loan Documents and the Affiliated Loan Documents in such order of
application and in such amounts as Lender shall deem appropriate in its sole and
absolute discretion. Borrower waives any right it may have to require Lender to
pursue any Person for any of the Obligations.
ARTICLE IX
MISCELLANEOUS
Section 9.1. EXPENSES AND TAXES.
(a) Borrower agrees to pay, whether or not the Closing occurs,
a reasonable documentation preparation fee, together with actual legal, audit
and appraisal fees and all other out-of-pocket charges and expenses incurred by
Lender in connection with the negotiation, preparation, legal review and
execution of each of the Loan Documents, including, without limitation, UCC and
judgment lien searches and UCC filings and fees for post-Closing UCC and
judgment lien searches. In addition, Borrower shall pay all such fees associated
with any amendments, modifications and terminations to the Loan Documents
following Closing. If Lender uses in-house counsel for any of these purposes,
Borrower further agrees that its Obligations under the Loan Documents include
reasonable charges for such work commensurate with the fees that would otherwise
be charged by outside legal counsel selected by Lender for the work performed.
Notwithstanding the foregoing, the fees incurred by Lender's in-house counsel in
connection with closing the Loan shall not exceed Thirty Five Thousand Dollars
($35,000), which specifically excludes any outside counsel retained by Lender
and any out-of-pocket legal costs incurred by Lender, including lien and
litigation search fees, UCC financing statements and termination statements, and
the similar fees.
30
(b) Borrower also agrees to pay all out-of-pocket charges and
expenses incurred by Lender (including the fees and expenses of Lender's
counsel) in connection with the enforcement, protection or preservation of any
right or claim of Lender, the termination of this Agreement, the termination of
any Liens of Lender on the Collateral, or the collection of any amounts due
under the Loan Documents. If Lender uses in-house counsel for any of these
purposes (i.e., for any task in connection with the enforcement, protection or
preservation of any right or claim of Lender and the collection of any amounts
due under its Loan Documents), Borrower further agrees that its Obligations
under the Loan Documents include reasonable charges for such work commensurate
with the fees that would otherwise be charged by outside legal counsel selected
by Lender for the work performed.
(c) Borrower shall pay all taxes (other than taxes based upon
or measured by Lender's income or revenues or any personal property tax), if
any, in connection with the issuance of the Note and the recording of the
security documents therefor. The obligations of Borrower under this clause (c)
shall survive the payment of Borrower's indebtedness under this Agreement and
the termination of this Agreement.
Section 9.2. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
other Loan Documents constitute the full and entire understanding and agreement
among the parties with regard to their subject matter and supersede all prior
written or oral agreements, understandings, representations and warranties made
with respect thereto. No amendment, supplement or modification of this Agreement
nor any waiver of any provision thereof shall be made except in writing executed
by the party against whom enforcement is sought.
Section 9.3. NO WAIVER; CUMULATIVE RIGHTS. No waiver by any party
to this Agreement of any one or more defaults by the other party in the
performance of any of the provisions of this Agreement shall operate or be
construed as a waiver of any future default or defaults, whether of a like or
different nature. No failure or delay on the part of any party in exercising any
right, power or remedy under this Agreement, nor acceptance of partial
performance or partial payment, shall operate as a waiver of such right, power
or remedy nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise of such right, power or remedy or
the exercise of any other right, power or remedy. The remedies provided for in
this Agreement are cumulative and are not exclusive of any remedies that may be
available to any party to this Agreement at law, in equity or otherwise.
Section 9.4. NOTICES. Any notice or other communication required or
permitted under this Agreement shall be in writing and personally delivered,
mailed by registered or certified mail (return receipt requested and postage
prepaid), sent by telecopier (with a confirming copy sent by regular mail), or
sent by prepaid overnight courier service, and addressed to the relevant party
at its address set forth below, or at such other address as such party may, by
written notice, designate as its address for purposes of notice under this
Agreement:
(a) If to Lender, at:
-----------------
Heller Healthcare Finance, Inc.
c/o GE Capital Healthcare Financial Services
2 Wisconsin Circle, 4th Floor
Chevy Chase, Maryland 20815
Attention: Pascale Bissainthe, Esq., Chief Counsel
Telephone: (301) 961-1640
Telecopier: (301) 664-9866
(b) If to Borrower, at:
-------------------
c/o IDX Systems Corporation
40 IDX Drive
South Burlington, Vermont 05403
Attention: William F. Grieco, Esquire,
Senior Vice President and
General Counsel
Telephone: (802) 862-1022
Telecopier: (802) 862-6351
If mailed, notice shall be deemed to be given five (5) days after being sent,
and if sent by personal delivery, telecopier or prepaid courier, notice shall be
deemed to be given when delivered.
31
Section 9.5. SEVERABILITY. If any term, covenant or condition of
this Agreement, or the application of such term, covenant or condition to any
party or circumstance shall be found by a court of competent jurisdiction to be,
to any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to the fullest extent permitted by law. Upon determination that any
such term is invalid, illegal or unenforceable, Lender may, but is not obligated
to, advance funds to Borrower under this Agreement until the parties to this
Agreement amend this Agreement so as to effect the original intent of the
parties as closely as possible in a valid and enforceable manner.
Section 9.6. SUCCESSORS AND ASSIGNS. This Agreement, the Note, and
the other Loan Documents shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns and shall bind
all Persons who become bound as a debtor to this Agreement. Notwithstanding the
foregoing, Borrower may not assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of Lender,
which may be withheld in its sole discretion. Lender may sell, assign, transfer,
or participate any or all of its rights or obligations under this Agreement
without notice to or consent of Borrower.
Section 9.7. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one instrument.
Section 9.8. INTERPRETATION. No provision of this Agreement or any
other Loan Document shall be interpreted or construed against any party because
that party or its legal representative drafted that provision. The titles of the
paragraphs of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. Any pronoun used in this
Agreement shall be deemed to include singular and plural and masculine, feminine
and neuter gender as the case may be. The words "herein," "hereof," and
"hereunder" shall be deemed to refer to this entire Agreement, except as the
context otherwise requires.
Section 9.9. SURVIVAL OF TERMS. All covenants, agreements,
representations and warranties made in this Agreement, any other Loan Document,
and in any certificates and other instruments delivered in connection with this
Agreement shall be considered to have been relied upon by Lender and shall
survive the making by Lender of the Loans contemplated by this Agreement and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect until all liabilities and obligations of Borrower to Lender are
satisfied in full.
Section 9.10. RELEASE OF LENDER. For and in consideration of the
Loan and each advance or other financial accommodation hereunder, each Borrower,
voluntarily, knowingly, unconditionally, and irrevocably, with specific and
express intent, for and on behalf of itself and its agents, attorneys, heirs,
successors, and assigns (collectively the "RELEASING PARTIES") does hereby fully
and completely release, acquit and forever discharge Lender, and its successors,
assigns, heirs, affiliates, subsidiaries, parent companies, principals,
directors, officers, employees, shareholders and agents (hereinafter called the
"LENDER PARTIES"), and any other person, firm, business, corporation, insurer,
or association which may be responsible or liable for the acts or omissions of
the Lender Parties, or who may be liable for the injury or damage resulting
therefrom (collectively the "RELEASED PARTIES"), of and from any and all
actions, causes of action, suits, debts, disputes, damages, claims, obligations,
liabilities, costs, expenses and demands of any kind whatsoever, at law or in
equity, whether matured or unmatured, liquidated or unliquidated, vested or
contingent, choate or inchoate, known or unknown that the Releasing Parties (or
any of them) have or may have, against the Released Parties or any of them
(whether directly or indirectly), except to the extent caused by a Lender
Party's gross negligence or willful misconduct. Each Borrower acknowledges that
the foregoing release is a material inducement to Lender's decision to extend to
Borrower the financial accommodations hereunder and has been relied upon by
Lender in agreeing to make the Loan and in making each advance of Loan proceeds
hereunder.
Section 9.11. TIME. Whenever Borrower is required to make any
payment or perform any act on a Saturday, Sunday, or a legal holiday under the
laws of the State of Maryland (or other jurisdiction where Borrower is required
to make the payment or perform the act), the payment may be made or the act
performed on the next Business Day. Time is of the essence in Borrower's
performance under this Agreement and all other Loan Documents.
Section 9.12. COMMISSIONS. The transaction contemplated by this
Agreement was brought about by Lender and Borrower acting as principals and
without any brokers, agents, or finders being the effective procuring cause.
Borrower represents that it has not committed Lender to the payment of any
brokerage fee, commission, or charge in connection with this transaction. If any
such claim is made on Lender by any broker, finder, or agent or other person,
32
Borrower will indemnify, defend, and hold Lender harmless from and against the
claim and will defend any action to recover on that claim, at Borrower's cost
and expense, including Lender's counsel fees. Borrower further agrees that until
any such claim or demand is adjudicated in Lender's favor, the amount demanded
will be deemed a liability of Borrower under this Agreement, secured by the
Collateral.
Section 9.13. THIRD PARTIES. No rights are intended to be created
under this Agreement or under any other Loan Document for the benefit of any
third party donee, creditor, or incidental beneficiary of Borrower. Nothing
contained in this Agreement shall be construed as a delegation to Lender of
Borrower's duty of performance, including, without limitation, Borrower's duties
under any account or contract in which Lender has a security interest.
Section 9.14. DISCHARGE OF BORROWER'S OBLIGATIONS. Lender, in its
sole discretion, shall have the right at any time, and from time to time,
without prior notice to Borrower but only if Borrower fails to do so within the
time permitted, to: (a) obtain insurance covering any of the Collateral as
required under this Agreement; (b) pay for the performance of any of Borrower's
obligations under this Agreement; (c) discharge taxes, Liens, security
interests, or other encumbrances at any time levied or placed on any of the
Collateral in violation of this Agreement unless Borrower is in good faith with
due diligence by appropriate proceedings contesting those items; and (d) pay for
the maintenance and preservation of any of the Collateral. Expenses and advances
shall be added to the Loan, until reimbursed to Lender and shall be secured by
the Collateral. Any such payments and advances by Lender shall not be construed
as a waiver by Lender of an Event of Default.
Section 9.15. INFORMATION TO PARTICIPANTS. Lender may divulge to
any participant it may obtain in the Loan, or any portion of the Loan, all
information, and furnish to such participant copies of reports, financial
statements, certificates, and documents obtained under any provision of this
Agreement or any other Loan Document.
Section 9.16. INDEMNITY. Borrower hereby indemnifies and agrees to
defend (with counsel acceptable to Lender) and hold harmless Lender, its
partners, officers, agents and employees (collectively, "Indemnitee") from and
against any liability, loss, cost, expense (including reasonable attorneys' fees
and expenses for both in-house and outside counsel), claim, damage, suit, action
or proceeding ever suffered or incurred by Lender or in which Lender may ever be
or become involved (whether as a party, witness or otherwise) (a) arising from
Borrower's failure to observe, perform or discharge any of its covenants,
obligations, agreements or duties under this Agreement, (b) arising from the
breach of any of the representations or warranties contained in Article IV of
this Agreement, (c) by reason of this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby, except to the extent resulting from
Lender's gross negligence or willful misconduct, or (d) relating to claims of
any Person with respect to the Collateral. Notwithstanding any contrary
provision in this Agreement, the obligation of Borrower under this Section 9.16
shall survive the payment in full of the Obligations and the termination of this
Agreement.
Section 9.17. APPOINTMENT OF AGENT UNDER THIS AGREEMENT.
(a) Each of the entities comprising Borrower (other than IDX
Systems Corporation) hereby irrevocably appoints and constitutes IDX Systems
Corporation as its agent to request and receive Revolving Credit Loans (and to
otherwise act on behalf of each such entity pursuant to this Agreement and the
other Loan Documents) from Lender in the name or on behalf of each such entity.
Lender may disburse the Revolving Credit Loans to the bank account of any one or
more of such entities without notice to any of the other entities comprising
Borrower or any other Person at any time obligated on or in respect of the
Obligations.
(b) Each of the entities comprising Borrower (other than IDX
Systems Corporation) hereby irrevocably appoints and constitutes IDX Systems
Corporation as its agent to receive statements of account and all other notices
from Lender with respect to the Obligations or otherwise under or in connection
with this Agreement and the other Loan Documents.
(c) No purported termination of the appointment of IDX Systems
Corporation agent shall be effective without the prior written consent of
Lender.
Section 9.18. LENDER APPROVALS. Unless expressly provided herein
to the contrary, any approval, consent, waiver or satisfaction of Lender with
respect to any matter that is the subject of this Agreement, the other Loan
Documents may be granted or withheld by Lender in its sole and absolute
discretion.
33
Section 9.18a. FURTHER ASSURANCES. Borrower hereby agrees that at
any time and from time to time, at the expense of Borrower, Borrower will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or that Lender may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Lender or any of its agents to exercise and enforce
its rights and remedies under this Agreement with respect to any portion of such
collateral.
Section 9.19. CHOICE OF LAW; CONSENT TO JURISDICTION. EXCEPT TO THE
EXTENT THAT THE UCC PROVIDES FOR THE APPLICATION OF THE LAW OF THE BORROWER'S
STATE OF ORGANIZATION, THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS. IF ANY ACTION
ARISING OUT OF THIS AGREEMENT OR THE NOTE IS COMMENCED BY LENDER IN THE STATE
COURTS OF THE STATE OF MARYLAND OR IN THE U.S. DISTRICT COURT FOR THE DISTRICT
OF MARYLAND, BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUCH ACTION AND TO THE LAYING OF VENUE IN THE STATE OF MARYLAND. ANY PROCESS
IN ANY SUCH ACTION SHALL BE DULY SERVED IF MAILED BY REGISTERED MAIL, POSTAGE
PREPAID, TO BORROWER AT ITS ADDRESS DESCRIBED IN SECTION 9.4. OR IF SERVED BY
ANY OTHER MEANS PERMITTED BY APPLICABLE LAW.
Section 9.20. COOPERATION IN DISCOVERY AND LITIGATION. IN ANY
LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF BORROWER OR OF ITS AFFILIATES SHALL BE DEEMED TO BE
EMPLOYEES OR MANAGING AGENTS OF BORROWER FOR PURPOSES OF ALL APPLICABLE LAW OR
COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY
(WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). BORROWER AGREES THAT LENDER'S
COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE
INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF
ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION.
BORROWER IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN
ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED
BY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER
FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE DISPUTE IN ANY
JURISDICTION THAT RECOGNIZES THAT (OR ANY SIMILAR) DISTINCTION.
Section 9.21. WAIVER OF TRIAL BY JURY. BORROWER HEREBY (A) COVENANTS
AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY,
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY BORROWER, AND THIS WAIVER IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED AND
REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE
SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT, SO AS TO SERVE AS CONCLUSIVE
EVIDENCE OF BORROWER'S WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING LENDER'S
COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER THAT LENDER WILL
NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
Section 9.22. CONFESSION OF JUDGMENT. BORROWER AUTHORIZES ANY ATTORNEY
ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE
CLERK OF SUCH COURT TO APPEAR ON BEHALF OF BORROWER IN ANY COURT IN ONE OR MORE
PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT
OFFICIAL, AND TO CONFESS JUDGMENT AGAINST BORROWER IN FAVOR OF LENDER IN THE
34
FULL AMOUNT DUE ON THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY
AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT
(15%) OF THE AMOUNT DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR
OPPORTUNITY OF BORROWER FOR PRIOR HEARING; PROVIDED, HOWEVER, THAT WITH RESPECT
TO ATTORNEYS' FEES, LENDER SHALL NOT SEEK TO COLLECT FROM BORROWER MORE THAN ITS
ACTUAL ATTORNEYS' FEES INCURRED. BORROWER AGREES AND CONSENTS THAT VENUE AND
JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF
MARYLAND OR OF BALTIMORE CITY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND. BORROWER WAIVES THE BENEFIT OF ANY AND EVERY
STATUTE, ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING
UPON BORROWER ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF
EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR
IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. THE
AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST BORROWER SHALL NOT
BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE
THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO;
SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO
TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS LENDER SHALL DEEM
NECESSARY, CONVENIENT, OR PROPER.
Section 9.23. CONFIDENTIALITY OF BORROWER INFORMATION. Lender will
not disclose to any third party, other than to Lender's employees on a
need-to-know basis, any information provided by Borrower to Lender in connection
with this Agreement or any Loan made hereunder that is identified to the Lender
as "proprietary" or "confidential"; PROVIDED, HOWEVER, that, notwithstanding the
foregoing, Lender may disclose any such information (a) to any Person at any
time with Borrower's written consent; (b) to the extent such disclosure is
compelled by legal, arbitral, judicial or regulatory process, or is requested by
any judge, arbitrator, agency or authority having authority over Lender; (c) to
any Person to whom Lender sells or assigns a participation in the Loan, provided
that such Person executes an agreement reasonably acceptable to Borrower
providing for the confidential treatment of such information; (d) to any Person
in connection with Lender's exercise or enforcement of any rights, remedies or
privileges under this Agreement or at law in equity in respect of this Agreement
and the Loans made by Lender hereunder; and (e) to any Person in connection with
any dispute, claim, litigation, action, regulatory inquiry or other similar
process to which Lender or any of its employees, officers, directors, Affiliates
or Subsidiaries are a party or in which Lender or any of such individuals or
entities are required to testify. Notwithstanding the foregoing, information
provided by Borrower to Lender shall not be deemed "proprietary" or
"confidential" to the extent such information (x) was available to the public at
the time of Lender's receipt thereof, (y) becomes available to the public at any
time following Lender's receipt thereof other than as a result of unauthorized
disclosure by Lender, or (z) is acquired by Lender from a Person not known by
Lender to have any confidentiality obligation to Borrower in respect of such
information.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
35
IN WITNESS WHEREOF, intending to be legally bound, and intending that
this Agreement constitutes an instrument executed under seal, the parties have
caused this Agreement to be executed under seal as of the date first written
above.
WITNESS/ATTEST: LENDER:
-------
HELLER HEALTHCARE FINANCE, INC.,
a Delaware corporation and a GE
Capital Company
By: /S/ LISA LENDERMAN By:/S/ BRETT ROBINSON
___________________________ ________________________________(SEAL)
Name: Lisa Lenderman Name: Brett Robinson
Title: Senior Counsel & VP Title: Vice Pres.
BORROWER:
--------
IDX SYSTEMS CORPORATION,
a Vermont corporation
By: /S/ DIANE L. BROWN By: /S/ JOHN A. KANE
___________________________ ________________________________(SEAL)
Name: Diane L. Brown Name: John A. Kane
Title: Sr. Paralegal Title: Sr. V.P., CFO & Treasurer
IDX INFORMATION SYSTEMS CORPORATION,
a Vermont corporation
By: /S/ DIANE L. BROWN By: /S/ JOHN A. KANE
___________________________ _______________________________(SEAL)
Name: Diane L. Brown Name: John A. Kane
Title: Sr. Paralegal Title: Sr. V.P. & Treasurer
IDX INVESTMENT CORPORATION,
a Vermont corporation
By: /S/ DIANE L. BROWN By: /S/ JOHN A. KANE
___________________________ ________________________________(SEAL)
Name: Diane L. Brown Name: John A. Kane
Title: Sr. Paralegal Title: Sr. V.P. & Treasurer
EDIX CORPORATION,
a Delaware corporation
By: /S/ DIANE L. BROWN By: /S/ JOHN A. KANE
___________________________ ________________________________(SEAL)
Name: Diane L. Brown Name: John A. Kane
Title: Sr. Paralegal Title: Sr. V.P. & Treasurer
36
LIST OF EXHIBITS
- ----------------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Lockbox Agreement
Exhibit C - Form of Legal Opinion
Exhibit D - Form of Copyright Security Agreement
37
LIST OF SCHEDULES
-----------------
Schedule 1.40 - Permitted Liens
Schedule 4.1 - Subsidiaries
Schedule 4.2 - State of Organization
Schedule 4.5 - Litigation
Schedule 4.7 - Tax Identification Numbers; Fiscal Years
Schedule 4.13 - Non-Compliance with Law
Schedule 4.14 - Environmental Matters
Schedule 4.15 - Places of Business; Record Owner; Chief Executive
Office
Schedule 4.16 - Intellectual Property
Schedule 4.17 - Capitalization; Ownership
Schedule 4.19 - Borrowings and Guarantees
Schedule 4.21 - Trade Names
Schedule 4.22 - Joint Ventures
Schedule 6.28 - Post-Closing Obligations
Schedule 7.12 - Affiliated Transactions
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