1
[BANK ONE LOGO]
PROMISSORY NOTE
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PRINCIPAL LOAN DATE MATURITY LOAN NO. CALL COLLATERAL ACCOUNT OFFICER INITIALS
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$1,500,000.00 03-04-1999 03-04-2000 098053 010 2756603893 00480
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
BORROWER: THE TRIZETTO GROUP, INC. A DELAWARE LENDER: BANK ONE, COLORADO, NA
CORPORATION CORPORATE LENDING - BOULDER
000 XXX XXXXXXX XXXXX, XXXXX 000 0000 00XX XXXXXX
XXXXXXX XXXXX, XX 00000 XXXXXX, XX 00000
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PRINCIPAL AMOUNT: $1,500,000.00 DATE OF NOTE: MARCH 4, 1999
PROMISE TO PAY. For value received, THE TRIZETTO GROUP, INC., A DELAWARE
CORPORATION ("Borrower") promises to pay to Bank One, Colorado, NA {"Lender"),
or order, in lawful money of the United States of America, the principal amount
of One Million Five Hundred Thousand & 00/100 Dollars ($1,500,000.00) ("Total
Principal Amount") or so much as may be outstanding, together with interest on
the unpaid outstanding principal balance from the date advanced until paid in
full.
PAYMENT. This Note shall be payable as follows: Interest shall be due and
payable monthly as it accrues, commencing on April 4, 1999 and continuing on
the same day of each month thereafter during the term of this Note, and the
outstanding principal balance of this Note, together with all accrued but
unpaid interest, shall be due and payable on March 4, 2000. The annual interest
rate for this Note is computed on a 365/360 basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding. Borrower will pay Lender at the address
designated by Xxxxxx from time to time in writing. If any payment of principal
of or interest on this Note shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day. As used
herein, the term "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which national banking associations are authorized to
be closed. Unless otherwise agreed to, in writing, or otherwise required by
applicable law, payments will be applied first to accrued, unpaid interest, then
to principal, and any remaining amount to any unpaid collection costs, late
charges and other charges, provided, however, upon delinquency or other
default, Lender reserves the right to apply payments among principal, interest,
late charges, collection costs and other charges at its discretion. The books
and records of Xxxxxx shall be prima facie evidence of all outstanding
principal of and accrued but unpaid interest on this Note. This Note may be
executed in connection with a loan agreement. Any such loan agreement may
contain additional rights, obligations and terms.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
fluctuation based upon the Prime Rate of interest in effect from time to time
(the "Index") (which rate may not be the lowest, best or most favorable rate of
interest which Lender may charge on loans to its customers). "Prime Rate" shall
mean the rate announced from time to time by Lender as its prime rate. Each
change in the rate to be charged on this Note will become effective without
notice on the same day as the Index changes. Except as otherwise provided
herein, the unpaid principal balance of this Note will accrue interest at a
rate per annum which will from time to time be equal to the sum of the Index,
plus 0.500%. NOTICE: Under no circumstances will the interest rate on this Note
be more than the maximum rate allowed by applicable law.
PREPAYMENT. Xxxxxxxx agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay
without fee all or a portion of the principal amount owed hereunder earlier
than it is due. All prepayments shall be applied to the indebtedness owing
hereunder in such order and manner as Xxxxxx may from time to time determine in
its sole discretion.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment of $25.00, whichever is greater.
DEFAULT. Xxxxxxxx will be in default if any of the following happens: (a)
Borrower fails to make any payment of principal or interest when due under this
Note or any other indebtedness owing now or hereafter by Borrower to Lender;
(b) failure of Borrower or any other party to comply with or perform any term,
obligation, covenant or condition contained in this Note or in any other
promissory note, credit agreement, loan agreement, guaranty, security
agreement, mortgage, deed of trust or any other instrument, agreement or
document, whether now or hereafter existing, executed in connection with this
Note (the Note and all such other instruments, agreements, and documents shall
be collectively known herein as the "RELATED DOCUMENTS"); (c) Any
representation or statement made or furnished to Lender herein, in any of the
related Documents or in connection with any of the foregoing is false or
misleading in any material respect; (d) Borrower or any other party liable for
the payment of this Note, whether as maker, endorser, guarantor, surety or
otherwise, becomes insolvent or bankrupt, has a receiver or trustee appointed
for any part of its property, makes an assignment for the benefit of its
creditors, or any proceeding is commenced either by any such party or against
it under any bankruptcy or insolvency laws; (e) the occurrence of any event of
default specified in any of the other Related Documents or in any other
agreement now or hereafter arising between Borrower and Lender; (f) the
occurrence of any event which permits the acceleration of the maturity of any
indebtedness owing now or hereafter by Borrower to any third party; or (g) the
liquidation, termination, dissolution, death or legal incapacity of Borrower
or any other party liable for the payment of this Note, whether as maker,
endorser, guarantor, surety, or otherwise.
LENDER'S RIGHTS. Upon default, Lender may at its option, without further notice
or demand (i) declare the entire unpaid principal balance on this Note, all
accrued unpaid interest and all other costs and expenses for which Borrower is
responsible for under this Note and any other Related Document immediately due,
(ii) refuse to advance any additional amounts under this Note, (iii) foreclose
all liens securing payment hereof, (iv) pursue any other rights, remedies and
recourses available to the Lender, including without limitation, any such
rights, remedies or recourses under the Related Documents, at law or in equity,
or (v) pursue any combination of the foregoing. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, do one or both of the following: (a) increase the variable
interest rate on this Note to 3.500 percentage points over the Index, and (b)
add any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any
increased rate). The interest rate will not exceed the maximum rate permitted
by applicable law. Xxxxxx may hire an attorney to help collect this Note if
borrower does not pay and borrower will pay Xxxxxx's reasonable attorneys' fees
and all other costs of collection, unless prohibited by applicable law. This
Note has been delivered to Lender and accepted by Xxxxxx in the State of
Colorado. Subject to the provisions on arbitration, this Note shall be governed
by and construed in accordance with the laws of the State of Colorado without
regard to any conflict of laws or provisions thereof.
PURPOSE. Xxxxxxxx agrees that no advances under this Note shall be used for
personal, family, or household purposes and that all advances hereunder shall
be used solely for business, commercial, agricultural or other similar purposes.
JURY WAIVER. THE BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE BORROWER AND LENDER ARISING OUT OF OR IN ANY
WAY RELATED TO THIS NOTE, ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP
BETWEEN XXXXXX AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER
TO PROVIDE THE FINANCING EVIDENCED BY THIS NOTE.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Xxxxxxxx's accounts
with Lender (whether checking, savings, or any other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future. Borrower authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing on this Note
against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Xxxxxxxx may
request advances and make payments hereunder from time to time, provided that it
is understood and agreed that the aggregate principal amount outstanding from
time to time hereunder shall not at any time exceed the Total Principal Amount.
The unpaid principal balance of this Note shall increase and decrease with each
new advance or payment hereunder, as the case may be. Subject to the terms
hereof, Xxxxxxxx may borrow, repay and reborrow hereunder. Advances under this
Note, as well as directions for payment from Xxxxxxxx's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing.
Xxxxxxxx agrees to be liable for all sums either: (a) advanced in accordance
with the instructions of an authorized person or (b) credited to any of
Xxxxxxxx's accounts with Xxxxxx.
ARBITRATION. Xxxxxx and Xxxxxxxx agree that upon the written demand of either
party, whether made before or after the institution of any legal proceedings,
but prior to the rendering of any judgment in that proceeding, all disputes,
claims and controversies between them, whether individual, joint or class in
nature, arising from this Notice, any Related Document or otherwise, including
without limitation control disputes and tort claims, shall be resolved by
binding arbitration pursuant to the Commercial Rules of the American
Arbitration Association ("AAA"). Any arbitration proceeding held pursuant to
this arbitration provision shall be conducted in the city nearest the
Borrower's address having an AAA regional office, or at any other place
selected by mutual agreement of the parties. No act to take or dispose of any
collateral shall constitute a
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03-04-1999 PROMISSORY NOTE Page 2
Loan No (Continued)
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waiver of this arbitration agreement or be prohibited by this arbitration
agreement. This arbitration provision shall not limit the right of either party
during any dispute, claim or controversy to seek, use, and employ ancillary, or
preliminary rights and/or remedies, judicial or otherwise, for the purposes of
realizing upon, preserving, protecting, foreclosing upon or proceeding under
forcible entry and detainer for possession of, any real or personal property,
and any such action shall not be deemed an election of remedies. Such remedies
include, without limitation, obtaining injunctive relief or a temporary
restraining order, invoking a power of sale under any deed of trust or
mortgage, obtaining a writ of attachment or imposition of a receivership, or
exercising any rights relating to personal property, including exercising the
right of set-off, or taking or disposing of such property with or without
judicial process pursuant to the Uniform Commercial Code. Any disputes, claims,
or controversies concerning the lawfulness or reasonableness of an act, or
exercise of any right or remedy, concerning any collateral, including any claim
to rescind, reform, or otherwise modify any agreement relating to the
collateral, shall also be arbitrated; provided, however that no arbitrator
shall have the right or the power to enjoin or restrain any act of either
party. Judgment upon any award rendered by any arbitrator may be entered in any
court having jurisdiction. The statute of limitations, estoppel, waiver, laches
and similar doctrines which would otherwise be applicable in an action brought
by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement of
any action for these purposes. The Federal Arbitration Act (Title 9 of the
United States Code) shall apply to the construction, interpretation, and
enforcement of this arbitration provision.
ADDITIONAL PROVISION REGARDING LATE CHARGES. In the "Late Charge" provision set
forth above, the following language is hereby added after the word "greater":
"up to the maximum amount of One Thousand Five Hundred Dollars ($1500.00) per
late charge".
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this Note, or release any party or guarantor or collateral; or
unjustifiably impair, fail to realize upon or perfect Xxxxxx's security
interest in the collateral; and take any other action deemed necessary by
Xxxxxx without the consent of or notice to anyone. All such parties also agree
that Xxxxxx may modify this Note without the consent of or notice to anyone
other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. XXXXXXXX AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
THE TRIZETTO GROUP, INC., A DELAWARE CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX, PRESIDENT AND CEO
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3
BANK ONE.
LOAN AGREEMENT
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PRINCIPAL LOAN DATE MATURITY LOAN NO. CALL COLLATERAL ACCOUNT OFFICER INITIALS
1,500,000.00 03-04-1999 03-04-2000 098053 010 2756603893 00480
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References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
loan or item
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BORROWER: THE TRIZETTO GROUP, INC., LENDER: BANK ONE, COLORADO, NA
A DELAWARE CORPORATION CORPORATE LENDING-BOULDER
000 XXX XXXXXXX XXXXX, XXXXX 000 0000 00XX XXXXXX
XXXXXXX XXXXX, XX 00000 XXXXXX, XX. 00000
================================================================================================================================
THIS LOAN AGREEMENT BETWEEN THE TRIZETTO GROUP, INC., A DELAWARE CORPORATION
("BORROWER") AND BANK ONE, COLORADO, NA {"LENDER"} IS MADE AND EXECUTED AS OF
MARCH 4, 1999. THIS AGREEMENT GOVERNS ALL LOANS, CREDIT FACILITIES AND/OR OTHER
FINANCIAL ACCOMMODATIONS DESCRIBED HEREIN AND, UNLESS OTHERWISE AGREED TO IN
WRITING BY XXXXXX AND BORROWER, ALL OTHER PRESENT AND FUTURE LOANS, CREDIT
FACILITIES AND OTHER FINANCIAL ACCOMMODATIONS PROVIDED BY LENDER TO BORROWER.
ALL SUCH LOANS, CREDIT FACILITIES AND OTHER FINANCIAL ACCOMMODATIONS, TOGETHER
WITH ALL RENEWALS, EXTENSIONS AND MODIFICATIONS THEREOF, ARE REFERRED TO IN
THIS AGREEMENT INDIVIDUALLY AS THE "LOAN" AND COLLECTIVELY AS THE "LOANS."
XXXXXXXX UNDERSTANDS AND AGREES THAT: (A) IN GRANTING, RENEWING, OR EXTENDING
ANY LOAN, LENDER IS RELYING UPON BORROWER'S REPRESENTATIONS, WARRANTIES, AND
AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; AND (B) ALL SUCH LOANS SHALL BE AND
SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS AGREEMENT.
TERM. This Agreement shall be effective as of March 4, 1999, and shall continue
thereafter until all Loans and other obligations owing by Xxxxxxxx to Lender
hereunder have been paid in full and Lender has no commitments or obligations
to make further Advances under the Loans to Borrower.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code as adopted in
the State of Colorado. All references to dollar amounts shall mean amounts in
lawful money of the United States of America.
AGREEMENT. The word "Agreement" means this Loan Agreement, as may be
amended or modified from time to time, together with all exhibits and
schedules attached hereto from time to time.
ACCOUNT. The word "Account" means a trade account receivable of Borrower
for goods sold or leased or for services rendered by Borrower in the
ordinary course of its business.
ACCOUNT DEBTOR. The words "Account Debtor" mean the person or entity
obligated upon an Account.
ADVANCE. The word "Advance" means any advance or other disbursement of Loan
proceeds under this Agreement.
BORROWER. The word "Borrower" means THE TRIZETTO GROUP, INC., A DELAWARE
CORPORATION.
BORROWING BASE. The words "Borrowing Base" mean 75% of the aggregate
account of eligible accounts, less the aggregate amount of Letters of
Credit issued under the Line.
COLLATERAL. The word "Collateral" means and includes without limitation all
property and assets granted as collateral for any Loan, whether real or
personal property, whether granted directly or indirectly, whether granted
now or in the future, and whether granted in the form of a security
interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
COMMITTED SUM. The words "Committed Sum" mean an amount equal to
$1,500,000.00.
ELIGIBLE ACCOUNTS. The words "Eligible Accounts" means, at any time, all of
Borrower's Accounts which contain terms and conditions acceptable to Lender
and in which Lender has a first lien security interest, less the amount of
all returns, discounts, credits, and offsets of any nature; provided,
however, unless otherwise agreed to by Lender in writing, Eligible Accounts
do not include:
(a) Accounts with respect to which the Account Debtor is an officer,
an employee or agent of Xxxxxxxx and to which the Account Debtor is a
subsidiary of, or affiliated with or related to Borrower or its
shareholders, officers, or directors.
(b) All Accounts with respect to which Borrower has furnished a
payment and/or performance bond and that portion of any Accounts for
or representing retainage, if any, until all prerequisites to the
immediate payment of such retainage have been satisfied.
(c) Accounts with respect to which goods are placed on consignment or
subject to a guaranteed sale or other terms by reason of which the
payment by the Account Debtor may be conditional.
(d) Accounts with respect to which the Account Debtor is not a
resident of, or whose principal place of business is located outside
of, the United States or its territories, except to the extent such
Accounts are supported by insurance, bonds or other assurances
satisfactory to Lender in its sole and absolute discretion.
(e) Accounts with respect to which Borrower is or may become liable
to the Account Debtor for goods sold or services rendered by the
Account Debtor to Borrower.
(f) Accounts which are subject to dispute, counterclaim, or setoff.
(g) Accounts with respect to which all goods have not been shipped or
delivered, or all services have not been rendered, to the Account
Debtor
(h) Accounts with respect to which Xxxxxx, in its sole discretion,
deems the creditworthiness or financial condition of the Account
Debtor to be unsatisfactory.
(i) Accounts of any Account Debtor who has filed or has had filed
against it a petition in bankruptcy or an application for relief under
any provision of any state or federal bankruptcy, or debtor-in-relief
acts; or who has had appointed a trustee, custodian, or receiver for
the assets of such Account Debtor; or who has made an assignment for
the benefit of creditors or has become insolvent or fails generally to
pay its debts (including its payrolls) as such debts become due.
(j) Accounts with respect to which the Account Debtor is the United
States government or any department or agency of the United States,
except to the extent an acknowledgement of assignment to Lender of any
such Accounts in compliance with the Federal Assignment of Claims Act
and other applicable laws has been received by Xxxxxx.
(k) Accounts which have not been paid or are not due and payable in
full within ninety (90) days from the original invoice date. The
entire balance of all Accounts of any single Account Debtor will be
ineligible whenever 10.000% or more of the total amount outstanding on
all Accounts owing by such Account Debtor is past due ninety (90) days
or more.
ERISA. The "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
GRANTOR. The word "Grantor" means and includes each and all of the persons
or entities granting a Security Interest in any Collateral to any of the
Loans.
GUARANTOR. The word "Guarantor" means and includes without limitation, each
and all of the guarantors, sureties, and accommodation parties for any of
the Loans.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
the Note, including all principal and accrued interest thereon, together
with all other liabilities, costs and expenses for which Borrower is
responsible under this Agreement or under any of the Related Documents. In
addition, the word "Indebtedness" includes all other obligations, debts and
liabilities, plus any accrued interest thereon, owing by Borrower, or any
one or more of them, to Lender of any kind or character, now existing or
hereafter arising, as well as all present and future claims by Lender
against Borrower, or any one or more of them, and all renewals, extensions,
modifications, substitutions and rearrangements of any of the foregoing;
whether such indebtedness arises by note, draft, acceptance, guaranty,
endorsement, letter of credit, assignment, overdraft,indemnity agreement or
otherwise; whether such indebtedness is voluntary or involuntary, due or
not due, direct or indirect, absolute or contingent, liquidated or
unliquidated; whether Borrower may be liable individually or jointly with
others; whether Borrower may be liable primarily or secondarily or as
debtor, maker, comaker, drawer, endorser, guarantor surety, accommodation
party or otherwise.
LENDOR. The word "Lender" meant Bank One, Colorado, NA, its successors and
assigns.
LINE OF CREDIT. The words "Line of Credit" mean the credit facility
described in the Section titled "LINE OF CREDIT" below.
NOTE. The word "Note" means any and all promissory note or notes which
evidenced Borrower's Loans in favor of Lender, as well as any
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03-04-1999 LOAN AGREEMENT Page 2
Loan No (Continued)
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amendment, modification, renewal or replacement thereof.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
interests securing indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either (i) not yet due, or (ii)
being contested in good faith by appropriate proceedings and for which
Xxxxxxxx has established adequate reserves; (c) purchase money liens or
purchase money security interests upon or in any property acquired or held
by Borrower in the ordinary course of business to secure any indebtedness
permitted under this Agreement; and (d) liens and security interests
which, as of the date of this Agreement, have been disclosed to and
approved by the Lender in writing.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation the Note and all credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages,
deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Note.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
SECURITY INTEREST. The words "Security Interest" mean and include without
limitation any type of security interest, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or consignment intended
as a security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
LINE OF CREDIT. Subject to the other terms and conditions herein, Lender hereby
establishes a Line of Credit for Borrower through which Xxxxxx agrees to make
advances to Borrower from time to time from the effective date of this
Agreement until the maturity date of the Note evidencing the Line of Credit,
provided the aggregate amount of such advances outstanding at any time does not
exceed the lesser of the amount equal to the Borrowing Base or an amount equal
to the Committed Sum. Within the foregoing limits, Borrower may borrow,
partially or wholly prepay, and reborrow under this Agreement.
BORROWING BASE COMPLIANCE. If at any time the aggregate principal amount
outstanding under the Line of Credit shall exceed the applicable
Borrowing Base, Borrower shall pay to Lender an amount equal to the
difference between the outstanding principal balance under the Line of
Credit and the Borrowing Base.
REPRESENTATIONS AND WARRANTIES CONCERNING ACCOUNTS. With respect to the
Accounts, Borrower represents and warrants to Lender: (a) Each Account
represented by Borrower to be an Eligible Account for purposes of this
Agreement conforms to the requirements of the definition of an Eligible
Account; and (b) All Account information listed on reports and schedules
delivered to Lender will be true and correct, subject to immaterial
variance.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as
of the date of this Agreement, as of the date of each request for an Advance,
as of the date of any renewal, extension or modification of any Loan, and at
all times any Loans or Xxxxxx's commitment to make Loans hereunder is
outstanding:
ORGANIZATION. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Delaware
and is duly qualified and in good standing in all other states in which
Borrower is doing business. Borrower has the full power and authority to
own its properties and to transact the businesses in which it is
presently engaged or presently proposes to engage.
AUTHORIZATION. The execution, delivery, and performance of this Agreement
and all Related Documents to which Borrower is a party have been duly
authorized by all necessary action by Borrower; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation of, or
constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (b) any law, governmental regulation,
court decree, or order applicable to Borrower. Borrower has all requisite
power and authority to execute and deliver this Agreement and all other
Related Documents to which Borrower is a party.
FINANCIAL INFORMATION. Each financial statement of Xxxxxxxx supplied to
Lender truly and completely discloses Borrower's financial condition as
of the date of the statement, and there has been no material adverse
change in Borrower's financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial
statements.
LEGAL EFFECT. This Agreement and all other Related Documents to which
Borrower is a party constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective
terms, except as limited by bankruptcy, insolvency or similar laws of
general application relating to the enforcement of creditors' rights and
except to the extent specific remedies may generally be limited by
equitable principles.
PROPERTIES. Except for Permitted Liens, Xxxxxxxx is the sole owner of,
and has good title to, all of Borrower's properties free and clear of
all Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Xxxxxxxx's
properties are titled in Borrower's legal name, and Xxxxxxxx has not
used, or filed a financing statement under, any other name for at least
the last six (6) years.
COMPLIANCE. Except as disclosed in writing to Lender (a) Borrower is
conducting Borrower's businesses in material compliance with all
applicable federal, state and local laws, statutes, ordinances, rules,
regulations, orders, determinations and court decisions, including
without limitation, those pertaining to health or environmental matters,
and (b) Borrower otherwise does not have any known material contingent
liability in connection with the release into the environment, disposal
or the improper storage of any toxic or hazardous substance or solid
waste.
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event has
occurred which may in any one case or in the aggregate materially
adversely affect the Borrower's financial condition or properties, other
than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Xxxxxx in writing.
TAXES. All tax returns and reports of Borrower that are or were required
to be filed, have been filed, and all taxes, assessments and other
governmental charges have been paid in full, except those that have been
disclosed in writing to Lender which are presently being or to be
contested by Borrower in good faith in the ordinary course of business
and for which adequate reserves have been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to and approved by
Xxxxxx in writing, Xxxxxxxx has not entered into any Security Agreements,
granted a Security Interest or permitted the filing or attachment of any
Security Interests on or affecting any of the Collateral, except in favor
of Lender.
LICENSES, TRADEMARKS AND PATENTS. Borrower possesses and will continue to
possess all permits, licenses, trademarks, patents and rights thereto
which are needed to conduct Borrower's business and Xxxxxxxx's business
does not conflict with or violate any valid rights of others with respect
to the foregoing.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes approved by Lender and such
proceeds will not be used for the purchasing or carrying of "margin
stock" as defined in Regulation U issued by the Board of Governors of the
Federal Reserve System.
INELIGIBLE SECURITIES. No portion or any advance or Loan made hereunder
shall be used directly or indirectly to purchase ineligible securities
as defined by applicable regulations of the Federal Reserve Board,
underwritten by Lender or any other affiliate of Banc One Corporation
during the underwriting period and for 30 days thereafter.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred with
respect to any such plan, (ii) Borrower has not withdrawn from any such
plan or initiated steps to do so, (iii) no steps have been taken to
terminate any such plan, and (iv) there are no unfunded liabilities other
than those previously disclosed to Lender in writing.
LOCATION OF BORROWER'S OFFICES AND RECORDS. Xxxxxxxx's place of business,
or Xxxxxxxx's chief executive office if Xxxxxxxx has more than one place
of business, is located at 000 XXX XXXXXXX XXXXX, XXXXX 000, XXXXXXX
XXXXX, XX 00000. Unless Borrower has designated otherwise in writing this
location is also the office or offices where Borrower keeps its records
concerning the Collateral.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purpose of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Xxxxxxxx understands and
agrees that Xxxxxx, without independent investigation, is relying upon the
above representations and warranties in extending the Loans to Borrower.
Xxxxxxxx further agrees that the foregoing representations and warranties
shall be continuing in nature and shall remain in full force and effect
during the term of this Agreement.
5
03-04-1999 LOAN AGREEMENT PAGE 3
LOAN NO (CONTINUED)
================================================================================
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Xxxxxx that, while
this Agreement is in effect, Borrower will:
DEPOSITORY RELATIONSHIP. Establish and maintain its primary operating
account(s) with Lender.
LITIGATION. Promptly inform Xxxxxx in writing of (a) all material adverse
changes in Borrower's financial condition, (b) all existing and all
threatened litigation, claims, investigations, administrative proceedings
or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial
condition of any Guarantor, and (c) the creation, occurrence or assumption
by Borrower of any actual or contingent liabilities not permitted under
this Agreement.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit Lender to examine, audit and make and take away copies or
reproductions of Borrower's books and records at all reasonable times. If
Borrower now or at any time hereafter maintains any records (including
without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third
party, Borrower, upon request of Xxxxxx, shall notify such party to permit
Lender free access to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at Borrower's
expense.
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in no
event later than one hundred twenty (120) days after the end of each fiscal
year, Xxxxxxxx's balance sheet, income statement, and statement of changes
in financial position for the year ended, audited by a certified public
accountant satisfactory to Lender, and, as soon as available, but in no
event later than thirty five (35) days after the end of each month,
Borrower's balance sheet, income statement, and statement of changes in
financial position for the period ended, prepared and certified, subject to
year-end review adjustments, as correct to the best knowledge and belief by
Xxxxxxxx's chief financial officer or other officer or person acceptable to
Xxxxxx. All financial reports required to be provided under this Agreement
shall be prepared in accordance with generally accepted accounting
principles, applied on a consistent basis, and certified by Borrower as
being true and correct.
ADDITIONAL INFORMATION. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables,
inventory schedules, budgets, forecasts, tax returns, and other reports
with respect to Xxxxxxxx's financial condition and business operations as
Lender may request from time to time.
FINANCIAL COVENANTS AND RATIOS. Comply at all times with the following
covenants and ratios:
CURRENT RATIO. Maintain, at all times, a ratio of Liquid Assets plus
inventory, to current liabilities in excess of 1.50 to 1.00.
For purposes of this Agreement and to the extent the following terms are
utilized in this Agreement, the term "Tangible Net Worth" shall mean
borrower's total assets excluding all intangible assets (including, without
limitation, goodwill, trademarks, patents, copyrights, organization
expenses, and similar intangible items) less total liabilities excluding
Subordinated Debt. The term "Subordinated Debt" shall mean all indebtedness
owing by Borrower which has been subordinated by written agreement to all
indebtedness now or hereafter owing by Borrower to Lender, such agreement
to be in form and substance acceptable to Lender. The term "Working
Capital" shall mean Borrower's Liquid Assets plus inventory, less current
liabilities. The term "Liquid Assets" shall mean borrower's unencumbered
cash, marketable securities and accounts receivable net of reserves. The
term "Cash Flow" shall mean net income after taxes, and exclusive of
extraordinary items, plus depreciation and amortization. Except as provided
above, all computations made to determine compliance with the requirements
contained in this paragraph shall be made in accordance with generally
accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies reasonably acceptable to Lender. Borrower, upon request
of Xxxxxx, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at
least thirty (30) days' prior written notice to Lender. In connection with
all policies covering assets in which Lender holds or is offered a Security
Interest for the Loans, Borrower will provide Lender with such loss payable
or other endorsements as Lender may require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (f) the expiration date of the policy.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
LOAN FEES AND CHARGES. In addition to all other agreed upon fees and
charges, pay the following: .25% PER ANNUM.
LOAN PROCEEDS. Use all Loan proceeds solely for Xxxxxxxx's business
operations, unless specifically consented to the contrary by Xxxxxx in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if
unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits; provided however, Borrower will not be required to pay
and discharge any such assessment, tax, charge, xxxx, xxxx or claim so long
as (a) the legality of the same shall be contested in good faith by
appropriate proceedings, and (b) Borrower shall have established on its
books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting principles. Xxxxxxxx, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies,
liens and claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, liens and claims against Xxxxxxxx's properties,
income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the Related Documents in a timely
manner, and promptly notify Xxxxxx if Xxxxxxxx learns of the occurrence of
any event which constitutes an Event of Default under this Agreement or
under any of the Related Documents.
OPERATIONS. Conduct its business affairs in a reasonable and prudent manner
and in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation compliance with the
Americans With Disabilities Act, all applicable environmental statutes,
rules, regulations and ordinances and with all minimum funding standards
and other requirements of ERISA and other laws applicable to Borrower's
employee benefit plans.
COMPLIANCE CERTIFICATE. Unless waived in writing by Xxxxxx, provide Lender
THIRTY FIVE (35) DAYS AFTER EACH CALENDAR MONTH with a certificate executed
by Xxxxxxxx's chief financial officer, or other officer or person
acceptable to Xxxxxx, (a) certifying that this representations and
warranties set forth in this Agreement are true and correct as of the date
of the certificate and that, as of the date of the certificate, no Event of
Default exists under this Agreement, and (b) demonstrating compliance with
all financial covenants set forth in this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all respects
with all federal, state and local environmental laws, statutes, regulations
and ordinances; not cause or permit to exist, as a result of an intentional
or unintentional action or omission on its part or on the part of any third
party, on property owned and/or occupied by Borrower, any environmental
activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions
of a permit issued by the appropriate federal, state or local governmental
authorities; and furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof, a copy of any notice, summons, lien,
citation, directive, letter or other communication from any governmental
agency or instrumentality concerning any intentional or unintentional
action or omission on Borrower's part in connection with any environmental
activity whether or not there is damage to the environment and/or other
natural resources.
BORROWING BASE CERTIFICATE. Within 35 days after each month, Borrower shall
deliver to Lender a borrowing base certificate, in form and detail
satisfactory to Lender, along with such supporting documentation as Lender
may request, including without limitation, an account receivable aging
report and/or a list or schedule of Borrower's accounts receivable,
inventory and/or equipment.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing
statements, instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:
MAINTAIN BASIC BUSINESS. Engage in any business activities substantially
different than those in which Borrower is presently engaged.
CONTINUITY OF OPERATIONS. Cease operations, liquidate, dissolve or merge or
consolidate with or into any other entity.
6
03-04-1999 LOAN AGREEMENT Page 4
(Continued)
================================================================================
INDEBTEDNESS. Create, incur or assume additional indebtedness for borrowed
money, including capital leases, or guarantee any indebtedness owing by
others, other than (a) current unsecured trade debt incurred in the
ordinary course of business, (b) indebtedness owing to Lender, (c)
borrowings outstanding as of the date hereof and disclosed to Lender in
writing, and (d) any borrowings otherwise approved by Xxxxxx in writing.
LIENS. Mortgage, assign, pledge, grant a security interest in or otherwise
encumber Borrower's assets, except as allowed as a Permitted Lien.
TRANSFER OF ASSETS. Transfer, sell or otherwise dispose of any of
Borrower's assets other than in the ordinary course of business.
CHANGE IN MANAGEMENT. Permit a change in the senior executive or management
personnel of Xxxxxxxx.
TRANSFER OF OWNERSHIP. Permit the sale, pledge or other transfer of any
ownership interest in Borrower.
INVESTMENTS. Invest in, or purchase, create, form or acquire any interest
in, any other enterprise or entity.
LOANS. Make any loans to any person or entity.
DIVIDENDS. Pay any dividends on Borrower's capital stock or purchase,
redeem, retire or otherwise acquire any of Borrower's capital stock or
alter or amend Borrower's capital structure.
AFFILIATES. Enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service,
with any Affiliate of Borrower, except in the ordinary course of and
pursuant to the reasonable requirements of Borrower's business and upon
fair and reasonable terms no less favorable than would be obtained in a
comparable arm's length transaction with a person or entity not an
Affiliate or Borrower. As used herein, the term "Affiliate" means any
individual or entity directly or indirectly controlling, controlled by or
under common control with, another entity or individual.
CONDITIONS PRECEDENT TO ADVANCES. Xxxxxx's obligation to make any Advances or
to provide any other financial accommodations to or for the benefit of Borrower
hereunder shall be subject to the conditions precedent that as of the date of
such advance or disbursement and after giving effect thereto (a) all
representations and warranties made to Lender in this Agreement and the Related
Documents shall be true and correct as of and as if made on such date, (b) no
material advance change in the financial condition of Borrower or any Guarantor
since the effective date of the most recent financial statements furnished to
Lender, or in the value of any Collateral, shall have occurred and be
continuing, (c) no event has occurred and is continuing, or would result from
the requested advance or disbursement, which with notice or lapse of time, or
both, would constitute an Event of Default, (d) no Guarantor has sought,
claimed or otherwise attempted to limit, modify or revoke such Guarantor's
guaranty of any Loan, and (a) Xxxxxx has received all Related Documents
appropriately executed by Xxxxxxxx and all other proper parties.
ADDENDUM. An addendum, titled "ADDENDUM", is attached to this document and by
this document and by this reference is made a part of this document just as if
all the provisions, terms and conditions of the ADDENDUM had been fully set
forth in this document.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Xxxxxxxx's accounts
with Lender (whether checking, savings, or any other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future. Xxxxxxxx authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
on any of the Indebtedness.
OTHER DEFAULTS. Failure of Borrower, any Guarantor or any Grantor to comply
with or to perform when due any other term, obligation, covenant or
condition contained in this Agreement, the Note or in any of the other
Related Documents, or failure of Borrower to comply with or to perform any
other term, obligation, covenant or condition contained in any other
agreement now existing or hereafter arising between Lender and Borrower.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender under this Agreement or the Related Documents is false
or misleading in any material respect.
DEFAULT TO THIRD PARTY. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Xxxxxxxx, Grantor
or any Guarantor to any third party under any agreement or undertaking.
BANKRUPTCY OR INSOLVENCY. If the Borrower, Grantor or Guarantor: (i)
becomes insolvent, or makes a transfer in fraud of creditors, or makes an
assignment for the benefit of creditors, or admits in writing its inability
to pay its debts as they become due; (ii) generally is not paying its debts
as such debts become due; (iii) has a receiver, trustee or custodian
appointed for, or take possession of, all or substantially all of the
assets of such party or any of the Collateral, either in a proceeding
brought by such party or in a proceeding brought against such party and
such appointment is not discharged or such possession is not terminated
within sixty (60) days after the effective date thereof or such party
consents to or acquiesces in such appointment or possession; (iv) files a
petition for relief under the United States Bankruptcy Code or any other
present or future federal or state insolvency, bankruptcy or similar laws
(all of the foregoing hereinafter collectively called "APPLICABLE
BANKRUPTCY LAW") or an involuntary petition for relief is filed against
such party under any Applicable Bankruptcy Law and such involuntary
petition is not dismissed within sixty (60) days after the filing thereof,
or an order for relief naming such party is entered under any Applicable
Bankruptcy Law, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have discharged
within a period of sixty (60) days any attachment, sequestration or similar
writ levied upon any property of such party; or (vi) fails to pay within
thirty (30) days any final money judgment against such party.
LIQUIDATION, DEATH AND RELATED EVENTS. If Borrower, Grantor or any
Guarantor is an entity, the liquidation, dissolution, merger or
consolidation of any such entity or, if any of such parties is an
individual, the death or legal incapacity of any such individual.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help
repossession or any other method, by any creditor of Borrower, any creditor
of any Grantor against any collateral securing the indebtedness, or by any
governmental agency.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, Lender may,
at its option, without further notice or demand, (a) terminate all commitments
and obligations of Lender to make Loans to Borrower, if any, (b) declare all
Loans and any other Indebtedness immediately due and payable, (c) refuse to
advance any additional amounts under the Note or to provide any other financial
accommodations under this Agreement, or (d) exercise all the rights and
remedies provided in the Note or in any of the Related Documents or available
at law, in equity, or otherwise; provided, however, if any Event of Default of
the type described in the "Bankruptcy or Insolvency" subsection above shall
occur, all Loans and any other Indebtedness shall automatically become due and
payable, without any notice, demand or action by Lender. Except as may be
prohibited by applicable law, all of Lender's rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Xxxxxx
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Borrower or of any Grantor shall not affect Xxxxxx's right to declare a default
and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS.
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and accepted by
Lender in the State of Colorado. Subject to the provisions on arbitration,
this Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado without regard to any conflict of laws or
provisions thereof.
JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER
ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT, AND ANY OTHER
RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN LENDER AND THE BORROWER, THIS
PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS.
ARBITRATION. Xxxxxx and Xxxxxxxx agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that proceeding,
all disputes, claims and controversies between them, whether individual,
joint, or class in nature, arising from this Agreement, any Related
Document or otherwise, including without limitation contract disputes and
tort claims, shall be resolved by binding arbitration pursuant to the
Commercial Rules of the American Arbitration Association ("AAA"). Any
arbitration proceeding held pursuant to the arbitration provision shall be
conducted in the city nearest the
7
LOAN AGREEMENT
03-04-1999 PAGE 5
LOAN NO (CONTINUED)
================================================================================
Xxxxxxxx's address having an AAA regional office, or at any other place
selected by mutual agreement of the parties. No act to take or dispose of
any Collateral shall constitute a waiver of this arbitration agreement or
be prohibited by this arbitration agreement. This arbitration provision
shall not limit the right of either party during any dispute, claim or
controversy to seek, use, and employ ancillary, or preliminary rights
and/or remedies, judicial or otherwise, for the purposes of realizing upon,
preserving, protecting, foreclosing upon or proceeding under forcible entry
and detainer for possession of, any real or personal property, and any such
action shall not be deemed an election of remedies. Such remedies include,
without limitation, obtaining injunctive relief or a temporary restraining
order, invoking a power of sale under any deed of trust or mortgage,
obtaining a writ of attachment or imposition of a receivership, or
exercising any rights relating to personal property, including exercising
the right of set-off, or taking or disposing of such property with or
without judicial process pursuant to the Uniform Commercial Code. Any
disputes, claims, or controversies concerning the lawfulness or
reasonableness of an act, or exercise of any right or remedy, concerning
any Collateral, including any claim to rescind, reform, or otherwise modify
any agreement relating to the Collateral, shall also be arbitrated;
provided, however that no arbitrator shall have the right or the power to
enjoin or restrain any act of either party. Judgment upon any award
rendered by any arbitrator may be entered in any court having jurisdiction.
The statute of limitations, estoppel, waiver, laches and similar doctrines
which would otherwise be applicable in an action brought by a party shall
be applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of any action for
these purposes. The Federal Arbitration Act (Title 9 of the United States
Code) shall apply to the construction, interpretation, and enforcement of
this arbitration provision.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
CONSENT OF LOAN PARTICIPATION. Xxxxxxxx agrees and consents to Xxxxxx's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy it may have
with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, was well as all notices of any
repurchase of such participation interests.
COSTS AND EXPENSES. Xxxxxxxx agrees to pay upon demand all of Xxxxxx's
expenses, including attorneys' fees, incurred in connection with the
preparation, execution, enforcement, modification and collection of this
Agreement or in connection with the Loans made pursuant to this Agreement.
Xxxxxx may hire one or more attorneys to help collect the Indebtedness if
Xxxxxxxx does not pay, and Borrower will pay Xxxxxx's reasonable attorneys'
fees.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered or when
deposited with a nationally recognized overnight courier or deposited in
the United States mail, first class, postage prepaid, addressed to the
party to whom the notice is to be given at the address shown above. Any
party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of
the notice is to change the party's address. To the extent permitted by
applicable law, if there is more than one Borrower, notice to any Borrower
will constitute notice to all Borrowers. For notice purposes, Borrower will
keep Lender informed at all times of Xxxxxxxx's current address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute the same document. Signature pages may be detached from the
counterparts to a single copy of this Agreement to physically form one
document.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
SURVIVAL. All warranties, representations, and covenants made by Borrower
in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Xxxxxx and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any investigation made by
Xxxxxx or on Xxxxxx's behalf.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Agreement.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Xxxxxx. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Xxxxxx of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Xxxxxx, nor any
course of dealing between Xxxxxx and Borrower, or between Lender and any
Grantor or Guarantor, shall constitute a waiver of any of Lender's rights
or of any obligations of Borrower or of any Grantor as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall not
constitute continuing consent in subsequent instances where such consent is
required, and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
XXXXXXXX ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND
XXXXXXXX AGREES TO ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF THE DATE SET
FORTH ABOVE.
BORROWER:
THE TRIZETTO GROUP, INC., A DELAWARE CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------------
XXXXXXX X. XXXXXXXX, PRESIDENT AND CEO
LENDER:
BANK ONE, COLORADO, NA
By: [Signature Illegible]
--------------------------------------
Authorized Officer
================================================================================
8
ADDENDUM
================================================================================
BORROWER: THE TRIZETTO GROUP, INC., LENDER: BANK ONE, COLORADO, NA
A DELAWARE CORPORATION CORPORATE LENDING - BOULDER
000 XXX XXXXXXX XXXXX, 0000 00XX XXXXXX
XXXXX 000 XXXXXX, XX 00000
XXXXXXX XXXXX, XX 00000
================================================================================
This ADDENDUM is attached to and by this reference is made a part of the
Business Loan Agreement dated March 4, 1999, and executed by BANK ONE,
COLORADO, NA and THE TRIZETTO GROUP, INC., A DELAWARE CORPORATION.
LETTERS OF CREDIT. Letters of credit may be issued under the Line of Credit
from time to time provided the expiration date of the letter of credit is prior
to the maturity date of the Line of Credit.
LINE OF CREDIT CLEARANCE. Borrower shall, at least once during the term of the
Line of Credit, reduce and maintain the outstanding principal balance of the
Line of Credit to $0.00 for a period of at least thirty (30) consecutive
calendar days.
ADDITIONAL AFFIRMATIVE COVENANT - TANGIBLE NET WORTH. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will comply at all times with the following covenant: Maintain as of
each fiscal month end a minimum Tangible Net Worth of not less than the
following amounts for the following periods: for the period 03/01/99 to
07/31/99, $5,100,000.00; for the period 08/01/99 to 12/31/99, $5,500,000.00;
and for the period 01/01/00 and thereafter, $6,000,000.00.
ADDITIONAL AFFIRMATIVE COVENANT - DEBT TO TANGIBLE NET WORTH RATIO. Borrower
further covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will comply at all times with the following ratio: Maintain as
of each fiscal month end, a ratio of (a) total liabilities, to (b) Tangible Net
Worth of less than the following ratios for the following periods: for the
period 03/01/99 to 09/30/99, 1.00 to 1.00; and for the period 10/01/99 and
thereafter, 1.20 to 1.00.
ADDITIONAL AFFIRMATIVE COVENANT - ADDITIONAL REPORTING. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will provide Lender (a) within thirty five (35) days of the end of
each month (i) an aging and listing of all accounts receivable prepared in
accordance with generally accepted accounting principles which itemizes each
account debtor by name and which states the total amount payable to Borrower and
contains a breakdown indicating future amounts due and when due, current
amounts due, amounts thirty (30) days past due, sixty (60) days past due and
ninety (90) or more days past due, and reflecting any credit adjustments,
returns and allowances; (ii) an aging and listing of all account payable trade
prepared in a similar manner; (b) within thirty five (35) days of the end of
each fiscal year and, (i) a listing of all accounts receivable which itemizes
each account debtor by name and address; (ii) Borrower's annual operating
budget showing monthly activity forecast; (iii) Borrower's annual projections
for the year immediately following (balance sheet, income statement, cash flow)
showing monthly activity forecast.
ADDITIONAL AFFIRMATIVE COVENANT - LIQUIDITY. Borrower further covenants and
agrees with Xxxxxx that, while this Agreement is in effect, Borrower will
maintain Liquid Assets of not less than $1,000,000.00.
ADDITIONAL AFFIRMATIVE COVENANT - FINANCIAL STATEMENTS. Borrower further
covenants and agrees with Xxxxxx that, while this Agreement is in effect,
Borrower will furnish Lender with its annual financial statements, including a
balance sheet, income statement and statement of changes in financial position,
on or before June 1, 1999, for the fiscal years ended 12/31/97 and 12/31/98
audited by certified public accountant(s) reasonably acceptable to Lender.
THIS ADDENDUM IS EXECUTED MARCH 4, 1999.
BORROWER:
THE TRIZETTO GROUP, INC., A DELAWARE CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
---------------------------------------
XXXXXXX X. XXXXXXXX, PRESIDENT AND CEO
LENDER:
Bank One, Colorado, NA
By: /s/ [Signature Illegible]
----------------------------------------
Authorized Officer
9
BANK(1)ONE
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$1,500,000.00 03-04-1999 03-04-2000 098053 010 2756603893 00480
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
or item.
BORROWER: THE TRIZETTO GROUP, INC., A DELAWARE LENDER: Bank One, Colorado, NA
CORPORATION Corporate Lending - Boulder
000 XXX XXXXXXX XXXXX, XXXXX 000 0000 00xx Xxxxxx
XXXXXXX XXXXX, XX 00000 Xxxxxx, XX 00000
THIS COMMERCIAL SECURITY AGREEMENT is entered into by THE TRIZETTO GROUP, INC.,
A DELAWARE CORPORATION (referred to below as "Grantor") for the benefit of Bank
One, Colorado, NA (referred to below as "Lender"). For valuable consideration,
Grantor grants to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Xxxxxx shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code as adopted in
the State of Colorado ("Code"). All references to dollar amounts shall mean
amounts in lawful money of the United States of America.
AGREEMENT. The word "Agreement" means this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.
COLLATERAL. The word "Collateral" means the following described property of
Grantor, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL
INTANGIBLES
In addition, the word "Collateral" includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(a) All attachments, accessions, accessories, tools, parts, supplies,
increases, and additions to and all replacements of and substitutions
for any property described above.
(b) All products and produce of any of the property described in this
Collateral section.
(c) All proceeds (including, without limitation, insurance proceeds)
from the sale, lease, destruction, loss, or other disposition of any
of the property described in this Collateral section.
(d) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
EVENT OF DEFAULT. The words "Event of Default" mean and include any of the
Events of Default set forth below in the section titled "Events of
Default."
GRANTOR. The word "Grantor" means THE TRIZETTO GROUP, INC., A DELAWARE
CORPORATION, its successors and assigns (which is a debtor under the Code).
GUARANTOR. The word "Guarantor" means and includes without limitation, each
and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
the Note, including all principal and accrued interest thereon, together
with all other liabilities, costs and expenses for which Grantor is
responsible under this Agreement or under any of the Related Documents. In
addition, the word "Indebtedness" includes all other obligations, debts and
liabilities, plus any accrued interest thereon, owing by Grantor, or any
one or more of them, to Lender of any kind or character, now existing or
hereafter arising, as well as all present and future claims by Lender
against Grantor, or any one or more of them, and all renewals, extensions,
modifications, substitutions and rearrangements of any of the foregoing;
whether such Indebtedness arises by note, draft, acceptance, guaranty,
endorsement, letter of credit, assignment, overdraft, indemnity agreement
or otherwise; whether such Indebtedness is voluntary or involuntary, due or
not due, direct or indirect, absolute or contingent, liquidated or
unliquidated; whether Grantor may be liable individually or jointly with
others; whether Grantor may be liable primarily or secondarily or as
debtor, maker, comaker, drawer, endorser, guarantor, surety, accommodation
party or otherwise.
LENDER. The word "Lender" means Bank One, Colorado, NA, its successors and
assigns (which is a secured party under the Code).
NOTE. The word "Note" means the promissory note dated March 4, 1999, in the
principal amount of $1,500,000.00 from THE TRIZETTO GROUP, INC., A DELAWARE
CORPORATION to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of and substitutions for
such promissory note.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation the Note and all credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Note.
OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender as
follows:
PERFECTION OF SECURITY INTEREST. Xxxxxxx agrees to execute such financing
statements and to take whatever other actions are requested by Xxxxxx to
perfect and continue Xxxxxx's security interest in the Collateral. Upon
request of Xxxxxx, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Xxxxxx's interest upon any and all chattel paper if not delivered to Lender
for possession by Xxxxxx. Grantor hereby irrevocably appoints Lender as its
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Xxxxxx's security interest in the
Collateral. Grantor has disclosed to Lender all tradenames and assumed
names currently used by Grantor, all tradenames and assumed names used by
Grantor within the previous six (6) years and all of Grantor's current
business locations. Grantor will notify Xxxxxx in writing at least thirty
(30) days prior to the occurrence of any of the following: (i) any changes
in Grantor's name, tradename(s) or assumed name(s), or (ii) any change in
Grantor's business location(s) or the location of any of the Collateral.
NO VIOLATION. The execution and delivery of this Agreement will not violate
any law or agreement, governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not prohibit any
term or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear
to be on the Collateral. At the time any account becomes subject to a
security interest in favor of Xxxxxx, the account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor, for merchandise held subject to delivery instructions or
theretofore shipped or delivered pursuant to a contract of sale, or for
services theretofore performed by Grantor with or for the account debtor;
Grantor will not adjust, settle, compromise, amend or modify any account,
except in good faith and in the ordinary course of business; provided,
however, this exception shall automatically terminate upon the occurrence
of an Event of Default or upon Xxxxxx's written request.
LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will deliver
to Lender in form satisfactory to Lender a schedule of real properties and
Collateral locations relating to Grantor's operations, including without
limitation the following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by Grantor; (c) all
storage facilities owned, rented, leased, or being used by Grantor; and (d)
all other properties where Collateral is or may be located. Except in the
ordinary course of its business, Grantor shall not remove the Collateral
for its existing locations without the prior written consent of Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral for to the extent
the Collateral consists of intangible property such as accounts, the
records concerning the Collateral at Grantor's address shown above, or at
such other locations as are acceptable to Lender. Except in the ordinary
course of its business, including the sales of inventory, Grantor shall not
remove the Collateral from its existing locations.
10
03-04-1999 COMMERCIAL SECURITY AGREEMENT Page 2
Loan No (Continued)
===============================================================================
without the prior written consent of Lender. To the extent that the
Collateral consists of vehicles, or other titled property, Grantor shall
not take or permit any action which would require application for
certificates of title for the vehicles outside the State of Colorado,
without the prior written consent of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventor sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A sale in
the ordinary course of Xxxxxxx's business does not include a transfer in
partial or total satisfaction of a debt or any bulk sale. Grantor shall not
pledge, mortgage, encumber or otherwise permit the Collateral to be subject
to any lien, security interest, encumbrance, or charge, other than the
security interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in right
to the security interests granted under this Agreement. Unless waived by
Xxxxxx, all proceeds from any disposition of the Collateral (for whatever
reasons) shall be held in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that it is the owner of
the Collateral and holds good and marketable title to the Collateral, free
and clear of all liens and encumbrances except for the lien of this
Agreement. No financing statement covering any of the Collateral is on file
in any public office other than those which reflect the security interest
created by this Agreement or to which Lender has specifically consented.
Grantor shall defend Xxxxxx's rights in the Collateral against the claims
and demands of all other persons.
COLLATERAL SCHEDULES AND LOCATIONS. As often as Lender shall require, and
insofar as the collateral consists of accounts and general intangibles,
Grantor shall deliver to Lender schedules of such Collateral, including
such information as Lender may require, including without limitation names
and addresses of account debtors and agings of accounts and general
intangibles. Insofar as the Collateral consists of inventory and equipment,
Grantor shall deliver to Lender, as often as Lender shall require, such
lists, descriptions, and designations of such Collateral as Lender may
require to identify the nature, extent, and location of such Collateral.
MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
tangible Collateral in good condition and repair. Grantor will not commit
or permit damage to or destruction of the Collateral or any part of the
Collateral. Lender and its designated representatives and agents shall have
the right at all reasonable times to examine, inspect, and audit the
Collateral wherever located. Grantor shall immediately notify Lender of all
cases involving the return, rejection, repossession, loss or damage of or
to any Collateral; of any request for credit or adjustment or of any other
dispute arising with respect to the Collateral; and generally of all
happenings and events affecting the Collateral or the value or the amount
of the Collateral.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and governmental charges or levies upon the Collateral and
provide Lender evidence of such payment upon its request. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is in
good faith conducting an appropriate proceeding to contest the obligation
to pay and so long as Xxxxxx's interest in the Collateral is not
jeopardized in Xxxxxx's sole opinion. If the Collateral is subjected to a
lien which is not discharged within fifteen (15) days, Grantor shall
deposit with Lender cash, a sufficient corporate surety bond or other
security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, attorneys' fees or other
charges that could accrue as a result of foreclosure or sale of the
Collateral. In any contest Grantor shall defend itself and Xxxxxx and shall
satisfy any final adverse judgment before enforcement against the
Collateral. Grantor shall name Xxxxxx as an additional obligee under any
surety bond furnished in the contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor is conducting and will
continue to conduct Grantor's businesses in material compliance with all
federal, state and local laws, statutes, ordinances, rules, regulations,
orders, determinations and court decisions applicable to Grantor's
businesses and to the production, disposition or use of the Collateral,
including without limitation, those pertaining to health and environmental
matters such as the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (collectively, together with any subsequent
amendments, hereinafter called "CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980, and the Hazardous Substance
Waste Amendments of 1984 (collectively, together with any subsequent
amendments, hereinafter called "RCRA"). Grantor represents and warrants
that (i) none of the operations of Grantor is the subject of a federal,
state or local investigation evaluating whether any material remedial
action is needed to respond to a release or disposal of any toxic or
hazardous substance or solid waste into the environment; (ii) Grantor has
not filed any notice under any federal, state or local law indicating that
Grantor is responsible for the release into the environment, the disposal
on any premises in which Grantor is conducting its businesses or the
improper storage, of any material amount of any toxic or hazardous
substance or solid waste or that any such toxic or hazardous substance or
solid waste has been released, disposed of or is improperly stored, upon
any premises on which Grantor is conducting its businesses; and (iii)
Grantor otherwise does not have any known material contingent liability in
connection with the release into the environment, disposal or the improper
storage, of any such toxic or hazardous substance or solid waste. The terms
"hazardous substance" and "release", as used herein, shall have the
meanings specified in CERCLA, and the terms "solid waste" and "disposal",
as used herein, shall have the meanings specified in RCRA; provided,
however, that to the extent that the laws of the State of Colorado
establish meanings for such terms which are broader than that specified in
either CERCLA or RCRA, such broader meanings shall apply. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims
against Xxxxxx for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b) agrees to
indemnify and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This
obligation to indemnify shall survive the payment of the indebtedness and
the termination of this Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
risk insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with
respect to the Collateral, in form , amounts, coverages and basis
reasonably acceptable to Lender and issued by a company or companies
reasonably acceptable to Lender. Grantor, upon request of Xxxxxx, will
deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least thirty (30)
days' prior written notice to Xxxxxx and not including any disclaimer of
the insurer's liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest, Grantor
will provide Lender with such loss payable or other endorsements as Lender
may require. If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall not be
obligated to) obtain such insurance as Lender deems appropriate, including
if it so chooses "single interest insurance," which will cover only
Xxxxxx's interest in the Collateral.
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of
any loss or damage to the Collateral. Lender may make proof of loss if
Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral,
Lender shall, upon satisfactory proof of expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration.
If Lender does not consent to repair or replacement of the Collateral,
Lender shall retain a sufficient amount of the proceeds to pay all of the
Indebtedness, and shall pay the balance to Grantor. Any proceeds which have
not been disburse within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness. Application of insurance proceeds
to the payment of the Indebtedness will not extend, postpone or waive any
payments otherwise due, or change the amount of such payments to be made
and proceeds may be applied in such order and such amounts a Lender may
elect.
SOLVENCY OF GRANTOR. As of the date hereof, and after giving effect to this
Agreement and the completion of all other transactions contemplated by
Grantor at the time of the execution of this Agreement, (i) Grantor is and
will be solvent, (ii) the fair salable value of Grantor's assets exceeds
and will continue to exceed Xxxxxxx's liabilities (both fixed and
contingent), (iii) Grantor is paying and will continue to be able to pay
its debts as they mature, and (iv) if Grantor is not an individual, Grantor
has and will have sufficient capital to carry on Grantor's businesses and
all businesses in which Grantor is about to engage.
LIEN NOT RELEASED. The lien, security interest and other security rights of
Lender hereunder shall not be impaired by any indulgence, moratorium or
release granted by Xxxxxx, including but not limited to, the following: (a)
any renewal, extension, increase or modification of any of the
Indebtedness; (b) any surrender, compromise, release, renewal, extension,
exchange or substitution granted in respect of any of the Collateral; (c)
any release or indulgence granted to any endorser, guarantor or surety of
any of the Indebtedness; (d) any release of any other collateral for any of
the indebtedness; (e) any acquisition of any additional collateral for any
of the Indebtedness; and (f) any waiver or failure to exercise any right,
power or remedy granted herein, by law or in any of the Related Documents.
REQUEST FOR ENVIRONMENTAL INSPECTIONS. Upon Xxxxxx's reasonable request
from time to time, Grantor will obtain at Grantor's expense an inspection
or audit report(s) addressed to Lender of Grantor's operations from an
engineering or consulting firm approved by Lender, indicating the presence
or absence of toxic and hazardous substances, underground storage tanks and
solid waste on any premises in which Grantor is conducting a business;
provided, however, Grantor will be obligated to pay for the cost of any
such inspection or audit no more than one time in any twelve (12) month
period unless Xxxxxx has reason to believe that toxic or hazardous
substance or solid
11
03-04-1999 COMMERCIAL SECURITY AGREEMENT Page 3
LOAN NO (CONTINUED)
================================================================================
wastes have been dumped or released on any such premises. If Grantor fails
to order or obtain an inspection or audit within ten (10) days after
Xxxxxx's request, Lender may at its option order such inspection or audit,
and Grantor grants to Lender and its agents, employees, contractors and
consultants access to the premises in which it is conducting its business
and a license (which is coupled with an interest and is irrevocable) to
obtain inspections and audits. Xxxxxxx agrees to promptly provide Lender
with a copy of the results of any such inspection or audit received by
Grantor. The cost of such inspections and audits by Lender shall be a part
of the Indebtedness, secured by the Collateral and payable by Grantor on
demand.
CHATTEL PAPER. To the extent a security interest in the chattel paper of
Grantor is granted hereunder, Xxxxxxx represents and warrants that all
such chattel paper have only one original counterpart and no other party
other than Grantor or Lender is in actual or constructive possession of
any such chattel paper. Xxxxxxx agrees that at the option of and on the
request by Xxxxxx, Grantor will either deliver to Lender all originals of
the chattel paper which is included in the Collateral or will mark all
such chattel paper with a legend indicating that such chattel paper is
subject to the security interest granted hereunder.
LANDLORD'S WAIVERS. Grantor agrees that upon the request of Xxxxxx,
Grantor shall cause each landlord of real property leased by Grantor at
which any of the Collateral is located from time to time to execute and
deliver agreements satisfactory in form and substance to Lender by which
such landlord waives or subordinates any rights it may have in the
Collateral.
XXXXXXX'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest
in such Collateral. Until otherwise notified by Xxxxxx, Grantor may collect any
of the Collateral consisting of accounts. At any time and even though no Event
of Default exists, Xxxxxx may collect the accounts, notify account debtors to
make payments directly to Lender for application to the indebtedness and to
verify the accounts with such account debtors. Xxxxxx also has the right, at
the expense of Grantor, to enforce collection of such accounts and adjust,
settle, compromise, sue for or foreclose on the amount owing under any such
account, in the same manner and to the same extent as Grantor. If Lender at any
time has possession of any Collateral, whether before or after an Event of
Default, Lender shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral if Lender takes such action for that
purpose as Grantor shall request or as Lender, in Xxxxxx's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any
request by Grantor shall not of itself be deemed to be a failure to exercise
reasonable care. Lender shall not be required to take any steps necessary to
preserve any rights in the Collateral against prior parties, nor to protect,
preserve or maintain any security interest given to secure the Indebtedness.
EXPENDITURES BY XXXXXX. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from
the date incurred or paid by Lender to the date of repayment by Grantor. All
such expenses shall become a part of the Indebtedness and be payable on demand
by Xxxxxx. Such right shall be in addition to all other rights and remedies to
which Xxxxxx may be entitled upon the occurrence of an Event of Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due
on the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement, the
Note, any of the other Related Documents or in any other agreement now
existing or hereafter arising between Lender and Grantor.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender under this Agreement, the Note or any of the other
Related Documents is false or misleading in any material respect.
DEFAULT TO THIRD PARTY. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Grantor or any
Guarantor to any third party under any agreement or undertaking.
BANKRUPTCY OR INSOLVENCY. If the Grantor or any Guarantor: (i) becomes
insolvent, or makes a transfer in fraud of creditors, or makes an
assignment for the benefit of creditors, or admits in writing its
inability to pay its debts as they become due; (ii) generally is not
paying its debts as such debts become due; (iii) has a receiver, trustee
or custodian appointed for, or take possession of, all or substantially
all of the assets of such party or any of the Collateral, either in a
proceeding brought by such party or in a proceeding brought against such
party and such appointment is not discharged or such possession is not
terminated within sixty (60) days after the effective date thereof or such
party consents to or acquiesces in such appointment or possession; (iv)
files a petition for relief under the United States Bankruptcy Code or any
other present or future federal or state insolvency, bankruptcy or similar
laws (all of the foregoing hereinafter collectively called "APPLICABLE
BANKRUPTCY LAW") or an involuntary petition for relief is filed against
such party under any Applicable Bankruptcy Law and such involuntary
petition is not dismissed within sixty (60) days after the filing thereof,
or an order for relief naming such party is entered under any Applicable
Bankruptcy Law, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have discharged
within a period of sixty (60) days any attachment, sequestration or
similar writ levied upon any property of such party; or (vi) fails to pay
within thirty (30) days any final money judgment against such party.
LIQUIDATION, DEATH AND RELATED EVENTS. If Grantor or any Guarantor is an
entity, the liquidation, dissolution, merger or consolidation of any such
entity or, if any of such parties is an individual, the death or legal
incapacity of any such individual.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against the Collateral or any other collateral
securing the indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Code. In addition and without limitation, Lender may exercise
any one or more of the following rights and remedies:
ACCELERATE INDEBTEDNESS. Xxxxxx may declare the entire indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all
or any portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require Grantor to
assemble the Collateral and make it available to Lender at a place to be
designated by Lender. Xxxxxx also shall have full power to enter upon the
property of Grantor to take possession of and remove the Collateral. If
the Collateral contains other goods not covered by this Agreement at the
time of repossession, Grantor agrees Lender may take such other goods,
provided that Xxxxxx makes reasonable efforts to return them to Grantor
after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease,
transfer, or otherwise dispose of the Collateral or the proceeds thereof
in its own name or that of Grantor. Lender may sell the Collateral (as a
unit or in parcels) at public auction or private sale. Lender may buy the
Collateral, or any portion thereof, (i) at any public sale, and (ii) at
any private sale if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely
distributed standard price quotations. Lender shall not be obligated to
make any sale of Collateral regardless of a notice of sale having been
given. Lender may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Lender will give Grantor reasonable notice of the time and place of any
public sale thereof or of the time after which any private sale or any
other intended disposition of the Collateral is to be made. The
requirements of reasonable notice shall be met if such notice is given at
least ten (10) days prior to the date any public sale, or after which a
private sale, of any such Collateral is to be held. All expenses relating
to the disposition of the Collateral, including without limitation the
expenses of retaking, holding, insuring, preparing for sale and selling
the Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note rate
from date of expenditure until repaid. Any sale of Collateral through the
public trustee shall be deemed a commercially reasonable sale.
APPOINT RECEIVER. To the extent permitted by applicable law, Xxxxxx shall
have the following rights and remedies regarding the appointment of a
receiver: (a) Lender may have a receiver appointed as a matter of right,
(b) the receiver may be an employee of Xxxxxx and may serve without bond,
and (c) all fees of the receiver and his or her attorney shall become
part of the Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure until
repaid. The receiver may be appointed by a court of competent
jurisdiction upon ex parte application and without notice, notice being
expressly waived.
COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may transfer any Collateral into its own name or that
of its nominee and receive the payments, rents, income and revenues
therefrom and hold the same as security for the Indebtedness or apply it
to payment of the Indebtedness in such order of
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03-04-1999 PROMISSORY NOTE Page 2
Loan No (Continued)
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preference as Lender may determine. Insofar as the Collateral consists of
accounts, general intangibles, insurance policies, instruments, chattel paper,
chooses in action, or similar property, Lender may demand, collect, receipt for,
settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as
Lender may determine. For these purposes, Xxxxxx may, on behalf of and in the
name of Grantor, receive, open and dispose of mail addressed to Grantor; change
any address to which mail and payments are to be sent; and endorse notes,
checks, drafts, money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral. To facilitate
collection, Xxxxxx may notify account debtors and obligors on any Collateral to
make payments directly to Lender.
OBTAIN DEFICIENCY. If Xxxxxx chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining on the
Indebtedness due to Lender after application of all amounts received from the
exercise of the rights provided in this Agreement. Grantor shall be liable for
a deficiency even if the transaction described in this subsection is a sale of
accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies
of a secured creditor under the provisions of the Code, as may be amended from
time to time. In addition, Lender shall have and may exercise any or all other
rights and remedies it may have available at law, in equity, or otherwise.
Grantor waives any right to require Lender to proceed against any third party,
exhaust any other security for the Indebtedness or pursue any other right or
remedy available to Lender.
CUMULATIVE REMEDIES. All of Xxxxxx's right and remedies, whether evidenced
by this Agreement or the Related Documents or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by Xxxxxx
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Grantor under this Agreement, after Xxxxxxx's failure to perform, shall not
affect Xxxxxx's right to declare a default and to exercise its remedies.
MISCELLANEOUS PROVISIONS.
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement and supercedes all prior written and oral
agreements and understandings, if any, regarding same. No alteration of or
amendment to this Agreement shall be effective unless given in writing and
signed by the party or parties sought to be changed or bound by the alteration
or amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and accepted by
Lender in the State of Colorado. Subject to the provisions on arbitration in
any Related Document, this Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado without regard to any conflict
of laws or provisions thereof.
JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN
ANY WAY RELATED TO THIS DOCUMENT, AND ANY OTHER RELATED DOCUMENT, OR ANY
RELATIONSHIP BETWEEN XXXXXX AND THE BORROWER. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER
RELATED DOCUMENTS.
ATTORNEYS' FEES; EXPENSES. Grantor will upon demand pay to Lender the
amount of any and all costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) which Lender may incur in connection
with (i) the perfection and preservation of the collateral assignment and
security interests created under this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iii) the exercise or enforcement of any of
the rights of Lender under this Agreement, or (iv) the failure by Grantor to
perform or observe any of the provisions hereof.
TERMINATION. Upon (i) the satisfaction in full of the Indebtedness and all
obligations hereunder, (ii) the termination or expiration of any commitment of
Lender to extend credit that would become Indebtedness hereunder, and (iii)
Xxxxxx's receipt of a written request from Grantor for the termination hereof,
this Agreement and the security interests created hereby shall terminate. Upon
termination of this Agreement and Xxxxxxx's written request, Lender will, at
Grantor's sole cost and expense, return to Grantor such of the Collateral as
shall not have been sold or otherwise disposed of or applied pursuant to the
terms hereof and execute and deliver to Grantor such documents as Grantor shall
reasonably request to evidence such termination.
INDEMNITY. Grantor hereby agrees to indemnify, defend and hold harmless
Lender, and its officers, directors, shareholders, employees, agents and
representatives (each an "INDEMNIFIED PERSON") from and against any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
(collectively, the "CLAIMS") which may be imposed on, incurred by or asserted
against, any Indemnified Person (whether or not caused by any Indemnified
Person's sole, concurrent or contributory negligence) arising in connection
with the Related Documents, the Indebtedness or the Collateral (including,
without limitation, the enforcement of the Related Documents and the defense of
any Indemnified Person's action and/or inactions in connection with the Related
Documents), except to the limited extent that the Claims against the
Indemnified Person are proximately caused by such Indemnified Person's willful
misconduct. The indemnification provided for in this Section shall survive the
termination of this Agreement and shall extend and continue to benefit each
individual or entity who is or has at any time been an Indemnified Person
hereunder.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered or when
deposited with a nationally recognized overnight courier or deposited in the
United States mail, first class, postage prepaid, addressed to the party to
whom the notice is to be given at the address shown above. Any party may change
its address for notices under this Agreement by giving formal written notice to
the other parties, specifying that the purpose of the notice is to change the
party's address. To the extent permitted by applicable law, if there is more
than one Grantor, notice to any Grantor will constitute notice to all Grantors.
For notice purposes, Grantor will keep Xxxxxx informed at all times of
Grantor's current address(es).
POWER OF ATTORNEY. Grantor hereby irrevocably appoints Lender as its true
and lawful attorney-in-fact, such power of attorney being coupled with an
interest, with full power of substitution to do the following in the place and
stead of Grantor and in the name of Grantor: (a) to demand, collect, receive,
receipt for, sue and recover all sums of money or other property which may now
or hereafter become due, owing or payable from the Collateral; (b) to execute,
sign and endorse any and all claims, instruments, receipts, checks, drafts or
warrants issued in payment for the Collateral; (c) to settle or compromise any
and all claims arising under the Collateral, and, in the place and stead of
Grantor, to execute and deliver its release and settlement for the claim; and
(d) to file any claim or claims or to take any action or institute or take part
in any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable. This power is given as security for the Indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in full
force and effect until renounced by Xxxxxx.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or circumstance,
such finding shall not render that provision invalid or unenforceable as to any
other persons or circumstances. If feasible, any such offending provision shall
be deemed to be modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall be stricken
and all other provisions of this Agreement in all other respects shall remain
valid and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and inure to
the benefit of the parties, their successors and assigns; provided, however,
Xxxxxxx's rights and obligations hereunder may not be assigned or otherwise
transferred without the prior written consent of Lender.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Xxxxxx. No delay
or omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Xxxxxx of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right to
thereafter demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Xxxxxx, nor any course of dealing between
Xxxxxx and Grantor, shall constitute a waiver of any Lender's rights or of any
of Grantor's obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
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03-04-1999 COMMERCIAL SECURITY AGREEMENT PAGE 5
LOAN NO. (Continued)
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GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 4,
1999.
GRANTOR:
THE TRIZETTO GROUP, INC., A DELAWARE CORPORATION
By: /s/XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx, President and CEO
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