1
EXHIBIT 10.22
LOAN AGREEMENT
DATED AS OF FEBRUARY [__], 2001
BY AND BETWEEN
PRACTICEWORKS, INC.,
AS BORROWER,
AND
FINOVA CAPITAL CORPORATION,
AS LENDER
2
TABLE OF CONTENTS
ARTICLE I .......................................................................... 1
DEFINITIONS AND DETERMINATIONS ..................................................... 1
1.1 Definitions ...................................................... 1
1.2 Time Periods ..................................................... 17
1.3 Accounting Terms and Determinations .............................. 17
1.4 References ....................................................... 18
1.5 Lender's Discretion .............................................. 18
1.6 Borrower's Knowledge ............................................. 18
ARTICLE II ......................................................................... 18
TERM LOAN AND TERMS OF PAYMENT; SYNDICATION ........................................ 18
2.1 Term Loan ........................................................ 18
2.2 Use of Proceeds, Term Note and Reborrowing ....................... 18
2.2.1 Use of Proceeds ............................................ 18
2.2.2 Term Note .................................................. 18
2.2.3 Reborrowing ................................................ 19
2.3 Interest ......................................................... 19
2.3.1 Interest Rates and Payment ................................. 19
2.3.2 Default Rate ............................................... 19
2.3.3 Interest and Fees Computation .............................. 19
2.3.4 Maximum Interest ........................................... 19
2.4 Intentionally Omitted ............................................ 20
2.5 Intentionally Omitted ............................................ 20
2.6 Scheduled Principal Repayments ................................... 20
2.7 Late Charges ..................................................... 20
2.8 Optional/Voluntary and Mandatory Prepayment ...................... 20
2.8.1 Voluntary Prepayments ...................................... 20
2.8.2 Mandatory Prepayments ...................................... 21
2.8.3 Intentionally Omitted ...................................... 22
2.9 Commitment Fee ................................................... 22
2.10 Intentionally Omitted ............................................ 22
2.11 Intentionally Omitted ............................................ 23
2.12 Payments after Event of Default .................................. 23
2.13 Method of Payment; Good Funds .................................... 23
2.14 Syndication ...................................................... 23
ARTICLE III ........................................................................ 23
SECURITY ........................................................................... 23
ARTICLE IV ......................................................................... 24
CONDITIONS OF CLOSING AND DISBURSEMENT; ACQUISITIONS ............................... 24
4.1 Closing; Conditions of Disbursement .......................... 24
4.1.1 Representations and Warranties ............................... 24
4.1.2 Related Transactions ......................................... 24
4.1.3 Delivery of Documents ........................................ 24
4.1.4 Performance; No Default ...................................... 25
4.1.5 Opinions of Counsel .......................................... 26
4.1.6 Approval of Loan Documents and Security Interests ............ 26
i
3
4.1.7 Security Interests ........................................... 26
4.1.8 Licenses ..................................................... 26
4.1.10 Financial Statements, Reports and Projections; Inspection .... 26
4.1.11 Material Adverse Effect ...................................... 26
4.1.12 Use of Assets ................................................ 26
4.1.13 Broker Fees .................................................. 26
4.1.14 Insurance; Survey ............................................ 27
4.1.15 Intentionally Omitted ........................................ 27
4.1.16 Payment of Fees, Expenses and Loans .......................... 27
4.2 Conditions to Acquisitions .......................................... 28
4.2.1 Evidence of Perfected First Priority Security Interest ....... 28
4.2.2 Additional Documentation ..................................... 28
ARTICLE V .......................................................................... 29
REPRESENTATIONS AND WARRANTIES ..................................................... 29
5.1 Existence and Power .............................................. 29
5.2 Authority ........................................................ 29
5.3 Capital Stock/Equity Interests and Related Matters ............... 29
5.3.1 Capital Stock; Equity Interests ............................ 29
5.3.2 Restrictions ............................................... 29
5.4 Binding Agreements ............................................... 30
5.5 Business and Property of Borrower................................. 30
5.5.1 Business and Property ...................................... 30
5.5.2 Licenses ................................................... 30
5.5.3 Operating Agreements ....................................... 30
5.5.4 Facility Sites ............................................. 30
5.5.5 Leases ..................................................... 30
5.5.6 Real Estate ................................................ 31
5.5.7 Operation and Maintenance of Equipment ..................... 31
5.5.8 License Agreements ......................................... 31
5.6 Title to Property; Liens ......................................... 31
5.7 Projections and Financial Statements ............................. 32
5.7.1 Financial Statements ....................................... 32
5.7.2 Projections ................................................ 32
5.8 Litigation ....................................................... 32
5.9 Defaults in Other Agreements; Consents; Conflicting Agreements ... 32
5.10 Taxes ............................................................ 33
5.11 Compliance with Applicable Laws .................................. 33
5.12 Patents, Trademarks, Franchises, Agreements....................... 33
5.13 Regulatory Matters ............................................... 33
5.14 Environmental Matters ............................................ 34
5.15 Application of Certain Laws and Regulations....................... 34
5.15.1 Investment Company Act .................................... 34
5.15.2 Holding Company Act ....................................... 34
5.15.3 Foreign or Enemy Status ................................... 34
5.15.4 Regulations as to Borrowing ............................... 34
5.16 Margin Regulations ............................................... 34
5.17 Other Indebtedness ............................................... 35
5.18 No Misrepresentation ............................................. 35
5.19 Employee Benefit Plans ........................................... 35
5.19.1 No Other Plans ............................................ 35
5.19.2 ERISA and Code Compliance and Liability ................... 35
5.19.3 Funding ................................................... 36
ii
4
5.19.4 Prohibited Transactions and Payments ........................ 36
5.19.5 No Termination Event ........................................ 36
5.19.6 ERISA Litigation ............................................ 36
5.20 Employee Matters ................................................... 36
5.20.1 Collective Bargaining Agreements; Grievances ................ 36
5.20.2 Claims Relating to Employment ............................... 36
5.21 Burdensome Obligations ............................................. 37
5.22 Insurance .......................................................... 37
5.23 Subsidiaries ....................................................... 37
5.24 Year 2000 .......................................................... 37
5.25 Warrant ............................................................ 38
ARTICLE VI ......................................................................... 38
AFFIRMATIVE COVENANTS .............................................................. 38
6.1 Legal Existence; Good Standing ..................................... 38
6.2 Inspection ......................................................... 38
6.3 Financial Statements and Other Information ......................... 39
6.3.1 Monthly Statements ........................................... 39
6.3.2 Quarterly Statements; Compliance Certificate ................. 39
6.3.3 Annual Statements ............................................ 39
6.3.4 Intentionally Omitted ........................................ 40
6.3.5 Audit Reports ................................................ 40
6.3.6 Notice of Defaults; Loss ..................................... 40
6.3.7 Notice of Suits, Adverse Events .............................. 41
6.3.8 Reports to Shareholders, Creditors and Governmental Bodies ... 41
6.3.9 ERISA Notices and Requests ................................... 41
6.3.10 Other Information ........................................... 42
6.4 Reports to Governmental Bodies and Other Persons ................... 43
6.5 Maintenance of Licenses, Franchises and Other Agreements ........... 43
6.6 Insurance .......................................................... 43
6.6.1 Maintenance of Insurance .................................... 43
6.6.2 Proceeds .................................................... 43
6.7 Future Leases ...................................................... 44
6.8 Future Acquisitions of Real Estate ................................. 44
6.9 Environmental Matters .............................................. 44
6.10 Compliance with Laws ............................................... 45
6.11 Taxes and Claims ................................................... 45
6.12 Maintenance of Properties .......................................... 45
6.13 Governmental Approvals ............................................. 45
6.14 Intentionally Omitted .............................................. 45
6.15 Further Assurances ................................................. 46
6.16 Landlord Consents .................................................. 46
6.17 Intentionally Omitted .............................................. 46
6.18 Lien Waivers ....................................................... 46
ARTICLE VII ........................................................................ 46
NEGATIVE COVENANTS ................................................................. 46
7.1 Borrowing ........................................................ 46
7.2 Liens ............................................................ 47
7.3 Mergers and Acquisitions ......................................... 47
7.4 Contingent Liabilities/Obligations ............................... 47
7.5 Distributions/Restricted Junior Payments ......................... 47
iii
5
7.6 Capital Expenditures ............................................. 48
7.7 Payments of Indebtedness for Borrowed Money ...................... 48
7.8 Investments; Loans ............................................... 48
7.9 Fundamental Business Changes ..................................... 49
7.10 Facility Sites ................................................... 49
7.11 Sale or Transfer of Assets ....................................... 49
7.12 Amendment of Documents ........................................... 50
7.13 Acquisition of Additional Properties ............................. 50
7.14 Issuance of Capital Stock or Other Similar Interests ............. 50
7.15 Transactions with Affiliates ..................................... 50
7.16 Compliance with ERISA ............................................ 51
7.17 Minimum Net Worth ................................................ 51
7.18 Maximum Leverage Ratio ........................................... 52
7.19 Minimum Total Debt Service Coverage Ratio ........................ 52
7.20 Subsidiaries ..................................................... 52
7.21 Acquisitions ..................................................... 52
7.22 Minimum Current Ratio ............................................ 52
7.23 Minimum Liquidity ................................................ 52
ARTICLE VIII ....................................................................... 53
DEFAULT AND REMEDIES ............................................................... 53
8.1 Events of Default ................................................... 53
8.1.1 Default in Payment ........................................... 53
8.1.2 Breach of Covenants .......................................... 53
8.1.3 Breach of Warranty ........................................... 54
8.1.4 Default Under Other Indebtedness for Borrowed Money .......... 54
8.1.5 Bankruptcy ................................................... 54
8.1.6 Judgments .................................................... 55
8.1.7 Impairment of Licenses; Other Agreements ..................... 55
8.1.8 Collateral ................................................... 55
8.1.9 Plans ........................................................ 55
8.1.10 Change in Control ........................................... 55
8.2 Acceleration of Borrower's Obligations .............................. 57
8.3 Remedies on Default ................................................. 57
8.3.1 Enforcement of Security Interests ............................ 57
8.3.2 Other Remedies ............................................... 57
8.4 Application of Funds ................................................ 57
8.4.1 Expenses ..................................................... 58
8.4.2 Borrower's Obligations ....................................... 58
8.4.3 Surplus ...................................................... 58
8.5 Performance of Borrower's Obligations ............................... 58
ARTICLE IX ......................................................................... 58
CLOSING ............................................................................ 58
ARTICLE X .......................................................................... 59
EXPENSES AND INDEMNITY ............................................................. 59
10.1 Attorneys' Fees and Other Fees and Expenses ......................... 59
10.1.1 Fees and Expenses for Preparation of Loan Documents ...... 59
10.1.2 Fees and Expenses in Enforcement of Rights or Defense
of Loan Documents ........................................ 59
10.2 Indemnity ........................................................... 59
iv
6
10.2.1 Brokerage Fees .................................................... 59
10.2.2 General ........................................................... 59
10.2.3 Operation of Collateral; Joint Venturers .......................... 60
10.2.4 Environmental Indemnity ........................................... 60
10.2.5 Distribution Transactions ......................................... 60
ARTICLE XI ......................................................................... 61
TAXES AND ILLEGALITY ............................................................... 61
11.1 Taxes ............................................................... 61
11.2 Intentionally Omitted ............................................... 62
11.3 Increased Costs and Reduction of Return ............................. 62
11.4 Funding Losses ...................................................... 62
11.5 Certificates of Lender .............................................. 62
11.6 Survival ............................................................ 62
ARTICLE XII ........................................................................ 63
MISCELLANEOUS ...................................................................... 63
12.1 Notices ............................................................. 63
12.2 Survival of Loan Agreement; Indemnities .............................. 64
12.3 Further Assurance .................................................... 64
12.4 Taxes and Fees ....................................................... 64
12.5 Severability ......................................................... 64
12.6 Waiver ............................................................... 65
12.7 Modification of Loan Documents ....................................... 65
12.8 Captions ............................................................. 65
12.9 Successors and Assigns ............................................... 65
12.10 Remedies Cumulative ................................................. 65
12.11 Entire Agreement; Conflict .......................................... 65
12.12 APPLICABLE LAW ...................................................... 65
12.13 JURISDICTION AND VENUE .............................................. 65
12.14 WAIVER OF RIGHT TO JURY TRIAL ....................................... 66
12.15 TIME OF ESSENCE ..................................................... 66
12.16 Estoppel Certificate ................................................ 66
12.17 Consequential Damages ............................................... 67
12.18 Counterparts ........................................................ 67
12.19 No Fiduciary Relationship ........................................... 67
12.20 Notice of Breach by Lender .......................................... 67
12.21 Unwind Agreement .................................................... 67
LIST OF EXHIBITS TO LOAN AGREEMENT
Exhibit 1.1 - Compliance Certificate
Exhibit 5.3.1 - Subsidiary Equity Interests
Exhibit 5.5.1 - Business and Property
Exhibit 5.5.2 - Licenses
Exhibit 5.5.3 - Operating Agreements
Exhibit 5.5.4 - Facility Sites
Exhibit 5.5.5 - Leases
Exhibit 5.5.6 - Real Estate
Exhibit 5.5.8 - License Agreements
Exhibit 5.7.1 - Financial Statements
Exhibit 5.7.2 - Projections
Exhibit 5.8 - Litigation
Exhibit 5.12 - Intellectual Property
Exhibit 5.19.1 - Employee Benefit Plans
Exhibit 5.20.1 - Collective Bargaining
Exhibit 7.1 - Existing Indebtedness
v
7
LOAN AGREEMENT
This LOAN AGREEMENT, dated as of February [__], 2001 (this "Loan
Agreement"), is between PRACTICEWORKS, INC., a Delaware corporation
("Borrower"), and FINOVA CAPITAL CORPORATION, a Delaware corporation ("Lender").
PRELIMINARY STATEMENT:
WHEREAS, Borrower has requested, and Lender has agreed to make
available to Borrower, a term loan upon and subject to the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND DETERMINATIONS
1.1 DEFINITIONS . As used in this Loan Agreement and in the other
Loan Documents, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of the terms defined):
Accounting Changes - as defined in Section 1.3.
Acquisition means any transaction or series of related
transactions for the purpose of or resulting in, directly or
indirectly, (a) the acquisition of all or substantially all of the
assets of a Person, or of any business or division of a Person, (b) the
acquisition of in excess of fifty percent (50%) of the capital stock,
partnership interests or other equity interests of a Person or
otherwise causing a Person to become a Subsidiary of Borrower or (c) a
merger or consolidation or any other combination with another Person
(other than a Person that is a wholly-owned domestic Subsidiary of
Borrower).
Acquisition Documents - as defined in subsection 4.2.2.
ADA means the Americans with Disabilities Act of 1990, as
amended, any successor statute thereto, and the rules and regulations
promulgated thereunder, as in effect from time to time.
1
8
Adjusted EBITDA means, as of any determination date, without
duplication, the sum of (a) EBITDA of Borrowers and their Subsidiaries
on a consolidated basis for the period in question and except to the
extent intended to be included in clauses (1), (2) or (3) below, plus
(b) the sum of the following:
(1) with respect to each Target owned by
Borrower or any Subsidiary of Borrower for which Lender has
not received financial statements for at least one quarter
pursuant to subsection 6.3.2, the sum of Pro Forma EBITDA for
each such Target; plus
(2) with respect to any Target owned by Borrower
or any Subsidiary of Borrower for one (1) full quarter or more
for which Lender has received the financial statements for
such quarters required pursuant to subsection 6.3.2, but owned
by any such Person for less than four (4) full quarters, the
product obtained by multiplying EBITDA of such Target for the
full quarters that such Target has been owned by such Person
for which Lender has received such financial statements by a
fraction, the numerator of which is four (4) and the
denominator of which is the number of full quarters that such
Target has been owned by such Person for which Lender has
received such financial statements; plus
(3) with respect to any Target owned by Borrower
or any Subsidiary of Borrower for four (4) full quarters or
more for which Lender has received financial statements for
not less than a four-quarter period, EBITDA of such Target for
the trailing four-quarter period ending on the last day of the
immediately preceding the quarter for which Lender has
received such financial statements.
Affiliate means, as to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, is in
control of, is controlled by, or is under common control with, such
Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the
other Person, whether through the ownership of voting securities, by
contract or otherwise. Without limitation, any director, executive
officer or beneficial owner of five percent (5%) or more of the equity
of a Person shall, for purposes of this Loan Agreement, be deemed to
control the other Person. Notwithstanding the foregoing, Lender shall
not be deemed to be an "Affiliate" of Borrower or any Subsidiary of
Borrower.
Agreement and Plan of Distribution means that certain
Agreement and Plan of Distribution dated as of February __, 2001 by and
between InfoCure Corporation and Practice Works, as the same from time
to time may be amended, modified or supplemented.
2
9
Applicable Margin means (i) during the period from and after
the Closing Date through and including June 30, 2001, one and one-half
percent (1.50%), (ii) during the period from and after July 1, 2001
through and including December 31, 2001, one and three-quarters percent
(1.75%), and (iii) from and after January 1, 2002, two and one-quarter
percent (2.25%).
Approved Replacement means, with respect to any initial
person, a person reasonably acceptable to Lender hired or engaged by
Borrower to replace and perform the tasks of such initial person whose
employment or occupancy of an office shall have ceased for any reason,
which replacement shall have occurred on or before the ninetieth (90th)
day after the cessation of the employment of or office occupancy by
such initial person.
Assignment of Leases means an assignment of leases executed by
Borrower or any Subsidiary of Borrower, in form and substance
satisfactory to Lender.
Bankruptcy Code means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. 101, et seq.), any successor statute thereto, and the
rules, regulations and legally binding policies promulgated thereunder,
as amended and in effect from time to time.
Base Rate means, at any time and from time to time, the higher
of:
(i) the per annum rate of interest announced or
published publicly from time to time by Citibank, N.A. in New
York, New York as its corporate base (or equivalent) rate of
interest (which rate (a) shall change automatically without
notice and simultaneously with each change in such corporate
base rate, (b) is a reference rate and (c) does not
necessarily represent the lowest or best rate actually charged
to any customer by Citibank, N.A. in New York, New York), and
(ii) the sum of, for any day, (a) the weighted
average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day for such transactions
received by Lender from three Federal funds brokers of
recognized standing selected by it, plus (b) 0.50%.
Basic Financial Statements - as defined in subsection 6.3.3.
Borrower - see the Preamble of this Loan Agreement.
3
10
Borrower's Obligations means, collectively, (i) any and all
Loans, Indebtedness, liabilities, obligations and fees due or to become
due, whether now existing or hereafter arising, of Borrower and its
Subsidiaries to Lender (or any other Person required to be indemnified)
pursuant to the terms of this Loan Agreement, any other Loan Document,
any Rate Contracts (to the extent between Borrower and Lender or any
Affiliate of Lender) or otherwise, including, without limitation, the
Commitment Fee and indemnification obligations, and (ii) the
performance of the covenants of Borrower and its Subsidiaries contained
in the Loan Documents.
Business Day means any day other than a Saturday, Sunday or
other day on which banks in Phoenix, Arizona or New York, New York are
required to close.
Capital Adequacy Regulation means any guideline, request or
directive of any central bank or other Governmental Body, or any other
law, rule or regulation, whether or not having the force of law, in
each case, regarding capital adequacy of Lender or of any corporation
controlling Lender.
Capital Expenditures means for any period and with respect to
any Person, the aggregate of all (i) payments that are made or
liabilities that are incurred by such Person and its Subsidiaries for
the lease, purchase, improvement, construction or use of any Property,
the value or cost of which under GAAP is required to be capitalized and
appears on such Person's consolidated balance sheet in the category of
property, plant or equipment, and (ii) Capital Expenditures/Research
and Development Costs, in any case, without regard to the manner in
which such payments or the instruments pursuant to which they are made
are characterized by such Person or any other Person.
Capital Expenditures/Research and Development Costs means for
any period and with respect to any Person, the aggregate of all
expenditures by and costs of such Person and its Subsidiaries for
research and development which are capitalized, in accordance with
GAAP, on a consolidated balance sheet of such Person and its
Subsidiaries.
Capitalized Lease means any lease of Property, the obligations
for the rental of which are required to be capitalized in accordance
with GAAP.
Cash Equivalents means (a) securities issued or fully
guaranteed or insured by the United States Government or any agency
thereof having maturities of not more than six (6) months from the date
of acquisition; (b) certificates of deposit, time deposits, repurchase
agreements, reverse repurchase agreements or bankers' acceptances
having in each case a tenor of not more than six (6) months, issued by
any U.S. commercial bank or any branch or agency of a non-U.S. bank
licensed to conduct business in the U.S. having combined capital and
surplus of not less than $500,000,000; and (c) commercial paper of an
issuer rated at least A-1 by Standard & Poor's Corporation or P-1 by
▇▇▇▇▇'▇ Investors Service Inc. and in either case having a tenor of not
more than three (3) months.
4
11
Chief Financial Officer means the chief financial officer or
treasurer of Borrower.
Closing means the disbursement of the Term Loan on the Closing
Date.
Closing Date means the date on which all conditions precedent
set forth in Section 4.1 are satisfied or waived by Lender.
Code means the Internal Revenue Code of 1986, any successor
statute thereto, and the rules, regulations and legally binding
policies promulgated thereunder, as amended and in effect from time to
time.
Collateral means, collectively, (i) all existing and
after-acquired Property of Borrower and its Subsidiaries, including,
without limitation, all existing and after-acquired accounts,
machinery, equipment, inventory, goods, fixtures, chattel paper,
investment property, instruments, documents, deposit accounts and
general intangibles, (ii) the Subsidiary Equity Interests and (iii) all
proceeds of the foregoing.
Collateral Documents means, collectively, the Security
Agreement, the Assignment of Leases, the Mortgages, the Pledge
Agreement, the Subsidiary Guaranty, the Subsidiary Security Agreement
and all other security agreements, mortgages, deeds of trust, patent
and trademark assignments, lease and other assignments, guarantees and
other similar agreements, and all amendments, restatements,
modifications or supplements thereof or thereto, between Borrower or
any Subsidiary of Borrower and Lender now or hereafter delivered to
Lender pursuant to or in connection with the transactions contemplated
hereby, and all financing statements (or comparable documents now on
file or hereafter filed in accordance with the UCC or comparable law)
against Borrower or any Subsidiary of Borrower as debtor in favor of
Lender, as secured party.
Commitment(s) means the commitment of Lender to make the Term
Loan.
Commitment Fee - as defined in Section 2.9.
Common Stock Purchase Agreement means that certain Stock
Purchase Agreement dated as of ____________, 2001 by and between
Crescent International Ltd. and Borrower, as the same from time to time
may be amended, modified or supplemented in accordance with the terms
hereof.
Common Stock Purchase Documents means, collectively, (i) the
Common Stock Purchase Agreement, (ii) the Registration Rights Agreement
dated as of ___________, 2001 by and between Crescent International
Ltd. and Borrower, (iii) the Incentive Warrant issued by Borrower to
Crescent International Ltd. on _____________, 2001, together with any
and all warrants issued in replacement thereof or substitution
therefor, (iv) the Protective Warrant issued by Borrower to Crescent
International Ltd.
5
12
on _____________, 2001, together with any and all warrants issued in
replacement thereof or substitution therefor, and (v) all other
agreements, documents and instruments executed and delivered under the
Common Stock Purchase Agreement, in each such case as the same from
time to time may be amended, modified, supplement or restated in
accordance with the terms hereof.
Compliance Certificate means a compliance certificate executed
by the Chief Financial Officer, in substantially the form of EXHIBIT
1.1 hereto.
Consolidated Net Income means, for any period, the net income
of Borrower and its Subsidiaries for such period, on a consolidated
basis, computed in accordance with GAAP.
Consolidated Net Worth means, as of any date of determination,
the net worth of Borrower and its Subsidiaries on such date, on a
consolidated basis, computed in accordance with GAAP.
Contribution means, collectively, (i) the contribution by
InfoCure Corporation to PracticeWorks Systems of the "Included Assets"
(as defined in the Agreement and Plan of Distribution) and the
resulting issuance and delivery by PracticeWorks Systems to InfoCure
Corporation of all of the equity interests of PracticeWorks Systems,
(ii) the contribution by InfoCure Corporation to Borrower of all of the
equity interests of PracticeWorks Systems and the resulting issuance
and delivery by Borrower to InfoCure Corporation of all of the equity
interests of PracticeWorks, and (iii) the contribution by InfoCure
Corporation to Borrower of the equity interests of CADI Acquisition
Corporation, a Colorado corporation, Swenam Holdings B.V., a
Netherlands corporation, and InfoCure Australia Pty. Limited, a company
organized under the laws of Australia, in each case pursuant to and in
accordance with the terms of the Agreement and Plan of Distribution.
Default Rate means (i) with respect to the Term Loan, a rate
equal to the Base Rate, plus the Applicable Margin then in effect, plus
2.0% per annum, and (ii) with respect to any other amounts which may be
owing by Borrower or any Subsidiary of Borrower to Lender pursuant to
this Loan Agreement, the other Loan Documents or otherwise, the rate
equal to the rate in the foregoing clause (i) of this definition.
Default Rate Period means a period of time commencing on the
date an Event of Default has occurred and ending on the date that such
Event of Default is cured or waived in writing by Lender.
Disposition means (a) the sale, lease, conveyance or other
disposition of Property, other than sales or other dispositions
expressly permitted under clause (i) and (ii) of Section 7.11, and (b)
the sale or transfer by Borrower or any Subsidiary of Borrower of any
equity securities issued by any Subsidiary of Borrower and held by such
transferor Person.
6
13
Distribution means the "Distribution," as defined in the
Agreement and Plan of Distribution, pursuant to which InfoCure
Corporation shall distribute to the holders of its common stock the
equity interests of Borrower that were the subject of the Internal
Distribution.
Distribution Transaction Documents means, collectively, (i)
the Agreement and Plan of Distribution, (ii) the Employee Benefits and
Compensation Allocation Agreement dated as of February __, 2001 by and
between InfoCure Corporation and Borrower, (iii) the Tax Disaffiliation
Agreement dated as of February __, 2001 by and between InfoCure
Corporation and Borrower, (iv) the Transition Services Agreement, (v)
the "Registration Statement" and the "Prospectus," in each case as
defined in the Agreement and Plan of Distribution, (vi) the Software
License Agreements, each dated as of February __, 2001, by and between
InfoCure Corporation and Borrower, (vii) the Assignment of Copyrights,
each dated as of February __, 2001, by InfoCure Corporation to and for
the benefit of Borrower, (viii) all other "Ancillary Agreements" and
"Intercompany Agreements", in each case as defined in the Agreement and
Plan of Distribution, and (ix) all agreements, documents and
instruments evidencing or otherwise pertaining to the ISI Merger and/or
the Subsidiary Mergers, including, without limitation, amendments to
constituent documents, certificates of merger and agreements and plans
of merger, in each case as the same from time to time may be amended,
modified or supplemented.
EBITDA means for any period, without duplication, net income
(or loss) for the applicable period of measurement of Borrower and its
Subsidiaries (or such other Persons as the context may require) on a
consolidated basis determined in accordance with GAAP, plus the sum of
the following to the extent deducted in determining such net income:
(i) losses from sales, transactions, exchanges and other dispositions
of Property and other extraordinary losses not in the ordinary course
of business; (ii) interest, fees and other charges paid or accrued on
Indebtedness for Borrowed Money; (iii) depreciation and amortization of
Property; and (iv) income taxes which are accrued or paid during such
period; less gains from sales, transactions, exchanges and other
dispositions of Property and other extraordinary gains not in the
ordinary course of business to the extent included in determining such
net income.
Employee Benefit Plan means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of Borrower or any ERISA Affiliates of Borrower or (ii) has
at any time within the preceding six (6) years been maintained for the
employees of Borrower or any current or former ERISA Affiliates of
Borrower.
Employment Agreements means, collectively, each of the
employment agreements, dated as of the Closing Date, between Borrower
and each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, Dr. ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇.
7
14
Environmental Certificate means an environmental certificate
executed by Borrower, in form and substance satisfactory to Lender.
Environmental Laws means any and all federal, state and local
laws that relate to or impose liability or standards of conduct
concerning public or occupational health and safety or protection of
the environment, as now or hereafter in effect and as have been or
hereafter may be amended or reauthorized, including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C ss.9601 et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. ss.1802 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. ss.1251 et seq.), the Toxic
Substances Control Act (15 U.S.C. ss.2601 et seq.), the Clean Air Act
(42 U.S.C. ss.7901 et seq.), the National Environmental Policy Act (42
U.S.C. ss.4231, et seq.), the Refuse Act (33 U.S.C. ss.407, et seq.),
the Safe Drinking Water Act (42 U.S.C. ss.300(f) et seq.), the
Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.), and all
rules, regulations, codes, ordinances and guidance documents
promulgated or published thereunder, and the provisions of any
licenses, permits, orders and decrees issued pursuant to any of the
foregoing.
Equity Purchase Documents means, collectively, the Stock
Purchase Agreement dated as of February __, 2001 between Crescent
International Ltd., an entity organized under the laws of Bermuda, and
Borrower, and all agreements, documents and instruments executed and
delivered in connection therewith.
ERISA means the Employee Retirement Income Security Act of
1974, and any successor statute thereto, and the rules, regulations and
legally binding policies promulgated thereunder, as amended and in
effect from time to time.
ERISA Affiliate means any Person who is a member of a group
which is under common control with Borrower, who together with Borrower
is treated as a single employer within the meaning of Section 414(b),
(c) and (m) of the Code.
Event of Default means any of the Events of Default set forth
in Section 8.1.
Excess Cash Flow means, for any period, (i) the Operating Cash
Flow of Borrower and its Subsidiaries for such period, minus (ii) the
aggregate of the following for such period: (A) Total Debt Service and
(B) income taxes paid by Borrower and its Subsidiaries during such
period.
Excess Interest - as defined in subsection 2.3.4.
Existing FINOVA Loan Agreement means that certain Loan
Agreement dated August 11, 1999 among Lender, InfoCure Corporation and
certain affiliates thereof, as amended from time to time.
FINOVA means FINOVA Capital Corporation, a Delaware
corporation.
8
15
Fiscal Year means the fiscal year of Borrower and its
Subsidiaries for financial accounting purposes, which fiscal year ends
on December 31. For example, a reference to the 2001 Fiscal Year of
Borrower shall be deemed to refer to Borrower's Fiscal Year ended
December 31, 2001.
Foreign Subsidiary means, with respect to Borrower or any
Subsidiary of Borrower, a Subsidiary thereof that is not organized
under the laws of any State of the United States.
GAAP means generally accepted accounting principles as in
effect from time to time, which shall include but shall not be limited
to the official interpretations thereof by the Financial Accounting
Standards Board or any successor thereto.
Good Funds means United States Dollars available in Federal
funds to Lender at or before 2:00 p.m., Phoenix time, on a Business
Day.
Governmental Body means any foreign, federal, state, municipal
or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof or any court or
arbitrator.
Hazardous Materials means any hazardous, toxic, dangerous or
other waste, substance or material defined as such in, regulated by or
for purposes of any Environmental Law.
HIPAA means the Health Insurance Portability & Accountability
Act, as amended, any successor statute thereto, and the rules and
regulations promulgated thereunder, as in effect from time to time.
Incipient Default means any event, circumstance or condition
which, with the giving of notice, the lapse of time, or both, would
constitute an Event of Default.
Indebtedness means all liabilities, obligations and reserves,
contingent or otherwise, which, in accordance with GAAP, would be
reflected as a liability on a balance sheet or would be required to be
disclosed in a financial statement, including, without duplication: (i)
Indebtedness for Borrowed Money, (ii) obligations secured by any Lien
upon Property, (iii) guaranties, letters of credit and other contingent
obligations and (iv) liabilities in respect of unfunded vested benefits
under any Pension Plan or in respect of withdrawal liabilities incurred
under ERISA by Borrower or any of its ERISA Affiliates to any
Multiemployer Plan.
Indebtedness for Borrowed Money means, without duplication,
all (i) Indebtedness in respect of borrowed money, (ii) Indebtedness
evidenced by a note, debenture or other like written obligation to pay
money (including, without limitation, all of Borrower's Obligations and
Permitted Senior Indebtedness), (iii) Indebtedness in
9
16
respect of rent or hire of Property under Capitalized Leases or for the
deferred purchase price of Property or services, (iv) Indebtedness in
respect of obligations under conditional sales or other title retention
agreements, (v) all net obligations with respect to Rate Contracts and
(vi) all guaranties of any or all of the foregoing.
InfoCure Corporation means InfoCure Corporation, a Delaware
corporation.
InfoCure Systems means InfoCure Systems, Inc., a Georgia
corporation.
Interest Payment Date means the first Business Day of each
quarter.
ISI Merger means the merger of InfoCure Systems with and into
InfoCure Corporation, with InfoCure Corporation being the surviving
entity, pursuant to and in accordance with the terms of the Agreement
and Plan of Distribution and the other Distribution Transaction
Documents.
Landlord means a lessor under a Lease.
Landlord Consent means a consent from a Landlord in form and
substance satisfactory to Lender.
Lease means any lease of real estate under which Borrower or
any Subsidiary of Borrower is the lessee or sublessee.
Leasehold Property means any real estate which is the subject
of a Lease.
Leverage Ratio means, as of any date of determination, the
ratio of (i) the aggregate amount of all Indebtedness for Borrowed
Money of Borrower and its Subsidiaries as of such date to (ii) the
amount by which (a) EBITDA of Borrower and its Subsidiaries for the
twelve-month period ending on such date, exceeds (b) the aggregate
amount of Capital Expenditures/Research and Development Costs made,
incurred or otherwise recognized by Borrower and its Subsidiaries
during such period.
License Agreements means all license agreements pursuant to
which Borrower or any Subsidiary of Borrower is licensed to use the
computer software or similar Property of any other Person in connection
with the business of Borrower or such Subsidiary.
Licenses means all licenses, permits, consents, approvals and
authority issued by any Governmental Body in connection with the
operation of the business of Borrower or any Subsidiary of Borrower.
Lien means any mortgage, pledge, assignment, lien, charge,
encumbrance or security interest of any kind, or the interest of a
vendor or lessor under any conditional sale agreement, Capitalized
Lease or other title retention agreement.
10
17
Loan Agreement means this Loan Agreement and any amendments or
supplements hereto and restatements hereof.
Loan Documents means, collectively, this Loan Agreement, the
Term Note, the Environmental Certificates, the Subsidiary Guaranty, the
Collateral Documents, the Warrant, all agreements, documents and
instruments delivered to Lender in connection therewith and all Rate
Contracts between Borrower and Lender (or any Affiliate of Lender),
including, without limitation, any subordination agreements covering or
otherwise relating to any of the Subordinated Indebtedness.
Loans means the Term Loan or any portion thereof.
Loan Year means a period of time from the Closing Date or any
anniversary of the Closing Date to the immediately succeeding
anniversary of the Closing Date.
Material Adverse Effect means (i) a material adverse effect
upon or change in the business, operations, Property, profits or
condition (financial or otherwise) of Borrower and its Subsidiaries
taken as a whole or upon the validity, enforceability or priority of
the Security Interests or (ii) a material impairment of the ability of
Borrower and its Subsidiaries taken as a whole to perform their
obligations under any Loan Document or of Lender to enforce or collect
any of Borrower's Obligations.
Maximum Rate - as defined in subsection 2.3.4.
Mortgage means any mortgage, deed of trust or other document
creating a Lien on any parcel of Real Estate in favor of Lender, in
form and substance satisfactory to Lender.
Multiemployer Plan means any multiemployer plan as defined
pursuant to Section 3(37) of ERISA to which Borrower or any ERISA
Affiliate of Borrower makes, or accrues an obligation to make
contributions, or has made, or been obligated to make, contributions
within the preceding six (6) years.
Net Issuance Proceeds means, in respect of any issuance of
debt or equity, cash proceeds or non-cash proceeds received or
receivable in connection therewith, net of reasonable out-of-pocket
costs and expenses paid or incurred in connection therewith in favor of
any Person not an Affiliate of Borrower; provided, however, that the
term "Net Issuance Proceeds" shall not include any proceeds (i)
received by PracticeWorks in connection with the issuance of stock to
its employees in the ordinary course of business pursuant to a stock
option plan maintained by PracticeWorks or (ii) of the Term Loan.
Net Proceeds means proceeds in cash, checks or other cash
equivalent financial instruments (including cash equivalents) as and
when received by the Person making a Disposition, net of: (a) the
direct costs relating to such Disposition excluding amounts
11
18
payable to Borrower or any Affiliate of Borrower, (b) sale, use or
other transaction taxes paid or payable as a result thereof and (c)
amounts required to be applied to repay principal, interest and
prepayment premiums and penalties on Indebtedness secured by a Lien on
the asset which is the subject of such Disposition.
Operating Agreements means all right-of-entry agreements,
access agreements, advertising contracts, equipment leases, agreements
pursuant to which any Person provides electronic data service to
Borrower or any Subsidiary of Borrower, service contracts and similar
agreements relating to the operation of the business of Borrower or any
Subsidiary of Borrower, excluding Leases.
Operating Cash Flow means, for any period, Adjusted EBITDA of
Borrower and its Subsidiaries for such period, less Capital
Expenditures made or incurred by Borrower and its Subsidiaries during
such period.
Operating Lease means any lease which, under GAAP, is not
required to be capitalized.
PBGC means the Pension Benefit Guaranty Corporation or any
Governmental Body succeeding to the functions thereof.
Pension Plan means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Part 3 of
Title I of ERISA, Title IV of ERISA, or Section 412 of the Code and
which (i) is maintained for employees of Borrower or any of its ERISA
Affiliates of Borrower, or (ii) has at any time within the preceding
six (6)years been maintained for the employees of Borrower or any
current or former ERISA Affiliates of Borrower.
Permitted Liens means any of the following Liens:
(i) the Security Interests;
(ii) the Permitted Senior Indebtedness Liens;
(iii) Liens for taxes or assessments and similar charges,
which either are (a) not delinquent or (b) being
contested diligently and in good faith by appropriate
proceedings, and as to which Borrower or any
Subsidiary of Borrower has set aside reserves on its
books which are satisfactory to Lender;
(iv) statutory Liens, such as mechanic's, materialman's,
warehouseman's, carrier's or other like Liens,
incurred in good faith in the ordinary course of
business, provided that the underlying obligations
relating to such Liens are paid in the ordinary
course of business, or are being contested diligently
and in good faith by appropriate proceedings and as
12
19
to which Borrower has set aside reserves on its books
satisfactory to Lender, or the payment of which
obligations are otherwise secured in a manner
satisfactory to Lender;
(v) zoning ordinances, easements, licenses, reservations,
provisions, covenants, conditions, waivers or
restrictions on the use of Property and other title
exceptions, in each case, that are acceptable to
Lender;
(vi) Liens in respect of judgments or awards with respect
to which no Event of Default would exist pursuant to
subsection 8.1.6; and
(vii) Liens to secure payment of insurance premiums (a) to
be paid in accordance with applicable laws in the
ordinary course of business relating to payment of
worker's compensation, or (b) that are required for
the participation in any fund in connection with
worker's compensation, unemployment insurance,
old-age pensions or other social security programs.
Permitted Prior Liens means any of the following Liens:
(i) the Permitted Senior Indebtedness Liens;
(ii) the Permitted Liens described in clauses (iii) and
(iv) of the definition of Permitted Liens that are
accorded priority to the Security Interests by law;
and
(iii) the Permitted Liens described in clauses (v) and
(vii) of the definition of Permitted Liens, subject
to the limitations set forth therein.
Permitted Senior Indebtedness means Indebtedness, other than
Borrower's Obligations, incurred to purchase tangible personal property
or Indebtedness incurred to lease tangible personal property pursuant
to Capitalized Leases, provided that (i) such aggregate Indebtedness of
Borrower existing as of the Closing Date shall not exceed $__________
in the aggregate, (ii) during any Loan Year after the Closing Date, the
aggregate amount of such Indebtedness of Borrower and its Subsidiaries
at any one time outstanding during such Loan Year shall not exceed
$_______ and principal payments made with respect to such Indebtedness
during such Loan Year shall not exceed $________ in the aggregate, and
(iii) no Event of Default exists at the time or will be caused as a
result of the incurrence of any Indebtedness described in clause (ii)
of this definition.
Permitted Senior Indebtedness Liens means Liens that secure
Permitted Senior Indebtedness, provided that each such Lien attaches
only to the Property purchased or leased with the proceeds of the
Permitted Senior Indebtedness incurred with respect to such Property.
13
20
Person means any individual, firm, corporation, business
enterprise, trust, association, joint venture, partnership, limited
liability company or partnership, Governmental Body or other entity,
whether acting in an individual, fiduciary or other capacity.
Pledge Agreement means, collectively, the pledge agreements
executed by Borrower and such other Persons, pursuant to which Lender
is granted a first Lien upon the Subsidiary Equity Interests, in form
and substance satisfactory to Lender.
PracticeWorks Systems means PracticeWorks Systems, LLC, a
Georgia limited liability company and a wholly-owned domestic
Subsidiary of Borrower.
Principal Balance means the unpaid principal balance of the
Term Loan or any specified portion thereof outstanding from time to
time.
Pro Forma EBITDA means, with respect to any Target, EBITDA for
such Target for the most recent twelve-month period (or, if otherwise
designated, for any other applicable period or periods) for which
financial statements are available at the time of determination
thereof, adjusted for verifiable expense reductions which are expected
to be realized, calculated by Borrowers and approved by Lender, in its
sole and absolute discretion.
Property means all types of real, personal or mixed property
and all types of tangible or intangible property.
Qualified Depository means a member bank of the Federal
Reserve System having a combined capital and surplus of at least
$100,000,000.
Rate Contracts means swap agreements (as such term is defined
in Section 101 of the Bankruptcy Code) and any other agreements or
arrangements designed to provide protection against fluctuations in
interest or currency exchange rates.
Real Estate means any real estate which is owned, beneficially
or otherwise, by Borrower or any Subsidiary of Borrower.
Related Transactions means, collectively, the ISI Merger, the
Subsidiary Mergers, the Distribution, the Contribution and any
Acquisitions consummated by Borrower or any of its Subsidiaries, and
the other transactions contemplated by the Related Transaction
Documents.
Related Transaction Documents means the Distribution
Transaction Documents, the Common Stock Purchase Documents, any
Acquisition Documents, the Equity Purchase Documents and the Employment
Agreements.
14
21
Requirement of Law means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Body, in each case applicable to or
binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.
Responsible Officer means the Chief Executive Officer or the
president of Borrower, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of
Borrower, or any other officer having substantially the same authority
and responsibility.
Securities Act means the Securities Act of 1933, the
Securities Exchange Act of 1934, any successor statute thereto, and the
rules, regulations and legally binding policies of the Securities
Exchange Commission promulgated thereunder, as amended and in effect
from time to time.
Security Interests means the Liens in the Collateral granted
to Lender pursuant to the Collateral Documents and any other agreement,
document or instrument now or hereafter executed by Borrower, any
Subsidiary of Borrower or any other Person which purports to ▇▇▇▇▇ ▇
▇▇▇▇ on the Property of Borrower, such Subsidiary or such other Person
in favor of Lender.
Security Agreement means a security agreement made by Borrower
in favor of Lender, in form and substance satisfactory to Lender.
Stated Rate - as defined in subsection 2.3.4.
Subordinated Indebtedness means all unsecured Indebtedness for
Borrowed Money of Borrower or any Subsidiary of Borrower approved and
consented to by Lender and which is subordinated in right of payment
and action to Borrower's Obligations, but specifically excluding the
Indebtedness for Borrowed Money described on EXHIBIT 7.1 hereto.
Subsidiary of a Person means any other Person of which more
than fifty percent (50%) of the voting stock or other equity interests
(in the case of Persons other than corporations) is owned or
controlled, directly or indirectly, by such Person, or one or more of
the Subsidiaries of such Person, or any combination thereof.
Subsidiary Equity Interests means all of the issued and
outstanding capital stock, partnership and limited liability company
interests and other equity interests, any all warrants, options and
other rights to purchase or otherwise acquire any capital stock,
partnership and limited liability company interests or other equity
interests, of the Subsidiaries of Borrower.
15
22
Subsidiary Guaranty means the guaranty made by the
Subsidiaries of Borrower (subject to Section 6.15) in favor of Lender,
in form and substance satisfactory to Lender.
Subsidiary Mergers means, collectively, the merger of Applied
Professional Systems, Inc., a Delaware corporation, Technos
Corporation, a New Hampshire corporation, and DataTrac Services
Corporation, a Kansas corporation, with and into InfoCure Systems, with
InfoCure Systems being the surviving entity.
Subsidiary Security Agreement means the security agreement
made by the Subsidiaries of Borrower (subject to Section 6.15) in favor
of Lender, in form and substance satisfactory to Lender.
Target means (i) any other Person engaged in business
activities primarily related to the business activities of Borrower or
(ii) a business unit or asset group of any other Person which is used
in business activities primarily related to the business activities of
Borrower, in each case acquired or proposed to be acquired in an
Acquisition; provided, that, with respect to the calculation of
Adjusted EBITDA, the term "Target" shall be deemed also to include any
Person or business unit or asset group of any other Person that shall
have been acquired by Borrower or any Subsidiary of Borrower pursuant
to an Acquisition (which shall have been approved and consented to by
Lender in writing in its sole and absolute discretion) during the
twelve-month period ending on the Closing Date.
Term Loan means the term loan in the amount of [$_______] to
be made by Lender to Borrower pursuant to subsection 2.1.1.
Term Note means a promissory note of Borrower payable to the
order of Lender evidencing the Term Loan.
Termination Event means (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder; or (ii)
the withdrawal of Borrower or any ERISA Affiliate of Borrower from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2); or (iii) the termination of
a Pension Plan, the filing of a notice of intent to terminate a Pension
Plan or the treatment of a Pension Plan amendment as a termination
under Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate, or the appointment of a trustee with respect to, any Pension
Plan by the PBGC; or (v) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan; or
(vi) the partial or complete withdrawal of Borrower or any ERISA
Affiliate of Borrower from a Multiemployer Plan; or (vii) the
imposition of a lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections
4241 or 4245 of ERISA; or (ix) any event or condition which results in
the termination of a Multiemployer Plan under
16
23
Section 4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
Total Debt Service means during any period, all payments of
principal, interest, premium, loan fees and other charges with respect
to Indebtedness for Borrowed Money of Borrower and its Subsidiaries
(including, without limitation, Borrower's Obligations, Permitted
Senior Indebtedness and Subordinated Indebtedness), which payments are
required or permitted to be made pursuant to this Loan Agreement and
are due and payable during such period.
Total Debt Service Coverage Ratio means the ratio of (i)
Operating Cash Flow of Borrower and its Subsidiaries for the
twelve-month period ending on the last day of any quarter to (ii) Total
Debt Service of Borrower and its Subsidiaries for such twelve-month
period.
Transition Services Agreement means that certain Transition
Services Agreement dated as of February ___, 2001 by and between
InfoCure Corporation and Borrower, as the same from time to time may be
amended, modified or supplemented.
UCC or Uniform Commercial Code means the Uniform Commercial
Code as in effect from time to time in the State of Arizona.
[WARRANT MEANS THAT CERTAIN WARRANT AGREEMENT WITH AN ORIGINAL
ISSUE DATE OF THE CLOSING DATE ISSUED BY BORROWER TO AND FOR THE
BENEFIT OF LENDER.]
1.2 TIME PERIODS. In this Loan Agreement and the other Loan
Documents, in the computation of periods of time from a specified date to a
later specified date, (i) the word "from" means "from and including," (ii) the
words "to" and "until" each mean "to, but excluding" and (iii) the words
"through," "end of" and "expiration" each mean "through and including." Unless
otherwise specified, all references in this Loan Agreement and the other Loan
Documents to (i) a "month" shall be deemed to refer to a calendar month, (ii) a
"quarter" shall be deemed to refer to a calendar quarter and (iii) a "year"
shall be deemed to refer to a calendar year.
1.3 ACCOUNTING TERMS AND DETERMINATIONS. All accounting terms not
specifically defined herein shall be construed, all accounting determinations
hereunder shall be made and all financial statements required to be delivered
pursuant hereto shall be prepared in accordance with GAAP as in effect at the
time of such interpretation, determination or preparation, as applicable. In the
event that any Accounting Changes (as hereinafter defined) occur and such
changes result in a change in the method of calculation of financial covenants,
standards or terms contained in this Loan Agreement, then Borrower and Lender
agree to enter into negotiations to amend such provisions of this Loan Agreement
so as to reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of Borrower shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
For purposes hereof, "Accounting Changes" shall mean (i)
17
24
changes in generally accepted accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants (or
any successor thereto) or other appropriate authoritative body and (ii) changes
in accounting principles as approved by Borrower's accountants.
1.4 REFERENCES. All references in this Loan Agreement to
"Article," "Section," "subsection," "subparagraph," "clause" or "Exhibit,"
unless otherwise indicated, shall be deemed to refer to an Article, Section,
subsection, subparagraph, clause or Exhibit, as applicable, of this Loan
Agreement.
1.5 LENDER'S DISCRETION. Whenever the terms "satisfactory to
Lender," "determined by Lender," "acceptable to Lender," "Lender shall elect,"
"Lender shall request," "at the option or election of Lender," or similar terms
are used in the Loan Documents, except as otherwise specifically provided
therein, such terms shall mean satisfactory to, at the election or option of,
determined by, acceptable to or requested by Lender, in its sole and unlimited
discretion.
1.6 BORROWER'S KNOWLEDGE. Any statements, representations or
warranties in the Loan Documents that are based upon the knowledge or best
knowledge of Borrower or an officer thereof shall be deemed to have been made
after due inquiry by the officer making such statements, representations or
warranties on behalf of Borrower or himself or herself, as applicable, with
respect to the matter in question, and Borrower shall not be imputed with
knowledge of any fact or circumstance unless a Responsible Officer of Borrower
shall have or should have had actual knowledge of such fact or circumstance.
ARTICLE II
TERM LOAN AND TERMS OF PAYMENT; SYNDICATION
2.1 TERM LOAN. Lender agrees, on the terms and conditions
hereinafter set forth, to disburse the proceeds of the Term Loan to or at the
direction of Borrower on the Closing Date.
2.2 USE OF PROCEEDS, TERM NOTE AND REBORROWING.
2.2.1 USE OF PROCEEDS. The proceeds of the Term Loan shall
be used solely to repay a portion of certain Indebtedness owed to
Lender under the Existing FINOVA Loan Agreement, or to repay
intercompany Indebtedness owing by Borrower to InfoCure Corporation (to
the extent contemporaneously used by InfoCure Corporation to repay a
portion of the Indebtedness owed to Lender under the Existing FINOVA
Loan Agreement) and to pay related transaction costs.
2.2.2 TERM NOTE. The Term Loan shall be evidenced by the
Term Note.
18
25
2.2.3 REBORROWING. Borrower may not reborrow all or any
portion of the Term Loan which is repaid or prepaid.
2.3 INTEREST.
2.3.1 INTEREST RATES AND PAYMENT. Except as provided in
subsection 2.3.2, the Principal Balance of the Term Loan shall bear
interest at a per annum rate equal to the Base Rate, plus the
Applicable Margin. Interest shall be payable in arrears on each
Interest Payment Date. Interest also shall be paid on the date of any
payment or prepayment of the Term Loan pursuant to Sections 2.6 and
2.8.
2.3.2 DEFAULT RATE. During a Default Rate Period,
Borrower's Obligations shall bear interest at the applicable Default
Rate.
2.3.3 INTEREST AND FEES COMPUTATION. Computations of
interest on fees and all other Borrower's Obligations (other than the
Term Loan) shall be computed on the basis of a year consisting of 360
days and charged for the actual number of days during the period for
which such interest and fees are being charged. Computations of
interest on the Term Loan shall be computed on the basis of a year
consisting of 365 days (or, in the case of a leap year, 366 days) and
charged for the actual number of days during the period for which such
interest is being charged. In computing interest and fees, the date of
funding shall be included and the date of payment shall be excluded.
2.3.4 MAXIMUM INTEREST. Notwithstanding any provision to
the contrary contained herein or in any other Loan Document, Lender
shall not collect a rate of interest on any obligation or liability due
and owing by Borrower to Lender in excess of the maximum contract rate
of interest permitted by applicable law (such excess referred to as
"Excess Interest"). Lender and Borrower agree that the interest laws of
the State of Arizona shall govern the relationship among them and
understand and believe that the transactions contemplated by the Loan
Documents comply with the usury laws of the State of Arizona, but in
the event of a final adjudication to the contrary, Borrower shall be
obligated to pay, nunc pro tunc, to Lender only such interest as then
shall be permitted by the laws of the state found to govern the
contract relationship between Lender and Borrower. If any Excess
Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Loan Agreement or any
other Loan Document, then in such event (i) Borrower shall not be
obligated to pay such Excess Interest, (ii) any Excess Interest
collected by Lender shall be, at Lender's option, (A) applied to the
Principal Balance in such manner as Lender may elect or to accrued and
unpaid interest not in excess of the maximum rate permitted by
applicable law (the "Maximum Rate") or (B) refunded to the payor
thereof, (iii) the interest rates provided for herein (the "Stated
Rate") shall be automatically reduced to the Maximum Rate and the Loan
Documents shall be deemed to have been, and shall be, modified to
reflect such reduction and (iv) Borrower shall not have any action
against Lender for any damages arising out of the payment or collection
of such Excess Interest; provided,
19
26
however, that if at any time thereafter the Stated Rate is less than
the Maximum Rate, Borrower shall, to the extent permitted by law,
continue to pay interest at the Maximum Rate until such time as the
total interest received by Lender is equal to the total interest which
Lender would have received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the
interest rate payable shall be the Stated Rate unless and until the
Stated Rate again exceeds the Maximum Rate, in which event the
provisions contained in this subsection 2.3.4 shall again apply.
2.4 INTENTIONALLY OMITTED.
2.5 INTENTIONALLY OMITTED.
2.6 SCHEDULED PRINCIPAL REPAYMENTS. The Principal Balance of the
Term Loan shall be paid in installments on the dates and in the respective
amounts shown below:
Amount of Payment (expressed as
percentage of the Principal Balance
Date of Payment on the Closing Date)
--------------- -------------------
October 1, 2001 5%
January 1, 2002 5%
April 1, 2002 5%
July 1, 2002 5%
October 1, 2002 5%
January 1, 2003 5%
April 1, 2003 5%
June 30, 2003 65%
The then remaining Principal Balance of the Term Loan, and any other
sums which then are due and payable pursuant to the terms of the Loan Documents,
shall be due and payable on June 30, 2003.
2.7 LATE CHARGES. If a payment of principal, interest or any fee
to be made pursuant to this Loan Agreement or any other Loan Document becomes
past due for a period in excess of five (5) days, Borrower shall pay to Lender
on demand a late charge of five percent (5.0%) of the amount of such overdue
payment.
2.8 OPTIONAL/VOLUNTARY AND MANDATORY PREPAYMENT.
2.8.1 VOLUNTARY PREPAYMENTS. Borrower may at any time and
from time to time voluntarily prepay all or any portion of the
Principal Balance, subject to the following terms and conditions:
(A) NOTICE OF PREPAYMENT; NUMBER AND AMOUNT OF
PREPAYMENTS. Not less than ten (10) days prior to the date
upon which Borrower desires to make any such voluntary
prepayment, Borrower shall deliver to Lender notice of its
intention to prepay, which notice shall state the prepayment
date and the
20
27
amount of the Principal Balance to be prepaid. No partial
prepayment of the Principal Balance shall be in an amount less
than $100,000 or integral multiples of $100,000 in excess
thereof. A voluntary prepayment of the Principal Balance shall
not be made more frequently than once each month. If Borrower
delivers to Lender a notice of prepayment and fails to make
such prepayment, Borrower shall reimburse Lender on demand for
any actual out-of-pocket loss, cost and/or expense incurred by
Lender as a result of Lender's reliance on such notice.
(B) ADDITIONAL PAYMENTS. Concurrently with any
prepayment pursuant to this subsection 2.8.1, Borrower shall
pay to Lender (i) accrued and unpaid interest on the Principal
Balance which is being prepaid to the date on which Lender is
in receipt of Good Funds, (ii) any amounts required to be paid
in connection therewith pursuant to subsection 2.8.3 and
Section 11.4 and (iii) any other sums which are due and
payable pursuant to the terms of any of the Loan Documents.
(C) APPLICATION OF VOLUNTARY PREPAYMENTS.
Voluntary partial prepayments of the Term Loan shall be
applied against the scheduled installments of the Term Loan in
inverse order of maturity.
2.8.2 MANDATORY PREPAYMENTS.
(A) EXCESS CASH FLOW PAYMENTS. Until Borrower's
Obligations are paid and performed in full, for the Fiscal
Year of Borrower ending December 31, 2001, Borrower shall pay
to Lender an amount equal to fifty percent (50%) of the Excess
Cash Flow for such Fiscal Year. Each such payment shall be
made within thirty (30) days after the date that Borrower is
required to deliver to Lender the audited financial statements
for such Fiscal Year pursuant to subsection 6.3.3.
(B) DISPOSITIONS. If Borrower or any Subsidiary
of Borrower at any time or from time to time shall make or
agree to make a Disposition and the aggregate amount of the
Net Proceeds received by such Person in connection with such
Disposition and all other Dispositions occurring during the
then current Fiscal Year of Borrower and its Subsidiaries
exceeds $300,000, then Borrower shall promptly notify Lender
of such proposed Disposition (including the amount of the
estimated Net Proceeds to be received by Borrower in respect
thereof). In the event that Borrower reasonably expects the
Net Proceeds of such Disposition, or a portion thereof, to be
reinvested in productive assets of a kind then used or useable
in the business of Borrower and its Subsidiaries within ninety
(90) days, then Borrower may use the Net Proceeds (or such
portion thereof) for such purpose. In the event either
Borrower does not reasonably expect the Net Proceeds of such
Disposition, or any portion thereof, to be so used or Borrower
does not reinvest such Net Proceeds within ninety (90) days,
21
28
Borrower shall deliver 100% of such Net Proceeds to Lender as
a prepayment of the Term Loan.
(C) EQUITY ISSUANCES. If Borrower or any
Subsidiary of Borrower shall issue equity securities (other
than issuances by any Subsidiary of Borrower to Borrower or a
wholly-owned domestic Subsidiary of Borrower and issuances on
the Closing Date in connection with the Distribution and
pursuant to the Equity Purchase Documents), Borrower shall
promptly notify Lender of the estimated Net Issuance Proceeds
of such issuance to be received by Borrower or such Subsidiary
in respect thereof and, if any Event of Default shall exist on
the date of either such issuance or Borrower's receipt of such
Net Issuance Proceeds, or if any Event of Default shall result
from the consummation of such issuance, promptly upon receipt
by Borrower of the Net Issuance Proceeds of such issuance,
Borrower shall deliver to Lender 100% of such Net Issuance
Proceeds as a prepayment of the Principal Balance.
(D) PREPAYMENTS IN RESPECT OF EXERCISE OF
REMEDIES. Concurrently with any payment of the Principal
Balance received by Lender resulting from the exercise by
Lender of any remedy available to Lender subsequent to the
occurrence of an Event of Default and the acceleration of
Borrower's Obligations, Borrower shall pay to Lender such
other amounts, as applicable, in accordance with Section 11.4.
(E) APPLICATION OF MANDATORY PREPAYMENTS.
Prepayments received by Lender pursuant to this subsection
2.8.2 shall be applied in the following order of priority to
the payment of: (i) any and all sums which are due and payable
pursuant to the terms of the Loan Documents, except the
Principal Balance and accrued and unpaid interest thereon but
specifically including fees payable in accordance with Section
11.4; (ii) accrued and unpaid interest on the portion of the
Principal Balance being prepaid; (iii) any other accrued and
unpaid interest which is unpaid; and (iv) the installments of
the Principal Balance of the Term Loan in inverse order of
maturity. Together with each prepayment under this subsection
2.8.2, Borrower shall pay any amounts required pursuant to
Section 11.4.
2.8.3 INTENTIONALLY OMITTED.
2.9 COMMITMENT FEE. Borrower shall pay to Lender on the Closing
Date a commitment fee equal to [$183,500] (the "Commitment Fee"), which fee
shall be deemed fully earned on the Closing Date.
2.10 INTENTIONALLY OMITTED.
22
29
2.11 INTENTIONALLY OMITTED.
2.12 PAYMENTS AFTER EVENT OF DEFAULT. All payments received by
Lender during the existence of an Event of Default shall be applied in
accordance with Section 8.4.
2.13 METHOD OF PAYMENT; GOOD FUNDS. All payments to be made
pursuant to the Loan Documents by Borrower shall be made by wire transfer of
Good Funds to the account of Lender at Citibank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, Credit: FINOVA Capital Corporation, Credit
Account No. ▇▇▇▇▇▇▇▇, Reference: PracticeWorks Loan, Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇,
or to such other account as Lender shall notify Borrower. All payments
(including prepayments) to be made by Borrower on account of principal,
interest, fees and other amounts required hereunder shall be made without
off-set, recoupment or counterclaim.
2.14 SYNDICATION. Borrower agree and acknowledge that (i) Lender
shall have the right at any time to sell, assign and transfer any portion of its
loan position to one or more lenders or otherwise syndicate the transaction
contemplated by this Loan Agreement, (ii) in connection with any such sale,
assignment, transfer or syndication, Lender shall have the right to disclose to
such prospective lender(s) any and all information regarding or relating to
Borrower, the transactions contemplated by this Loan Agreement and the other
Loan Documents which have or hereafter may be provided to or obtained by Lender,
(iii) until successful completion of the initial syndication of the Loans, in
the event such initial syndication of the Loans by Lender shall prove to be
impracticable, Borrower agrees to restructure the credit facilities evidenced by
this Loan Agreement and the other Loan Documents and, in furtherance thereof,
Lender may change pricing or make structural changes to the Loans and this Loan
Agreement if Lender determines that such changes are reasonably required in
order to ensure successful syndication of the Loans on terms which are
acceptable to Lender. In connection with any such sale, assignment, transfer or
syndication contemplated by this Section 2.14, Borrower agrees and acknowledges
that (a) Lender and Borrower will be required to re-document the transactions
contemplated by this Loan Agreement and the other Loan Documents, which
re-documentation shall contain such terms, agreements, provisions, covenants,
representations and warranties customarily contained in Lender's syndicated
transactions, and (b) the costs, fees, disbursements and expenses (including
attorneys' fees and expenses) for any such re-documentation shall be borne
solely by Borrower.
ARTICLE III
SECURITY
Borrower's Obligations shall be secured by a Lien upon all of the
Collateral, which at all times shall be superior and prior to all other Liens
(except Permitted Prior Liens), and, subject to Section 6.15, unconditionally
guaranteed by each Subsidiary of Borrower.
23
30
ARTICLE IV
CONDITIONS OF CLOSING AND DISBURSEMENT; ACQUISITIONS
4.1 CLOSING; CONDITIONS OF DISBURSEMENT. This Loan Agreement shall
not be deemed to be effective, and Lender shall not be obligated to disburse the
proceeds of the Term Loan, until all of the following conditions precedent shall
have been satisfied in a manner, form and substance satisfactory to Lender:
4.1.1 REPRESENTATIONS AND WARRANTIES. On the Closing Date
the representations and warranties of Borrower and each of its
Subsidiaries set forth in the Loan Documents and the Related
Transaction Documents to which such Person is a party shall be true and
correct.
4.1.2 RELATED TRANSACTIONS. (a) The Related Transactions
shall have closed in the manner contemplated by the Related Transaction
Documents and shall otherwise be in form and substance satisfactory to
Lender and (b) the Existing FINOVA Loan Agreement shall have been
amended on terms and conditions satisfactory to Lender and all
conditions precedent to the effectiveness thereof shall have been
satisfied (and InfoCure Corporation shall have made a mandatory
prepayment of certain of the Indebtedness owing by InfoCure Corporation
to Lender under the Existing FINOVA Loan Agreement equal in amount to
the proceeds of the Term Loan).
4.1.3 DELIVERY OF DOCUMENTS. The following shall have been
delivered to Lender, each duly authorized and executed, where
applicable:
(a) this Loan Agreement, the Term Note, the
Warrant and an Environmental Certificate;
(b) good standing certificates or their
equivalents for Borrower and each Subsidiary of Borrower from
each of the states in which such Person is organized,
maintains facilities or business locations or otherwise
conducts material business, each dated a recent date prior to
the Closing Date;
(c) copies of (i) the articles of incorporation,
or its equivalent, of Borrower and each Subsidiary of
Borrower, together with all current and proposed amendments
thereto, certified by the Secretary of State of the state in
which each such Person is organized as of a recent date prior
to the Closing Date; (ii) the by-laws, or its equivalent, of
Borrower and each Subsidiary of Borrower, together with all
current and proposed amendments thereto, certified by the
corporate secretary of each such Person, (iii) copies of
resolutions adopted by the board of directors of Borrower and
each Subsidiary of Borrower, each authorizing the execution
and delivery by Borrower of the Loan Documents and the Related
Transaction Documents to which each such Person is a party and
the consummation of the transactions contemplated thereby,
certified as of the Closing Date by the corporate secretary of
each such Person;
24
31
(d) signature and incumbency certificates of the
officers of Borrower and each Subsidiary of Borrower;
(e) the Collateral Documents, in appropriate
form for recording where necessary, and such Loan Documents
executed by each Subsidiary of Borrower, or by Borrower in
respect thereof, including, without limitation, the Subsidiary
Guaranty and the Subsidiary Security Agreement;
(f) certified copies or executed originals of
each of the following:
(1) all Leases;
(2) all Licenses;
(3) all material License Agreements;
(4) all material Operating Agreements;
(5) all Related Transaction Documents;
and
(6) all instruments and documents
evidencing Permitted Senior
Indebtedness existing as of the
Closing Date;
(g) subordination agreements and/or
reaffirmation of subordination in respect of all Subordinated
Indebtedness outstanding as of the Closing Date;
(h) a Landlord Consent from each Landlord under
each Lease (except to the extent previously delivered to
Lender pursuant to the requirements of previous credit
facilities provided to Borrower by Lender);
(i) such other agreements, instruments,
documents, certificates, consents, waivers and opinions as
Lender reasonably may request; and
(j) original stock certificates representing the
Subsidiary Equity Interests as of the date hereof and
assignments separate from certificate executed in blank.
4.1.4 PERFORMANCE; NO DEFAULT. Borrower and each Subsidiary
of Borrower shall have performed and complied with all agreements and
conditions contained in the Loan Documents and the Related Transaction
Documents to be performed by or complied with by such Person prior to
or at the Closing, and no Event of Default or Incipient Default shall
then exist or result from the disbursement of the proceeds of the Term
Loan on the Closing Date.
25
32
4.1.5 OPINIONS OF COUNSEL. Lender shall have received an
opinion dated the Closing Date from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and ▇▇▇▇ &
Spalding, counsel to Borrower and its Subsidiaries, and such other
opinions as Lender may request, including, without limitation, opinions
of foreign counsel.
4.1.6 APPROVAL OF LOAN DOCUMENTS AND SECURITY INTERESTS.
Lender shall have received evidence that all filings have been filed
with, and all approvals or consents shall have been obtained from, all
Governmental Bodies and all other Persons which filing or whose
approval or consent is required to enable Borrower and its Subsidiaries
to (a) enter into and perform their respective obligations under the
Loan Documents and the Related Transaction Documents to which each such
Person is a party and (b) grant the Security Interests to Lender.
4.1.7 SECURITY INTERESTS. All filings of Uniform Commercial
Code financing statements, all recordings of Mortgages and all other
filings and actions necessary to perfect and maintain the Security
Interests as first, valid and perfected Liens in the Property covered
thereby, subject only to Permitted Prior Liens, shall have been filed
or taken and Lender shall have received such UCC, state and federal tax
Lien, pending suit, judgment and other Lien searches as it deems
necessary to confirm the foregoing.
4.1.8 LICENSES. Lender shall have received evidence that
(a) Borrower and each Subsidiary of Borrower is the licensee of all
Licenses necessary for the operation of its business and (b) such
Licenses are in full force and effect as of the Closing Date and no
event has occurred which could result in the termination, revocation or
non-renewal of any such License.
4.1.10 FINANCIAL STATEMENTS, REPORTS AND PROJECTIONS;
INSPECTION. Lender shall have received the financial statements
described in EXHIBIT 5.7.1 and the projections described in EXHIBIT
5.7.2. Borrower shall have arranged for representatives of Lender to
visit and inspect its offices and properties.
4.1.11 MATERIAL ADVERSE EFFECT. No event shall have occurred
since September 30, 2000, which has had or could have a Material
Adverse Effect. No litigation or governmental proceedings or
investigation shall be pending, which in the opinion of Lender could,
if adversely determined, have a Material Adverse Affect.
4.1.12 USE OF ASSETS. Lender shall be satisfied that
Borrower at all times shall be entitled to the use and quiet enjoyment
of all Property necessary for the continued ownership and operation of
the business conducted by Borrower, including, without limitation, the
use of equipment, fixtures, Licenses, offices and means of ingress and
egress thereto, necessary for the operation of such business.
4.1.13 BROKER FEES. If the services of a broker or other
agent have been used in connection with the Loans, all fees owed to
such broker or agent shall have been paid by Borrower and Lender shall
have received evidence of such payment.
26
33
4.1.14 INSURANCE; SURVEY.
(A) BUSINESS AND FLOOD INSURANCE. At least three
(3) Business Days prior to the Closing Date Borrower shall
have delivered to Lender evidence satisfactory to Lender (i)
of flood insurance with respect to each parcel of Real Estate
other than a parcel as to which Borrower has supplied Lender
evidence that the improvements located on such parcel are not
in a flood hazard area and (ii) that all insurance coverage
required pursuant to Section 6.6 is in full force and effect
and all premiums then due thereon have been paid in full.
(B) REAL ESTATE; LEASEHOLD PROPERTY. Lender
shall have received an ALTA mortgagee's policy of title
insurance (ALTA Revised 1987 Form) in favor of Lender with
respect to each parcel of Real Estate, issued by a title
company and in an amount showing that Borrower or the
applicable Subsidiary of Borrower has good and marketable
title to each such parcel of Real Estate and insuring that the
Mortgage covering such parcel constitutes a valid Lien on
Borrower's or such Subsidiary's interest in such parcel,
subject only to Permitted Prior Liens. Each policy shall
insure over all survey and other general exceptions contained
therein and shall include such affirmative endorsements as may
be required by Lender, including, without limitation,
comprehensive endorsement no. 1, contiguity (if applicable),
usury, doing business, variable rate, tie-in, restrictions
(where applicable), encroachment (where applicable), 3.1
zoning (including parking), last dollar, tax parcel, survey,
location, access and future advances. Lender shall have
received copies of and found satisfactory the provisions of
each document referred to in each such policy.
(C) PREMIUMS. Lender shall have received
evidence that all premiums with respect to such title
insurance have been paid by Borrower.
(D) SURVEY. Lender shall have received an
"as-built" survey of each parcel of Real Estate dated not
earlier than 45 days prior to the Closing Date, certified to
Lender and the title company as being drawn in compliance with
the American Land Title Association and American Congress on
Surveying and Mapping Standards (as adopted in 1997),
containing a flood plain certification and showing no matters
or exceptions which are not Permitted Liens and otherwise in
sufficient detail as to permit the elimination of any survey
exceptions to the title policies described above.
4.1.15 INTENTIONALLY OMITTED.
4.1.16 PAYMENT OF FEES, EXPENSES AND LOANS. Borrower shall
have paid (a) the Commitment Fee and (b) all fees and expenses
described in subsection 10.1.1 incurred in connection with the Term
Loan (including attorneys' fees and expenses).
27
34
4.2 CONDITIONS TO ACQUISITIONS. The right of Borrower or any
Subsidiary of Borrower to make any Acquisition, in addition to the receipt of
written approval and consent by Lender, which may be granted or withheld in
Lender's sole and absolute discretion, shall be subject further to the
satisfaction of all of the following conditions in respect of each such
Acquisition, in a manner, form and substance satisfactory to Lender:
4.2.1 EVIDENCE OF PERFECTED FIRST PRIORITY SECURITY
INTEREST. Lender shall have been granted a first priority Lien on and
security interest in the subject Target, and shall have received,
without limitation, the items described in subsection 4.1.3(b), (c)
and (d) and Section 6.15, and shall have received evidence of the
proper filing in all required filing offices of duly executed UCC
financing statements or amendments to existing financing statements
with respect to the subject Target, perfecting the first priority
security interest of Lender in such Property. In the event real
property is being acquired in connection with such Acquisition, Lender
shall have received a fully executed Mortgage, together with an ALTA
lender's title insurance policy issued by a title insurer satisfactory
to Lender in an amount satisfactory to Lender insuring that the
Mortgage is a valid and enforceable first priority Lien on the
respective Property, free and clear of all defects, encumbrances and
Liens, other than Permitted Liens. In addition, Lender shall have
received then current surveys, certified to Lender by a licensed
surveyor sufficient to allow the issuer of Lender's title insurance
policy to issue such policy without a survey exception and an
environmental site assessment prepared by a qualified firm acceptable
to Lender.
4.2.2 ADDITIONAL DOCUMENTATION.
(i) Lender shall have received complete executed or
conformed copies of each document, instrument and agreement executed
in connection with such Acquisition (collectively, the "Acquisition
Documents"), all of which shall be subject to Lender's review and
approval;
(ii) the applicable Acquisition Documents shall be in
full force and effect and no material term or condition thereof shall
have been amended, modified or waived after the execution thereof
(other than solely to extend the date by which the subject Acquisition
is required to occur) except with the prior written consent of Lender;
(iii) none of the parties to any of the applicable
Acquisition Documents shall have failed to perform any material
obligation or covenant required to be performed or complied with on or
before the date on which the subject Acquisition is to be consummated;
(iv) Lender shall have received a collateral assignment
of the seller's representations, warranties and indemnities to
Borrowers or their Subsidiaries
28
35
under the applicable Acquisition Documents and the applicable seller
parties shall have consented thereto in writing; and
(v) such other agreements, instruments, documents,
certificates, consents, waivers and opinions as Lender may request
(including without limitation, opinions from the sellers' counsel).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as follows (after giving
effect to the Related Transactions):
5.1 EXISTENCE AND POWER. Borrower and each Subsidiary of Borrower
is a corporation, partnership or limited liability company, as applicable, duly
formed, validly existing and in good standing under the laws of the state (or
country) of its incorporation, organization or formation and Borrower and each
Subsidiary of Borrower has all requisite power and authority to own its
Property and to carry on its business as now conducted and as proposed to be
conducted following the Closing Date, and is in good standing and authorized to
do business in each jurisdiction in which the failure so to qualify would be a
Material Adverse Effect.
5.2 AUTHORITY. Borrower and each Subsidiary of Borrower has full
power and authority to enter into, execute, deliver and carry out the terms of
the Loan Documents and the Related Transaction Documents to which it is a party
and to incur the obligations provided for therein, all of which have been duly
authorized by all proper and necessary action and are not prohibited by the
organizational instruments of such Person.
5.3 CAPITAL STOCK/EQUITY INTERESTS AND RELATED MATTERS.
5.3.1 CAPITAL STOCK; EQUITY INTERESTS. There is set forth
in EXHIBIT 5.3.1 a complete description of the Subsidiary Equity
Interests, all of which are validly issued, fully paid and
non-assessable, and have been issued and sold in compliance with all
applicable foreign, federal and state laws, rules and regulations,
including, without limitation, all so-called "Blue-Sky" laws. The
Subsidiary Equity Interests are owned beneficially and of record by
the Persons set forth on EXHIBIT 5.3.1 and in the amounts therein
described, free and clear of all Liens except the Security Interests.
5.3.2 RESTRICTIONS. Neither Borrower nor any Subsidiary of
Borrower (i) is a party to or has knowledge of any agreements
restricting the transfer of Subsidiary Equity Interests, except the
Loan Documents, (ii) has issued any rights which can be convertible
into or exchangeable or exercisable for any of Subsidiary Equity
Interests,
29
36
or any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character
relating to, any of Subsidiary Equity Interests or any securities
convertible into or exchangeable or exercisable for any of Subsidiary
Equity Interests and (iii) is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of
Subsidiary Equity Interests or any convertible rights or options with
respect thereto.
5.4 BINDING AGREEMENTS. This Loan Agreement, the other Loan
Documents and the Related Transaction Documents, when executed and delivered,
will constitute the valid and legally binding obligations of Borrower and each
Subsidiary of Borrower to the extent such Person is a party thereto,
enforceable against such Person in accordance with their respective terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting the enforcement of creditors' rights generally and (ii)
equitable principles (whether or not any action to enforce such document is
brought at law or in equity).
5.5 BUSINESS AND PROPERTY OF BORROWER.
5.5.1 BUSINESS AND PROPERTY. Borrower and each Subsidiary
of Borrower is the owner of all Property and the holder of all Leases,
Licenses and Operating Agreements necessary to conduct its business as
now conducted. Neither Borrower nor any Subsidiary of Borrower engages
or proposes to engage in any business or activity other than as set
forth in EXHIBIT 5.5.1.
5.5.2 LICENSES. There is set forth in EXHIBIT 5.5.2 a
description of all Licenses which have been issued or assigned to
Borrower and its Subsidiaries. All of such Licenses are in full force
and effect and have been duly issued in the name of, or validly
assigned to, Borrower or the applicable Subsidiary of Borrower, no
default or breach exists thereunder and Borrower and each Subsidiary
of Borrower has full power and authority thereunder to conduct its
business.
5.5.3 OPERATING AGREEMENTS. There is set forth in EXHIBIT
5.5.3 a description of all material Operating Agreements with respect
to the businesses of Borrower and its Subsidiaries. All of Operating
Agreements are in full force and effect and no event has occurred
which could result in the cancellation or termination of any such
Operating Agreement or the imposition thereunder of any liability upon
Borrower or any Subsidiary of Borrower which could have a Material
Adverse Effect.
5.5.4 FACILITY SITES. There is set forth in EXHIBIT 5.5.4
the location of the chief executive office of Borrower and each
Subsidiary of Borrower and all other locations of such Persons'
Property.
5.5.5 LEASES. There is set forth in EXHIBIT
5.5.5 a list of all Leases, together with a complete and accurate
address of each parcel of Leasehold Property. Each Lease is in full
force and effect, there has been no material default in the
performance
30
37
of any of its terms or conditions by any party thereto, and no claims
of default have been asserted with respect thereto.
5.5.6 REAL ESTATE. There is set forth in EXHIBIT 5.5.6 a
complete and accurate address and legal description of each parcel of
Real Estate. The present and contemplated use of the Leasehold
Property and the Real Estate is in compliance with all applicable
zoning ordinances and regulations and other laws and regulations, the
violation of which could have a Material Adverse Effect.
5.5.7 OPERATION AND MAINTENANCE OF EQUIPMENT. Neither
Borrower nor any Subsidiary of Borrower owning or operating any
equipment necessary for the operation of its business has used,
operated or maintained the same in a manner which now or hereafter
could result in the cancellation or termination of the right of such
Person to use or make use of the same or which could result in any
material liability of such Person for damages in connection therewith.
All of the equipment and other tangible personal property owned by
Borrower and each Subsidiary of Borrower is, in all material respects,
in good operating condition and repair and has been used, operated and
maintained in substantial compliance with all applicable laws, rules
and regulations.
5.5.8 LICENSE AGREEMENTS. There is set forth in EXHIBIT
5.5.8 a description of all material License Agreements with respect to
the businesses of Borrower and its Subsidiaries. All such License
Agreements are in full force and effect and no event has occurred
which could result in the cancellation or termination of any such
License Agreement or the imposition thereunder of any liability upon
Borrower or any Subsidiary of Borrower which could have a Material
Adverse Effect.
5.6 TITLE TO PROPERTY; LIENS. Borrower and each Subsidiary of
Borrower has (i) good and marketable title to all of its Property, except (A)
any License which cannot be transferred without the consent of a Governmental
Body and (B) the portion thereof consisting of a leasehold estate and (ii) a
valid leasehold estate in each portion of its Property which consists of a
leasehold estate. All of such Property is free and clear of all Liens, except
Permitted Liens. Upon the proper filing with the appropriate Governmental
Bodies of the Mortgages and appropriate Uniform Commercial Code financing
statements, the applicable Loan Documents will create valid and perfected Liens
in the Property described therein, subject only to Permitted Prior Liens.
31
38
5.7 PROJECTIONS AND FINANCIAL STATEMENTS.
5.7.1 FINANCIAL STATEMENTS. Borrower has delivered to
Lender the financial statements described in EXHIBIT 5.7.1 pertaining
to the operations of Borrower and its Subsidiaries. Such financial
statements present fairly in all material respects the results of
operations of the business of Borrower and its Subsidiaries for the
periods covered thereby and the financial condition of Borrower and
its Subsidiaries as of the dates indicated therein. All of such
financial statements have been prepared in conformity with GAAP,
subject to normal year-end adjustments and the absence of footnotes.
Since September 30, 2000, there has been no change which has had or
could have a Material Adverse Effect. Borrower also has delivered to
Lender a pro-forma balance sheet of Borrower and its Subsidiaries as
of the Closing Date. Such pro-forma balance sheets, which assume the
consummation of the transactions contemplated by the Related
Transaction Documents, present fairly in all material respects the
anticipated financial condition of Borrower and its Subsidiaries as of
the Closing Date.
5.7.2 PROJECTIONS. Borrower has delivered to Lender the
projections described in EXHIBIT 5.7.2 of the future operations of
Borrower and its Subsidiaries. Such projections represent the best,
good faith estimates of Borrower as of the Closing Date of the future
financial performance of Borrower and its Subsidiaries.
5.8 LITIGATION. There is set forth in EXHIBIT 5.8 a description
of all actions and suits, arbitration proceedings and claims pending or, to the
best knowledge of Borrower, threatened against Borrower or any Subsidiary of
Borrower or maintained by Borrower or any Subsidiary of Borrower at law or in
equity or before any Governmental Body. None of the matters set forth in such
EXHIBIT 5.8, if adversely determined, could have a Material Adverse Effect.
5.9 DEFAULTS IN OTHER AGREEMENTS; CONSENTS; CONFLICTING
AGREEMENTS. Except as otherwise disclosed herein, neither Borrower nor any
Subsidiary of Borrower is in default under any agreement to which such Person
is a party or by which such Person or any of the Property of such Person is
bound, the effect of which default could have a Material Adverse Effect. No
authorization, consent, approval or other action by, and no notice to or filing
with, any Governmental Body or any other Person which has not already been
obtained, taken or filed, as applicable, is required (i) for the due execution,
delivery or performance by Borrower or any Subsidiary of Borrower of any of the
Loan Documents and the Related Transaction Documents to which such Person is a
party or (ii) as a condition to the validity or enforceability of any of the
Loan Documents or Related Transaction Documents to which Borrower or any
Subsidiary of Borrower is a party or any of the transactions contemplated
thereby or the priority of the Security Interests, except for certain filings
to establish and perfect the Security Interests. No provision of any mortgage,
indenture, contract, agreement, statute, rule, regulation, judgment, decree or
order binding on Borrower or any Subsidiary of Borrower or affecting the
Property of Borrower or any Subsidiary of Borrower conflicts with, or requires
any consent which has not already been obtained under, or would in any way
prevent the execution, delivery or performance of the terms of any of the Loan
Documents or
32
39
Related Transaction Documents or affect the validity or priority of the
Security Interests. The execution, delivery or performance of the terms of the
Loan Documents and the Related Transaction Documents will not constitute a
default under, or result in the creation or imposition of, or obligation to
create, any Lien upon the Property of Borrower or any Subsidiary of Borrower
pursuant to the terms of any such mortgage, indenture, contract or agreement,
other than the Loan Documents.
5.10 TAXES. Borrower and each Subsidiary of Borrower has filed all
tax returns required to be filed, and has paid, or made adequate provision for
the payment of, all taxes shown to be due and payable on such returns or in any
assessments made against any such Person, and no tax Liens have been filed and
no claims are being asserted in respect of such taxes which are required by
GAAP to be reflected in the financial statements of Borrower or any Subsidiary
of Borrower and are not so reflected therein. The charges, accruals and
reserves on the books of Borrower and each Subsidiary of Borrower with respect
to all federal, state, local and other taxes are considered by the management
of each such Person to be adequate, and there is no unpaid assessment which is
or might be due and payable by any such Person or create a Lien against any
such Person's Property, except such assessments as are being contested in good
faith and by appropriate proceedings diligently conducted, and for which
adequate reserves have been set aside in accordance with GAAP. None of the tax
returns of Borrower or any Subsidiary of Borrower is under audit.
5.11 COMPLIANCE WITH APPLICABLE LAWS. Neither Borrower nor any
Subsidiary of Borrower is in default in respect of any judgment, order, writ,
injunction, decree or decision of any Governmental Body, which default could
have a Material Adverse Effect. Except as otherwise provided herein, Borrower
and each Subsidiary of Borrower is in compliance in all material respects with
all applicable laws, statutes and regulations, including, without limitation,
health-care related laws (including anti-fee splitting laws, corporate practice
of medicine laws, fraud and abuse laws and HIPAA), all Environmental Laws,
ERISA, ADA and all laws and regulations relating to unfair labor practices,
equal employment opportunity and employee safety, of all Governmental Bodies
(including, without limitation, the Food and Drug Administration and the United
States Department of Health & Human Services), a violation of which could have
a Material Adverse Effect. No condemnation, eminent domain or expropriation has
been commenced or, to the best knowledge of Borrower, threatened against the
Property of Borrower or any Subsidiary of Borrower.
5.12 PATENTS, TRADEMARKS, FRANCHISES, AGREEMENTS. There is set
forth on EXHIBIT 5.12 a description of all patents, patent applications,
trademarks, trademark applications, copyrights and copyright applications owned
or used by Borrower and each Subsidiary of Borrower. Borrower and each
Subsidiary of Borrower owns, possesses or has the right to use all patents,
trademarks, service marks, trade names, copyrights, franchises and rights with
respect thereto, necessary for the conduct of its business, without any known
conflict with the rights of others and, in each case, free of any Liens.
5.13 REGULATORY MATTERS. Borrower and each Subsidiary of Borrower
(i) has duly and timely filed all reports, statements of account and other
filings which are required to be
33
40
filed by such Person under any applicable law, rule or regulation of any
Governmental Body, the non-filing of which could have a Material Adverse
Effect, and (ii) is in compliance with all such laws, rules and regulations,
the noncompliance with which could have a Material Adverse Effect.
5.14 ENVIRONMENTAL MATTERS. To the best of Borrower's knowledge,
Borrower and each Subsidiary of Borrower is in compliance with all applicable
Environmental Laws and no portion of the Real Estate or Leasehold Property has
been used as a land fill. To the best of Borrower's knowledge there currently
are not any known Hazardous Materials generated, manufactured, released,
stored, buried or deposited over, beneath, in or on (or used in the
construction and/or renovation of) the Real Estate or Leasehold Property in
violation of applicable Environmental Laws.
5.15 APPLICATION OF CERTAIN LAWS AND REGULATIONS. Neither Borrower
nor any Affiliate of Borrower is:
5.15.1 INVESTMENT COMPANY ACT. An "investment company," or
a company "controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940, as amended.
5.15.2 HOLDING COMPANY ACT. A "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company,"
as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
5.15.3 FOREIGN OR ENEMY STATUS. (i) An "enemy" or an "ally
of an enemy" within the meaning of Section 2 of the Trading with the
Enemy Act, (ii) a "national" of a foreign country designated in
Executive Order No. 8389, as amended, or of any "designated enemy
country" as defined in Executive Order No. 9095, as amended, of the
President of the United States of America, in each case within the
meaning of such Executive Orders, as amended, or of any regulation
issued thereunder, (iii) a "national of any designated foreign
country" within the meaning of the Foreign Assets Control Regulations
or of the Cuban Assets Control Regulations of the United States of
America (Code of Federal Regulations, Title 31, Chapter V, Part 515,
Subpart B, as amended), or (iv) an alien or a representative of any
alien or foreign government within the meaning of Section 310 of Title
47 of the United States Code.
5.15.4 REGULATIONS AS TO BORROWING. Subject to any statute
or regulation which regulates the incurrence of any Indebtedness for
Borrowed Money, including, without limitation, statutes or regulations
relative to common or interstate carriers or to the sale of
electricity, gas, steam, water, telephone, telegraph or other public
utility services.
5.16 MARGIN REGULATIONS. None of the transactions contemplated by
this Loan Agreement, any of the other Loan Documents or any of the Related
Transaction Documents,
34
41
including the use of the proceeds of the Loans, will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including, without limitation,
Regulations T, U and X, and neither Borrower nor any Subsidiary of Borrower
owns or intend to carry or purchase any "margin security" within the meaning of
such Regulation U.
5.17 OTHER INDEBTEDNESS. After giving effect to the Closing and
the Related Transactions, on the Closing Date neither Borrower nor any
Subsidiary of Borrower shall have any Indebtedness for Borrowed Money, except
(i) Borrower's Obligations, (ii) Permitted Senior Indebtedness and (iii)
Indebtedness for Borrowed Money otherwise permitted under Section 7.1.
5.18 NO MISREPRESENTATION. To the best of Borrower's knowledge
neither this Loan Agreement nor any other Loan Document, certificate,
information or report furnished or to be furnished by or on behalf of Borrower
or any Subsidiary of Borrower to Lender in connection with any of the
transactions contemplated hereby or thereby, contains or will contain a
misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements contained herein or
therein, taken as a whole, not misleading in the light of the circumstances
under which such statements were made. There is no fact, other than information
known to the public generally, known to or reasonably foreseen by Borrower
after diligent inquiry, that could have a Material Adverse Effect that has not
expressly been disclosed to Lender in writing.
5.19 EMPLOYEE BENEFIT PLANS.
5.19.1 NO OTHER PLANS. Neither Borrower nor any ERISA
Affiliate of Borrower maintains or contributes to, or has any
obligation under, any Employee Benefit Plan other than those
identified on EXHIBIT 5.19.1. Borrower has provided Lender accurate
and complete copies of all material contracts, agreements and
documents described on EXHIBIT 5.19.1.
5.19.2 ERISA AND CODE COMPLIANCE AND LIABILITY. Borrower
and each ERISA Affiliate of Borrower is in compliance with all
applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans
except where failure to comply would not result in a material
liability to Borrower or such other Person and except for any required
amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the Code
has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to
be exempt under Section 401(a) of the Code. No material liability has
been incurred by Borrower or any ERISA Affiliate of Borrower which
remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan.
5.19.3 FUNDING. No Pension Plan has been terminated, nor
has any accumulated funding deficiency (as defined in Section 412 of
the Code) been insured
35
42
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been
received or requested with respect to any Pension Plan, nor has
Borrower or any ERISA Affiliate of Borrower failed to make any
contributions or to pay any amounts due and owing as required by
Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under
Section 412 of the Code or Section 302 of ERISA, nor has there been
any event requiring any disclosure under Section 4041(c)(3)(C),
4063(a) or 4068 of ERISA with respect to any Pension Plan.
5.19.4 PROHIBITED TRANSACTIONS AND PAYMENTS. Neither
Borrower nor any ERISA Affiliate of Borrower has: (i) engaged in a
nonexempt "prohibited transaction" as such term is defined in Section
406 of ERISA or Section 4975 of the Code; (ii) incurred any liability
to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid;
(iii) failed to make a required contribution or payment to a
Multiemployer Plan; or (iv) failed to make a required installment or
other required payment under Section 412 of the Code.
5.19.5 NO TERMINATION EVENT. No Termination Event has
occurred or is reasonably expected to occur.
5.19.6 ERISA LITIGATION. No material proceeding, claim,
lawsuit and/or investigation is existing or, to the best knowledge of
Borrower, threatened concerning or involving any (i) employee welfare
benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by Borrower or any of ERISA Affiliate of
Borrower, (ii) Pension Plan or (iii) Multiemployer Plan.
5.20 EMPLOYEE MATTERS.
5.20.1 COLLECTIVE BARGAINING AGREEMENTS; GRIEVANCES. (i)
None of the employees of Borrower or any Subsidiary of Borrower is
subject to any collective bargaining agreement, (ii) except as
described in EXHIBIT 5.20.1, no petition for certification or union
election is pending with respect to the employees of Borrower or any
Subsidiary of Borrower and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees
of Borrower or any Subsidiary of Borrower and (iii) there are no
strikes, slowdowns, work stoppages, unfair labor practice complaints,
grievances, arbitration proceedings or controversies pending or, to
the best knowledge of Borrower, threatened against Borrower or any
Subsidiary of Borrower by any of such Person's employees, other than
employee grievances or controversies arising in the ordinary course of
business that could not in the aggregate have a Material Adverse
Effect.
5.20.2 CLAIMS RELATING TO EMPLOYMENT. Neither Borrower nor,
to Borrower's best knowledge, any shareholder or employee of Borrower,
is subject to any employment agreement or non-competition agreement
with any former employer or any other Person which agreement could
have a Material Adverse Effect due to (i) any
36
43
information which Borrower would be prohibited from using under the
terms of such agreement or (ii) any legal considerations relating to
unfair competition, trade secrets or proprietary information.
5.21 BURDENSOME OBLIGATIONS. After giving effect to the
transactions contemplated by the Loan Documents and the Related Transaction
Documents, (i) neither Borrower nor any Subsidiary of Borrower (A) will be a
party to or be bound by any franchise, agreement, deed, lease or other
instrument, or be subject to any restriction, which is so unusual or burdensome
so as to cause, in the foreseeable future, a Material Adverse Effect and (B)
intends to incur, or believes that it will incur, debts beyond its ability to
pay such debts as they become due, and (ii) Borrower and each Subsidiary of
Borrower (A) owns and will own Property, the fair saleable value of which is
(I) greater than the total amount of its liabilities (including contingent
liabilities) and (II) greater than the amount that will be required to pay the
probable liabilities of its then existing debts as they become absolute and
matured, and (B) has and will have capital that is not unreasonably small in
relation to its business as presently conducted and as proposed to be
conducted. Borrower does not presently anticipate that future expenditures
needed to meet the provisions of federal or state statutes, orders, rules or
regulations will be so burdensome so as to have a Material Adverse Effect.
5.22 INSURANCE. The Property of Borrower and each Subsidiary of
Borrower is insured with financially sound and reputable insurance companies
which are not Affiliates of Borrower, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar Property in locales where Borrower or such
Subsidiary operates.
5.23 SUBSIDIARIES. As of the Closing Date and after giving affect
to the Related Transactions, (i) Borrower has no Subsidiaries other than
PracticeWorks Systems, CADI Acquisition Corporation, a Colorado corporation,
Swenam Holdings, B.V., a Netherlands corporation, InfoCure Australia Pty.
Limited, an Australian corporation, PracticeWorks Limited, a United Kingdom
corporation, Scandic Dental Computer Systems AB, a Swedish corporation, Medical
and Dental Business Solutions (Sweden) AB, a Swedish corporation, ▇▇▇▇▇▇ Pty
Limited, an Australian corporation, and InfoCure Orthodontics Pty. Limited, an
Australian corporation, (ii) Swenam Holdings B.V., a Netherlands corporation,
has no Subsidiaries other than PracticeWorks Limited, a United Kingdom
corporation, Scandic Dental Computer Systems AB, a Swedish corporation, Medical
and Dental Business Solutions (Sweden) AB, a Swedish corporation, (iii)
InfoCure Australia Pty. Limited, an Australian corporation, has no Subsidiaries
other than ▇▇▇▇▇▇ Pty Limited, an Australian corporation, and InfoCure
Orthodontics Pty. Limited, an Australian corporation, and (iv) neither
PracticeWorks Systems nor CADI Acquisition Corporation, a Colorado corporation,
has any Subsidiaries.
5.24 YEAR 2000. Borrower and each Subsidiary of Borrower has made
an assessment of the microchip and computer-based systems and the software used
in its and its Subsidiaries' business and based upon such assessment believes
that it is "Year 2000 Compliant". For purposes of this paragraph, "Year 2000
Compliant" means that all software, embedded microchips and other processing
capabilities utilized by, and material to the business
37
44
operations or financial condition of, Borrower or any of its Subsidiaries are
able to interpret, store, transmit, receive and manipulate date on and
involving all calendar dates correctly and without causing any abnormal ending
scenarios in relation to dates in and after the year 2000.
5.25 WARRANT.
(A) AUTHORITY. Borrower has full corporate power and
authority to execute and deliver the Warrant and to perform all of its
obligations thereunder, and the execution, delivery and performance
thereof have been duly authorized by all necessary corporate action on
its part. The Warrant has been duly executed on behalf of Borrower and
constitutes the legal, valid and binding obligation of Borrower
enforceable in accordance with its terms.
(B) NO LEGAL BAR. Neither the execution, delivery or
performance of the Warrant will (a) conflict with or result in a
violation of the articles or certificate of incorporation or by-laws
of Borrower, (b) conflict with or result in a violation of any law,
statute, regulation, order or decree applicable to Borrower or any
Affiliate of Borrower, (c) require any consent or authorization or
filing with, or other act by or in respect of, any Governmental Body,
or (d) result in a breach of, constitute a default under or constitute
an event creating rights of acceleration, termination or cancellation
under any mortgage, lease, contract, franchise, instrument or other
agreement to which Borrower is a party or by which it is bound.
(C) VALIDITY OF SHARES. When issued upon the exercise of
the Warrant as contemplated therein, shares of common stock of
Borrower will have been validly issued and will be fully paid and
nonassessable. Borrower has reserved for issuance, free of preemptive
rights, the number of shares of common stock issuable from time to
time upon the exercise of the Warrant.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full and
the Commitment shall have terminated, Borrower agrees that it shall, and shall
cause its Subsidiaries to:
6.1 LEGAL EXISTENCE; GOOD STANDING. Maintain its existence and
its good standing in the jurisdiction of its formation and its qualification in
each jurisdiction in which the failure so to qualify could have a Material
Adverse Effect.
6.2 INSPECTION. Permit representatives of Lender at any time to
(i) visit its offices, (ii) examine its books and records and accountants'
reports relating thereto, (iii) make copies or extracts therefrom, (iv) discuss
its affairs with its employees, (v) examine and inspect its Property and (vi)
meet and discuss its affairs with its accountants, and such accountants, as a
38
45
condition to their retention by Borrower, are hereby irrevocably authorized by
Borrower to fully discuss and disclose all such affairs with Lender.
6.3 FINANCIAL STATEMENTS AND OTHER INFORMATION. Maintain a system
of accounting in accordance with GAAP and furnish to Lender:
6.3.1 MONTHLY STATEMENTS. As soon as available and in any
event within thirty (30) days after the close of each month of each
year:
(a) the consolidated balance sheet of Borrower
and its Subsidiaries as of the end of such month, and
(b) the consolidated statements of operations
of Borrower and its Subsidiaries and the consolidated
statements of cash flows of Borrower and its Subsidiaries for
such month and for the period from the beginning of the then
current year to the end of such month,
all in reasonable detail, containing such information as Lender
reasonably may require, and certified by the Chief Financial Officer
as complete and correct, subject to normal year-end adjustments.
6.3.2 QUARTERLY STATEMENTS; COMPLIANCE CERTIFICATE. As
soon as available and in any event within forty-five (45) days after
the close of each quarter of each year:
(a) the consolidated balance sheet of Borrower
and its Subsidiaries and the consolidating balance sheet of
Borrower and each Subsidiary of Borrower as of the end of
such quarter, and
(b) the consolidated statements of operations
of Borrower and its Subsidiaries, the consolidated statements
of cash flows of Borrower and its Subsidiaries and the
consolidating statements of operations and cash flows for
Borrower and each Subsidiary of Borrower for such quarter and
for the period from the beginning of the then current year to
the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the
corresponding period in the preceding year, and showing a
comparison with the budget for such period,
all in reasonable detail, containing such information as Lender
reasonably may require, and certified by the Chief Financial Officer
as complete and correct, subject to normal year-end adjustments. Each
such financial statement shall be accompanied by a Compliance
Certificate.
6.3.3 ANNUAL STATEMENTS. As soon as available and in any
event within ninety (90) days after the close of each Fiscal Year:
39
46
(a) the audited consolidated balance sheet of
Borrower and its Subsidiaries as of the end of such Fiscal
Year, the audited consolidated statements of operations, cash
flows and stockholders' equity of Borrower and its
Subsidiaries (collectively, the "Basic Financial
Statements"), the audited consolidating balance sheet of
Borrower and each Subsidiary of Borrower as of the end of
such Fiscal Year, the audited consolidating statements of
operations, cash flows and stockholders' equity for Borrower
and each Subsidiary of Borrower for such Fiscal Year, the
audited statements of the consolidated and consolidating cash
flows for Borrower and each Subsidiary of Borrower for such
Fiscal Year, setting forth in each case in comparative form
the corresponding figures for the preceding Fiscal Year,
(b) an opinion of Borrower's accountants which
shall accompany the Basic Financial Statements, which opinion
shall be unqualified as to going concern and scope of audit,
stating that (i) the examination by the accountants in
connection with such Basic Financial Statements has been made
in accordance with generally accepted auditing standards,
(ii) such Basic Financial Statements have been prepared in
conformity with GAAP and in a manner consistent with prior
periods, and (iii) such Basic Financial Statements fairly
present in all material respects the financial position and
results of operations of Borrower and its Subsidiaries, and
(c) a letter from the accountants stating that
the statements of cash flows were computed in accordance with
the requirements of this Loan Agreement.
6.3.4 INTENTIONALLY OMITTED.
6.3.5 AUDIT REPORTS. Promptly upon receipt thereof, a copy
of each report, other than the reports referred to in subsection
6.3.3, including any so-called "management letter" or similar report,
submitted to Borrower or any Subsidiary of Borrower by the accountants
in connection with any annual, interim or special audit made by the
accountants of the books of Borrower or such Subsidiary.
6.3.6 NOTICE OF DEFAULTS; LOSS. Prompt written notice if:
(i) any Indebtedness of Borrower or any Subsidiary of Borrower in
excess of $100,000 is declared or shall become due and payable prior
to its declared or stated maturity, or called and not paid when due,
(ii) an event has occurred that enables the holder of any note, or
other evidence of such Indebtedness, certificate or security
evidencing any such Indebtedness to declare such Indebtedness due and
payable prior to its stated maturity, (iii) there shall occur and be
continuing an Incipient Default or Event of Default, accompanied by a
statement setting forth what action Borrower proposes to take in
respect thereof, or (iv) any event shall occur which has or could have
a Material Adverse Effect, including the amount or the estimated
amount of any loss or depreciation or adverse effect.
40
47
6.3.7 NOTICE OF SUITS, ADVERSE EVENTS. Prompt written
notice of: (i) any citation, summons, subpoena, order to show cause or
other order naming Borrower or any Subsidiary of Borrower a party to
any proceeding before any Governmental Body which could have a
Material Adverse Effect and include with such notice a copy of such
citation, summons, subpoena, order to show cause or other order, (ii)
any lapse or other termination of any license, permit, franchise,
agreement or other authorization issued to Borrower or any Subsidiary
of Borrower by any Governmental Body or any other Person that is
material to the operation of the Business of Borrower or such
Subsidiary, (iii) any refusal by any Governmental Body or any other
Person to renew or extend any such license, permit, franchise,
agreement or other authorization and (iv) any dispute between Borrower
and any Governmental Body or any other Person, which lapse,
termination, refusal or dispute referred to in clauses (ii) and (iii)
above or in this clause (iv) could have a Material Adverse Effect.
6.3.8 REPORTS TO SHAREHOLDERS, CREDITORS AND GOVERNMENTAL
BODIES.
(a) Promptly upon becoming available, copies of
all financial statements, reports, notices and other
statements sent or made available generally by Borrower to
its shareholders or members, of all regular and periodic
reports and all registration statements and prospectuses
filed by Borrower with any securities exchange or with the
Securities and Exchange Commission or any Governmental Body
succeeding to any of its functions, and of all statements
generally made available by Borrower or any Subsidiary of
Borrower or others concerning material developments in the
business of Borrower or such Subsidiary.
(b) Promptly upon becoming available, copies of
any periodic or special reports filed by Borrower or any
Subsidiary of Borrower with any Governmental Body or Person,
if such reports indicate any material change in the business,
operations, affairs or condition of Borrower, or if copies
thereof are requested by Lender, and copies of any material
notices and other communications from any Governmental Body
or Person which specifically relate to Borrower or any
Subsidiary of Borrower.
6.3.9 ERISA NOTICES AND REQUESTS.
(a) With reasonable promptness, and in any
event within thirty (30) days after occurrence of any of the
following Borrower will give notice of and/or deliver to
Lender copies of: (i) the establishment of any new material
Employee Benefit Plan, Pension Plan or Multiemployer Plan;
(ii) the commencement of contributions to any Employee
Benefit Plan, Pension Plan or Multiemployer Plan to which
Borrower or any ERISA Affiliate of Borrower was not
previously contributing or any increase in the benefits of
any existing Employee Benefit Plan, Pension Plan or
Multiemployer Plan; (iii) each funding
41
48
waiver request filed with respect to any Employee Benefit
Plan and all communications received or sent by Borrower or
any ERISA Affiliate of Borrower with respect to such request;
and (iv) the failure of Borrower or any ERISA Affiliate of
Borrower to make a required installment or payment under
Section 302 of ERISA or Section 412 of the Code by the due
date.
(b) Promptly and in any event within ten (10)
days of becoming aware of the occurrence of or forthcoming
occurrence of any (i) Termination Event or (ii) "prohibited
transaction", as such term is defined in Section 406 of ERISA
or Section 4975 of the Code, in connection with any Pension
Plan or any trust created thereunder Borrower shall deliver
to Lender a notice specifying the nature thereof, what action
Borrower or their ERISA Affiliate has taken, is taking or
proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto.
(c) With reasonable promptness but in any event
within ten (10) days after the occurrence of any of the
following, Borrower shall deliver to Lender copies of: (i)
any favorable or unfavorable determination letter from the
Internal Revenue Service regarding the qualification of an
Employee Benefit Plan under Section 401(a) of the Code; (ii)
all notices received by Borrower or any ERISA Affiliate of
Borrower of the PBGC's intent to terminate any Pension Plan
or to have a trustee appointed to administer any Pension
Plan; (iii) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by Borrower or any
ERISA Affiliate of Borrower with the Internal Revenue Service
with respect to each Pension Plan; and (iv) all notices
received by Borrower or any ERISA Affiliate of Borrower from
a Multiemployer Plan sponsor concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of
ERISA. Borrower promptly will notify Lender in writing in the
event Borrower or any ERISA Affiliate of Borrower files or
intends to file a notice of intent to terminate any Pension
Plan under a distress termination within the meaning of
Section 4041(c) of ERISA.
6.3.10 OTHER INFORMATION.
(a) Prompt notice of any change in the location
of any Property of Borrower or any Subsidiary of Borrower
which is material to or necessary for the continued operation
of such Person's business, any change in the name of Borrower
or any Subsidiary of Borrower, any sale or purchase of
Property outside the regular course of business of Borrower
or any Subsidiary of Borrower, and any change in the business
or financial affairs of Borrower or any Subsidiary of
Borrower, which change could have a Material Adverse Effect.
42
49
(b) Promptly upon request therefor, such other
information and reports relating to the past, present or
future financial condition, operations, plans and projections
of Borrower and its Subsidiaries as Lender reasonably may
request from time to time.
6.4 REPORTS TO GOVERNMENTAL BODIES AND OTHER PERSONS. Timely file
all material reports, applications, documents, instruments and information
required to be filed pursuant to all rules, regulations or requests of any
Governmental Body or other Person having jurisdiction over the operation of the
business of Borrower and its Subsidiaries, including, but not limited to, such
of the Loan Documents as are required to be filed with any such Governmental
Body or other Person pursuant to applicable rules and regulations promulgated
by such Governmental Body or other Person.
6.5 MAINTENANCE OF LICENSES, FRANCHISES AND OTHER AGREEMENTS.
Maintain in full force and effect at all times, and apply in a timely manner
for renewal of, all Licenses, trademarks, trademark applications, trademark
licenses, copyrights, copyright applications, copyright licenses, patents,
patent applications, patent licenses, trade names, License Agreements and
Operating Agreements necessary for the operation of business of Borrower or any
Subsidiary of Borrower, the loss of any of which could have a Material Adverse
Effect.
6.6 INSURANCE.
6.6.1 MAINTENANCE OF INSURANCE. Maintain in full force and
effect at all times such property, casualty, business interruption and
other insurance required by Lender, all of which shall be written by
insurers, contain terms and be in amounts and forms satisfactory to
Lender, including public liability insurance, flood insurance required
pursuant to this Loan Agreement, workmen's compensation, builders'
risk, fire and extended coverage and flood insurance, with a standard
mortgagee clause endorsed thereon in favor of Lender which shall
provide, among other things, that the policies may not be canceled
without thirty (30) days' prior notice to Lender. Deliver to Lender,
from time to time as Lender may reasonably request, evidence of
compliance with this subsection 6.6.1.
6.6.2 PROCEEDS. Borrower hereby directs all insurers under
all policies of insurance to pay all proceeds payable thereunder
directly to Lender and Borrower hereby authorizes Lender to collect
all such proceeds subject to Borrower's rights as described below in
this subsection 6.6.2 to receive certain proceeds. Borrower
irrevocably appoints Lender (and all officers, employees or agents
designated by Lender) as Borrower's true and lawful attorney and agent
in fact for the purpose of and with power to make, settle and adjust
claims under such policies of insurance, endorse the name of Borrower
on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance, and to make all determinations
and decisions with respect to such policies of insurance. Borrower
acknowledges that such appointment as attorney and agent in fact is a
power, coupled with an interest, and therefore is irrevocable.
Borrower shall notify Lender promptly of any loss, damage,
43
50
destruction or other casualty to the Collateral in excess of $20,000.
If the proceeds of a casualty do not exceed $50,000 and no Event of
Default exists such proceeds shall be paid to Borrower or Subsidiary
of Borrower and applied to repair or replace the Property which is the
subject of such casualty. If the proceeds of a casualty exceed $50,000
or an Event of Default exists, at the option of Lender, such proceeds
shall be applied to the (i) payment of Borrower's Obligations in
accordance with Section 8.4 or (ii) repair or replacement of the
Collateral. In the event the proceeds are to be applied to the repair
or replacement of Collateral, the Collateral shall be repaired or
replaced so as to be of at least equal value and substantially the
same character as prior to such loss, damage, destruction or other
casualty.
6.7 FUTURE LEASES. Deliver to Lender, concurrently with the
execution by Borrower or any Subsidiary of Borrower, as lessee, of any Lease,
an executed copy thereof and a Landlord's Consent to the assignment of such
Lease pursuant to an Assignment of Leases.
6.8 FUTURE ACQUISITIONS OF REAL ESTATE. Deliver to Lender
concurrently with the (i) execution by Borrower or any Subsidiary of Borrower
of any contract relating to the purchase by such Person of real estate, an
executed copy of such contract and (ii) closing of the purchase of such real
estate (A) a first mortgage or deed of trust in favor of Lender on such real
estate, in form and substance satisfactory to Lender, (B) a lender's policy of
title insurance, in such form and amount and containing such endorsements as
shall be satisfactory to Lender (C) an ALTA/ACSM survey of such real estate and
(D) such other documents and assurances with respect to such real estate as
Lender may require.
6.9 ENVIRONMENTAL MATTERS. At all times comply with, and be
responsible for, its obligations under all Environmental Laws applicable to the
Real Estate, the Leasehold Property and any other Property owned by Borrower or
any Subsidiary of Borrower or used by any such Person in the operation of its
business. Borrower shall at its sole cost and expense (i) comply, and cause its
Subsidiaries to comply, in all respects with (A) any notice of any violation or
administrative or judicial complaint or order having been filed against any
such Person, any portion of any Leasehold Property or any other Property owned
by such Person or used by such Person in the operation of its business alleging
violations of any law, ordinance and/or regulation requiring such Person to
take any action in connection with the release, transportation and/or clean-up
of any Hazardous Materials, and (B) any notice from any Governmental Body or
any other Person alleging that such Person is or may be liable for costs
associated with a response or clean-up of any Hazardous Materials or any
damages resulting from such release or transportation, or (ii) diligently
contest, and cause its Subsidiaries to diligently contest, in good faith by
appropriate proceedings any demands set forth in such notices, provided (A)
reserves in an amount satisfactory to Lender to pay the costs associated with
complying with any such notice are established by such Person and (B) no Lien
would or will attach to the Property which is the subject of any such notice as
a result of any compliance by such Person which is delayed during any such
contest. Promptly upon receipt of any notice described in the foregoing clause
(i), Borrower shall deliver a copy thereof to Lender.
44
51
6.10 COMPLIANCE WITH LAWS. Comply with all foreign, federal, state
and local laws, ordinances, requirements and regulations and all judgments,
orders, injunctions and decrees applicable to Borrower or any Subsidiary of
Borrower or their operations, the failure to comply with which could have a
Material Adverse Effect.
6.11 TAXES AND CLAIMS. Pay and discharge all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any Property belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become
a Lien (other than a Permitted Lien) upon the Property of Borrower or any
Subsidiary of Borrower, provided that so long as no Lien has attached to the
Property of Borrower or any Subsidiary of Borrower as a result of any of the
foregoing, neither Borrower nor any Subsidiary of Borrower shall be required by
this Section 6.11 to pay any such amount if the same is being contested
diligently and in good faith by appropriate proceedings and as to which the
applicable Person has set aside reserves on its books satisfactory to Lender.
6.12 MAINTENANCE OF PROPERTIES. Maintain all of its Properties
necessary in the operation of its business in good working order and condition.
6.13 GOVERNMENTAL APPROVALS. Upon the exercise by Lender of any
power, right or privilege pursuant to the provisions of any of the Loan
Documents requiring any consent, approval or authorization of any Governmental
Body (including, without limitation, transfers of Licenses), promptly execute
and cause the execution of all applications, certificates, instruments and
other documents that Lender may be required to obtain for such consent,
approval or authorization.
6.14 INTENTIONALLY OMITTED.
6.15 FURTHER ASSURANCES. Promptly upon request of Lender, take
such additional actions as Lender may require from time to time in order to (i)
carry out more effectively the purposes of this Loan Agreement and the other
Loan Documents, (ii) subject to the Liens created by any of the Collateral
Documents any of the Property, rights or interests covered by any of the
Collateral Documents, (iii) perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby and (iv) better assure, convey, grant, assign, transfer,
preserve, protect and confirm to Lender the rights granted or now or hereafter
intended to be granted to Lender under any Loan Document or under any other
document executed in connection therewith. Without limiting the generality of
the foregoing and except as otherwise approved in writing by Lender, Borrower
shall cause each of its Subsidiaries to guaranty Borrower's Obligations and to
cause each such Subsidiary to grant to Lender a security interest in all of
such Subsidiary's Property to secure such guaranty, and, in connection with
Acquisitions, execute and deliver to Lender such other agreements, documents
and instruments as reasonably requested by Lender prior to the consummation of
any such Acquisition. Furthermore and except as otherwise approved in writing
by Lender, Borrower shall pledge the stock or other equity interests of each of
its Subsidiaries to Lender to secure Borrower's Obligations. Notwithstanding
anything contained
45
52
herein to the contrary, neither any Foreign Subsidiary of Borrower nor any
Foreign Subsidiary of any Subsidiary of Borrower shall be required to execute
and deliver, or join in the execution and delivery of, the Subsidiary Guaranty
or grant a security interest in any of its Property to secure any such
guaranty, and Borrower shall not be required to pledge in excess of sixty-six
and two-thirds percent (66 2/3%) of the Subsidiary Equity Interests of any
direct Foreign Subsidiary, in any such case to the extent such guarantee and/or
granting of a security interest would result, in the opinion of Lender, in
material and adverse tax consequences to Borrower or such Foreign Subsidiary
under Section 956 of the Code.
6.16 Landlord Consents. Use its best efforts to obtain and deliver to
Lender, on or before the sixtieth (60) day after the Closing Date, a Landlord
Consent from the lessor and sublessor, as applicable, under each Lease under
which Borrower or such Subsidiary is a lessee or sublessee, except to the extent
a Landlord Consent from such lessor or sublessor, as applicable, shall have been
delivered previously to Lender.
6.17 INTENTIONALLY OMITTED.
6.18 LIEN WAIVERS. If Lender shall have approved any plans for
improvements and/or build-outs in respect of any Real Estate and permitted
Borrower to consummate such improvements and/or build-outs, Borrower shall
provide to Lender, and shall continue to provide to Lender on an on going basis
when and as requested by Lender, any lien waivers requested by Lender,
including, without limitation, mechanics' lien waivers, in form and substance
satisfactory to Lender, and a date down endorsement to the title policy in
favor of Lender, as insured, covering such Real Estate.
ARTICLE VII
NEGATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full and
the Commitments shall have terminated, Borrower shall not, and shall not permit
or cause any of its Subsidiaries to:
7.1 BORROWING/INDEBTEDNESS. Create, incur, assume or suffer to
exist any liability for Indebtedness for Borrowed Money, except:
(i) the Borrower's Obligations;
(ii) Permitted Senior Indebtedness;
(iii) Subordinated Indebtedness disclosed to, and approved
by, Lender;
(iv) unsecured inter-company loans by Borrower to any of
its wholly-owned domestic Subsidiaries, provided that the obligations
of each obligor of such Indebtedness shall: (A) be evidenced by
promissory notes which shall have been
46
53
pledged to Lender as security for Borrower's Obligations, (B) if
required by Lender, be subordinated in right of payment to Borrower's
Obligations on terms and conditions acceptable to Lender and (C) have
such other terms and provisions as Lender may reasonably require; and
(v) other unsecured Indebtedness in an aggregate amount
not to exceed $500,000 at any one time outstanding (which shall
include the Indebtedness described on EXHIBIT 7.1 hereto).
7.2 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its Property, whether now owned or hereafter acquired, except Permitted
Liens.
7.3 MERGERS AND ACQUISITIONS. Consolidate with or merge with or
into any Person, or acquire directly or indirectly all or substantially all of
the capital stock, equity interests or Property of any Person, except: (i)
Acquisitions consented to by Lender in writing (in its sole and absolute
discretion), the Contribution and the Internal Distribution, and (ii) any
Subsidiary of Borrower may merge with or into any other wholly-owned domestic
Subsidiary of Borrower, provided that (A) no Event of Default or Incipient
Default would exist after giving effect to any such merger, (B) Lender shall
have received at least forty-five (45) days' prior written notice of any such
merger, (C) Borrower and its Subsidiaries shall have executed and delivered to
Lender such instruments, agreements and documents as Lender shall require to
preserve the validity and priority of the Security Interests in the Property
transferred to the surviving Subsidiary in connection with any such merger and
(D) Lender shall have received such other instruments, agreements and documents
in connection with any such merger as Lender shall require, including, without
limitation, certified copies of the related plan of merger and certificates of
merger.
7.4 CONTINGENT LIABILITIES/OBLIGATIONS. Assume, guarantee,
endorse, contingently agree to purchase, become liable in respect of any letter
of credit, or otherwise become liable upon the obligation of any Person,
except: (i) liabilities arising from the endorsement of negotiable instruments
for deposit or collection in the ordinary course of business, and (ii) the
posting of bonds to secure performance to the extent necessary in connection
with its business and similar transactions in the ordinary course of business.
7.5 DISTRIBUTIONS/RESTRICTED JUNIOR PAYMENTS. Make any dividends,
distributions or other shareholder expenditures with respect to its capital
stock or other equity interests or apply any of its Property to the purchase,
redemption or other retirement of, or set apart any sum for the payment of, or
make any other distribution by reduction of capital or otherwise in respect of,
any of such capital stock or equity interests, except any Subsidiary of
Borrower may make dividends or other distributions to Borrower.
7.6 CAPITAL EXPENDITURES. Make or incur any Capital Expenditures
(other than Acquisitions consented to by Lender in writing, in its sole and
absolute discretion) if the aggregate amount of Capital Expenditures of
Borrower and its Subsidiaries for any period set forth below exceeds the amount
set forth below opposite such period:
47
54
Period Maximum Amount
------ --------------
Each Fiscal Quarter of Borrower $300,000
occurring in 2001
Each Fiscal Quarter of Borrower $390,000
occurring in 2002
Each Fiscal Quarter of Borrower $480,000
Thereafter
7.7 PAYMENTS OF INDEBTEDNESS FOR BORROWED MONEY. Make any
voluntary or optional payment or prepayment of any Indebtedness for Borrowed
Money or make any payment in respect of Subordinated Indebtedness, other than
in respect of Borrower's Obligations.
7.8 INVESTMENTS; LOANS. At any time purchase or otherwise
acquire, hold or invest in the capital stock of, or any other interest in, any
Person (including the creation of any Subsidiary), or make any loan or advance
to, or enter into any arrangement for the purpose of providing funds or credit
to, or make any other investment, whether by way of capital contribution or
otherwise, in or with any Person, including, without limitation, any Affiliate,
except:
(i) investments in direct obligations of, or instruments
unconditionally guaranteed by, the United States of America or in
certificates of deposit issued by a Qualified Depository;
(ii) investments in commercial or finance paper which, at
the time of investment, is rated "A" or better by ▇▇▇▇▇'▇ Investors
Service, Inc., or Standard & Poor's Ratings Group, a Division of
▇▇▇▇▇▇-▇▇▇▇, Inc., respectively, or at the equivalent rate by any of
their respective successors;
(iii) any interests in any money market account
maintained, at the time of investment, with a Qualified Depository,
the investments of which, at the time of investment, are restricted to
the types specified in clause (i) above;
(iv) unsecured inter-company loans otherwise permitted
under Section 7.1;
(v) current outstanding investments in Subsidiaries in
existence on the Closing Date; and
(vi) Acquisitions consented to by Lender in writing (in
its sole and absolute discretion), including establishment or creation
of, and equity investments in, wholly-owned Subsidiaries consented to
by Lender in writing in connection with any such Acquisitions.
48
55
All investments permitted pursuant to clauses (i), (ii) and (iii) of this
Section 7.8 shall have a maturity not exceeding one year.
7.9 FUNDAMENTAL BUSINESS CHANGES. Materially change the nature of
its business.
7.10 FACILITY SITES. Change the locations of its chief executive
office or other Property used in the operation of its business (except to the
extent Borrower shall close any facilities at which such Property is located
(other than the locations of its chief executive office) and only to the extent
Borrower shall have complied with the provisions of this Section 7.10 in
respect of the locations at which such Property is to be moved), unless (i)
Lender shall have received at least thirty (30) days' prior written notice
thereof, (ii) Borrower or the applicable Subsidiary shall have complied with
all applicable laws, rules and regulations and shall have received all required
consents and approvals from any Governmental Body, (iii) Lender shall have
received satisfactory evidence that such change could not reasonably be
expected to affect adversely the operations or business prospects of Borrower
or the applicable Subsidiary and (iv) Borrower or the applicable Subsidiary
shall have executed and delivered to Lender any documents, agreements and
instruments Lender may reasonably require in order to maintain the validity and
priority of the Security Interests, including, without limitation, UCC
financing statements and amendments.
7.11 SALE OR TRANSFER OF ASSETS. Sell, lease, assign, transfer or
otherwise dispose of any Property (whether in one transaction or a series of
transactions), or enter into any agreement to do any of the foregoing, except:
(i) the disposition of Property which is not material to
or necessary for the continued operation of its business;
(ii) obsolete or unusable items of equipment which
promptly are replaced with new items of equipment of like function and
comparable value to the obsolete or unusable items of equipment when
the same were new or not obsolete or unusable, provided such
replacement items of equipment shall become subject to the Security
Interests;
(iii) dispositions not otherwise permitted hereunder which
are made for fair market value and the mandatory prepayment, if any,
in the amount of the Net Proceeds of such disposition is made as
provided in subsection 2.8.2(b); provided, that (i) at the time of any
such disposition, no Event of Default shall exist or shall result from
such disposition, (ii) not less than the greater of eighty-five
percent (85%) of aggregate sales price from such disposition and the
amount of the mandatory prepayment required pursuant to subsection
2.8.2(b) shall be paid in cash, (iii) the aggregate value of assets so
sold by Borrower and its Subsidiaries, together, shall not exceed in
any year $500,000 and (iv) any non-cash portion of the sales price
shall be pledged to Lender as security for Borrower's Obligations; and
49
56
(iv) as expressly permitted pursuant to Section 7.3.
7.12 AMENDMENT OF DOCUMENTS. Amend or modify in a manner adverse
to Lender or the Collateral (i) its articles of incorporation (including any
certificates of designations, preferences and rights), bylaws or other
corporate governance documents or organization instruments, except if required
by law or (ii) any Related Transaction Agreements to the extent reasonably
expected to have a Material Adverse Effect.
7.13 ACQUISITION OF ADDITIONAL PROPERTIES. Acquire any additional
Property except (i) such Property as is necessary to or useful in the operation
of its business, provided such acquisitions shall be subject to the conditions
and limitations set forth in this Loan Agreement, and (ii) acquisitions of
Property as are permitted pursuant to Section 7.3 and Section 7.21.
7.14 ISSUANCE OF CAPITAL STOCK OR OTHER SIMILAR INTERESTS. Issue
or sell, permit to be issued or sold, or otherwise consent to the transfer of,
any additional capital stock or equity interests or any interests convertible
into or exercisable for any such capital stock or additional equity interests,
except (i) the issuance of capital stock of Borrower, provided that (a)
Borrower shall not be required or permitted to pay cash dividends, redeem such
capital stock or make other distributions with respect thereto and, without
limiting the foregoing, any preferred stock of Borrower so issued shall not
contain, provide for or otherwise have any mandatory redemption or put rights
during the term of this Loan Agreement or until Borrower's Obligations shall
have been performed and paid in full and the Commitment shall have terminated,
and (b) Borrower shall comply with the provisions of subsection 2.8.2(c), (ii)
the convertible rights granted pursuant to promissory notes evidencing
Subordinated Indebtedness or other Indebtedness for Borrowed Money otherwise
permitted hereunder, (iii) Borrower may issue, sell or otherwise transfer, and
InfoCure Australia Pty Limited, a company organized under the laws of
Australia, may permit the issuance, sale or other transfer, of the equity
interests of InfoCure Australia Pty Limited, provided that Borrower shall
continue to own and control at all times (a) at least 51% of the issued and
outstanding equity interests of InfoCure Australia Pty Limited and (b) such
percentage of the voting securities of InfoCure Australia Pty Limited at least
sufficient to enable Borrower to direct the direction of management and
policies of such Person and (iv) in connection with the Contribution, the
Distribution and Internal Distribution, in each instance, in accordance with
the Distribution Transaction Documents.
7.15 TRANSACTIONS WITH AFFILIATES. Sell, lease, assign, transfer
or otherwise dispose of any Property to any Affiliate of Borrower, lease
Property, render or receive services or purchase assets from any such
Affiliate, or otherwise enter into any contractual relationship with any
Affiliate, except:
(i) as expressly permitted by this Loan Agreement; and
(ii) in the ordinary course of business and pursuant to
the reasonable requirements of the business of Borrower or the
applicable Subsidiary;
50
57
and, in the case of each of (i) and (ii) above, upon fair and
reasonable terms no less favorable to Borrower or the
applicable Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate of
such Person and which are disclosed in writing to Lender.
7.16 COMPLIANCE WITH ERISA.
(i) Permit the occurrence of any Termination Event which
would result in a liability to Borrower or any ERISA Affiliate of
Borrower in excess of $250,000;
(ii) Permit the present value of all benefit liabilities
under all Pension Plans to exceed the current value of the assets of
such Pension Plans allocable to such benefit liabilities by more than
$250,000;
(iii) Permit any accumulated funding deficiency in excess
of $250,000 (as defined in Section 302 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(iv) Fail to make any contribution or payment to any
Multiemployer Plan which Borrower or any ERISA Affiliate of Borrower
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto which results in or
is likely to result in a liability in excess of $250,000;
(v) Engage, or permit Borrower or any ERISA Affiliate of
Borrower to engage, in any "prohibited transaction" as such term is
defined in Section 406 of ERISA or Section 4975 of the Code for which
a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code in excess of $250,000 is imposed;
(vi) Permit the establishment of any Employee Benefit
Plan providing post-retirement welfare benefits or establish or amend
any Employee Benefit Plan which establishment or amendment could
result in liability to Borrower or any ERISA Affiliate of Borrower or
increase the obligation of Borrower or any ERISA Affiliate of Borrower
to a Multiemployer Plan which liability or increase, individually or
together with all similar liabilities and increases, is material to
Borrower or any ERISA Affiliate of Borrower; or
(vii) Fail, or permit any of its ERISA Affiliates to fail,
to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with ERISA, the Code and all other
applicable laws and regulations and interpretations thereof.
7.17 MINIMUM NET WORTH. Permit Consolidated Net Worth as of the
last day of any quarter set forth below to be less than the amount set forth
below opposite such quarter:
51
58
Quarter Minimum Amount
------- --------------
March 31, 2001 $41,760,000
June 30, 2001 $34,720,000
September 30, 2001 $28,200,000
December 31, 2001 $22,360,000
March 31, 2002 $18,100,000
June 30, 2002 $30,480,000
September 30, 2002 $28,020,000
December 31, 2002 $27,000,000
March 31, 2003 $27,600,000
June 30, 2003 $29,700,000
and Thereafter
7.18 MAXIMUM LEVERAGE RATIO. Permit the Leverage Ratio, calculated
as of the last day of any quarter, to exceed [2.50 to 1.00].
7.19 MINIMUM TOTAL DEBT SERVICE COVERAGE RATIO. Permit the Total
Debt Service Coverage Ratio as of the last day of any quarter to be less than
[1.50 to 1.00].
7.20 SUBSIDIARIES. Create or permit to exist any Subsidiary,
except (i) Borrower and its Subsidiaries may permit the existence of the
Subsidiaries in existence on the Closing Date (as described in Section 5.23)
and (ii) Borrower may create and permit the existence of wholly-owned domestic
Subsidiaries in connection with Acquisitions otherwise consented to by Lender
in writing, which consent may be withheld or granted in Lender's sole and
absolute discretion; provided, that each such Subsidiary described in the
foregoing clauses (i) and (ii) shall have executed and delivered all
agreements, documents and instruments required under Section 6.15.
7.21 ACQUISITIONS. Consummate, or permit any of its Subsidiaries
to consummate, any Acquisitions, or enter into any letter of intent or other
binding agreement or contract in contemplation thereof.
7.22 MINIMUM CURRENT RATIO. Permit the ratio of (i) consolidated
current assets of Borrower and its Subsidiaries as of any date to (ii)
consolidated current liabilities of Borrower and its Subsidiaries, less the
amount of so-called "deferred revenues and customer deposits" of Borrower as of
such date (but specifically including in such consolidated current liabilities
the amount of so-called "deferred revenues for signed contracts" of Borrower
and its Subsidiaries as of such date), in each case as accurately reflected on
the financial statements of Borrower and its Subsidiaries, determined in
accordance with GAAP as of such date, to be less than 1.00 to 1.00.
7.23 MINIMUM LIQUIDITY. Permit the sum of (i) cash and Cash
Equivalents of Borrower and its Subsidiaries as of the last day of any quarter
set forth below, plus (ii) the lesser of (a) the aggregate amount of cash
proceeds that shall be immediately available to
52
59
Borrower in accordance with and under the Common Stock Purchase Agreement
(subject to no conditions or consent or approval rights of any Person
thereunder that shall not have been actually satisfied as of such date) in the
event, or as if, Borrower shall have previously delivered a "Seller Notice" (as
defined in the Common Stock Purchase Agreement) and such last day shall be the
respective "Closing Date" (as defined in the Common Stock Purchase Agreement)
(net of costs and expenses of Borrower paid, to be paid or otherwise incurred
in connection therewith) and (b) $2,500,000, to the be less than the amount set
forth below opposite such date:
Date Minimum Amount
---- --------------
March 31, 2001 $ 9,000,000
June 30, 2001 $ 6,520,000
September 30, 2001 $ 5,380,000
December 31, 2001 $ 4,057,000
March 31, 2002 $ 3,960,000
June 30, 2002 $ 4,580,000
September 30, 2002 $ 6,080,000
December 31, 2002 $ 8,700,000
March 31, 2003 $12,250,000
June 30, 2003 $16,840,000
and Thereafter
ARTICLE VIII
DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any of the
following shall constitute an "Event of Default" under the Loan Documents:
8.1.1 DEFAULT IN PAYMENT. If Borrower shall fail
to pay all or any portion of Borrower's Obligations when the same
become due and payable.
8.1.2 BREACH OF COVENANTS.
(a) If Borrower shall fail to observe
or perform any covenant or agreement made by or on behalf of
such Person contained in Section 6.1, 6.2, 6.3, 6.5, 6.6,
6.9, 6.11, 6.15 or 6.16 or in Article VII;
(b) If Borrower or any Subsidiary of
Borrower shall fail to observe or perform any covenant or
agreement (other than those referred to in subparagraph (a)
above or specifically addressed elsewhere in this Section
8.1) made by such Person in any of the Loan Documents to
which such Person is a
53
60
party, and such failure shall continue for a period of thirty
(30) days after written notice of such failure is given by
Lender.
8.1.3 BREACH OF WARRANTY. If any representation or
warranty made by or on behalf of Borrower or any Subsidiary of
Borrower in or pursuant to any of the Loan Documents or in any
instrument or document furnished in compliance with the Loan Documents
(including, without limitation, any Compliance Certificate) shall
prove to be false or misleading in any material respect on the date
made.
8.1.4 DEFAULT UNDER OTHER INDEBTEDNESS FOR BORROWED MONEY.
If (i) Borrower or any Subsidiary of Borrower at any time shall be in
default (as principal or guarantor or other surety) in the payment of
any principal of or premium or interest on any Indebtedness for
Borrowed Money (other than Borrower's Obligations) beyond the grace
period, if any, applicable thereto and the aggregate amount of such
payments then in default beyond such grace period shall exceed
$500,000 or (ii) any default shall occur in respect of any issue of
Indebtedness for Borrowed Money of Borrower or any Subsidiary of
Borrower (other than Borrower's Obligations) outstanding in a
principal amount of at least $500,000, or in respect of any agreement
or instrument relating to any such issue of Indebtedness for Borrowed
Money, and such default shall continue beyond the grace period, if
any, applicable thereto.
8.1.5 BANKRUPTCY.
(a) If Borrower or any Subsidiary of Borrower
shall (i) generally not be paying its debts as they become
due, (ii) file, or consent, by answer or otherwise, to the
filing against it of a petition for relief or reorganization
or arrangement or any other petition in bankruptcy or
insolvency under the laws of any jurisdiction, (iii) make an
assignment for the benefit of creditors, (iv) consent to the
appointment of a custodian, receiver, trustee or other
officer with similar powers for Borrower or such Subsidiary,
or for any substantial part of the Property of Borrower or
such Subsidiary or (v) be adjudicated insolvent.
(b) If any Governmental Body of competent
jurisdiction shall enter an order appointing, without consent
of Borrower or such Subsidiary, a custodian, receiver,
trustee or other officer with similar powers with respect to
Borrower or any Subsidiary of Borrower, or with respect to
any substantial part of the Property belonging to any such
Person, or if an order for relief shall be entered in any
case or proceeding for liquidation or reorganization or
otherwise to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of Borrower or any Subsidiary of
Borrower or if any petition for any such relief shall be
filed against Borrower and such petition shall not be
dismissed or stayed within sixty (60) days.
54
61
8.1.6 JUDGMENTS. If the aggregate amount of all judgments
or awards against Borrower and its Subsidiaries exceeds $500,000 at
any one time outstanding, excluding judgments or awards (i) for which
there is full insurance and with respect to which the insurer has
assumed responsibility in writing, (ii) for which there is full
indemnification (upon terms and by credit worthy indemnitors which are
satisfactory to Lender) or (iii) which have not been discharged in
full or stayed pending appeal.
8.1.7 IMPAIRMENT OF LICENSES; OTHER AGREEMENTS. If (i) any
Governmental Body shall (A) revoke, terminate, suspend or adversely
modify any License of Borrower or any Subsidiary of Borrower, the
non-continuation of which could have a Material Adverse Effect, or (B)
enter a final order or decision to suspend, revoke, terminate or
adversely modify any such License or (ii) there shall exist any
violation or default in the performance of, or a material failure to
comply with any agreement, or condition or term of any License or
License Agreement, which violation, default or failure could have a
Material Adverse Effect, or any such License or License Agreement
shall cease to be in full force and effect, or (iii) any Operating
Agreement or License Agreement shall expire or be revoked or
terminated and not replaced by a substitute acceptable to Lender
within thirty (30) days after the date of such expiration, revocation
or termination, and such expiration, revocation or termination and
non-replacement could have a Material Adverse Effect.
8.1.8 COLLATERAL. If any material portion of the
Collateral shall be seized or taken by a Governmental Body or Person,
or Borrower and its Subsidiaries shall fail to maintain or cause to be
maintained the Security Interests and priority of the Loan Documents
as against any Person, or the title and rights of Borrower or any
Subsidiary of Borrower to any material portion of the Collateral shall
have become the subject matter of litigation which reasonably could be
expected to result in impairment or loss of the security provided by
the Loan Documents.
8.1.9 PLANS. If an event or condition specified in
subsection 6.3.9 hereof shall occur or exist with respect to any Plan
or Multiemployer Plan and, as a result of such event or condition,
together with all other such events or conditions, Borrower or any
ERISA Affiliates of Borrower shall incur, or in the opinion of Lender
be reasonably likely to incur, a liability to a Plan or Multiemployer
Plan or the PBGC (or any of them) which, in the reasonable judgment of
Lender, could have a Material Adverse Effect.
8.1.10 CHANGE IN CONTROL. If at any time (i) Borrower
ceases to own and control all of the issued and outstanding Subsidiary
Equity Interests, or (ii) any Person or any Persons acting together
which would constitute a "group" (a "Group") for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provision thereto, other than a
Group whose nominees constitute a majority of the board of directors
of Borrower as of the Closing Date and after giving effect to the
Related Transactions to be consummated on or before the Closing Date,
together with any Affiliates or "Related Persons" (as defined
55
62
in Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act or any successor provision thereto) thereof, shall
beneficially own 50% or more of the aggregate voting power of all
classes of capital stock of Borrower entitled to vote generally in the
election of directors of Borrower; or (iii) any Person or Group, other
than any Person or Group whose nominees constituted a majority of the
board of directors of Borrower as of the Closing Date, together with
any Affiliates or Related Persons thereof, shall succeed in having
sufficient of its or their nominees elected to the board of directors
of Borrower, such that such nominees, when added to any existing
director remaining on the board of directors of Borrower after such
election who is an Affiliate or a Related Person of such Group, shall
constitute a majority of the board of directors of Borrower; or (iv)
Lender shall cease at any time to have a first Lien on all of the
issued and outstanding Subsidiary Equity Interests (subject to the
last sentence of Section 6.15).
8.1.11 CHANGE IN MANAGEMENT. If for any reason each of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇ shall have ceased to (i) hold the
office or offices maintained by such Persons as of the Closing Date,
or (ii) otherwise perform the corporate and day to day management
functions performed by such Persons as of the Closing Date, and
Borrower shall have failed to engage or otherwise hire an Approved
Replacement for at least one of them. Thereafter, at least one
Approved Replacement must continue to hold the office or offices
maintained by such Person as of the date of hire or engagement or
otherwise perform the corporate and day to day management functions
performed by such Person as of such date (and Borrower acknowledges
that the cessation thereof shall constitute an Event of Default
hereunder, unless replaced by another Approved Replacement, and, in
such case, the terms hereof shall apply to such Person).
8.1.12 INVALIDITY OF SUBORDINATION AGREEMENTS AND TERMS.
The subordination provisions of any agreement, document or instrument
governing any Subordinated Indebtedness shall, for any reason at any
time, be revoked or invalidated, or otherwise cease to be in full
force and effect, or Borrower or any Subsidiary of Borrower shall
contest in any manner the validity or enforceability thereof, or
Borrower's Obligations shall for any reason not have the priority
contemplated by this Loan Agreement or such subordination provisions.
8.1.13 TRANSITION SERVICES AGREEMENT. The Transition
Services Agreement or any of the material terms, provisions,
agreements or covenants set forth in the Transition Services Agreement
shall, for any reason at any time, be revoked or invalidated, or
otherwise cease to be in full force and effect, or Borrower, any
Subsidiary of Borrower or InfoCure Corporation shall contest in any
manner the validity or enforceability thereof, or their obligations or
liabilities thereunder.
8.1.14 CERTAIN QUALIFICATIONS. If for any reason at any
time (i) the Contribution, the ISI Merger and/or the Distribution
shall cease or fail to qualify as tax-free "reorganizations" under
Section 368(a)(1)(D) of the Code or to otherwise qualify for
non-
56
63
recognition treatment under the Code; or (ii) the Distribution shall
cease or fail to qualify as a tax-free transaction described in
Section 355 of the Code.
8.1.15 COMMON STOCK PURCHASE DOCUMENTS. (i) The Common
Stock Purchase Agreement or any of the material terms, provisions,
agreements or covenants set forth in the Common Stock Purchase
Agreement shall, for any reason at any time, be revoked or
invalidated, or otherwise cease to be in full force and effect, or
Borrower, any Subsidiary of Borrower or any other Person party thereto
shall contest in any manner the validity or enforceability thereof, or
their obligations and liabilities thereunder, or (ii) Borrower shall
be obligated to pay any penalty or fees of the type described in
Section 1.1(c), (d) and/or (e) of the "Registration Rights Agreement"
described in the definition of "Common Stock Purchase Documents"
herein contained.
8.2 ACCELERATION OF BORROWER'S OBLIGATIONS. Upon the occurrence
of:
(a) any Event of Default described in clauses (ii),
(iii), (iv) or (v) of subsection 8.1.5(a) or in subsection 8.1.5(b),
all Commitments shall terminate automatically and all of Borrower's
Obligations at that time outstanding automatically shall mature and
become due and payable, and
(b) any other Event of Default, Lender, at any time
(unless such Event of Default shall have been waived in writing or
remedied), at its option, without further notice or demand may
terminate the Commitments and/or declare all of Borrower's Obligations
due and payable, whereupon Borrower's Obligations immediately shall
mature and become due and payable,
all without presentment, demand, protest or notice (other than the declaration
referred to in clause (b) above), all of which hereby are waived.
8.3 REMEDIES ON DEFAULT. If an Event of Default shall have
occurred, Lender, at its option, may:
8.3.1 ENFORCEMENT OF SECURITY INTERESTS. Enforce or cause
to be enforced any of the rights or remedies accorded to Lender under
the Loan Documents.
8.3.2 OTHER REMEDIES. Enforce or cause to be enforced any
of the rights or remedies accorded to Lender at equity or law, by
virtue of statute or otherwise.
8.4 APPLICATION OF FUNDS. Any funds received by Lender pursuant
to the exercise of any rights accorded to Lender pursuant to, or by the
operation of any of the terms of, any of the Loan Documents, including, without
limitation, insurance proceeds, condemnation proceeds or proceeds from the sale
of Collateral, shall be applied to Borrower's Obligations in the following
order of priority:
57
64
8.4.1 EXPENSES. First, to the payment of all fees and
expenses actually incurred, including, without limitation, court
costs, fees of appraisers, title charges, costs of maintaining and
preserving the Collateral, costs of sale, and all other costs incurred
by Lender, in exercising any rights accorded to Lender pursuant to the
Loan Documents or by applicable law, including, without limitation,
reasonable attorney's fees.
8.4.2 BORROWER'S OBLIGATIONS. Next, to the payment of
Borrower's Obligations in such manner as Lender shall determine.
8.4.3 SURPLUS. Any surplus, to the Person or Persons
entitled thereto.
8.5 PERFORMANCE OF BORROWER'S OBLIGATIONS. If Borrower or any
Subsidiary of Borrower fails to (i) maintain in force and pay for any insurance
policy or bond which such Person is required to provide pursuant to any of the
Loan Documents, (ii) keep the Collateral free from all Liens except for
Permitted Liens, (iii) pay when due all taxes, levies and assessments on or in
respect of the Collateral, except as otherwise permitted pursuant to the terms
hereof, (iv) make all payments and perform all acts on the part of such Person
to be paid or performed in the manner required by the terms hereof and by the
terms of the other Loan Documents with respect to any of the Collateral,
including, without limitation, all expenses of protecting, storing,
warehousing, insuring, handling and maintaining the Collateral, (v) keep fully
and perform promptly any other of the obligations of such Person hereunder or
under any of the other Loan Documents, and (vi) keep fully and perform promptly
the obligations of Borrower with respect to any issue of Indebtedness for
Borrowed Money secured by a Permitted Prior Lien, then Lender may (but shall
not be required to) procure and pay for such insurance policy or bond, place
such Collateral in good repair and operating condition, pay, contest or settle
such Liens or taxes or any judgments based thereon or otherwise make good any
other aforesaid failure of such Person. Borrower shall reimburse Lender
immediately upon demand for all reasonable sums paid or advanced on behalf of
Borrower or any Subsidiary of Borrower for any such purpose, together with
reasonable and/or necessary costs and expenses (including reasonable attorneys'
fees) paid or incurred by Lender in connection therewith and interest on all
sums advanced from the date of advancement until repaid to Lender at the
Default Rate applicable thereto. All such sums advanced by Lender, with
interest thereon, immediately upon advancement thereof, shall be deemed to be
part of Borrower's Obligations and secured by the Security Interests.
ARTICLE IX
CLOSING
The Closing Date shall be such date as the parties shall determine,
and the Closing shall take place on such date, provided all conditions for the
Closing as set forth in this Loan Agreement have been satisfied or otherwise
waived by Lender. The Closing shall take place at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇
Zavis or such other place as the parties hereto shall agree. Unless the Closing
occurs on or before February __, 2001, this Loan Agreement shall terminate and
58
65
be of no further force or effect and, except for any obligations of Borrower to
Lender pursuant to Article X, none of the parties hereto shall have any further
obligation to any other party.
ARTICLE X
EXPENSES AND INDEMNITY
10.1 ATTORNEYS' FEES AND OTHER FEES AND EXPENSES. Whether or not
any of the transactions contemplated by this Loan Agreement shall be
consummated, subject to the limitations set forth in subsection 10.1.1,
Borrower agrees to pay to Lender on demand all expenses incurred by Lender in
connection with the transactions contemplated hereby and in connection with any
amendments, modifications or waivers (whether or not the same become effective)
under or in respect of any of the Loan Documents, including, without
limitation:
10.1.1 FEES AND EXPENSES FOR PREPARATION OF LOAN DOCUMENTS.
All expenses, disbursements (including, without limitation, charges
for required mortgagee's title insurance, lien searches, reproduction
of documents, long distance telephone calls and overnight express
carriers) and reasonable attorneys' fees, actually incurred by Lender
in connection with the (i) preparation and negotiation of the Loan
Documents or any amendments, modifications or waivers thereto or any
documents delivered pursuant thereto and (ii) administration of the
Term Loan.
10.1.2 FEES AND EXPENSES IN ENFORCEMENT OF RIGHTS OR
DEFENSE OF LOAN DOCUMENTS. Any expenses or other costs, including
reasonable attorneys' fees and expert witness fees, actually incurred
by Lender in connection with the enforcement or collection against
Borrower or any Subsidiary of Borrower of any provision of any of the
Loan Documents, and in connection with or arising out of any
litigation, investigation or proceeding instituted by any Governmental
Body or any other Person with respect to any of the Loan Documents,
whether or not suit is instituted, including, but not limited to, such
costs or expenses arising from the enforcement or collection against
Borrower or any Subsidiary of Borrower of any provision of any of the
Loan Documents in workout or restructuring, any state or federal
bankruptcy or reorganization proceeding.
10.2 INDEMNITY. Borrower agrees to indemnify and save Lender
harmless of and from the following:
10.2.1 BROKERAGE FEES. The fees, if any, of brokers and
finders engaged by Borrower.
10.2.2 GENERAL. Any loss, cost, liability, damage or
expense (including reasonable attorneys' fees and expenses) incurred
by Lender in investigating, preparing for, defending against,
providing evidence, producing documents or taking other action in
respect of any commenced or threatened litigation, administrative
proceeding, suit
59
66
instituted by any Person or investigation under any law, including any
federal securities law, the Bankruptcy Code, any relevant state
corporate statute or any other securities law, bankruptcy law or law
affecting creditors generally of any jurisdiction, or any regulation
pertaining to any of the foregoing, or at common law or otherwise,
relating, directly or indirectly, to the transactions contemplated by
or referred to in, or any other matter related to, the Loan Documents.
10.2.3 OPERATION OF COLLATERAL; JOINT VENTURERS. Any loss,
cost, liability, damage or expense (including reasonable attorneys'
fees and expenses) incurred in connection with the ownership,
operation or maintenance of the Collateral, the construction of Lender
and Borrower or any Subsidiary of Borrower as having the relationship
of joint venturers or partners or the determination that Lender has
acted as agent for Borrower or any Subsidiary of Borrower.
10.2.4 ENVIRONMENTAL INDEMNITY. Any and all claims, losses,
damages, response costs, clean-up costs and expenses suffered and/or
incurred at any time by Lender arising out of or in any way relating
to the existence at any time of any Hazardous Materials in, on, under,
at, transported to or from, or used in the construction and/or
renovation of, any of the Real Estate or Leasehold Property, or
otherwise with respect to any Environmental Law, and/or the failure of
Borrower or any Subsidiary of Borrower to perform its obligations and
covenants hereunder with respect to environmental matters, including,
but not limited to: (i) claims of any Persons for damages, penalties,
response costs, clean-up costs, injunctive or other relief, (ii) costs
of removal and restoration, including fees of attorneys and experts,
and costs of reporting the existence of Hazardous Materials to any
Governmental Body, and (iii) any expenses or obligations, including
attorneys' fees and expert witness fees, incurred at, before and after
any trial or other proceeding before any Governmental Body or appeal
therefrom whether or not taxable as costs, including, without
limitation, witness fees, deposition costs, copying and telephone
charges and other expenses, all of which shall be paid by Borrower to
Lender.
10.2.5 DISTRIBUTION TRANSACTIONS. Any and all claims,
losses, damages and expenses suffered and/or incurred at any time by
Lender arising out of or in any way relating to the Distribution
Transaction Documents and the transactions contemplated thereby,
including, without limitation, from any failure of the Distribution to
be consummated or otherwise of full force and effect or of the
Contribution, the Internal ISI Merger and/or the Distribution to
qualify as a tax-free reorganization under Section 368(a)(1)(D) of the
Code or to otherwise qualify for non-recognition treatment under the
Code and/or the Distribution to qualify as a tax-free transaction
described in Section 355 of the Code.
60
67
ARTICLE XI
TAXES AND ILLEGALITY
11.1 TAXES. (A) ANY AND ALL PAYMENTS BY BORROWER TO LENDER UNDER
THIS LOAN AGREEMENT SHALL BE MADE FREE AND CLEAR OF, AND WITHOUT DEDUCTION OR
WITHHOLDING FOR, ANY AND ALL PRESENT OR FUTURE TAXES, LEVIES, IMPOSTS,
DEDUCTIONS, CHARGES OR WITHHOLDINGS, AND ALL LIABILITIES WITH RESPECT THERETO,
EXCLUDING, IN THE CASE OF LENDER, SUCH TAXES (INCLUDING INCOME TAXES OR
FRANCHISE TAXES) AS ARE IMPOSED ON OR MEASURED BY LENDER'S NET INCOME BY THE
JURISDICTION UNDER THE LAWS OF WHICH SUCH LENDER, AS THE CASE MAY BE, IS
ORGANIZED OR MAINTAINS A LENDING OFFICE OR ANY POLITICAL SUBDIVISION THEREOF
(ALL SUCH NON-EXCLUDED TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES,
WITHHOLDINGS AND LIABILITIES BEING HEREINAFTER REFERRED TO AS "TAXES").
(b) In addition, Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Loan Agreement
or any other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Borrower shall indemnify and hold harmless Lender for the
full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 11.1) paid by Lender
and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within thirty (30) days from the date Lender
makes written demand therefor.
(d) If Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to
Lender, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 10.1) Lender
receives an amount equal to the sum it would have received had no such
deductions been made;
(ii) Borrower shall make such deductions; and
(iii) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(e) Within thirty (30) days after the date of any payment by
Borrower of Taxes or Other Taxes, Borrower shall furnish to Lender the original
or a certified copy of a receipt evidencing payment thereof or other evidence
of payment satisfactory to Lender.
61
68
(f) If Borrower is required to pay additional amounts to Lender
pursuant to subsection 11.1(d), then Lender shall use its reasonable best
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its lending office so as to eliminate any such additional
payment by Borrower which may thereafter accrue if such change in the judgment
of Lender is not otherwise disadvantageous to Lender.
11.2 INTENTIONALLY OMITTED.
11.3 INCREASED COSTS AND REDUCTION OF RETURN. If Lender shall have
determined that:
(a) the introduction of any Capital Adequacy Regulation;
(b) any change in any Capital Adequacy Regulation;
(c) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other
Governmental Body charged with the interpretation or administration
thereof; or
(d) compliance by Lender (or its lending office) or any
corporation controlling Lender, with any Capital Adequacy Regulation;
affects the amount of capital required or expected to be maintained by Lender
or any corporation controlling Lender and (taking into consideration Lender's
or such corporation's policies with respect to capital adequacy and Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment(s), loans, credits or obligations
under this Loan Agreement, then, within thirty (30) days of demand of Lender,
Borrower shall upon demand pay to Lender, from time to time as specified by
Lender, additional amounts sufficient to compensate Lender for such increase.
11.4 FUNDING LOSSES. Borrower agrees to reimburse Lender and to
hold Lender harmless from any loss or expense which Lender may sustain or incur
as a consequence of:
(a) the failure of Borrower to borrow the Term Loan; or
(b) the failure of Borrower to make any prepayment after
Borrower has given a notice in accordance with Section 2.8.1.
11.5 CERTIFICATES OF LENDER. If Lender claims reimbursement or
compensation pursuant to this Article XI, Lender shall deliver to Borrower a
certificate setting forth in reasonable detail the amount payable to Lender
hereunder and such certificate shall be conclusive and binding on Borrower in
the absence of manifest error.
11.6 SURVIVAL. The agreements and obligations of Borrower in this
Article XI shall survive the payment of all other Borrower's Obligations.
62
69
ARTICLE XII
MISCELLANEOUS
12.1 NOTICES. All notices and communications under this Loan
Agreement shall be in writing and shall be (i) delivered in person, (ii) sent
by telecopy, or (iii) mailed, postage prepaid, either by registered or
certified mail, return receipt requested, or by overnight express carrier,
addressed in each case as follows:
To Borrower: c/o PracticeWorks, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
To FINOVA: FINOVA Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Manager
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: FINOVA Capital Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Law
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Zavis
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
63
70
or to any other address or telecopy number, as to any of the parties hereto, as
such party shall designate in a written notice to the other parties hereto. All
notices sent pursuant to the terms of this Section 12.1 shall be deemed
received (i) if personally delivered, then on the Business Day of delivery,
(ii) if sent by telecopy before 2:00 p.m. Phoenix time, on the day sent if a
Business Day or if such day is not a Business Day or if sent after 2:00 p.m.
Phoenix time, then on the next Business Day, (iii) if sent by overnight,
express carrier, on the next Business Day immediately following the day sent,
or (iv) if sent by registered or certified mail, on the earlier of the fifth
(5th) Business Day following the day sent or when actually received. Any notice
by telecopy shall be followed by delivery on the next Business Day by
overnight, express carrier or by hand.
12.2 SURVIVAL OF LOAN AGREEMENT; INDEMNITIES. All covenants,
agreements, representations and warranties made in this Loan Agreement and in
the certificates delivered pursuant hereto shall survive the making by Lender
of the Term Loan and the execution and delivery to Lender of the Term Note and
of all other Loan Documents, and shall continue in full force and effect so
long as any of Borrower's Obligations remain outstanding, unperformed or unpaid
and the Commitments have not been terminated. Notwithstanding the repayment of
all amounts due under the Loan Documents, the cancellation of the Term Note and
the release and/or cancellation of any and all of the Loan Documents or the
foreclosure of any Liens on the Collateral or the termination of the
Commitments, the obligations of Borrower to indemnify Lender with respect to
the expenses, damages, losses, costs and liabilities described in Section 10.2
shall survive until all applicable statute of limitations periods with respect
to actions which may be brought against Lender have run.
12.3 FURTHER ASSURANCE. From time to time, Borrower shall execute
and deliver to Lender such additional documents as Lender reasonably may
require to carry out the purposes of the Loan Documents and to protect rights
of Lender thereunder, including, without limitation, using its best efforts in
the event any Collateral is to be sold to secure the approval by any
Governmental Body of any application required by such Governmental Body in
connection with such sale, and not take any action inconsistent with such sale
or the purposes of the Loan Documents.
12.4 TAXES AND FEES. Should any tax (other than taxes based upon
the net income of any Lender), recording or filing fees become payable in
respect of any of the Loan Documents, or any amendment, modification or
supplement thereof, Borrower agrees to pay the same on demand, together with
any interest or penalties thereon attributable to any delay by Borrower in
meeting any Lender demand, and agrees to hold Lender harmless with respect
thereto.
12.5 SEVERABILITY. In the event that any provision of this Loan
Agreement is deemed to be invalid by reason of the operation of any law, or by
reason of the interpretation placed thereon by any court or Governmental Body,
as applicable, this Loan Agreement shall be construed as not containing such
provision and the invalidity of such provision shall not affect the validity of
any other provisions hereof, and any and all other provisions hereof which
otherwise are lawful and valid shall remain in full force and effect.
64
71
12.6 WAIVER. No delay on the part of Lender in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, and no
single or partial exercise of any right, power or privilege hereunder shall
preclude other or further exercise thereof, or be deemed to establish a custom
or course of dealing or performance between the parties hereto, or preclude the
exercise of any other right, power or privilege.
12.7 MODIFICATION OF LOAN DOCUMENTS. No modification or waiver of
any provision of any of the Loan Documents shall be effective unless the same
shall be in writing and signed by Borrower and Lender, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in the same, similar or other
circumstances.
12.8 CAPTIONS. The headings in this Loan Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
12.9 SUCCESSORS AND ASSIGNS. This Loan Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
12.10 REMEDIES CUMULATIVE. All rights and remedies of the parties
hereto, any other Loan Documents or otherwise, shall be cumulative and
non-exclusive, and may be exercised singularly or concurrently. Lender shall
not be required to prosecute collection, enforcement or other remedies against
Borrower before proceeding against any Subsidiary of Borrower or to enforce or
resort to any security, liens, collateral or other rights of Lender. One or
more successive actions may be brought against Borrower and/or any Subsidiary
of Borrower, either in the same action or in separate actions, as often as
Lender deems advisable, until all of Borrower's Obligations are paid and
performed in full and the Commitments shall have terminated.
12.11 ENTIRE AGREEMENT; CONFLICT. This Loan Agreement and the other
Loan Documents executed prior or pursuant hereto constitute the entire
agreement among the parties hereto with respect to the transactions
contemplated hereby or thereby and supersede any prior agreements, whether
written or oral, relating to the subject matter hereof. In the event of a
conflict between the terms and conditions set forth herein and the terms and
conditions set forth in any other Loan Document, the terms and conditions set
forth herein shall govern.
12.12 APPLICABLE LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF ARIZONA.
12.13 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY
OUT OF THE LOAN DOCUMENTS SHALL BE
65
72
LITIGATED IN THE SUPERIOR COURT OF MARICOPA COUNTY, OR THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF ARIZONA OR, IF LENDER INITIATES SUCH ACTION,
IN ADDITION TO THE FOREGOING COURTS, ANY COURT IN WHICH LENDER SHALL INITIATE
SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. BORROWER HEREBY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH COURTS IN THE STATE OF ARIZONA.
BORROWER WAIVES ANY CLAIM THAT MARICOPA COUNTY, ARIZONA OR THE DISTRICT OF
ARIZONA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.
THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET FORTH IN THIS SECTION 12.13
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY OR LENDER OF ANY JUDGMENT
OBTAINED IN ANY OTHER FORUM TO THE EXTENT SUCH FORUM HAS JURISDICTION OR THE
TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER JURISDICTION
PERMITTED BY LAW, AND BORROWER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK
ANY SUCH JUDGMENT OR ACTION.
12.14 WAIVER OF RIGHT TO JURY TRIAL. LENDER AND BORROWER
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE
LOAN DOCUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD
BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE
THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
12.15 TIME OF ESSENCE. TIME IS OF THE ESSENCE FOR THE PERFORMANCE
BY BORROWER OF THE OBLIGATIONS SET FORTH IN THIS LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
12.16 ESTOPPEL CERTIFICATE. Within fifteen (15) days after Lender
requests Borrower to do so, Borrower will execute and deliver to Lender a
statement certifying (i) that this Loan Agreement is in full force and effect
and has not been modified except as described in such statement, (ii) the date
to which interest and principal on the Term Note have been paid, (iii) the
Principal Balance, (iv) whether or not to its knowledge an Incipient Default or
Event of Default has occurred and is continuing, and, if so, specifying in
reasonable detail each such Incipient Default or Event of Default of which they
have knowledge, (v) whether to its knowledge Borrower has any defense, setoff
or counterclaim to the payment of the Term Note in accordance with its terms,
and, if so, specifying each defense, setoff or counterclaim of which they have
knowledge in reasonable detail (including where applicable the amount thereof),
and (vi) as to any other matter reasonably requested by Lender.
66
73
12.17 CONSEQUENTIAL DAMAGES. Neither Lender nor any agent or
attorney of Lender shall be liable to Borrower or any Subsidiary of Borrower
for consequential damages arising from any breach of contract, tort or other
wrong relating to the establishment, administration or collection of the
Borrower's Obligations.
12.18 COUNTERPARTS. This Loan Agreement may be executed by the
parties hereto in several counterparts and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same agreement.
12.19 NO FIDUCIARY RELATIONSHIP. No provision in this Loan
Agreement or in any other Loan Document, and no course of dealing among the
parties hereto, shall be deemed to create any fiduciary duty by Lender to
Borrower or its Subsidiaries.
12.20 NOTICE OF BREACH BY LENDER. Borrower agrees to give Lender
written notice of (i) any action or inaction by Lender or any agent or attorney
of Lender in connection with the Loan Documents that may be actionable against
Lender or any agent or attorney of Lender or (ii) any defense to the payment of
Borrower's Obligations for any reason, including, but not limited to,
commission of a tort or violation of any contractual duty implied by law.
12.21 UNWIND AGREEMENT. If for any reason at any time the
Distribution shall fail, shall fail to be consummated or shall be unwound,
terminated, repealed or otherwise not of full force and effect, then the
Borrower agrees, and agrees to cause its Subsidiaries, to (a) take such action
as Lender may require, if any, in its sole and absolute discretion, to unwind
or otherwise amend and modify the transactions contemplated by this Loan
Agreement, the other Loan Documents and/or the Related Transaction Documents
and/or otherwise evidenced by the Existing FINOVA Loan Agreement and (b)
execute and deliver such agreements, documents and instruments, and procure the
issuance of such legal opinions, in each case as Lender may require in its sole
and absolute discretion. The Borrowers acknowledges that the agreements and
covenants contained in this Section 12.21 constitute a material inducement to
Lender's agreement to execute and deliver, and consent to the transactions
contemplated by, this Loan Agreement and the other Loan Documents. All costs,
expenses and fees incurred by Lender and its representatives under this Section
12.21 shall be borne solely by the Borrower and shall be due and payable by
Borrower to Lender on demand. The failure of Borrower or any Subsidiary of
Borrower, or any debtor, guarantor, borrower or other obligor under the
Existing FINOVA Loan Agreement, to comply with the terms and conditions of this
Section 12.21 shall constitute an immediate Event of Default, without further
action or notice by or on behalf of Lender or any other Person.
IN WITNESS WHEREOF, this Loan Agreement has been executed and
delivered by each of the parties hereto by a duly authorized officer of each
such party on the date first set forth above.
67
74
PRACTICEWORKS, INC., a Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
A duly authorized officer of Borrower
FEIN: ▇▇-▇▇▇▇▇▇▇
Wire Transfer Instructions:
c/o
----------------------------------------
-------------------------------, -------
Account No.
--------------------------------
ABA No.
------------------------------------
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By:
----------------------------------------
Name:
--------------------------------------
Vice President
68
