<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
{X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____ to ______
Commission file number 0-15846
FIRST HEALTH Group Corp.
------------------------
(Formerly HealthCare COMPARE Corp.)
(Exact name of registrant as specified in its charter)
Delaware 36-3307583
------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
3200 Highland Avenue
Downers Grove, Illinois 60515
------------------------------- ---------------------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (630) 241-7900
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant on June 1, 1998, was approximately $1,365,204,515. On that date,
there were 24,109,572 shares of Common Stock issued and outstanding. For the
purposes of the foregoing calculation only, all directors, executive officers
and five percent stockholders of the registrant have been deemed to be
affiliates.
<PAGE> 2
DOCUMENTS INCORPORATED BY REFERENCE
1997 Annual Report to Stockholders .................... Parts I, II, III and IV
Proxy Statement for the Annual Meeting of
Stockholders scheduled to be held on
May 19, 1998 .................................................. Parts I and III
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
FIRST HEALTH GROUP CORP.
By: /s/ James C. Smith
--------------------------
James C. Smith, President
and Chief Executive Officer
Date: June 5, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on June 5, 1998:
SIGNATURE TITLE
------------------------- ---------------------------------------------
/s/Thomas J. Pritzker * Chairman of the Board
-------------------------
Thomas J. Pritzker
/s/James C. Smith President, Chief Executive Officer,
------------------------- Director (Principal Executive Officer)
James C. Smith
/s/Robert J. Becker, M.D. * Chairman Emeritus
-------------------------
Robert J. Becker, M.D.
/s/Joseph E. Whitters * Chief Financial Officer
------------------------- (Principal Financial Officer)
Joseph E. Whitters
/s/Jerry L. Seiler * Controller
------------------------- (Principal Accounting Officer)
Jerry L. Seiler
/s/Ronald H. Galowich * Secretary
------------------------- Director
Ronald H. Galowich
/s/Michael J. Boskin * Director
-------------------------
Michael J. Boskin
/s/Burton W. Kanter * Director
-------------------------
Burton W. Kanter
/s/David Simon * Director
-------------------------
David Simon
/s/Daniel Brunner * Executive Vice President,
------------------------- Government Affairs, Director
Daniel Brunner
/s/Robert S. Colman * Director
-------------------------
Robert S. Colman
3
<PAGE> 4
SIGNATURE TITLE
------------------------- --------------------------------
/s/Harold S. Handelsman * Director
-------------------------
Harold S. Handelsman
/s/Don Logan * Director
-------------------------
Don Logan
* By: /s/ Joseph E. Whitters
-----------------------------------
Joseph E. Whitters, Attorney in Fact
4
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ---------------------------------------------------------------------------------------
<S> <C>
2.1. Omitted
3.1. Restated Certificate of Incorporation of the Company. {3.1} (1)
3.2. Amendment to Restated Certificate of Incorporation of the Company.
{3.2} (9)
3.3. Restated Certificate of Designation of Preferences, Rights and
Limitations. {3.2} (1)
3.4. Amended and Restated By-Laws of the Company. {3.3} (1)
3.5. Amendment, dated as of May 20, 1987, to Amended and Restated By-Laws
of the Company {3.4} (2)
3.6. Amendment to Amended and Restated By-Laws of the Company.{3.5} (6)
3.7. Amendment to Amended and Restated By-Laws of the Company.{3.6} (6)
4. Specimen of Stock Certificate for Common Stock. {4} (2)
9. Omitted
9.1. Omitted
9.2. Omitted
10.1 to 10.10. Omitted
10.11. HealthCare COMPARE Corp. 1987 Stock Option Plan, as amended and
restated. {4} (5)
10.12. Amendment No. 1 to HealthCare COMPARE Corp. Stock Option Plan, as
amended and restated {10.12} (6)
10.13.-10.24. Omitted
10.25. Form of Consulting Physician Agreement, {10.20} (2)
10.26. Form of Consulting Specialist Agreement. {10.21} (2)
10.27-10.35. Omitted
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
10.36. HealthCare COMPARE Corp. 1989 Employee Stock Purchase Plan. {10.36} (7)
10.37-10.54. Omitted
10.54. Form of Indemnification Agreement entered dated June 19, 1989 between
OUCH and executive officers and directors of OUCH (Incorporated by
reference to Exhibit B of definitive proxy materials filed by OUCH with
the SEC on April 7, 1989) {10.54} (11)
10.55-10.68. Omitted
10.69. Second Restatement of the HealthCare COMPARE Corp. Retirement Savings
Plan. {10.69} (14)
10.70. HealthCare COMPARE Corp. Director's Option Plan dated May 23, 1991.
{10.70} (14)
10.71. HealthCare COMPARE Corp. Stock Option Plan (for employees of OUCH).
{10.71} (14)
10.72. Omitted
10.73. Option Agreement dated as of July 1, 1993 by and between the Company and
James C. Smith. {10.73} (15)
10.74. Option Agreement dated as of July 1, 1993 by and between the Company and
James C. Smith. {10.74} (15)
10.75. Option Agreement dated as of July 1, 1993 by and between the Company and
James C. Smith. {10.75} (15)
10.76. Employment Agreement dated as of July 1, 1993 by and between COMPARE and
Daniel S. Brunner. {10.76} (15)
10.77.-10.80. Omitted
10.81. PPO Agreement dated October 1, 1990 between the Company and National
Association of Letter Carriers. {10.81}
10.82. First Combined Amendment to the PPO Agreement, each dated October 1,
1990, between AFFORDABLE HealthCare Concepts and National Association of
Letter Carriers Health Benefit Plan. {10.82}
10.83. Second Amendment to the PPO Agreement, each dated October 1, 1990, as
amended between AFFORDABLE HealthCare Concepts and National Association of
Letter Carriers Health Benefit Plan. {10.83}
10.84. Utilization Management Agreement dated January 1, 1989 between
HealthCare COMPARE Corp. and National Association of Letter Carriers.
{10.84}
</TABLE>
6
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<TABLE>
<S> <C>
10.85. First Amendment to the Utilization Management Agreement dated January 1,
1989 between HealthCare COMPARE Corp. and National Association of Letter
Carriers. {10.85}
10.86. Second Amendment to the Utilization Management Agreement dated January
1, 1989 between HealthCare COMPARE Corp. and National Association of
Letter Carriers. {10.86}
10.87. Third Amendment to the Utilization Management Agreement dated January 1,
1989 between HealthCare COMPARE Corp. and National Association of Letter
Carriers. {10.87}
10.88. Fourth Amendment to the Utilization Management Agreement dated January
1, 1989 between HealthCare COMPARE Corp. and National Association of
Letter Carriers. {10.88}
10.89. Fifth Amendment to the Utilization Management Agreement dated January 1,
1989 between HealthCare COMPARE Corp. and National Association of Letter
Carriers. {10.89}
10.90. Retainer Agreement dated January 1, 1994 between HealthCare COMPARE
Corp. and Ronald H. Galowich. {10.90}
10.91-10.93. Omitted.
10.94. HealthCare COMPARE Corp. 1995 Employee Stock Option Plan. (4.1) {18}
10.95. Employment Agreement dated January 1, 1997 between HealthCare COMPARE
Corp. and James C. Smith. {10.95} (20)
10.96. Option Agreement dated as of January 1, 1997 by and between The Company
and James C. Smith. {10.96} (20)
10.97. Option Agreement dated as of January 1, 1997 by and between The Company
and James C. Smith. {10.97} (20)
10.98. Option Agreement dated as of January 1, 1997 by and between The Company
and James C. Smith. {10.98} (20)
10.99. Agreement dated as of September 1, 1995 between HealthCare COMPARE Corp.
and Electronic Data Systems. {10.99} (20)
10.100. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and Joseph E. Whitters. {10.100} (22)
10.101. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and Ed Wristen. {10.101} (22)
10.102. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and Lottie Kurcz. {10.102} (22)
</TABLE>
7
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<TABLE>
<S> <C>
10.103. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and Mary Anne Carpenter. {10.103} (22)
10.104. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and Susan T. Smith. {10.104} (22)
10.105. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and A. Lee Dickerson. {10.105} (22)
10.106. Employment Agreement dated April 29, 1997 between HealthCare COMPARE
Corp. and Patrick G. Dills. {10.106} (22)
10.107. Employment Agreement dated July 1, 1997 between HealthCare COMPARE
Corp. and Jerry L. Seiler. {10.107} (22)
10.108. Stock Purchase Agreement among HealthCare COMPARE Corp., First
Financial Management Corporation and First Data Corporation dated as of
May 22, 1997, incorporated by reference from the Company's Second Quarter
1997 Form 10Q dated August 13, 1997. {10.108}
10.109. Amended and Restated Credit Agreement dated as of October 22, 1997 by
and among HealthCare COMPARE Corp. as borrowers; LaSalle National Bank as
administrative agent, issuing bank and lender; First Chicago Capital
Markets, Inc., as syndication agent; and the other financial institutions
party hereto as lenders.
10.110. Lease - 11301 West Lake Park Drive, Milwaukee, WI dated as of January
23, 1998 between First Health Group Corp. and TCC Milwaukee II Limited
Partnership.
10.111. Lease - 15710 John F. Kennedy Boulevard, Houston, TX dated as of
September 17, 1993 between First Health Strategies (TPA) Inc. and WHP,
Inc.
10.112. Lease - 2569, 2575, 2602, 2614, 2650 and 2686 South Decker Lake Lane
and 2601 South Redwood Road, Salt Lake City, UT dated as of November 1,
1994 between First Health Strategies, Inc. and Trinet Essential Facilities
X, Inc.
10.113. Lease - Cox Road in the Innsbrook Corporate Center, Henrico County, VA
dated as of February 6, 1989 between the Computer Company and Rowe
Properties - Data Limited Partnership.
11. Computation of Basic and Diluted Earnings Per Share. {11} (22)
13. 1997 Annual Report to Stockholders. {13} (22)
22. Subsidiaries of the Company. {22} (22)
23. Consent of Deloitte & Touche LLP.
</TABLE>
8
<PAGE> 9
<TABLE>
<S> <C>
24. Powers of Attorney of certain officers and directors of the Company.
(24) (22)
27. Financial data schedules of the Company. (27) (22)
( ) Exhibits so marked have been previously filed with the Securities
and Exchange Commission as exhibits to the filings shown below
under the exhibit number indicated following the respective
document description and are incorporated herein by reference.
</TABLE>
<TABLE>
<CAPTION>
Exhibit No. Description
- --------------------------------------------------------------------------------------
<S> <C>
(1) Registration Statement on Form S-1 ("Registration Statement"), as filed
with the Securities and Exchange Commission on April 17, 1987.
(2) Amendment No. 2 to Registration Statement, as filed with the Securities
and Exchange Commission on May 22, 1987.
(3) Amendment No. 3 to Registration Statement, as filed with the Securities
and Exchange Commission on May 29, 1987.
(4) Annual Report on Form 10-K for the fiscal year ended August 31, 1987, as
filed with the Securities and Exchange Commission on November 27, 1987.
(5) Registration Statement on Form S-8, as filed with the Securities and
Exchange Commission on January 12, 1988.
(6) Registration Statement on Form S-1, as filed with the Securities and
Exchange Commission on July 12, 1988.
(7) Registration Statement on Form S-8, as filed with the Securities and
Exchange Commission on January 18, 1989.
(8) Annual Report on Form 10-K for the year ended August 31, 1989, as filed
with the Securities and Exchange Commission on November 28, 1989.
(9) Annual Report on Form 10-K for the year ended December 31, 1990, as filed
with the Securities and Exchange Commission on March 30, 1991.
(10) Registration Statement on Form S-8, as filed with the Securities and
Exchange Commission on November 1, 1991.
(11) Registration Statement of Form S-4, as filed with the Securities and
Exchange Commission on January 27, 1992.
(12) Registration Statement on Form S-8, as filed with the Securities and
Exchange Commission on March 4, 1992.
</TABLE>
9
<PAGE> 10
<TABLE>
<S> <C>
(13) Annual Report on Form 10-K for the year ended December 31, 1991 as filed
with the Securities and Exchange Commission on March 27, 1992.
(14) Annual Report on Form 10-K for the year ended December 31, 1992 as filed
with the Securities and Exchange Commission on March 26, 1993.
(15) Annual Report on Form 10-K for the year ended December 31, 1993 as filed
with the Securities and Exchange Commission on March 25, 1994.
(16) Registration Statement on Form S-8, as filed with the Securities and
Exchange Commission on December 27, 1994.
(17) Annual Report on Form 10-K for the year ended December 31, 1994 as filed
with the Securities and Exchange Commission on March 24, 1995.
(18) Registration Statement on Form S-8 as filed with the Securities and
Exchange Commission on September 20, 1995.
(19) Annual Report on Form 10-K for the year ended December 31, 1995 as filed
with the Securities and Exchange Commission on March 27, 1996.
(20) Annual Report on Form 10-K for the year ended December 31, 1996 as filed
with the Securities and Exchange Commission on March 27, 1997.
(21) Registration Statement on Form S-8 as filed with the Securities Exchange
Commission on July 23, 1997.
(22) Annual Report on Form 10-K for the year ended December 31, 1997 as filed
with the Securities and Exchange Commission on March 26, 1998.
</TABLE>
10
<PAGE> 1
Ex-10.109
AMENDED AND RESTATED CREDIT AGREEMENT
Dated a' of October 229 1997
by and among
HEALTHCARE COMPARE CORP.,
as Borrower
LASALLE NATIONAL BANK
as Administrabve Agent, Issuing Bank and Lender,
FIRST CHICAGO CAP1IAL MARKETS, INC.
as Syndication Agent
a~d
THE OTHER [INANCIAL INSTITUTIONS PARTY HERETO
as Lenders
TABLE OF CONTENTS
AR11CLE 1
DEFINITIONS
SECTTON 1.1 Defined Terms ...............
SECTION 1.2 Other Interpretive Provisions ....
SECTTON 1.3 Accounting Principles. . . . . . . . .
ARTICLE 2
TEIE CREDITS
SECTION 2.1 Amounts and Terms of Commitments ...
SECTTON 2.2 Note ..........................
SECTTON 2.3 Revolving Loan Accounts ......................
SECTTON 2.4 Procedure for Revolving Credit Borrowing .........
SECTTON 2.5 Conversion and Continuation Elections
SECTTON 2.6 Optional Prepavments ...................................
SECTTON 2.7 Final Pavment: Optional Reduction of Aggregate Commitment......
SECTION 2.8 Interest ...................................
SECTTON 2.9 Fees ......................................
SECTTON 2.10 Computation of Fees and Interest ...............
SECTTON 2.11 Pavments by the Borrower ....................
SECTTON 2.12 Payments by the Lenders to the Administrative Agent
SECTTON 2.13 Sharing of Pavments. Etc .......................
ARTICLE 3
TAXES. YIELD PROTECTION AND ILLEGALIr'
<PAGE> 2
SECTION 3.1 Taxes .............................
SECTTON 3.2 Illegalitv . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.3 Increased Costs and Reduction of Return . .
SECTION 3.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTTON 3.5 Inability to Determine Rates ............
SECTTON 3 6 Reserves on LIBOR Rate Revolving Loans
SECTTON 3.7 Certificates of Lenders ................
SECTTON 3.8 Replacement of Lenders ..................
SECTTON 3.9 Survival ..........................
. .
........................... -16
..................... -17
-18
-20
. -20
..... -20
. -21
. -22
. -23
. -23
. -24
. -24
. -25
. -26
. -26
. -27
. -30
. -31
-31
. -32
-32
. -33
. -33
. -33
ARTICLE 4
C ONDITIO NS PFUECEDENT
<PAGE> 3
SECTTON 4 1 Conditions of Initial Revolving Loans
- -33
SECTTON 4 2 Conditions to All Borrowings and Issuances of Letters of Credit -35
SECTTON 4 3 Conditions to Effectiveness of Amendment and Restatement -36
ARIICIJE5
SECTTON 5 1 Corporate Existence and Power . SECTTON 5 2 SECTTON 5 3 SECTTON 5 4
SECTTON 5 5 SECTTON 5 6 SECTTON 5 7 SECTTON 5 8 SECTTON 5.9 SECTTON 5.10
SECTTON 5 11 SECTTON 5 12 SECTTON 5 13 SECTTON 5 14 SECTION 5 15 SECTTON 5 16
SECTTON 5 17 SECTTON 5 18 SECTTON 5 19 SECTTON 5 20 SECTTON 5 21
AFFDRA1ATrVE CO\]ENANTS
- -36
- -36
- -37
- -37
- -37
- -37
- -37
- -38
- -38
- -38
- -38
- -39
- -39
No Burdensome Restrictions ... -39
- -40
- -40
- -40
- -40
- -40
- -41
- -41
Corporate Authorization: No Contravention
Governmental Authorization .
Binding Effect
Litigation
<PAGE> 4
No Default
ERISA Compliance . ...........
Use of Proceeds: Margin Regulations . .
Title to Properties
Taxes
Financial Condition . . .
Environmental Matters ... ...
Regulated Entities . .. ..
Solvency
Labor Relations
Copvrights. Patents. Trademarks and Licenses. etc
Subsidiaries . .
Brokers' Fees: Transaction Fees
Insurance .. ......
Compliance with Law . ...
A RTICLE 6
SECTTON 6 1 Financial Statements . . .
SECTTON 6 2 Certificates: Other Information . .
SECTTON 6 3 Notices . . .
SECTTON 6 4 Preservation of Corporate Existence, Etc.
SECTTON 6 5 Maintenance of Property
SECTTON 6 6 Insurance
- -41-42-43 - -44-45-45
SECTTON 6.7 Payment of Obligations
SECTTON 6.8 Compliance with Laws . .
SECTTON 6.9 r : ~ r
SECTION 6.10 Use of Proceeds . . . .
SECTTON 6.11 Solvency .........
SECTTON 6.12 Further Assurances
. -46. -46
....... -46
. -46
. -46
<PAGE> 5
. -47
Insnection of ProDertv and Books and Records
ARTICLE 7
NEGATIVE COVENANTS
SECTTON 7 1 Limitation on Liens .........
SECTTON 7.2 Disposition of Assets ........
SECTTON 7.3 Consolidations and Mergers . .
SECTTON 7.4 Loans and Investments ......
SECTTON 7.5 Limitation on Indebtedness
SECTTON 7.6 Transactions with AdEdiates .......
SECTTON 7.7 Use of Proceeds ..............
SECTTON 7.8 Amendments to Acquisition Documents ....
SECTTON 7.9 Compliance with ERISA
SECTTON 7.10 Lease Obligations ......
SECTTON 7.11
SECTTON 7.12
SECTTON 7.13
SECTTON 7.14
SECTTON 7.15
SECTTON 7.17
SECTTON 7.18
Restricted Pavments ........
Fixed Charge Coverage Ratio
Consolidated Net Worth
Leverage Ratio ......
Change in Business
Accounting Changes .
Hostile Acquisitions . .
EVENTS OF DEFAULT
SECTTON 8.1 Event of Default ......
SECTTON 8.2 Remedies ............
SECTTON 8.3 Rights Not Exclusive . . .
THE AGENTS
ARTICLE 8
ARTICLE 9
<PAGE> 6
SECTTON 9.1 Appointment and Authorization . . . SECTTON 9.2 Delegation of
Duties . . . . . . . . . . .
. -47
.. -49-49-50
- -50
.. -51.. -51.. -52.. -52.. -52.. -53.. -53.. -53.. -54.. -54.. 54.. -54
. -54
..... -57
. -57
SECTTON 9.3 Liabilitv of Agents . .
SECTTON 9.4 Reliance bv Agents .
SECTTON 9.5 Notice of Default . . .
SECTION 9.6 Credit Decision . . . . .
SECTTON 9.7 Indemnification
SECTTON 9.8 Administrative Agent in Individual Capacity . . .
SECTTON 9.9 Successor Administrative Agent ........
A RTICLE 10
MISCELLA NEO US
. -58. -59. -59. -59. -60. -61. -61
SECTTON 10.1 Amendments and Waivers ...... ......... -61-
SECTTON 10.2 Notices .......... -62-
SECTTON 10.3 NO Waiver; Cumulative Remedies -63-
SECTTON 10.4 Costs and Expenses -63-
SECTTON 10.5 Indemnitv ........ . -64-
SECTTON 10.6 Marshalling; Payquents Set Aside . . . . . . . . . . . -64-
<PAGE> 7
SECTTON 10.7 Successors and Assigns . -65-
SECTTON 10.8 Assi~nments. Participations etc. -65-
SECTTON 10.9 Confidentialitv .. .. .. -67-
SECTTON 10.10 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . -68-
SECTTON 10.11 Notification of Addresses. Lending Offices. Etc . . .. -68-
SECTTON 10.12 Counterparts . -68-
SECTION 10.13 Severabilitv -68-
SECTTON 10.14 Captions -68-
SECTTON 10.15 Independence of Provisions . . .......... ....... -68-
SECTTON 10.16 Interpretation ................. . -69-
SECTTON 10.17 No Third Parties genefited ... .. -69-
SECTTON 10.18 Governing Law and Jurisdiction -69-
SECTTON 10.19 WA[VEROFJ1URY TRIAL . . . . . . . . . . . . . . . . . -69-
SECTTON 10.20 Entire Agreement -70-
SCEIEDULES
Schedule I
Schedule 5.5 Schedule 5.7 Schedule 5.1 1 Schedule 5. 12 Schedule 5. 13 Schedule
5.17 Schedule 5.18 Schedule 7.1 Schedule 7.4 Schedule 7.5 Schedule 7. 10
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Commitment Schedule
Litigation
ERISA
Liabilities
Environmental Matters
Regulated Entities
<PAGE> 8
Intellectual Property
Subsidiaries and Equity Investments
Liens
Investments
Indebtedness
Operating Leases
EXIIIBIlS
Notice of Borrowing
Notice of Continuation/Conversion
Revolving Note
Opinion of Counsel
Officer's Certificate
Assignment and Acceptance
Form of Letter of Credit
AMENDED AND RESTATED
CREDIT AGREEMENT
~ ~ _
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of October
22, 1997, by and among HealthCare COMPARE Corp., a Delaware corporation (the
"Borrower"), the several financial institutions from time to time party to this
Agreement (collectively, the "Lenders" and individually each a "Lender"),
LaSalle National Bank as a Lender, Issuing Bank and as administrative agent for
the Lenders (the "Administrative Agent") and First Chicago Capital Markets,
Inc., as syndication agent for the Lenders (the "Syndication Agent").
WITNES SETH:
WHEREAS, the Borrower and the Lenders have entered into that certain
Credit Agreement dated as of July 1, 1997 (the "Original Credit Agreement")
pursuant to which the Lenders have agreed to make available to the Borrower a
revolving credit facility upon and subject to the terms and conditions set
forth in the Original Credit Agreement;
WHEREAS, the Borrower has requested, and the Lenders have agreed to make
available to the Borrower, a letter of credit facility and in connection
therewith, the parties hereto have agreed to amend and restate the Original
Credit Agreement as set forth herein (the Original Credit Agreement, as amended
and restated hereby, the"Agreement");
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE 1
<PAGE> 9
DElIN1TIONS
SECTION 1.1 Defined Terms. The following terms shall have the following
meanin purposes of this Agreement:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (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 equity of any Person or otherwise
causing any Person to become a Subsidiary of the Borrower, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary of the Borrower) as long as the Borrower or the Borrower's
Subsidiary is the surviving entity.
"Acquisition Documents" means the Stock Purchase Agreement by and among
HealthCare COMPARE Corp., First Financial Management Corporation and First Data
Corporation dated as of May 22, 1997 and all related documents, agreements,
exhibits and schedules.
"Acquisition Transactions" means the transactions consummated pursuant
Acquisition Documents.
"Administrative Agent" means LaSalle in its capacity as agent for the
Lenders here~ and any successor agent.
"Administrative Agent's Payment Office" means the address for payments set
forth on the signature page hereto in relation to the Administrative Agent or
such other address as the Administrative Agent may from time to time specify in
accordance with Section 10.2.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, 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 the purposes of this
Agreement, be deemed to control the other Person. Notwithstanding the
foregoing, no Lender nor the Administrative Agent shall be deemed an
"Affiliate" of the Borrower or of any Subsidiary of the Borrower.
"Agency Fee" has the meaning ascribed to such term in Section 2.9(a) hereof.
"Agent-Related Person" means either of the Agents, any successor agent
arising under Section 9.9, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.
"Agents" means collectively, the Administrative Agent and the Syndication
Agent.
<PAGE> 10
"Aggregate Letter of Credit Commitment" means the combined Letter of
Credit Commitments of the Lenders as set forth in Schedule I attached hereto,
the aggregate of which shall not exceed $15,000,000
"Aggregate Revolving Loan Commitment" means the combined Revolving Loan
Commitments of the Lenders as set forth on Schedule I attached hereto, the
aggregate of which shall not exceed $350,000,000.
"Applicable Margin" means with respect to LIBOR Rate Revolving Loans, Base
Rate Revolving Loans, and Facility Fees, respectively, the applicable LIBOR
margin, Base Rate margin, or Facility Fee margin in effect from time to time
determined using either the Borrower's Senior Long-term Debt Rating then in
effect or the Borrower's Debt to EBITDA Ratio, at the Borrower's option from
time to time, pursuant to the appropriate column under the following table:
hereof.
<TABLE>
<CAPTION>
Senior Long-term Debt Applicable Base Applicable
Rate ng Debt to Applicable Rate Msrgn Facility Fee
EBIll)A Ratio LIBOR Marg~n Margin
S&P Moody's
<S> <C> <C> <C> <C> <C>
A- A3 c50 15.0 bps 0 7.5 bps
BBB+ Baal .50-1.00 18.5 bps 0 9.0 bps
BBB Baa2 1.01-1.50 21.5 bps 0 I1.0 bps
BBB- Baa3 1.51-2.00 25.0 bps 0 12.5 bps
sBB+ Bal >2.00 27.5 bps 0 15.0 bps
</TABLE>
The Applicable Margin shall be adjusted from time to time upon delivery to the
Administrative Agent of (i) the quarterly financial statements required to be
delivered pursuant to Section 6.1 hereof accompanied by a written calculation
of the Debt to EBITDA Ratio certified by a Responsible Officer as of the end of
the fiscal quarter for which such financial statements are delivered or (ii) a
statement of the Borrower's Senior Long-term Debt Rating by S&P and Moody's if
any, certified by a Responsible Officer. If the Senior Long-term Debt Ratings
by S&P and Moody's differ, for the purpose of calculating the Applicable
Margin, the Borrower's Senior Long-term Debt Rating shall be deemed to be one
level higher than the lower rating given by S&P and Moody's. If such
calculation or statement indicates that the Applicable Margin shall increase or
decrease, then one (1) Business Day after the date of delivery of such
financial statements and written calculation or statement the Applicable Margin
shall be adjusted in accordance therewith; provided, however, that if Borrower
shall fail to deliver any such financial statements for any such fiscal quarter
by the date required pursuant to Section 6.1, then, effective as of the
Business Day on which such financial statements were to have been delivered,
and continuing through the date which is one (1) Business Day after the date
(if ever) when such financial statements and such written calculation are
finally delivered, the Applicable Margin
<PAGE> 11
shall be conclusively presumed to equal the highest Applicable Margin specified
in the pricing table set forth above.
"Assignee" has the meaning ascribed to such term in Section 10.8(a) hereoL.
"Assignment and Acceptance" has the meaning ascribed to such term in Section
10.8(a)(ii)
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel, the reasonable allocated cost of
internal legal services (to the extent and at the rate customarily charged to
other customers) and all reasonable disbursements of internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. $101, et seq.), as amended and in effect from time to time and the rules
issued from time to time thereunder.
Base Rate.
"Base Rate" means, for any date, the greater of (i) the Federal Funds Rate
in effect on such date plus 0. 5% per annum, and (ii) the rate of interest
publicly announced from time to time by the Administrative Agent as its Prime
Rate.
"Base Rate Revolving Loan" means a Borrowing hereunder which bears interest at
the
"Borrowing" has the meaning ascribed to such term in Section 2.1 hereof.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois are authorized or required by law
to close and, if the applicable Business Day relates to any LIBOR Rate
Revolving Loan, a day on which dealings are carried on in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any cent~ bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Lease" means any leasing or similar arrangement which, in
accordanc GAAP, is class)fied as a capital lease.
"Capital Lease Obligations" means all monetary obligations of the Borrower
or an, Subsidiaries under any Capital Leases.
"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, demand deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, having in each
<PAGE> 12
case a tenor of not more than six (6) months, issued by any Lender, or 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; (c) commercial paper of an issuer rated, at the time of
purchase, at least A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Service Inc. and in either case having a tenor of not more than six
(6) months.
"CERCLA" has the meaning specified in the definition of"Environmental Laws."
"Change of Control" means such time as (i) the Borrower otherwise becomes
aware that, a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) ofthe Exchange Act) has become, directly or indirectly, the
"baneficial owner," by way of merger, consolidation or otherwise, of 30% or
more of the voting power of the voting stock of the Borrower on a fullydiluted
basis after giving effect to the conversion and exercise of all outstanding
warrants, options and other securities of the Borrower (whether or not such
securities are then currently convertible or exercisable), or (ii) during any
period of two consecutive calendar years, individuals who at the beginning of
such period constituted the board of directors of the Borrower (together with
any new directors whose election by the board of directors of the Borrower or
whose nomination for election by the shareholders of the Borrower was approved
by a vote of a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the board of directors of the Borrower then in office.
"Closing Date" means July 1, 1997, which was the date on which all
conditions precedent set forth in Section 4.1 of the Original Credit Agreement
were satisfied or waived by all Lenders.
thereunder.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
"Commitment Fee" has the meaning ascribed to such term in Section 2.9(a)
hereoL.
"Commitment Percentage" means, as to any Lender, the percentage equivalent
of such Lender's Revolving Loan Commitment divided by the Aggregate Revolving
Loan Commitment.
"Confidential Information" has the meaning ascribed to such term in Section
10.9 hereof.
"Consolidated Net Income (Loss)" means, for any period, the net income (or
loss) of Borrower and its Subsidiaries on a consolidated basis for such period,
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, gross consolidated
interest expense for the period (including all commissions, discounts, fees and
other charges in connection with standby letters of credit and similar
instruments) for the Borrower and its Subsidiaries, plus the portion of the
up-front costs and expenses for Rate Contracts (to the extent
<PAGE> 13
not included in gross interest expense) fairly allocated to such Rate Contracts
as expenses for such period, all as determined in accordance with GAAP.
"Continuation Date" means any date on which the Borrower continues a LIBOR
Rate Revolving Loan at the end of the period applicable to an existing LIBOR
Rate Revolving Loan.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement
to which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means the Borrower and all Persons (whether or not
incorpr under common control or treated as a single employer with the Borrower
pursuant to Section 414(b), (c), (m) or (o) ofthe Code.
"Conversion Date" means any date on which the Borrower converts a Base
Rate Revolving Loan to a LIBOR Rate Revolving Loan or a LIBOR Rate Revolving
Loan to a Base Rate Revolving Loan.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Debt to EBITDA Ratio" means, as of any date of determination, the ratio
of consolidat, Funded Indebtedness of Borrower as of such date to EBITDA for
the most recently completed four fiscal quarters.
"Disposition" has the meaning subscribed to such term in Section 7.2
"Dollars", "dollars" and "$" each mean lawful money of the United States of
America.
"EBITDA" means, for any period, for the Borrower and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, income before income
taxes (as reported on the Borrower's financial statements) p!~ interest
expenses, depreciation and amortization and minus interest income for such
Period. Prior to the first anniversary of the consummation of an Acquisition,
the historical financial results of the acquired Person or assets for the
relevant period will be included for purposes of calculating EBITDA (but
without any adjustment to such historical results for cost savings or other
synergies).
"Eligible Assignee" means any of: (a) a commercial bank or other financial
institution organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least $100,000,000;
(b) a commercial bank or other financial institution organized under the laws
of any country which is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000, provided that such bank
or financial institution is acting through a branch or agency located in the
United States; (c) a Person that is
<PAGE> 14
primarily engaged in the business of commercial lending and that is (A) a
Subsidiary of a Lender, (B) a Subsidiary of a Person of which a Lender is
another Subsidiary, or (C) a Person of which a Lender is a Subsidiary or (d) an
insurance company or mutual fund organized under the laws of the United States
or any State thereof and having total net worth in excess of $100,000,000.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden
or nonsudden, accidental or non-accidental, placement, spills, leaks,
discharges, emissions or releases) of any Hazardous Material at, in, or from
Property, whether or not owned by the Borrower.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties rules, regulations, ordinances and codes, together with all
administrative orders, licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case relating to environmental,
health, safety and land use matters; including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b), 414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified
Plan or a Multiemployer Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate from a Qualified Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA); (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan; (d) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination under Section
4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to
terminate a Qualified Plan or Multiemployer Plan subject to Title IV of ERISA;
(e) a failure by the Borrower or any member of the Controlled Group to make
required contributions to a Qualified Plan or Multiemployer Plan; (f) an event
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of
any liability under Title IV of
<PAGE> 15
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate; (h) an application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Plan; (i) a nonexempt prohibited
transaction occurs with respect to any Plan for which the Borrower or any
Subsidiary of the Borrower may be directly or indirectly liable; or (j) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401 (a) of the Code by any fiduciary or
disqualified person with respect to any Plan for which the Borrower or any
member of the Controlled Group may be directly or indirectly liable.
"Exchange Act" means the Securities and Exchange Act of 1934, and regu
promulgated thereunder.
"Event of Default" has the meaning ascribed to such term in Section 8.1
hereof.
"Facility Fee" has the meaning ascribed to such term in Section 2.9(b)
hereoL.
"Federal Funds Rate" means, for any day, the rate per annum set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519!") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3.30
p.m. Ouotation") for such day under the caption "Federal Funds Effective Rate".
If on any relevant day the appropriate rate for such previous day is not yet
published in either H. 15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean (rounded to the nearest 1/16th) as
determined by the Administrative Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that day
by each of three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve S or any entity succeeding to any of its principal functions.
"First Chicago" means First Chicago Capital Markets, Inc., a Delaware
corporation.
"Fixed Charges" means, for any period and without duplication, the sum of
(i) Consolidated Interest Expense and fees paid on, and amortization of debt
discount in respect of, all Funded Indebtedness, plus (ii) Operating Lease
rental payments made during such period, plus (iii) the aggregate principal
amount of all current maturities of long term Funded Indebtedness (including
the principal portion of rentals under Capital Leases) paid by the Borrower and
its Subsidiaries during such period (excluding payments of principal of the
Revolving Loans and payments of principal not required under the Revolving Loan
Documents).
<PAGE> 16
"Fixed Charge Coverage Ratio" means, at any date, the ratio of (i) EBITDA
plus Operating Lease rental payments for the period of the most recently
completed four consecutive fiscal quarters, to (ii) Fixed Charges for such
period.
"Form 1001" has the meaning ascribed to such term in Section 3.1(f) hereoL.
"Form 4224" has the meaning ascribed to such term in Section 3.1(f) hereoL.
"Funded Indebtedness" means with respect to any Person, at the time of
computation thereof, all of the following (without duplication): (a)
obligations of such Person in respect of money borrowed; (b) obligations of
such Person (other than trade debt incurred in the ordinary course of
business), whether or not for money borrowed (i) represented by notes payable,
or drafts accepted, in each case representing extensions of credit, (ii)
evidenced by bonds, debentures, notes or similar instruments, or (iii)
constituting purchase money indebtedness, conditional sales contracts, title
retention debt instruments or other similar instruments, upon which interest
charges are customarily paid or that are issued or assumed as full or partial
payment for property; (c) Capitalized Lease Obligations of such Person; (d) all
reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment); and (e)
all Funded Indebtedness of other Persons which (i) such Person has Guaranteed
or (ii) are secured by a Lien on any property of such Person, and which, in
each case of (a) through (e), is or would be reported under GAAP accounting
rules in such Person's financial statement.
"GAAP" means generally accepted accounting principles set forth from time
to time in th~ opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness (the
"primary obligations") of another Person (the "primary obligor"), including any
obligation of the Person, whether or not contingent:
(a) to purchase, repurchase or otherwise acquire such primary obligati'
any property constituting direct or indirect security therefor; or
(b) to advance or provide funds (i) for the payment or discharge of any
such primary obligation, or (ii) to maintain working capital or equity capital
of the primary obligor or
<PAGE> 17
otherwise to maintain the net worth or solvency or any balance sheet item,
level of income or financial condition of the primary obligor; or
(c) to purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation; or
(d) otherwise to assure or hold harmless the holder of any such p
obligation against loss in respect thereof;
in each case, including arrangements wherein the rights and remedies of the
holder of the primary obligation are limited to repossession or sale of certain
property of such Person.
"Hazardous Materials" means all those substances which are regulated 1
Environmental Law.
"Healthcare Regulations" means all Requirements of Law applicable to
providers of life, health care or disability insurance or the provision of
health care services or such insurance or the management of health care
services.
"Immaterial Subsidiary" means a Subsidiary with assets of $15,000,000 or
less and has net income for the previous four fiscal quarters of $5,000,000 or
less as of any date of determination.
"Indebtedness" of any Person means, without duplication: (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the Ordinary Course of Business); (c) all
reimbursement obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses; (e) all indebtedness created or arising
under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to Property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in
the event of default are limited to repossession or sale of such property); (f)
all Capital Lease Obligations; (g) all obligations with respect to Rate
Contracts; (h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contracts rights) owned by such Person, even though
such Person has not assumed or become liable for the payment of such
Indebtedness; provided, however, if recourse to such Person is specifically
limited in writing to the security with respect thereto, the amount of such
indebtedness shall be the lesser of the amount of such indebtedness and the
value of the assets of such Person which secure such indebtedness; and (i) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above.
"Indemnified Person" has the meaning ascribed to such term in Section 10.5
hereoL.
<PAGE> 18
"Indemnified Liabilities" has the meaning ascribed to such term in
Section 10.5 hereoL.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case (a) and (b) undertaken under U. S. Federal, State
or foreign law, including the Bankruptcy Code.
"Insurance Subsidiary" means any Subsidiary directly subject to
regulation by a state
. . .
~nsurance comrn~ss~on, commissioner, or similar authority or Person.
"Interest Payment Date" means, (i) with respect to any LIBOR Rate
Revolving Loan, the earlier of the last day of each Interest Period applicable
to such LIBOR Rate Revolving Loan or the date that is three months after the
date of the applicable LIBOR Rate Revolving Loan Borrowing and each three-month
anniversary thereafter, and (ii) with respect to Base Rate Revolving Loans, the
last Business Day of the months of September, December, March and June. If any
Interest Payment Date falls on a day which is not a Business Day, payment shall
be made on the next succeeding Business Day.
"Interest Period" means, with respect to any LIBOR Rate Revolving Loan,
the period commencing on the Business Day the Revolving Loan is disbursed or
continued or on the Conversion Date on which the Revolving Loan is converted to
the LIBOR Rate Revolving Loan and ending on the date one, two, three or six
months thereafter (or, if available from all Lenders,
nine or twelve months thereafter), as selected by the Borrower in its
Notice of Borrowing or Notice of Conversion/Continuation; provided that:
(a) if any Interest Period pertaining to a LIBOR Rate Revolving Loan would
otherwise end on a day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day; and
(b) any Interest Period pertaining to a LIBOR Rate Revolving Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period.
"Issuing Bank" means LaSalle National Bank or any other Lender which may
at any time issue or be requested to issue a Letter of Credit for the account
of the Borrower under this
<PAGE> 19
Agreement. If there is more than one Issuing Bank, all references to "the
Issuing Bank" shall be deemed to refer to each Issuing Bank or to all Issuing
Banks, as the context requires.
"Joint Venture" means a partnership, joint venture or other similar legal
arrangement (whether created pursuant to contract or conducted through a
separate legal entity) now or hereafter formed by the Borrower or any of its
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"LaSalle" means LaSalle National Bank a national banking association.
"LaSalle L/C" has the meaning ascribed to such term in Section 2.1 hereof.
"Lender" has the meaning ascribed to such term in the Preamble hereof.
"Lending Office" means, with respect to any Lender, the office or offices
of the Lender specified as its "Lending Office" opposite its name on the
applicable signature page hereto, or such other office or offices ofthe Lender
as it may from time to time notify the Borrower and the Administrative Agent.
"Leverage Ratio" means, as of any date of determination thereof, the
ratio of consolidated
2.1 (b).
Funded Indebtedness of the Borrower as of such date to EBITDA for the twelve
fiscal months then ended.
"Letter of Credit" shall have the meaning ascribed to such term in
Section 2.1 (b).
"Letter of Credit Commitment" shall have the meaning ascribed to such
term in Section
"Letter of Credit Reserve" means, at any time, an amount equal to all
liabilities of the Borrower to the Issuing Bank in respect of any Letters of
Credit outstanding at such time, whether contingent or otherwise, including:
(a) the amount available to be drawn or which may become available to be drawn;
(b) all amounts which have been paid or made available by the Issuing Bank as
issuer of such Letters of Credit to the extent not reimbursed; and (c) all
unpaid interest, fees and expenses in respect of such Letters of Credit.
"LIBOR Rate" means, for each applicable Interest Period, the London
Interbank Offered Rate per annum for deposits of Dollars quoted by the
Administrative Agent that appears on Telerate Page 3750 as of 11:00 A.M.
(London, England time) two (2) Business Days prior to the first day in such
Interest Period for an amount comparable to the amount of the applicable
Revolving Loan and the maturity comparable to such Interest Period. If no such
offered rate exists, such rate will be the rate of interest per annum, as
determined by the Administrative Agent (rounded upwards, if necessary, to the
nearest 1/16 of 1%) at which deposits of Dollars in immediately available funds
are offered at 11:00 A.M. (London, England time) two (2) Business Days prior to
the first day in such Interest Period by major financial institutions
reasonably
<PAGE> 20
satisfactory to the Administrative Agent in the London interbank market for a
period comparable to such Interest Period and for an amount equal or comparable
to the principal amount of the Revolving Loans outstanding on such date of
determination. If no such deposits are offered by such institutions, such rate
will be the rate in effect for the prior Interest Period.
"LIBOR Rate Revolving Loan" means a Borrowing hereunder which bears
interest at the LIBOR Rate.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable
law) and any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an Operating Lease.
"Majority Lenders" means at any time Lenders then holding at least 51% of
the then aggregate unpaid principal amount of the Revolving Loans or, if no
such principal amount is then outstanding, Lenders then having in excess of 51%
of the Revolving Loan Commitments.
"Margin Stock" means "margin stock" as such term is defined in Regulation
G, T, of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, or
condition (financial or otherwise) of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Borrower to perform any material obligation under any Revolving Loan Document
and avoid any Event of Default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability of any Revolving Loan
Document.
hereof.
"Maximum Revolving Loan Balance" has the meaning ascribed to such term in
Section 2.1
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"Net Worth" means shareholders' equity of the Borrower as determined in
accordance with GAAP, ~ (i) the lesser of (a) the amount of the total
consideration paid by the Borrower to acquire the Borrower's stock subsequent
to the Closing Date and held by the Borrower as treasury stock under GMP
accounting, or (b) $150,000,000, ~ (ii) any charges incurred subsequent to the
<PAGE> 21
Closing Date related to Acquisitions to the extent such charges are written off
against goodwill, provided such charges shall not exceed the aggregate amount
of $175,000,000.
"Note" has the meaning ascribed to such term in Section 2.2(a) hereof.
"Notice of Borrowing" means a notice given by the Borrower to the
Administrative Agent pursuant to Section 2.4, in substantially the form of
Exhibit A hereto.
"Notice of Conversion/Continuation" means a notice given by the Borrower
to the Administrative Agent pursuant to Section 2. 5, in substantially the form
of Exhibit B hereto.
"Notice of Lien" means any "notice of lien" or similar document filed or
recorded with court, registry, recorder's office, central filing office or
other Governmental Authority for the purpose of evidencing, creating,
perfecting or preserving the priority of a Lien securing obligations owing to a
Governmental Authority.
"Obligations" means all Revolving Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower to
any Lender, the Agents, or any other Person required to be indemnified, that
arises under any Revolving Loan Document, whether or not for the payment of
money, whether arising by reason of an extension of credit, Revolving Loan,
guaranty, indemnification or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereaBcer arising and however acquired.
"Officer's Certificate" has the meaning ascribed to such term in Section
6.2(b) hereof.
"Operating Lease" means, as applied to any Person, any lease of Property
which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any transaction
involving the Borrower or any Subsidiary of the Borrower, the ordinary course
of such Person's business, as conducted by any such Person in accordance with
industry practice for companies similarly situated and undertaken by such
Person in good faith and not for purposes of evading any covenant or
restriction in any Revolving Loan Document.
"Originating Lender" has the meaning ascribed to such term in Section
10.8(d) hereof.
"Other Taxes" has the meaning ascribed to such term in Section 3.1 (b)
hereof.
"Participant" has the meaning ascribed to such term in Section 10.8(d)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding of its principal functions under ERISA.
"Permitted Liens" has the meaning ascribed to such term in Section 7.1
hereoL.
<PAGE> 22
"Person" means an individual, partnership, corporation, limited liability
company, busi trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Borrower or any member of the Controlled Group sponsors or
maintains or to which the Borrower or any member of the Controlled Group makes,
is making or is obligated to make contributions.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) ofthe Code and which
any member of the Controlled Group sponsors, maintains, or to which it makes,
is making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"Rate Contracts" means swap agreements (as such term is defined in Section
101 of th Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.
"Reportable Event" means, as to any Plan, (a) any of the events set forth
in Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC, (b) a withdrawal from a Plan described in
Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"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 Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the president,
the chief financial officer or any executive vice president of the 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 the Borrower, or any other officer having
substantially the same authority and responsibility.
"Revolving Loan" has the meaning ascribed to such term in Section 2.1
hereof.
hereof.
<PAGE> 23
"Revolving Loan Commitment" has the meaning ascribed to such term in
Section 2.1
"Revolving Loan Documents" means this Agreement, the Note, and all Standby
Letter of Credit Agreements, including the LaSalle L/C.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the .alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured; (c) such Person is able to realize upon its Property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
2.1.
"Standby Letter of Credit Agreement" has the meaning ascribed to such
term in Section
"Subsidiary" of a Person means any corporation, association, partnership,
joint venture o other business entity 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 the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Taxes" has the meaning ascribed to such term in Section 3.1(a) hereoL.
"Termination Date" means the earlier to occur of: (a) the five year
anniversary of tl Closing Date; and (b) the date on which the Aggregate
Revolving Loan Commitment shall terminate in accordance with the provisions of
this Agreement.
"WCC" means the Uniform Commercial Code as in effect in the State of
Illinois.
"Unfunded Pension Liabilities" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in
accordance with the assumptions used by the Plan's actuaries for funding the
Plan pursuant to section 412 for the applicable plan year.
<PAGE> 24
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any corporation in which (other than
directors' or other similar qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of the
capital stock of every other class, in each case, at the time as of which any
determination is being made, is owned, baneficially and of record, by the
Borrower, or by one or more of the other Wholly-Owned Subsidiaries, or both.
SECTION 1.2 Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) The Agreement. The words "hereof", "herein", "hereunder" and words o
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
section, schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Certain Common Terms. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Whenever any performance obligation hereunder
(other than a payment obligation) shall be stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including." If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) Contracts. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments, including this Agreement and the
other Revolving Loan Documents, shall be deemed to include all subsequent
amendments, thereto, restatements thereof and other mod)fications and
supplements thereto which are in effect from time to time, but only to the
extent such amendments and other mod)fications are not prohibited by the terms
of any Revolving Loan Document.
<PAGE> 25
(f) Laws. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(g) Amendment and Restatement. On the date that all of the conditions
precedent set forth in Section 4.3 ofthis Agreement have been satisfied (the
"Restatement Effective Date") (i) the full principal balance of all of the
Revolving Loans (as defined in the Original Credit Agreement) outstanding under
the Original Credit Agreement on such date (the "Prior Loans") shall be
converted into and continued as Revolving Loans hereunder; and (ii) all fees
and other obligations of the Borrower which shall have accrued but which shall
remain unpaid on the Restatement Effective Date (the "Accrued Fees") shall be
converted into and continued as obligations of the Borrower hereunder. The
Prior Loans and Accrued Fees outstanding on the Restatement Effective Date
shall not be deemed to have been repaid as a result of this amendment and
restatement and all Interest Payment Dates for Revolving Loans made prior to
the Restatement Effective Date shall remain on the dates that were applicable
under the Original Credit Agreement. Any reference to the Original Credit
Agreement in any Assignment and Acceptance, Officer's Certificate, Notice of
Borrowing or Notice of Conversion/Continuation which is delivered after the
Restatement Effective Date shall be deemed to refer to this Agreement.
SECTION 1.3 Accounting Principles. (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied; provided, however, that
if any changes in GAAP are hereafter required or permitted and are adopted by
the Borrower and such changes result in a material change in the method of
calculation of any of the financial covenants or restrictions contained in
Article 7 or in the related definitions or terms used herein, the parties
hereto agree to enter into negotiations in good faith in order to amend such
provisions so as to reflect equitably such changes with the desired result that
the criteria for evaluating the Borrower's financial condition shall be the
same after such changes as if such changes had not been made.
(a) References herein to "fiscal year", "fiscal quarter" and "fisca to
such fiscal periods of the Borrower.
ARTICLE 2
TIIE CRED11 S
SECTION 2.1 Amounts and Terms of Commitments.
(a) The Revolving Credit. Each Lender severally and not jointly agrees, on
the terms and conditions hereinafter set forth, to make Revolving Loans to the
Borrower (the "Revolving Loans") from time to time on any Business Day during
the period from the Closing Date to the Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount set forth opposite the
Lender's name in Schedule I under the heading "Revolving Loan Commitment"
<PAGE> 26
(such amount as the same may be reduced from time to time pursuant to subsection
2.7(b) hereof or as a result of one or more assignments pursuant to Section
10.8, the Lender's "Revolving Loan Commitment"); provided, however, that, after
giving effect to any borrowing of Revolving Loans (each, a `'Borrowing"), the
aggregate principal amount of all outstanding Revolving Loans and Letters of
Credit shall not exceed the Maximum Revolving Loan Balance. Within the limits
of each Lender's Revolving Loan Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.1, prepay
pursuant to Section 2.6 and reborrow pursuant to this Section 2. 1. The
"Maximum Revolving Loan Balance" will be the aggregate of all Revolving Loan
Commitments then in effect. If at any time the Revolving Loans exceed the
Maximum Revolving Loan Balance, the Revolving Loans must be repaid immediately
in an amount sufficient to eliminate any excess.
(b) Letters of Credit. Subject to the terms and conditions of this
Agreement, in addition to the Revolving Loans, the Revolving Loan Commitments
may be utilized upon the request of Borrower and subject to the Administrative
Agent's approval of each application therefor, for the issuance (or, with
respect to any previously issued Letter of Credit, the extension of the
expiration thereof) by the Issuing Bank (or, if more than one Lender agrees to
be an Issuing Bank, the Issuing Bank designated by Borrower) of letters of
credit (each a "Letter of Credit") to a maximum amount outstanding at any time
of $15,000,000; provided, however, that, after giving effect to any issuance or
extension of a Letter of Credit, the aggregate principal amount of all
outstanding Revolving Loans and Letters of Credit shall not exceed the Maximum
Revolving Loan Balance. LaSalle agrees to be an Issuing Bank and any other
Lender may hereto agree to become an Issuing Bank by written notice to the
Administrative Agent. Each Lender severally and not jointly agrees to purchase
participations from the Issuing Bank in letters of credit issued by the Issuing
Bank in an aggregate amount not to exceed at any time outstanding the amount
set forth opposite the Lender's name in Schedule I under the heading "Letter of
Credit Commitment" (such amount as the same may be reduced from time to time
pursuant to subsection 2.7(b) hereof or as a result of one or more assignments
pursuant to Section 10.8, the Lender's "Letter of Credit Commitment"). In
determining the amount of outstanding Letters of Credit, the maximum amount
then undrawn under each Letter of Credit plus any drawings which have not been
reimbursed to the Issuing Bank will be considered outstanding. Each Letter of
Credit shall expire not later than the Termination Date in effect at the time
of issuance or extension. For each requested Letter of Credit, the Borrower
shall give the Administrative Agent and the Issuing Bank not less than five (5)
Business Days' prior written notice by delivery to the Administrative Agent and
the Issuing Bank of a duly completed and executed application for such Letter
of Credit in the form attached hereto as Exhibit G (each, a "Standby Letter of
Credit Agreement"), which the Administrative Agent or the Issuing Bank may
accept or reject in their sole discretion.
The Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to
reimburse the Issuing Bank and the Administrative Agent for any amounts paid by
the Issuing Bank or Administrative Agent under any Letter of Credit. The
Borrower hereby authorizes and directs the Lenders, at the Administrative
Agent's option, to make a Revolving Loan in the amount of any payment made by
the Issuing Bank with respect to any Letter of Credit. All amounts paid by the
Administrative
<PAGE> 27
Agent to the Issuing Bank with respect to any Letter of Credit that are not
immediately repaid by Borrower with the proceeds of a Revolving Loan or
otherwise shall bear interest at the interest rate then applicable to Revolving
Loans, calculated using the interest rate then in effect. Each Lender agrees to
fund its pro rata share of any Revolving Loan made pursuant to this subsection
2.1(b) and, if no such Revolving Loans are made, each Lender agrees to
purchase, and shall be deemed to have purchased, a participation in all of the
reimbursement obligation and other rights with respect to such Letter of Credit
in an amount equal to its ratable share of such Letter of Credit based upon the
Letter of Credit Commitments then in effect and each Lender agrees to pay to
the Administrative Agent or the Issuing Bank, as applicable, such share of any
payments made by the Administrative Agent or the Issuing Bank, as applicable,
under such Letter of Credit notwithstanding any challenge by the Borrower to
its obligation to reimburse any payments under such Letter of Credit; provided,
however, that each Lender shall be relieved of its obligations in this
sentence, if, and only if, and only to the extent a court of competent
jurisdiction has declared in a final, non-appealable judgment that Borrower is
relieved of its obligation to repay such Revolving Loan or to reimburse the
Issuing Bank for payments made under the applicable Letter of Credit because of
the Issuing Bank's gross negligence or willful misconduct. The obligations of
each Lender under the preceding two (2) sentences shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 4.2 hereof. If any Lender fails to make
available to the Administrative Agent or the Issuing Bank, as applicable, the
amount of such Lender's share of any payments made by the Administrative Agent
or the Issuing Bank, as applicable, in respect of any Letter of Credit as
provided in this subsection 2. l(b), the Administrative Agent or the Issuing
Bank, as applicable, shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal Funds Rate for the
period in question.
The parties hereto acknowledge and agree that on September 25, 1997,
LaSalle National Bank issued a letter of credit to Borrower in the amount of
$5,000,000.00 subject to customary terms and conditions (the "LaSalle L/C") and
that, notwithstanding anything to the contrary in this Agreement, on and as of
the date this Agreement becomes effective pursuant to the provisions of Section
4.3 hereof, the LaSalle L/C shall become subject to this Agreement and be
deemed to be a Letter of Credit issued by LaSalle National Bank as Issuing Bank
hereunder subject to the terms and conditions described in the form of Letter
of Credit application attached hereto as Exhibit G.
SECTION 2.2 Note.
(a) The Revolving Loans made by the Lenders shall be evidenced by a single
Revolving Note (the "Note") payable to the order of the Administrative Agent
for the benefit of the Lenders in substantially the form of Exhibit C to the
Original Credit Agreement, in an amount equal to the Aggregate Revolving Loan
Commitments of all Lenders. The note executed pursuant to the Original Credit
Agreement shall continue to evidence all such Revolving Loans and need not be
replaced by a substitute note.
(b) The Administrative Agent may, from time to time, and is irrevocably
authorized by the Borrower to, endorse on the schedules annexed to the Note the
amount of each Revolving
<PAGE> 28
Loan made thereunder, the applicable interest rates, all payments of principal
and interest thereon and the principal balance thereof from time to time
outstanding; provided. however, that the failure to make, or an error in
making, a notation thereon with respect to any Revolving Loan shall not limit
or otherwise affect the obligations of the Borrower hereunder or under the
Note.
SECTION 2.3 Revolving Loan Accounts. The Administrative Agent on behalf of
the Lenders, shall record on its books and records the amount of each Revolving
Loan made, the interest rate applicable, all payments of principal and interest
thereon and the principal balance thereof from time to time outstanding, and
the record thereof shall, absent manifest error be conclusive evidence of the
amount of the Revolving Loans made by the Lenders to the Borrower and the
interest and payments thereon. Any failure so to record or any error in doing
so shall not, however, limit or otherwise affect the obligation of the Borrower
hereunder (and under the Note) to pay any amount owing with respect to the
Revolving Loans.
SECTION 2.4 Procedure for Revolving Credit Borrowing.
(a) Each Borrowing shall be made upon the Borrower's irrevocable written
notice or telephonic notice confirmed promptly in writing delivered to the
Administrative Agent in the form of a Notice of Borrowing, which notice must be
received by the Administrative Agent prior to 10:00 a.m. (Chicago time) (x) on
the requested Borrowing date in the case of each Base Rate Revolving Loan and
(y) on the day which is three (3) Business Days prior to the requested
Borrowing date in the case of each LIBOR Rate Revolving Loan. Such Notice of
Borrowing shall specify:
(i) the amount of the Borrowing (which, in the case of both LIBOR Rate
Revolving Loans and Base Rate Revolving Loans, shall be in an aggregate minimum
principal amount of $5,000,000 or any multiple of $1,000,000 in excess
thereof);
(ii) the requested Borrowing date, which shall be a Business Day;
(iii) whether the Borrowing is to be comprised o~ Revolving Loans or Base
Rate Revolving Loans; and
(iv) if the Borrowing is to be LIBOR Rate Revolvi Interest Period
applicable to such Revolving Loans;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Administrative Agent
not later than 2:00 p.m. (Chicago time) one Business Day before the Closing
Date and such Borrowing will consist of Base Rate Revolving Loans only.
(b) Upon receipt of the Notice of Borrowing, the Administrative Agent will
promptly notify each Lender thereof and of the amount of such Lender's
Commitment Percentage of the Borrowing.
<PAGE> 29
(c) After giving effect to any Borrowing, there shall not be mor~
different Interest Periods in effect.
SECTION 2.5 Conversion and Continuation Elections.
(a) Subject to the provisions of this Agreement, the Borrower may upo~
irrevocable written notice or telephonic notice confirmed promptly in writing
to the Administrative Agent in accordance with subsection 2.5(b) below:
(i) elect to convert on any Business Day, any Base Rate Revolving Loans
(or any part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof) into LIBOR Rate Revolving
Loans or;
(ii) elect to convert on the last day of the applicable Interest Period
any LIBOR Rate Revolving Loans having Interest Periods maturing on such day (or
any part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof) into Base Rate Revolving
Loans; or
(iii) elect to renew on the last day of the applicable Interest Period any
LIBOR Rate Revolving Loans having Interest Periods maturing on such day (or any
part thereof in an amount not less than $5,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof);
provided, that if the aggregate amount of LIBOR Rate Revolving Loans in respect
of any Borrowing shall have been reduced, by payment, prepayment, or conversion
of part thereof to be less than $5,000,000, such LIBOR Rate Revolving Loans
shall automatically convert into Base Rate Revolving Loans, and on and after
such date the right of the Borrower to continue such Revolving Loans as, and
convert such Revolving Loans into, LIBOR Rate Revolving Loans, as the case may
be, shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Administrative Agent not later than 10:00 a.m. (Chicago time)
at least three (3) Business Days in advance of the requested Conversion Date or
Continuation Date, if the Revolving Loans are to be converted into or continued
as LIBOR Rate Revolving Loans and on the requested Conversion Date, if the
Revolving Loans are to be converted into Base Rate Revolving Loans, specifying:
(i) the proposed Conversion Date or Continuation Date;
renewed;
(ii) the aggregate amount of Revolving Loans to be converted or
(iii) the nature of the proposed conversion or continuation; and
<PAGE> 30
(iv) the duration of the requested Interest Period with respect to any
Revolving Loans to be converted or continued as LIBOR Rate Revolving Loans.
(c) If upon the expiration of any Interest Period applicable to LIBOR Rate
Revolving Loans, the Borrower has failed to select timely a new Interest Period
to be applicable to such LIBOR Rate Revolving Loans, as the case may be, or if
any Default or Event of Default shall then exist, the Borrower shall be deemed
to have elected to convert such LIBOR Rate Revolving Loans into Base Rate
Revolving Loans effective as of the expiration date of such current Interest
Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Lender thereof, or, if no timely
notice is provided by the Borrower, the Administrative Agent will promptly
notify each Lender of the details of any automatic conversion. All conversions
and continuations shall be made pro rata according to the respective
outstanding principal amounts of the Revolving Loans with respect to which the
notice was given held by each Lender.
(e) During the existence of a Default or Event of Default, the Borrower
may not elect to have any Revolving Loan converted into or continued as a LIBOR
Rate Revolving Loan.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Revolving Loans, there
shall not be more than ten (10) different Interest Periods in effect.
SECTION 2.6 Optional Prepayments. Subject to Section 3.4, the Borrower
may, at any time or from time to time, upon at least three (3) Business Days'
notice to the Administrative Agent for LIBOR Rate Revolving Loans and one (1)
Business Days' notice to the Administrative Agent for Base Rate Revolving
Loans, ratably among the Lenders prepay Revolving Loans in whole or in part, in
amounts of $5,000,000 or any multiple of $1,000,000 in excess thereof. Such
notice of prepayment shall specify the date and amount of such prepayment and
whether such prepayment is of Base Rate Revolving Loans or LIBOR Rate Revolving
Loans, or any combination thereoL. Such notice shall not thereafter be
revocable by the Borrower and the Administrative Agent will promptly notify
each Lender thereof and of such Lender's Revolving Loan Commitment Percentage
of such prepayment. If such notice is given by the Borrower, the Borrower shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein, together with any amounts
required pursuant to Section 3.4 and, for LIBOR Rate Revolving Loans, accrued
interest to each such date on the amount prepaid.
SECTION 2.7 Final Pavment: Optional Reduction of Aggregate Commitment.
(a) Final Payment. The Borrower shall repay to the Lenders in full on the
Termination Date the aggregate principal amount of the Revolving Loans
outstanding on such date together with all other amounts owing (including all
accrued interest, whether billed or unbilled) by the Borrower to the Lenders
hereunder.
<PAGE> 31
(b) Optional Revolving Loan Commitment Reduction. The Borrower may, at its
option from time to time, by providing five (5) Business Days' irrevocable
written notice or telephonic notice promptly confirmed in writing, to the
Administrative Agent, permanently reduce the amount of either or both of the
Aggregate Revolving Loan Commitment or the Aggregate Letter of Credit
Commitment in the minimum amount, in each case, of $5,000,000, or any multiple
of $1,000,000 in excess thereof, to any amount equal to or greater than the
aggregate principal amount of all outstanding Revolving Loans and Letters of
Credit. The Administrative Agent will promptly notify each Lender of such
notice and of each Lender's reduced Revolving Loan Commitment or Letter of
Credit Commitment (which shall be reduced pro rata among all Lenders based on
the Lenders' respective Commitment Percentage).
SECTION 2.8 Interest.
(a) Subject to subsection 3.4, each Revolving Loan shall bear interest on
the outstanding principal amount thereof from the date when made at a rate per
annum equal to the LIBOR or the Base Rate, as the case may be, plus the
Applicable Margin, as the same may be adjusted pursuant to the provisions of
the definition of Applicable Margin.
(b) Interest on each Revolving Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any payment
or prepayment of Revolving Loans in full at the Termination Date pursuant to
Section 2.7(a) or simultaneously with a reduction of the Revolving Loan
Commitments to zero pursuant to Section 2.~(b), and, during the existence of
any Event of Default, interest shall be payable on demand of the Administrative
Agent.
(c) While any Event of Default exists and is continuing or after maturity
of the Revolving Loans (whether by acceleration or otherwise), unless the
Majority Lenders shall otherwise then agree, the Borrower shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the principal amount of all Obligations due and unpaid, at a rate per
annum which is determined by adding two percent (2%) per annum to the
Applicable Margin then in effect for such Revolving Loans and, in the case of
Obligations not subject to an Applicable Margin, at a rate per annum equal to
the Base Rate plus two percent (2%); provided, however, that, on and after the
expiration of any Interest Period applicable to any LIBOR Rate Revolving Loan
outstanding on the date of occurrence of such Event of Default or maturity, the
principal amount of such Revolving Loan shall, during the continuation of such
Event of Default or after acceleration, bear interest at a rate per annum
equal to the Base Rate plus two percent (2%).
(d) Anything herein to the contrary notwithstanding, the obligations of
the Borrower hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by the respective Lender would be contrary to the
provisions of any law applicable to such Lender limiting the highest rate of
interest which may be
<PAGE> 32
lawfully contracted for, charged or received by such Lender, and in such event
the Borrower shall pay such Lender interest at the highest rate permitted by
applicable law.
SECTION 2.9 Fees.
(a) Commitment and Agencv Fees. Pursuant to the terms of a letter
agreement between the Borrower and the Administrative Agent dated June 11,
1997, the Borrower shall pay to the Administrative Agent (i) on the Closing
Date, a commitment fee (the "Commitment Fee"), and (ii) on the dates set forth
in the letter agreement, agency fees (the "Agency Fees").
(b) Facility Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender a facility fee ("Facility Fee") on the average daily
portion of such Lender's Revolving Loan Commitment calculated on the basis of ~
360-day year and the actual days multiplied by the Applicable Margin. Facility
Fees shall accrue from the Closing Date to the Termination Date and shall be
due and payable quarterly in arrears on the last Business Day of each
September, December, March and June, commencing on September 30, 1997 except
that the final payment shall be made on the Termination Date. The Facility Fees
provided in this subsection 2.9(b) shall accrue at all times after the Closing
Date, including at any time during which one or more conditions in Article 4
hereof are not met.
(c) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent (i) for the account of the Issuing Bank a letter of credit fronting fee
of five basis points for each Letter of Credit issued by the Issuing Bank, and
(ii) for the pro rata account of each of the Lenders, on each Interest Payment
Date with respect to Base Rate Revolving Loans, for the time period since the
previous Interest Payment Date, a letter of credit fee calculated on a daily
basis by multiplying the Applicable LIBOR Margin in effect on such day by the
outstanding balance of all Letters of Credit on such day and then dividing the
product by 360.
SECTION 2.10 Computation of Fees and Interest.
(a) Interest payable under this Agreement shall be calculated on the basis
of actual days elapsed in a 360-day year for LIBOR Rate Revolving Loans and in
a 365-day year for Base Rate Revolving Loans. Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(b) The Administrative Agent will, with reasonable promptness, notify the
Borrower and the Lenders of each determination of a LIBOR Rate; provided that
any failure to do so shall not relieve the Borrower of any liability hereunder
or provide the basis for any claim against the Administrative Agent. Any
change in the interest rate on a Revolving Loan resulting from a change in the
Applicable Margin shall become effective as of the opening of business on the
day on which such change in the Applicable Margin becomes effective. The
Administrative Agent will with reasonable promptness notify the Borrower and
the Lenders of the effective date and the amount of each such change, provided
that any failure to do so shall not relieve the Borrower of any liability
hereunder or provide the basis for any claim against the Administrative Agent.
<PAGE> 33
(c) Each determination of an interest rate by the Administrative Agent
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error.
SECTION 2. 11 Pavments bv the Borrower.
(a) All payments (including prepayments) to be made by the Borrower on
account of principal, interest, fees and other amounts required hereunder shall
be made without setoff, recoupment or counterclaim, shall, except as otherwise
expressly provided herein, be made to the Administrative Agent for the ratable
account of the Lenders at the Administrative Agent's Payment Office, and shall
be made in United States dollars and in immediately available funds, no later
than 1:00 p.m. (Chicago time) on the date specified herein. The Administrative
Agent will promptly distribute to each Lender its Commitment Percentage (or
other applicable share as expressly provided herein) of such principal,
interest, fees or other amounts, in like funds as received. Any payment which
is received by the Administrative Agent later than 1:00 p.m. (Chicago time)
shall be deemed to have been received on the immediately succeeding Business
Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of"Interest
Period" herein, if any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full as and when required
hereunder, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate as in effect for each such day, and the Borrower shall pay to the
Administrative Agent a processing fee in the amount of $200 for each such
payment for which the Administrative Agent makes demand to any Lender.
SECTION 2.12 Payments bv the Lenders to the Administrative Agent.
(a) Unless the Administrative Agent shall have received notice from a
Lender on the Closing Date or, with respect to each Borrowing after the Closing
Date, on the date of any proposed Borrowing, that such Lender will not make
available to the Administrative Agent as and when required hereunder for the
account of the Borrower the amount of that Lender's Revolving Loan Commitment
Percentage of the Borrowing, the Administrative Agent may assume that each
Lender has made such amount available to the Administrative Agent in
<PAGE> 34
immediately available funds on the applicable Borrowing date and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent any Lender shall not have made its full amount available
to the Administrative Agent in immediately available funds and the
Administrative Agent in such circumstances has made available to the Borrower
such amount, that Lender shall on the next Business Day following the date of
such Borrowing make such amount available to the Administrative Agent, together
with a processing fee of $200 and interest at the Federal Funds Rate for and
determined as of each day during such period. A notice of the Administrative
Agent submitted to any Lender with respect to amounts owing under this
subsection 2.12(a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Administrative Agent shall constitute
such Lender's Revolving Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Administrative Agent on
the next Business Day following the date of such Borrowing, the Administrative
Agent shall notify the Borrower of such failure to fund and, upon demand by the
Administrative Agent, the Borrower shall pay such amount to the Administrative
Agent for the Administrative Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable (including the Applicable Margin) at the
time to the Revolving Loans comprising such Borrowing.
(b) The failure of any Lender to make any Revolving Loan on any date of
Borrowing shall not relieve any other Lender of any obligation hereunder to
make a Revolving Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Loan to
be made by such other Lender on the date of any Borrowing.
SECTION 2. 13 Sharing of Payments. Etc. If, other than as expressly
provided elsewl herein, any Lender shall obtain on account of the Revolving
Loans made by it any payment (whether voluntary, involuntary, through the
exercise of any right of set-off including under Section 10.10 of this
Agreement, or otherwise) in excess of its Commitment Percentage of payments on
account of the Revolving Loans obtained by all the Lenders, such Lender shall
forthwith.
(i) notify the Administrative Agent of such fact; and
(ii) purchase from the other Lenders such Participations in the Revolving
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's Commitment
Percentage (according to the proportion of (i) the amount of such paying
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered.
<PAGE> 35
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.13 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off, but
subject to Section 10.10) with respect to such participation as fully as if
such Lender were the direct creditor of the Borrower in the amount of such
participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 2.13 and will in each case notify the
Lenders following any such purchases or repayments.
ARTICLE 3
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.1 Taxes.
(a) Subject to subsection 3. l(g), any and all payments by the Borrower to
each Lender or the Administrative Agent under this 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 each Lender and the
Administrative Agent, such taxes (including income taxes or franchise taxes) as
are imposed on or measured by each Lender's net income by the jurisdiction
under the laws of which such Lender or the Administrative Agent, as the case
may be, is organized or maintains a Lending Office or otherwise does business
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, the 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 Agreement or
any other Revolving Loan Documents (hereinafter referred to as L`Other
Taxes,').
(c) Subject to subsection 3.1(g), the Borrower shall indemnify and hold
harmless each Lender and the Administrative Agent 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 3.1) paid by the Lender or the
Administrative Agent 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 the Lender or the Administrative Agent makes written demand therefor.
(d) If the Borrower shall be reauired bv law to deduct or withhold or
Other Taxes from or in respect of any sum payable hereunder to any Lender or
the Administrative Agent, then, subject to subsection 3. l(g):
<PAGE> 36
(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 3.1) such Lender or the Administrative Agent, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted taxation authority
or other authority in accordance with applicable law.
(e) Within thirty (30) days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish to the Administrative Agent
the original or a certified copy of a receipt evidencing payment thereof, or
other evidence of payment satisfactory to the Administrative Agent.
(f) Each Lender which is a foreign person (i.e., a person other States
person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a Lender
which becomes a party hereto pursuant to Section 10.8 after the Closing Date,
the date upon which the Lender becomes a party hereto) deliver to the Borrower
through the Administrative Agent two accurate and complete signed originals of
Internal Revenue Service Form 4224 or any successor thereto ("Form 4224"), or
two accurate and complete signed originals of Internal Revenue Service Form
1001 or any successor thereto (`'Form 1001"), as appropriate, in each case
indicating that the Lender is on the date of delivery thereof entitled to
receive payments of principal, interest fees and other amounts under this
Agreement free from any deduction for or withholding of United States Federal
income tax;
(ii) if at any time the Lender makes any changes necessitating a new Form
4224 or Form 1001, it shall with reasonable promptness deliver to the Borrower
through the Administrative Agent in replacement for, or in addition to, the
forms previously delivered by it hereunder, two accurate and complete signed
originals of Forrn 4224, or two accurate and complete signed originals of Form
1001, as appropriate, in each case indicating that the Lender is on the date of
delivery thereof entitled to receive payments of principal, interest, fees and
other amounts under this Agreement free from withholding of United States
Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in (ii) above)
requiring a change in or renewal of the most recent Form 4224 or Form 1001
previously delivered by such Lender and deliver to the Borrower through the
Administrative Agent two accurate and complete original signed copies of Form
4224 or Form 1001 in replacement for the forms previously delivered by the
Lender as appropriate, in each case indicating that the Lender is on the date
of delivery thereof entitled to receive payments of principal, interest, fees
and other amounts under this Agreement free from withholding of United States
Federal income tax; and
<PAGE> 37
(iv) it shall, promptly upon the Borrower's or the Administrative Agent's
reasonable request to that effect, deliver to the Borrower or the
Administrative Agent (as the case may be) such other forms or similar
documentation as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Lender's tax status for
withholding purposes.
(g) The Borrower will not be required to pay any additional amounts in
respec of United States Federal income tax pursuant to subsection 3. l(d) to
any Lender for the account of any Lending Office of such Lender (and the
Borrower shall appropriately withhold or deduct Taxes):
(i) if the obligation to pay such additional amounts (or withhold or
deduct Taxes) would not have arisen but for a failure by such Lender to comply
with its obligations under subsection 3. l(f) in respect of such Lending
Office;
(ii) if such Lender shall have delivered to the Borrower a Form 4224 in
respect of such Lending Office pursuant to subsection 3.1(f), and such Lender
shall not at any time be entitled to a full and complete exemption from
deduction or withholding of United States Federal income tax in respect of
payments by the Borrower hereunder for the account of such Lending Office for
any reason other than a change in United States law or regulations or in the
official interpretation of such law or regulations by any governmental
authority charged with the interpretation or administration thereof (whether or
not having the force of law) after the date of delivery of such Form 4224; or
(iii) if the Lender shall have delivered to the Borrower a Form 1001 in
respect of such Lending Office pursuant to subsection 3. l(f), and such Lender
shall not at any time be entitled to a full and complete exemption from
deduction or withholding of United States Federal income tax in respect of
payments by the Borrower hereunder for the account of such Lending Office for
any reason other than a change in United States law or regulations or any
applicable tax treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 1001.
(h) If, at any time, the Borrower requests any Lender to deliver any forms
o other documentation pursuant to subsection 3. l(f)(iv), then the Borrower
shall, on demand of such Lender through the Administrative Agent, reimburse
such Lender for any reasonable costs and expenses (including Attomey Costs)
reasonably incurred by such Lender in the preparation or delivery of such forms
or other documentation.
(i) If the Borrower is required to pay additional amounts to any Lender or
the Administrative Agent pursuant to subsection 3. l(d), then such Lender shall
use its reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Borrower which may thereafter accrue if such change
in the judgment of such Lender is not otherwise materially disadvantageous to
such Lender.
<PAGE> 38
SECTION 3.2 Illegality.
(a) If any Lender shall determine that the introduction of any Requirement
of Law, or any change in any Requirement of Law or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for any Lender or its
Lending Office to make LIBOR Revolving Loans, then, on notice thereof by the
Lender to the Borrower through the Administrative Agent, the obligation of that
Lender to make LIBOR Rate Revolving Loans shall be suspended until the Lender
shall have not)fied the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender shall determine that it is unlawful to maintain any LIBOR
Rate Revolving Loan, the Borrower shall prepay in full all LIBOR Rate Revolving
Loans of that Lender then outstanding (or convert such Revolving Loan to Base
Rate Revolving Loans), together with interest accrued thereon, either on the
last day of the Interest Period thereof if the Lender may lawfully continue to
maintain such LIBOR Rate Revolving Loans to such day, or immediately, if the
Lender may not lawfully continue to maintain such LIBOR Rate Revolving Loans,
together with any amounts required to be paid in connection therewith pursuant
to Section 3.4.
(c) If the obligation of any Lender to make or maintain LIBOR Rate
Revolving Loans has been terminated, the Borrower may elect, by giving notice
to the Lender through the Administrative Agent that all Revolving Loans which
would otherwise be made by the Lender as LIBOR Rate Revolving Loans shall be
instead Base Rate Revolving Loans.
(d) Before giving any notice to the Administrative Agent pursuant to this
Section 3.2, the affected Lender shall designate a different Lending Office
with respect to its LIBOR Rate Revolving Loans if such designation will avoid
the need for giving such notice or making such demand and will not, in the
judgment of the Lender, be illegal or otherwise materially disadvantageous to
the Lender.
SECTION 3.3 Increased Costs and Reduction of Return.
(a) If any Lender shall determine that, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation after the
Closing Date or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority issued after the Closing Date
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Rate Revolving Loans, then the Borrower shall be liable for, and shall
from time to time, upon demand therefor by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs.
(b) If any Lender shall have determined that:
<PAGE> 39
Closing Date;
Date;
(i) the introduction of any Capital Adequacy Regulation after the
(ii) any change in any Capital Adequacy Regulation after the Closing
(iii) any change after the Closing Date in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof; or
(iv) compliance by the Lender (or its Lending Office) or any corporation
controlling the Lender, with any Capital Adequacy Regulation issued after the
Closing Date; affects or would affect the amount of capital required or
expected to be maintained by the Lender or any corporation controlling the
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Revolving Loan Commitment, Revolving Loans, Letter of Credit
Commitment, participation in the Letters of Credit, credits or obligations
under this Agreement, then, upon demand of such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to the Lender, from time to time
as specified by the Lender, additional amounts sufficient to compensate the
Lender for such increase.
(c) Before giving any notice to the Administrative Agent pursuant to this
Section 3.3, the affected Lender shall designate a different Lending Office
with respect to its LIBOR Rate Revolving Loans if such designation will avoid
the need for giving such notice or making such demand and will not, in the
judgment of the Lender, be illegal or otherwise materially disadvantageous to
the Lender.
SECTION 3.4 Funding Losses. The Borrower agrees to reimburse each Lender
and to hold each Lender harmless from any loss or expense which the Lender may
sustain or incur as a consequence of:
- (a) the failure of the Borrower to make any payment of principal of any
LIBOR Rate Revolving Loan (including payments made after any acceleration
thereof);
(b) the failure of the Borrower to borrow, continue or convert a Revolvin
Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion or Continuation;
(c) the failure of the Borrower to make any prepayment after the Borrower
has given a notice in accordance with Section 2.6;
<PAGE> 40
(d) the prepayment of a LIBOR Rate Revolving Loan on a day which is not
the last day of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 2.5 of any LIBOR Rate Revolving
Loan to a Base Rate Revolving Loan on a day that is not the last day of the
applicable Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Revolving Loans hereunder or
from fees payable to terminate the deposits from which such funds were
obtained. Solely for purposes of calculating amounts payable by the Borrower to
the Lenders under this Section 3.4 and under subsection 3.3(b), each LIBOR Rate
Revolving Loan made by a Lender (and each related reserve, special deposit or
similar requirement) shall be conclusively deemed to have been funded at the
LIBOR Rate used in determining the interest rate for such LIBOR Rate Revolving
Loan by a matching deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
LIBOR Rate Revolving Loan is in fact so funded.
SECTION 3 .5 Inabilitv to Determine Rates. If the Administrative Agent
shall have determined that for any reason adequate and reasonable means do not
exist for ascertaining the LIBOR Rate for any requested Interest Period with
respect to a proposed LIBOR Rate Revolving Loan or that the LIBOR Rate
applicable pursuant to subsection 2.8(a) for any requested Interest Period with
respect to a proposed LIBOR Rate Revolving Loan does not adequately and fairly
reflect the cost to the Lenders of funding such Revolving Loan, the
Administrative Agent will forthwith give notice of such determination to the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain LIBOR Rate Revolving Loans hereunder shall be suspended until the
Administrative Agent revokes such notice in writing. Upon receipt of such
notice, the Borrower may revoke any Notice of Borrowing or Notice of
ConversionlContinuation then submitted by it. If the Borrower does not revoke
such notice, the Lenders shall make, convert or continue the Revolving Loans,
as proposed by the Borrower, in the amount specified in the applicable notice
submitted by the Borrower, but such Revolving Loans shall be made, converted or
continued as Base Rate Revolving Loans.
SECTION 3.6 Reserves on LlBOR Rate Revolving Loans. The Borrower shall pay
to each Lender, as long as such Lender shall be required under regulations of
the Federal Reserve Board to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrencv liabilities"), additional costs on the unpaid principal
amount of each LIBOR Rate Revolving Loan equal to actual costs of such reserves
allocated to such Revolving Loan by the Lender (as determined by the Lender in
good faithj which determination shall be conclusive), payable on each date on
which interest is payable on such Revolving Loan provided the Borrower shall
have received at least fifteen (15) days' prior written notice (with a copy to
the Administrative Agent) of such additional interest from the Lender. If a
Lender fails to give notice fifteen (15) days prior to the relevant Interest
Payment Date, such additional interest shall be payable fifteen (15) days from
receipt of such notice.
<PAGE> 41
SECTION 3.7 Certificates of Lenders. Any Lender claiming reimbursement or
compensation pursuant to this Article 3 shall deliver to the Borrower (with a
copy to the Administrative Agent) a certificate setting forth in reasonable
detail the circumstances which give rise to such claim and the amount payable
to the Lender hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.
SECTION 3.8 Replacement of Lenders. If at any time a Lender fails to fund
all or any portion of its Revolving Loan Commitment (a "Defaulting Lender"),
requests a payment pursuant to Section 3.3 hereof (a "Gross Up Lender") or is
subject to United States withholding tax with respect to the transactions
hereunder, the Borrower shall have the right to replace such Lender with any
Person with the consent of the Administrative Agent, which consent shall not be
unreasonably withheld; provided, that (i) neither the Administrative Agent nor
any Lender shall have any obligation to the Borrower to find such other Person,
(ii) in order for the Borrower to be entitled to replace such a Lender, such
replacement must take place no later than one hundred fifty (150) days after
the date the applicable Lender becomes a Defaulting Lender, a Gross Up Lender,
or becomes subject to United States withholding tax with respect to the
transactions hereunder and (iii) such Lender shall be an Eligible Assignee.
Each Lender agrees to its replacement at the option ofthe Borrower pursuant to
this Section 3.8; provided that the successor Lender shall purchase without
recourse such Lender's interest in the Obligations and rights and obligations
under the Revolving Loan Documents for cash in an aggregate amount equal to the
aggregate unpaid principal amount owing to such selling lender hereunder, all
unpaid interest accrued thereon, and all other amounts then owing by the
Borrower to such Lender hereunder or under any other Revolving Loan Documents.
SECTION 3.9 Survival. The covenants, agreements and obligations of the
Borr~ this Article 3 shall survive the payment of all other Obligations.
ARTICLE 4
CONDITIONS PRECEDENT
SECTION 4 1 Conditions of Initial Revolving Loans. The obligation of each
Lender to make its initial Revolving Loan on or before the Closing Date was
subject to the condition that the Administrative Agent shall have received, on
or before the Closing Date, all of the following, which condition the parties
agree was previously satisfied:
(a) Credit Agreement and Note. The Original Credit Agreement and the Note;
(b) Secretary's Certificates: Resolutions: Incumbencv. A c~ Secretary or
Assistant Secretary of the Borrower certifying:
(i) the names and true signatures of the officers of the Borrower
authorized to execute, deliver and perform, as applicable, the Original Credit
Agreement, all other Revolving Loan Documents to be delivered thereunder and
notices to be delivered to the Administrative Agent; and
<PAGE> 42
(ii) copies of the resolutions of the board of directors of the Borrower
approving and authorizing the execution, delivery and performance by the
Borrower of the Original Credit Agreement and the other Revolving Loan
Documents to be executed or delivered by it thereunder;
(c) Articles of Incorporation: Bv-laws and Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation of the Borrower and each
Subsidiary as in effect on the Closing Date, certified by the Secretary of
State (or similar, applicable Governmental Authority) of the state of
incorporation of such Person as of a recent date, and the bylaws of the
Borrower as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Borrower as of the Closing Date; and
(ii) a good standing and tax good standing certificate for the Borrower
from the Secretary of State (or similar, applicable Governmental Authority) of
its state of incorporation.
(d) Legal Opinions. An opinion of Latham & Watkins, counsel to the
Borrower and addressed to the Administrative Agent and the Lenders,
substantially in the form of Exhibit D;
(e) Certificate. A certificate signed by a Responsible Offficer, d Closing
Date, stating that:
(i) the representations and warranties contained in Article 5 hereof a~
true and correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from the
initial Borrowing; and
(iii) there has occurred since December 31, 1996, no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Effect;
(f) Fees. Payment of all of the Administrative Agent's outstanding fees,
including the Agency Fee and the Commitment Fee which are payable at or prior
to the Closing Date.
(g) Acquisition Transactions.
(i) copies of the fully executed Acquisition Documents;
(ii) a certification that the conditions to the closing of t Transactions
have been satisfied or waived; and
(iii) a certification that since the delivery of the Acquisition Documents
to the Administrative Agent on or about June 18, 1997, no material amendments,
revisions or supplements have been made to the Acquisition Documents; and
<PAGE> 43
(h) Other Documents. Such other approvals, opinions, document as the
Administrative Agent may reasonably request.
SECMON 4.2 Conditions to All Borrowings and Issuances of Letters of
Credit. The obligation of each Lender to make any Revolving Loan and of any
Issuing Bank to issue any Letter of Credit hereunder is subject to the
satisfaction of the following conditions precedent on the relevant borrowing,
continuation or conversion date:
(a) Notice of Borrowing. Continuation or Conversion. The Administrative
'Agent shall have received a Notice of Borrowing or a Notice of
Continuation/Conversion, as applicable.
(b) Application and Request for Letter of Credit. For each Letter of
Credit requested, the Administrative Agent and the Issuing Bank shall have
received not less than five (5) Business Days' prior written notice of such
requested Letter of Credit accompanied by a completed application in the form
attached hereto as Exhibit G.
(c) Continuation of Representations and Warranties. With respect to any
Borrowing, the representations and warranties made by the Borrower contained in
Article 5 shall be true and correct on and as of such Borrowing with the same
effect as if made on and as of such Borrowing (except to the extent such
representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date); and
(d) No Existing Default. No Default or Event of Default shal result from
such Borrowing or continuation or conversion.
Each Notice of Borrowing and Notice of Continuation/Conversion and each
application for a Letter of Credit submitted by the Borrower hereunder shall
constitute a representation and warranty by the Borrower hereunder, as of the
date of each such notice or application and as of the date of each Borrowing or
continuation or conversion, as applicable, that the applicable conditions in
Section 4.2 are satisfied.
SECTION 4.3 Conditions to Effectiveness of Amendment and Restatement. The
effectiveness of the amendment and restatement of the Original Credit Agreement
as stated herein is subject to the condition that the Administrative Agent
shall have received all of the following, in form and substance satisfactory to
the Administrative Agent, duly executed by all parties thereto:
(a) Credit Agreement. This Agreement; date hereof, stating that:
(b) Certificate. A certificate signed by a Responsible Officer, dated as
of the
(i) the representations and warranties contained in Article 5 hereof are
true and correct on and as of such date (except to the extent such
representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date); and
<PAGE> 44
Agreement.
(ii) no Default or Event of Default exists under the Original Credit
ARTICLE 5
REPRPSENTATIONS AND WARRAN10;S
The Borrower represents and warrants to the Administrative Agent and each
Lender that (after giving effect to the Acquisition Transactions):
Subsidiaries:
SECTION 5.1 Corporate Existence and Power. The Borrower and each of its
(a) ~ rN-N
is a corDoration duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation (except as otherwise
permitted pursuant to Section 6.4).
(b) has the power and authority and all material governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and execute, deliver, and perform its obligations under, the Revolving Loan
Documents;
(c) is duly qualified as a foreign corporation, and licensed and in good
standing, under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification or license except to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect; and
(d) is in compliance with all material Requirements of Law.
SECTION 5.2 Corporate Authorization: No Contravention. As of the Closing
Date, t execution, delivery and performance by the Borrower of the Revolving
Loan Documents are within the corporate powers of the Borrower, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or offcial which has
not been taken or made and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the certificate of
incorporation or bylaws of the Borrower or of any debt instrument or material
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower or any of its Subsidiaries or result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority which has not been obtained, taken or made is necessary
or required in connection with the execution,
<PAGE> 45
delivery or performance by, or enforcement against, the Borrower of this
Agreement or any other Revolving Loan Document.
SECTION 5.4 Binding Effect. This Agreement and each other Revolving Loan
Document to which the Borrower is a party constitute the legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
SECTION 5.5 Litigation. Except as specifically disclosed in Schedule 5.5,
there is no action, suit, proceeding, claim or dispute pending, or to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Borrower, or its
Subsidiaries or any of their respective Properties which could reasonably be
expected to have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement, any Revolving Loan Document, or any
Acquisition Document, or directing that the transactions provided for herein or
therein not be consummated as herein or therein provided.
SECTION 5.6 NO Default. NO Default or Event of Default exists or would
result from the incurrence of any Obligations by the Borrower. Neither the
Borrower nor any of its Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect
(provided, that to the extent any such default(s) relate to Indebtedness, the
amount of such Indebtedness shall be at least $25,000,000) or that would, if
such default had occurred after the Closing Date, create an Event of Default.
SECTION 5.7 ERISA Compliance. Schedule 5.7 lists all Plans and separately
identifies Plans intended to be Qualified Plans and Multiemployer Plans. All
written descriptions thereof provided to the Administrative Agent are true and
complete in all material respects. There is (a) no outstanding liability under
Title IV of ERISA with respect to any Qualified Plan maintained or sponsored by
the Borrower or any ERISA Affiliate, nor with respect to any Qualified Plan to
which the Borrower or any ERISA Affiliate contributes or is obligated to
contribute; (b) no Qualified Plan subject to Title IV of ERISA has any Unfunded
Pension Liability in excess of $10,000,000 in the aggregate; and (c) no ERISA
Event which has occurred or is reasonably expected to occur with respect to any
Plan which, in the case of clauses (a), (b) or (c) above, could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has incurred nor reasonably expects to incur (i) any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan or (ii) any liability under Title IV of ERISA
(other than premiums due and not delinquent under Section 4007 of ERISA) with
respect to a Plan and which, in either case, could reasonably be expected to
have a Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate
has transferred any Unfunded Pension Liability to a Person other than the
Borrower or an ERISA Affiliate or otherwise engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA.
<PAGE> 46
SECTTON 5.8 Use of Proceeds: Margin Regulations. The proceeds of the
Revolving Loans are intended to be and shall be used solely for the purposes
set forth in and permitted by Section 6.10, and are intended to be and shall be
used in compliance with Sections 7.7 and 7.18. Neither the Borrower nor any of
its Subsidiaries is generally engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.
SECTTON 5.9 Title to Properties. The Borrower and each of its Subsidiaries
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real Property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the Property of the Borrower and its Subsidiaries is subject to
no Liens, other than Permitted Liens.
SECTION 5.10 Taxes. The Borrower and its Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed, and
have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their Properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP and no Notice of Lien has been filed or
recorded and except for filings and payments required to be made by an
Immaterial Subsidiary so long as any such failure to file or pay by all such
Immaterial Subsidiaries could not reasonably be expected to have a Material
Adverse Effect. There is no proposed tax assessment against the Borrower or any
of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
SECTION 5.1 1 Financial Condition.
(a) The audited consolidated annual financial statements of the Borrower
and its Subsidiaries dated December 31, 1996, and the related audited
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal year ended on December 31, 1996, and the unaudited
consolidated quarterly financial statements of financial condition of the
Borrower and its Subsidiaries dated March 31, 1997, and the related unaudited
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal quarter ended on March 31, 1997:
(i) were prepared in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein;
(ii) present fairly the consolidated financial condition of the Borrower
and its Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(iii) except as specifically disclosed in Schedule 5. 11, show all
material indebtedness and other liabilities, direct or contingent of the
Borrower and its consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and contingent obligations.
<PAGE> 47
(b) As of the Closing Date, since December 31, 1996, there has been no
Material Adverse Effect.
SECTION 5.12 Environmental Matters. Except as specifically disclosed in
Schedule 5.12 and except where such non-compliance could not reasonably be
expected to have a Material Adverse Effect, (i) the on-going operations of the
Borrower and each of its Subsidiaries comply in all respects with all
Environmental Laws; (ii) the Borrower and its Subsidiaries have obtained all
licenses, permits and authorizations required by Environmental Laws to conduct
their business; (iii) none of the Borrower, any of its Subsidiaries or any of
their respective present Property or operations, is subject to any outstanding
written order from or agreement with any Governmental Authority, nor subject to
any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material; and (iv) there
are no Hazardous Materials or circumstances existing with respect to any
Property of the Borrower or any of its Subsidiaries in violation of
Environmental Laws.
SECTION 5.13 Regulated Entities. None of the Borrower, any Person
controlling the Borrower, or any Subsidiary of the Borrower, is (a) an
"Investment Company" within the meaning ofthe Investment Company Act of 1940;
(b) subject to regulation under the Public Utility Holding Borrower Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other statute or regulation of any Governmental
Authority limiting or restricting its ability to incur Indebtedness, other than
the restrictions imposed in connection with the insurance activities and
businesses of the Subsidiaries identified on Schedule 5.13 in accordance with
Requirements of Law applicable generally to them, with respect to all of which
the Borrower and its Subsidiaries, as applicable, are in compliance except
where the failure to be in compliance would not reasonably be expected to have
a Material Adverse Effect; or (c) except as listed on Schedule 5.13, regulated
under any federal or state insurance, health care or similar laws, rules or
regulations.
SECTION 5.14 No Burdensome Restrictions. (a) Neither the Borrower nor any
if its Subsidiaries is a party to or bound by any Contractual Obligation, or
subject to any charter or corporate restriction, or any Requirement of Law,
which could reasonably be expected to have a Material Adverse Effect and which
Material Adverse Effect could not be cured using the proceeds of any Borrowing,
(b) other than Insurance Subsidiaries or as permitted by Section 7.1 5(b), no
Subsidiary is subject to any Requirement of Law that restricts its ability to
pay dividends (other than those restrictions with respect to capital
requirements and other similar requirements imposed by any applicable state on
all corporations incorporated in such state).
SECTION 5.15 Solvencv. The Borrower and each of its Subsidiaries is
Solvent (other than Immaterial Subsidiaries, except to the extent that the
failure of any one such Immaterial Subsidiary or a group of such Immaterial
Subsidiaries in the aggregate to be Solvent could not reasonably be expected to
have a Material Adverse Effect).
SECTION 5.16 Labor Relations. There are no strikes, lockouts or other
labor disputes against the Borrower or any of its Subsidiaries, or, to the best
of the Borrower's knowledge,
<PAGE> 48
threatened against or affecting the Borrower or any of its Subsidiaries, and
no sign)ficant unfair labor practice complaint is pending against the Borrower
or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against any of them before any Governmental Authority that could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.17 Copyrights. Patents. Trademarks and Licenses. etc. Schedule
5.17 identifies all material United States patents, trademarks, service marks,
trade names and copyrights, and all registrations and applications for
registration thereof and all licenses thereof, owned or held by Borrower or any
of its Subsidiaries on the Closing Date, and identifies the jurisdictions in
which such registrations and applications have been filed. Except as otherwise
disclosed in Schedule 5.17, as of the Closing Date, Borrower and its
Subsidiaries are the sole beneficial owners of, or have the right to use, free
from any restrictions, claims, rights encumbrances or burdens, the intellectual
property referred to in Schedule 5.17 and all other processes, designs,
formulas, computer programs, computer software packages, trade secrets,
inventions, product manufacturing instructions, technology, research and
development, knowhow and all other intellectual property that are necessary for
the operation of Borrower's and its Subsidiaries' businesses as being operated
on the Closing Date after giving effect to the Acquisition Transactions. Each
patent, trademark, service mark trade name, copyright and license listed on
Schedule 5.17 is in full force and effect except to the extent the failure to
be in effect could not be reasonably be expected to have a Material Adverse
Effect. Except as set forth in Schedule 5.17, to the best knowledge of
Borrower, as ofthe Closing Date (a) none ofthe present or contemplated products
or operations of Borrower or its Subsidiaries infringes any patent, trademark,
service mark trade name, copyright, license or other right owned by any other
Person, and (b) there is no pending or threatened claim or litigation against
or affecting Borrower or any of its Subsidiaries contesting the right of any of
them to manufacture, process, sell or use any such product or to engage in any
such operation, except for claims and/or litigation which could not reasonably
be expected to have a Material Adverse Effect.
SECTION 5.18 Subsidiaries. As of the Closing Date, the Borrower has no
Subsidiaries or equity investments in any other corporation or entity other
than those specifically disclosed in Schedule 5.18.
SECTION 5.19 Brokers' Fees; Transaction Fees. Other than in connection
with the Acquisition Transactions, neither the Borrower nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions
contemplated hereby.
SECTION 5.20 Insurance. The Properties of the Borrower and its
Subsidiaries are insure~ with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar Properties in localities where
the Borrower or such Subsidiary operates.
SECTION 5.2 1 Compliance with Law. The Borrower and each of its
Subsidiaries are in full compliance with all Requirements of Law, except where
such failure to comply could not
<PAGE> 49
reasonably be expected to result in a Material Adverse Effect. The Borrower and
each of its Insurance Subsidiaries are in compliance with (i) all licenses and
certifications required pursuant to any Healthcare Regulation; (ii) all
certifications and authorizations necessary to ensure that the Borrower and
each of its Subsidiaries is eligible for all reimbursements available under the
Healthcare Regulations to the extent applicable to the Subsidiaries and
providers of life, health care and disability insurance of their type; and
(iii) all licenses, permits, authorizations and qualifications required under
the Healthcare Regulations in connection with the ownership or operation of the
Subsidiaries and providers of life, health care and disability insurance and
the conduct of the health care, managed care and health insurance businesses
and businesses incidental thereto; except where the failure to be in compliance
with the items described in any of the preceding three clauses would not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.22 FUJI Disclosure. None of the written representations or
warranties made by the Borrower or any of its Subsidiaries in the Revolving
Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the written statements contained in each exhibit,
report, statement or certificate furnished by or on behalf of the Borrower or
any of its Subsidiaries in connection with the Revolving Loan Documents
(including the due diligence materials delivered by or on behalf of the
Borrower to the Lenders prior to the Closing Date), contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which there are made, not misleading as of the time when
made or delivered.
ARTICLE 6
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Revolving Loan Commitment hereunder, or any Revolving Loan or other
Obligation shall remain unpaid or unsatisfied:
SECTION 6.1 Financial Statements. The Borrower shall deliver to the
Administrative Agent in form and detail satisfactory to the Administrative
Agent and the Majority Lenders, with sufficient copies for each Lender:
(a) as soon as available, but not later than ninety (90) days after the
end of each fiscal year, a copy of the audited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of
Deloitte & Touche LLP or another nationally-recognized independent public
accounting firm acceptable to the Administrative Agent which report shall state
that such consolidated financial statements present fairly in all material
respects the financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years. Such opinion shall not be
qualified or limited because of a restricted or limited examination by such
accountant of any material portion of the Borrower's or any Subsidiary's
records;
<PAGE> 50
(b) as soon as available, but not later than forty-five (45) days after
the end of the first three fiscal quarters of each year, a copy of the
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such quarter, and
certified by an appropriate Responsible Officer as being complete and correct
and fairly presenting, in accordance with GAAP, the financial position and the
results of operations of the Borrower and the Subsidiaries, subject to normal
year-end adjustments and absence of footnote disclosure;
(c) as soon as available, but not later than seventy-five (75) days after
the Closing Date, a copy of the audited consolidated financial statements of
the Borrower as of June 30, 1997 giving effect to the Acquisition Transactions;
and
(d) at least ten Business Days prior to the consummation of an Acquisition
permitted by Section 7.4(f) with a purchase price of $50,000,000 or more, an
Officer's Certificate certifying that immediately after giving effect to such
Acquisition, the Borrower will be in compliance with representations,
warranties and covenants contained in this Agreement and that no Default or
Event of Default will occur as a result of such Acquisition. Such certificate
shall contain calculations sufficient to demonstrate compliance on a pro forma
basis as of the most recently completed four fiscal quarters, as applicable,
and based on the most recent financial statements delivered to the Lenders
pursuant to Section 6.1, and similar financial statements of the applicable
target, with the terms of Sections 7.12, 7.13, and 7.14 hereoL. If such
Acquisition is an acquisition of a division, the Borrower shall subtract
(except to the extent that the Administrative Agent disallows such subtraction)
reasonable allocations of corporate overhead.
SECTION 6.2 Certificates: Other Information. The Borrower shall furnish
Administrative Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements referred to
in subsection 6. l(a) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in subsections 6. l(a) and (b) above, a certificate of a Responsible Officer in
the form of Exhibit E hereto (an "Officer's Certificate") (i) stating that, to
the best of such Responsible Officer's knowledge and except as previously
disclosed to the Lenders, the Borrower, during such period, has observed and
performed all of its covenants and other agreements, and satisfied every
condition contained in this Agreement to be observed, performed or satisfied by
it, and that such officer has obtained no knowledge of any Default or Event of
Default except as specified (by applicable subsection reference) in such
certificate, (ii) stating that, to the best of such Responsible Officer's
knowledge, the Borrower could make each of the representations and warranties
contained in Article V hereof effective as of the date of the Officer's
Certificate, except for those representations and warranties listed by Section
number in an attachment to the Officer's Certificate which explains the
Borrower's inability to make such representation or
<PAGE> 51
warranty, and (iii) showing in detail the calculations supporting such
statement in respect of Sections 7.12, 7.13 and 7.14 hereof;
(c) promptly after the same are sent, copies of all financial statements
and reports which the Borrower sends to its shareholders; and promptly after
the same are filed, copies of all financial statements and regular, periodical
or special reports which the Borrower or any of its Subsidiaries makes to, or
files with, the Securities and Exchange Commission or any successor or similar
Governmental Authority; and
(d) promptly, such additional business, financial, corporate affairs and
other information as the Administrative Agent, at the request of any Lender,
may from time to time reasonably request.
SECTION 6.3 Notices. The Borrower shall promptly notify the Administrative
Agent and each Lender of any of the following, promptly (and in no event later
than three (3) Business Days) after any member ofthe Borrower's executive
committee or its corporate controller becoming aware thereof:
(a) the occurrence or existence of any Default or Event of
(b) any breach or non-performance of, or any default unde~ Contractual
Obligation of the Borrower or any of its Subsidiaries;
(c) any material dispute, litigation, investigation, proceeding or
suspension which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority;
(d) the commencement of, or any material development in, any litigation or
proceeding affecting the Borrower or any Subsidiary (i) which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect, or
(ii) in which the validity of this Agreement, any Revolving Loan Document or
any Acquisition Document is questioned or in which the relief sought is an
injunction or other stay of the performance of this Agreement or any Revolving
Loan Document;
(e) (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing against the
Borrower or any of its Subsidiaries or any of their respective Properties
pursuant to any applicable Environmental Laws, (ii) all other material
Environmental Claims, and (iii) any environmental or similar condition on any
real property adjoining or in the vicinity of the property of the Borrower or
any Subsidiary that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws;
(f) any of the following ERISA events affecting the Borrower or any member
of its Controlled Group, together with a copy of any notice with respect to
such event that may be
<PAGE> 52
required to be filed with a Governmental Authority and any notice delivered by
a Governmental Authority to the Borrower or any member or its Controlled Group
with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Plan that is subject to Title IV of ERISA or
section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is subject to Title IV
of ERISA or section 412 of the Code, if such amendment results in a material
increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the Controlled
Group to any Plan that is subject to Title IV of ERISA or section 412 of the
Code;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Borrower delivered to the Lenders pursuant
to this Agreement;
(h) any material change in accounting policies or financial reporting
practices by the Borrower or any of its Subsidiaries; and
(i) any material labor controversy resulting in or threatening to result
in strike, work stoppage, boycott, shutdown or other labor disruption against
or involving the Borrower or any of its Subsidiaries.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein, and stating what action the Borrower proposes
to take with respect thereto and at what time. Each notice under subsection
6.3(a) shall describe with particularity any and all clauses or provisions
ofthis Agreement or other Revolving Loan Document that have been breached or
violated.
SECTION 6.4 Preservation of Corporate Existence. Etc. The Borrower shall,
and shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate existence
and good standing under the laws of its state or jurisdiction of incorporation
except where the failure to maintain the existence of a Subsidiary could not
reasonably be expected to result in a Material Adverse Effect;
(b) preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises (including all licenses and
certifications required pursuant to any Healthcare Regulation in connection
with the ownership or operation of Insurance Subsidiaries and the conduct of
the health care, managed care and health insurance businesses and businesses
incidental thereto) necessary or desirable in the normal conduct of its
business (including all certification and authorization necessary to ensure
that each of the Insurance Subsidiaries is eligible for all reimbursements
available under the Healthcare Regulations to the extent
<PAGE> 53
applicable) except in connection with transactions permitted by Section 7.3 and
sales of assets permitted by Section 7.2 and except where such failure (as it
relates to a Subsidiary) could not reasonably be expected to result in a
Material Adverse Effect;
(c) use its reasonable efforts, in the Ordinary Course of Business, to
preserve its business organization and preserve the goodwill and business of
the customers, suppliers and others having material business relations with it,
other than, in the case of Immaterial Subsidiaries where the failure to so
preserve, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
SECTION 6.5 Maintenance of Property. The Borrower shall maintain and
preserve, and shall cause each of its Subsidiaries to maintain and preserve,
all Property which is used or useful in its or their business in good working
order and condition, ordinary wear and tear excepted and make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect and
except as permitted by Section 7.2.
SECTION 6.6 Insurance. The Borrower shall maintain, and shall cause each
of its Subsidiaries to maintain (other than, in the case of Immaterial
Subsidiaries, where the failure to so maintain, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect),
with financially sound and reputable independent insurers, insurance with
respect to its Properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons, including workers' compensation insurance,
public liability and property and casualty insurance. Upon request of the
Administrative Agent or any Lender, the Borrower shall furnish the
Administrative Agent, with sufficient copies for each Lender, at reasonable
intervals (but not more than once per calendar year) a certificate of a
Responsible Officer of the Borrower (and, if requested by the Administrative
Agent, any insurance broker of the Borrower) setting forth the nature and
extent of all insurance maintained by the Borrower and its Subsidiaries in
accordance with this Section 6.6 (and which, in the case of a certificate of a
broker, were placed through such broker).
SECTION 6.7 Pavment of Obligations. The Borrower shall, and shall cause
its Subsidiaries to, pay and discharge as the same shall become due and
payable, all their respective material obligations and liabilities, including
all tax liabilities, assessments and governmental charges or levies upon it or
its properties or assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary.
SECTION 6.8 Compliance with Laws. The Borrower shall comply, and shall
cause each of its Subsidiaries to comply (other than, in the case of Immaterial
Subsidiaries, where the failure to so comply, individually or in the aggregate,
could not reasonably be expected to have a
<PAGE> 54
Material Adverse Effect), in all material respects with all material
Requirements of Law of any Governmental Authority having jurisdiction over it
or its business (including applicable labor laws, insurance laws, health care
laws, Environmental Laws and ERISA), except such as may be contested in good
faith or as to which a bona fide dispute may exist.
SECTION 6.9 Inspection of Property and Books and Records. The Borrower
shall maintain and shall cause each of its Subsidiaries to maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP (or statutory accounting principles which are converted to
GAAP) consistently applied shall be made of all financial transactions and
matters involving the respective assets and business of the Borrower and such
Subsidiaries. The Borrower shall permit, and shall cause each of its
Subsidiaries to permit, representatives and independent contractors of the
Administrative Agent or any Lender to visit and inspect any of their respective
Properties, to examine their respective corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants at such reasonable times during
normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; provided, however, when a Default or
an Event of Default exists the Administrative Agent or any Lender may do any of
the foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
SECTION 6.10 Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Loans solely (a) to fund the Acquisition Transaction and other
permitted Acquisitions, (b) to fund stock purchases, acquisitions or
redemptions to the extent permitted by Section 7. 11, and (c) for working
capital and other general corporate purposes not in contravention of any
Requirement of Law.
SECTION 6.11 Solvency. The Borrower shall at all times be, and shall cause
each of its Subsidiaries to be, Solvent, other than, in the case of Immaterial
Subsidiaries, where the failure to remain Solvent, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
SECTION 6.12 Further Assurances. The Borrower shall ensure that all
written information, exhibits and reports furnished to the Administrative Agent
or the Lenders by the Borrower or its Subsidiaries do not and will not contain
any untrue statement of a material fact and do not and will not omit to state
any material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made, and will
promptly disclose to the Administrative Agent and the Lenders and correct any
defect or error that may be discovered therein or in any Revolving Loan
Document or in the execution, acknowledgment or recordation thereof.
ARTICLE 7
NEGATIVE COVENANTS
<PAGE> 55
termination of this ;ease an amount equal to the maximum allowed by any statute
or rule of law In effect at the time Nhen, and governing the proceedings In
which, the damages are to be proved, whether or not the amount be greater,
equal to, or less than the amount of the loss or damages reforred to above.
Should Landlord seek and be awarded a final ludo~nt for liquidated damages
under this section 7.02(b), the remedy In section 7.02(a) haraof shall not be
sought by Landlord.
(c) Landlord may terminate Tenant's right of possession (but not this
lease) and may repossess the fessed premises by forcible entry and detalner
suit or otherwise, without thereby releasing Tenant from any Ilability
hereunder and Nlthout demand or notice of any kind to Tenant and without
terminating this lesse, In which event Landlord may, but shall be under no
obligation to do so, relet the se"for the account of Tenant for such rent and
upon such terms as shall be satisfactory to Landlord. For the purpose of such
reletting, Landlord Is authorized to decorate or to make any repairs, changes,
alterations, or aWltions In or to lease premises as may be reasonably necessary
or desirable, end (1) If Landlord shall fail or refuse
r
Rotwlthstanding any contrary provision contained herein Tenant shall not
be declared In default should It move out of all or any portion of the Leased
Premises, jrovided that Tenant continues to tl_ly pay the rental and other
monetary suns due here~ndar and honor the other provisions of the Lease.
7.03 Ran-wolver. Fallura of Landlord to declare any default Immediately
upon occurrence thereof, or delay In taking any action in connection therewith,
or the acceptance of a partial payment or full payment of the dellnquent
rentals, shall not waive such default, but Landlord shall have the right to
declare any such default at any time and take such action aa might be lawful or
authorized hereunder, either in laN or in equity.
7.04 Holding Over. In the event of holding over by Tenant after expiration
or tars~lnatlon of this lease Nlthout the pclor weltten consent of Landlord,
Tenant shall pay, as liquidated damages, the amount of one hundred fifty
percent (150X) of the nonthly rental (including all tase Rental and Tenant's
Additional Rental) Nhich was due end peyable l~ediately pclor to the expiration
or termination of this Lease, for the entire holdover period. Ro holdine over
by Tenant after the term of this lease ahall be construed to extend the lease;
In the event of eny unauthorized holding over, Tenant shall also Indemnify
Landlord against all claims or de~agea by eny other tenant to whon Landlord
a~ay have leased all or any part of the leased premises effective upon the
termination of this lease. Any holding over with the prior consent of Landlord
in writing shall thereafter constitute thla lease e Leese from e;onth-to-month
any holding over without the prior consent of Landlord In writing shall create
a temncy at sufferance relationship with Tenant. As used in this lease, the
tera aMarket Base Rental Rate" shall _an the annual rental rates then being
charged in the "North Belt" area of Houston, Texas, for space comparable to the
space for which the Market Base Rental Rate is being determined (taking Into
consideration age, use, location and/or floor level within the applicable
building, definition of net rentable area leasehold
<PAGE> 56
The Borrower hereby covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Revolving Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Majority Lenders waive compliance in
writing:
SECTION 7. 1 Limitation on Liens. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its Property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) any Lien existing on the Property of the Borrower or its Subsidiarie
Closing Date and set forth in Schedule 7.1 securing the principal amount of
Indebtedness outstanding on the date hereof;
(b) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty or which are being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been made in accordance with GAAP; provided that no Notice of
Lien (other than with respect to Liens for de-minimus amounts) has been filed
or recorded under the Code;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the Property subject
thereto;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits made in the Ordinary Course of Business in connection with workers'
compensation, unemployment insurance and other social security legislation;
(e) Liens on the Property of the Borrower or any of its Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, (ii) contingent
obligations on surety and appeal bonds, and (iii) other non-delinquent
obligations of a like nature; in each case, incurred in the Ordinary Course of
Business, provided all such Liens in the aggregate would not (even if enforced)
cause a Material Adverse Effect;
(f) Liens consisting of judgment or judicial attachment liens, provided
that such liens in the aggregate shall not exceed $5,000,000, and provided that
such liens are (i) bonded to the reasonable satisfaction of the Administrative
Agent or (ii) covered by insurance to the reasonable satisfaction of the
Administrative Agent;
(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the Ordinary Course of Business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the businesses of the Borrower and its Subsidiaries;
<PAGE> 57
(h) Liens on assets of corporations which become Subsidiaries after the
date of this Agreement; provided. however, that (i) such Liens existed at the
time the respective corporations became Subsidiaries and were not created in
anticipation thereof and that all such Liens in the aggregate at any time
outstanding for the Borrower and its Subsidiaries, if enforced, would not cause
a Material Adverse Effect, (ii) until such time as such Liens and the related
Indebtedness have been fully paid, discharged or otherwise satisfied, such
Subsidiary may not engage or participate in any of the transactions permitted
under Sections 7.3, 7.4(c), 7.4(d), 7.4(e), 7.5(b), 7.5(c), 7.5(f) or 7.6, and
(iii) the aggregate principal amount of all Indebtedness of such Subsidiaries
secured by all such Liens does not exceed $25,000,000;
(i) Purchase money security interests on any Property acquired or held by
the Borrower or its Subsidiaries in the Ordinary Course of Business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part
of the cost of acquiring such Property; provided that (i) any such Lien
attaches to such Property concurrently with or within twenty (20) days after
the acquisition thereof, (ii) such Lien attaches solely to the Property so
acquired in such transaction, (iii) the principal amount of the Indebtedness
secured thereby does not exceed 100% of the cost of such Property, and (iv) the
principal amount of the Indebtedness secured by any and all such purchase money
security interests shall not at any time exceed $5,000,000;
(j) Liens securing Capital Lease Obligations on assets subject to such
Capital Leases, provided that such Capital Leases are permitted under
subsection 7.10(c);
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Borrower in excess of those set forth by regulations promulgated
by the Federal Reserve Board, and (ii) such deposit account is not intended by
the Borrower or any of its Subsidiaries to provide collateral to the depository
institution;
(1) leases or subleases of property of the Borrower or any of its
Subsidiaries not interfering with the ordinary conduct of business of the
Borrower or such Subsidiary; and
(m) any interest of any Person party to an agreement to acquire, or
holding an option to acquire, any property not prohibited from being
transferred hereunder.
SECTION 7.2 Disposition of Assets. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any Property (including accounts and notes receivable,
with or without recourse) or enter into any agreement to do any of the
foregoing (collectively, "Dispositions"), except:
(a) Dispositions of inventory, or used, worn-out or surplus eq' the
Ordinary Course of Business;
<PAGE> 58
(b) Dispositions of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are, within 90 days of receipt by the
Borrower or such Subsidiary, applied to the purchase price of such replacement
equipment; or
(c) other Dispositions of Property (including the liquidation of a
Subsidiary other than in an Insolvency Preceding during any fiscal year) not to
exceed 5% of Net Worth (as at December 31 of the immediately preceding fiscal
year);
(d) Dispositions of the Investments described in Sections 7.4(a) and
7.4(b) and, to the extent the transactions described in Section 7.3 constitute
a Disposition, Dispositions specifically permitted in Section 7.3; or
Subsidiary.
(e) Dispositions by a Subsidiary to the Borrower or to a Wholly-Owned
SECTION 7.3 Consolidations and Mergers. The Borrower shall not, and shall
not suffer or permit any of its Subsidiaries to, merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except:
(a) any Subsidiary of the Borrower may (i) merge with the Borrower (and
the Borrower may make such merger), provided that the Borrower shall be the
continuing or surviving corporation, or (ii) merge with any one or more
Subsidiaries of the Borrower, provided that if any transaction shall be between
a Subsidiary and a Wholly-Owned Subsidiary, the WhollyOwned Subsidiary shall be
the continuing or surviving corporation and shall remain WhollyOwned;
(b) any Subsidiary of the Borrower may sell all or substantially all of
its assets (upon voluntary liquidation or otherwise), to the Borrower or to a
Wholly-Owned Subsidiary of the Borrower; and
(c) any Subsidiary of the Borrower may merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of all or substantially all of its
assets in a transaction permitted under Section 7.2(c) so long as all such
transactions hereunder and thereunder comply with the limitations set forth in
Section 7.2(c).
SECTION 7.4 Loans and Investments. The Borrower shall not purchase or
acquire, or suffer or permit any of its Subsidiaries to purchase or acquire, or
make any commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, or make or
commit to make any Acquisitions, or make or commit to make any advance, loan,
extension of credit or capital contribution to or any other investment in, any
Person including any Affiliate of the Borrower, except for:
<PAGE> 59
(a) investments identified on Schedule 7.4 and other similar inve in the
Ordinary Course of Business;
(b) investments in Cash Equivalents;
(c) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the Ordinary
Course of Business;
(d) extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to the Borrower or to
one of its WhollyOwned Subsidiaries;
Subsidiaries;
(e) additional investments in the stock of then existing Wholly-Owned
(f) additional Acquisitions so long as no Default or Event of Default is
in existence or would occur as a result therefrom; provided that, the Borrower
shall deliver the certificate described in Section 6. l(d) with respect to any
Acquisition with a purchase price of $50,000,000 or more;
(g) additional purchases of or investments in the stock or interests of
Subsidiaries or Joint Ventures or the capital stock, assets, obligations or
other securities or interests in other Persons not exceeding $15,000,000 in the
aggregate at any one time outstanding;
(h) advances to employees in the ordinary course of business; and
(i) acquisitions and commitments therefor, of the capital stock of the
Borrower, subject to Section 7.1 l(c).
SECTION 7.5 Limitation on Indebtedness. The Borrower shall not, and shall
not suffer or permit any of its Subsidiaries to, create, incur, assume, suffer
to exist, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) unsecured Indebtedness of Subsidiaries in an aggregate Subsidiaries
not to exceed $10,000,000 at any one time outstanding;
7 lo;
Section 7. 10;
(c) Indebtedness outstanding on the Closing Date and set forth in Schedule
7.5 and extensions, renewals and replacements thereof which do not increase the
principal amount thereof;
<PAGE> 60
(d) Indebtedness secured by Liens permitted by Sections 7. l(h), 7.1 (i)
and
(e) Indebtedness incurred in connection with leases permitted pursuant to
(f) Indebtedness incurred in connection with an extension of credit
described in Section 7.4(c);
(g) unsecured Indebtedness of the Borrower in an aggregate amount not to
exceed $100,000,000 at any one time outstanding; provided, that such
Indebtedness is either pari passu with, or subordinated to, the Indebtedness of
the Borrower to the Lenders; and
(h) Indebtedness incurred by the Borrower in connection with Rate
Contracts entered into in the Ordinary Course of Business.
SECTION 7.6 Transactions with Affiliates. The Borrower shall not, and
shall not suffer c permit any of its Subsidiaries to, enter into any
transaction with any Affiliate of the Borrower or of any such Subsidiary (other
than transactions between the Borrower and its Wholly-Owned Subsidiaries or
between its Wholly-Owned Subsidiaries), except:
(a) as expressly permitted by this Agreement; or
(b) in the Ordinary Course of Business and pursuant to t requirements of
the business of the Borrower or such Subsidiary;
and, in each case (a) and (b), upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than would obtain in a comparable arm's
length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary.
SECTION 7.7 Use of Proceeds. The Borrower shall not and shall not suffer
or permit any of its Subsidiaries to use any portion of the Revolving Loan
proceeds, directly or indirectly, to purchase or carry Margin Stock in any
manner which violates Regulation G, T, U or X of the Federal Reserve Board or
repay or otherwise refinance indebtedness of the Borrower or others incurred to
purchase or carry Margin Stock in any manner which violates Regulation G, T, U
or X of the Federal Reserve Board, or otherwise in any manner which is in
contravention of any Requirements of Law.
SECTION 7.8 Amendments to Acquisition Documents. The Borrower shall not
(i) amend, modify, supplement, waive or otherwise modify any provision of, the
Acquisition Agreements, or (ii) take or fail to take any action under the
Acquisition Documents, in either case, that could reasonably be expected to
have a Material Adverse Effect.
SECTION 7.9 Compliance with ERISA. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to:
<PAGE> 61
(a) terminate any Plan subject to Title IV of ERISA so as tc material
liability to the Borrower or any ERISA Affiliate;
(b) permit to exist any ERISA Event or any other event or condition, which
presents the risk of a material liability to any member of the Controlled
Group;
(c) make a complete or partial withdrawal (within the meaning of ERI'
Section 4201) from any Multiemployer Plan so as to result in any material
liability to the Borrower or any ERISA Affiliate;
(d) enter into any new Plan or modify any existing Plan so as to increase
its obligations thereunder which could result in any material liability to any
member of the Controlled Group; or
(e) permit the present value of all nonforfeitable accrued benefits under
any Plan (using the actuarial assumptions utilized by the PBGC upon termination
of a Plan) materially to exceed the fair market value of Plan assets allocable
to such benefits, all determined as of the most recent valuation date for each
such Plan.
SECTION 7.10 Lease Obligations. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, create or suffer to exist any
obligations for the payment of rent for any Property under lease or agreement
to lease, except for:
(a) Operating Leases existing on the Closing Date and, in the case of any
single lease with annual rental payments of $50,000 or more, as set forth on
Schedule 7.10 hereof;
(b) Operating Leases entered into by the Borrower or any of it after the
Closing Date in the Ordinary Course of Business;
(c) leases entered into by the Borrower or any of its Subsidi Closing
Date, provided, that:
(i) immediately prior to giving effect to such lease, the Property subject
to such lease was sold by the Borrower or any such Subsidiary to the lessor
pursuant to a transaction permitted under Section 7.2; and
(ii) no Default or Event of Default exists or would occur as a result of
such sale and subsequent lease;
(d) Capital Leases other than those permitted under clause (b) of this
Section 7.10, entered into by the Borrower or any of its Subsidiaries after the
Closing Date to finance the acquisition of equipment in an aggregate amount not
to exceed $10,000,000 at any one time outstanding.
<PAGE> 62
SECTION 7.11 Restricted PaYments. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding; except that any Subsidiary of the Borrower may declare and pay
dividends to the Borrower or any WhollyOwned Subsidiary of the Borrower and to
its other equity holders; provided, that any such dividend shall not exceed the
net worth of the applicable Subsidiary, and except that the Borrower may:
(a) its common stock;
declare and make dividend payments or other distributions payable solely in
(b) purchase, redeem or otherwise acquire shares of its common stock or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock; and
(c) declare or pay cash dividends to its stockholders and purchase, redeem
or otherwise acquire shares of its capital stock or warrants, rights or options
to acquire any such shares for cash (i) in an aggregate amount not to exceed
$150,000,000 for the first four fiscal quarters subsequent to the Closing Date,
and (ii) solely out of 50% of Consolidated Net Income of the Borrower for
fiscal years thereafter, computed on a cumulative consolidated basis, provided,
that, immediately after giving effect to such proposed action, no Default or
Event of Default would exist; and
(d) pay dividends to the extent of any proceeds received by the Borrower
from the issuance of preferred stock.
SECTTON 7.12 Fixed Charge Coverage Ratio. The Borrower shall not permit
its Fixed Charge Coverage Ratio, as determined as of the end of each fiscal
quarter, to be less than 2.5.
SECTION 7.13 Consolidated Net Worth. The Borrower shall not permit its Net
Worth, as determined as of the end of each fiscal quarter, to be less than the
greater of (i) $190,000,000, or (ii) the sum of (x) 75% of the Borrower's Net
Worth as determined by the June 30, 1997 financial statements, plus (y) the
sum of 50% of the Borrower's Consolidated Net Income earned each fiscal quarter
commencing with the fiscal quarter ending September 30, 1997 (provided that if,
for any fiscal quarter, the Borrower's Consolidated Net Income shall be less
than zero, then for purposes of calculating the Borrower's compliance with this
covenant, the Borrower's Consolidated Net Income shall be deemed to be zero for
that fiscal quarter), plus (z) 50% of the net proceeds received from any
unaffiliated third parties from any stock offering of the Borrower.
SECTION 7.14 Leverage Ratio. The Borrower shall not permit its Leverage R;
determined as of the end of each fiscal quarter, to be greater than 3.25.
<PAGE> 63
SECTION 7.15 Change in Business. The Borrower shall not, and shall not
permit any of its Subsidiaries to (a) engage in any material line of business
substantially different from those lines of business carried on by the Borrower
or its Subsidiaries on the date hereof or lines of business incidental thereto,
or (b) other than an Insurance Subsidiary, become subject to any Requirement of
Law that restricts its ability to pay dividends (other than those restrictions
with respect to capital requirements and other similar requirements imposed by
any applicable state on all corporations incorporated in such state) unless,
with respect to a Subsidiary, becoming subject to any such Requirement of Law
could not reasonably be expected to have a Material Adverse Effect.
SECTION 7.16 Change in Structure. Except as expressly permitted under
Section 7.3, the Borrower shall not and shall not permit any of its
Subsidiaries to, make any changes in its equity capital structure (including in
the terms of its outstanding stock), or amend its certificate of incorporation
or by-laws in any material respect unless the effect thereof could not
reasonably be expected to have a Material Adverse Effect.
SECTTON 7.17 Accounting Changes. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, make any material change in
accounting treatment or reporting practices, except as required or permitted by
GAAP, or change the fiscal year of the Borrower or of any of its consolidated
Subsidiaries.
SEC~ON 7.18 Hostile Acquisitions. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to engage or participate in, or pursue
directly or indirectly, directly with the proceeds of any Revolving Loan, any
Acquisition (or any component part of any Acquisition) which receives any
disapproval vote by the board of directors or shareholders of the target
company.
Default":
ARTICLE 8
EVENTS OF DEFAULT
SECTION 8.1 Event of Default. Any of the following shall constitute an "Event
of
(a) Non-Payment. The Borrower fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Revolving Loan, or (ii) within
three (3) days after the same shall become due, any interest, fee or any other
amount payable hereunder or pursuant to any other Revolving Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
Borrower or any of its Subsidiaries made or deemed made herein, in any
Revolving Loan Document, or which is contained in any certificate, document or
financial or other written statement by the Borrower, any of its Subsidiaries,
or their respective Responsible Officers, furnished at any time under this
Agreement, or in or under any Revolving Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
<PAGE> 64
(c) Specific Defaults. The Borrower fails to perform or observe any term,
covenant or agreement contained in (i) Sections 6. l(c) and (d), 6.2, 6.3, 6.4
and 6.10 or Article 7 hereof, or (ii) Sections 6.1(a) and (b) hereof and such
default shall continue unremedied for a period of seven (7) days after the date
due under the applicable section; or
(d) Other Defaults. The Borrower fails to perform or observe any other
term or covenant contained in this Agreement or any Revolving Loan Document,
and such default shall continue unremedied for a period of twenty (20) days
after the earlier of (i) the date upon which a Responsible Officer of the
Borrower knew or should have known of such failure or (ii) the date upon which
written notice thereof is given to the Borrower by the Administrative Agent or
any Lender; or
(e) Cross-Default. The Borrower or any Subsidiary (i) fails to make any
payment in respect of any Indebtedness having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $10,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after any
applicable grace or notice period, if any; or (ii) fails to perform or observe
any other condition or covenant, or any other event shall occur or condition
exist, under any agreement or instrument relating to any such Indebtedness, and
such failure if the effect of such failure, event or condition is to cause, or
to permit the holder or holders or baneficiary or baneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
baneficiary or baneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or
(f) Insolvency: Voluntary Proceedings. The Borrower voluntarily ceases to
conduct its business in the ordinary course or the Borrower or any of its
Subsidiaries (i) generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; (ii) commences any Insolvency
Proceeding with respect to itself; or (iii) takes any action to effectuate or
authorize any of the foregoing, except in the case of (i), (ii) or (iii) where
such Subsidiary is an Immaterial Subsidiary and so long as all events described
in clauses (i) (ii) or (iii) herein related to an Immaterial Subsidiary could
not reasonably be expected to have a Material Adverse Effect; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Borrower or any Subsidiary of the Borrower, or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Borrower's or any of its
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within sixty (60) days
after commencement, filing or levy; (ii) the Borrower or any of its
Subsidiaries admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
Iaw) is ordered in any Insolvency Proceeding; or (iii) the Borrower or any
<PAGE> 65
of its Subsidiaries acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
Property or business, except in the case of (i), (ii) or (iii) where such
Subsidiary is an Immaterial Subsidiary and so long as all events described in
clauses (i) (ii) or (iii) herein related to an Immaterial Subsidiary could not
reasonably be expected to have a Material Adverse Effect; or
(h) ERISA. (i) A member of the Controlled Group shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under a Multiemployer Plan;
(ii) the Borrower or an ERISA Affiliate shall fail to satisfy its contribution
requirements under Section 412(c)(11) ofthe Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) in the case of an ERISA Event
involving the withdrawal from a Plan of a "substantial employer" (as defined in
Section 4001(a)(2) or Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension Liabilities is more than $
10,000,000; (iv) in the case of an ERISA Event involving the complete or
partial withdrawal from a Multiemployer Plan, the withdrawing employer has
incurred a withdrawal liability in an aggregate amount exceeding $10,000,000;
(v) in the case of an ERISA Event not described in clause (iii) or (iv), the
Unfunded Pension Liabilities ofthe relevant Plan or Plans exceed $10,000,000;
(vi) a Plan that is intended to be qualified under Section 401(a) ofthe Code
shall lose its qualification, and the loss can reasonably be expected to impose
on members of the Controlled Group liability (for additional taxes, to Plan
participants, or otherwise) in the aggregate amount of $10,000,000 or more;
(vii) the commencement or increase of contributions to, or the adoption of or
the amendment of a Plan by, a member of the Controlled Group shall result in a
net increase in unfunded liabilities to the Controlled Group in excess of $
10,000,000; (viii) any member of the Controlled Group engages in or otherwise
becomes liable for a non-exempt prohibited transaction and the initial tax or
additional tax under section 4975 of the Code relating thereto might reasonably
be expected to exceed $10,000,000; (ix) a violation of section 404 or 405 of
ERISA or the exclusive benefit rule under section 401(a) of the Code if such
violation might reasonably be expected to expose a member or members of the
Controlled Group to monetary liability in excess of $ 10,000,000; (x) any
member of the Controlled Group is assessed a tax under section 4980B of the
Code in excess of $10,000,000; or (xi) the occurrence of any combination of
events listed in clauses (iii) through (x) that involves a potential liability,
net increase in aggregate Unfunded Pension Liabilities, unfunded liabilities,
or any combination thereof, in excess of $10,000,000; or
(i) Monetary Judgments. One or more judgments, noninterlocutory orders,
decrees or arbitration awards shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate a liability (to the extent not
covered by independent third-party insurance) as to any single or related
series of transactions, incidents or conditions, of $10,000,000 or more, and
the same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of thirty (30) days after the entry thereof; or
(j) Change of Control. There shall occur a Change of Control.
<PAGE> 66
SECTION 8.2 Remedies. If any Event of Default occurs and is continuir
Administrative Agent may, and shall at the request of the Majority Lenders:
(a) declare the Revolving Loan Commitment of each Lender to make Revolving
Loans and the commitment of each Issuing Bank to issue (and the Lenders to
participate therein) Letters of Credit to be terminated, whereupon such
Revolving Loan Commitment and Letter of Credit Commitment shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding Revolving
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Revolving Loan Document to be immediately
due and payable; without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights and rem~ to it
and the Lenders under the Revolving Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsections 8. 1 (f) and (g) above (in the case of clause (i) of paragraph (g)
upon the expiration of the 60-day period mentioned therein), the obligation of
each Lender to make Revolving Loans shall automatically terminate and the
unpaid principal amount of all outstanding Revolving Loans and all interest and
other amounts as aforesaid shall automatically become due and payable without
further act of the Administrative Agent or any Lender.
SECTION 8.3 Rights Not Exclusive. The rights provided for in this
Agreement and other Revolving Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies provided by law
or in equity, or under any other instrument, document or agreement now existing
or hereafter arising.
SECTION 8.4 Cash Collateral for Letters of Credit. If an Event of Default
has occurred and is continuing or this Agreement shall be terminated for any
reason, then the Administrative Agent may demand (which demand shall be deemed
to have been delivered automatically upon any acceleration of the Loans and
other obligations hereunder pursuant to Section 8.2 hereof), and the Borrower
shall thereupon deliver to the Administrative Agent, to be held for the benefit
of the Administrative Agent, the Issuing Bank and the Lenders entitled thereto,
an amount of cash equal to the amount of the Letter of Credit Reserve as
additional collateral security for the Borrower's Obligations in respect of any
outstanding Letters of Credit. The Administrative Agent may at any time apply
any or all of such cash and cash collateral to the payment of any or all of the
Borrower's Obligations in respect of any Letters of Credit, including without
limitation to the payment of any or all of the Borrower's reimbursement
liabilities to the issuers of such Letters of Credit. Pending such application,
the Administrative Agent shall invest the same in an interest bearing account
in the Administrative Agent's name, under which deposits are available for
immediate withdrawal, at such bank or financial institution as the
Administrative Agent may, in its discretion, select, for the benefit of the
Administrative Agent, the Issuing Bank, the Lenders entitled thereto and the
Borrower, it being agreed that all such interest shall be credited to such
<PAGE> 67
account and that, to the extent the balance in the interest bearing account
exceeds the Letter of Credit Reserve, whether as a result of interest earnings
or cancellation or expiration of a Letter of Credit or otherwise, all such
excess shall be promptly paid to the Borrower.
ARTICLE 9
THE AGENTS
SECTION 9.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints, designates and authorizes the Agents to take such action on its
behalf under the provisions of this Agreement and each other Revolving Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Revolving Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Revolving Loan Document, the Agents shall not have
any duties or responsibilities, except those expressly set forth herein, nor
shall the Agents have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Revolving Loan Document or otherwise exist against the Agents. The Syndication
Agent has no rights, duties, obligations or liabilities under this Agreement.
SECTION 9.2 Delegation of Duties. The Agents may execute any oftheir
duties under this Agreement or any other Revolving Loan Document by or through
agents, employees or attorneysin-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. No Agent shall be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
SECTION 9.3 Liability of Agents. No Agent-Related Person shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Revolving Loan Document (except for
its own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Lenders for any recital, statement, representation or
warranty made by the Borrower or any Subsidiary or Affiliate of the Borrower,
or any officer thereof, contained in this Agreement or in any other Revolving
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents under or in
connection with, this Agreement or any other Revolving Loan Document, or for
the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Revolving Loan
Document, or for any failure of the Borrower or any other party to any
Revolving Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Revolving Loan
Document, or to inspect the Properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
<PAGE> 68
SECTION 9.4 Reliance by Agents. The Agents shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected by the
Agents. The Agents shall be fully just)fied in failing or refusing to take any
action under this Agreement or any other Revolving Loan Document unless the
applicable Agent shall first receive such advice or concurrence of the Lenders
(or, where an action or waiver need only be approved by the Majority Lenders,
by the Majority Lenders) as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agents shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Revolving Loan Document in accordance with a request or consent of the
Lenders (or, where an action or waiver need only be approved by the Majority
Lenders, by the Majority Lenders) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
SECTION 9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be requested by the Majority Lenders in accordance
with Article 8; provided, however. that unless and until the Administrative
Agent shall have received any such request, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
SECTION 9.6 Credit Decision. Each Lender expressly acknowledges that no
AgentRelated Person has made any representation or warranty to it and that no
act by the Agents hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries shall be deemed to constitute any representation
or warranty by the Agents to any Lender. Each Lender represents to the Agents
that it has, independently and without reliance upon the Agents and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agents and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis,
<PAGE> 69
appraisals and decisions in taking or not taking action under this Agreement
and the other Revolving Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower which may
come into the possession of the Administrative Agent.
SECTION 9.7 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, upon demand therefor the Lenders shall indemnify
the Agents (to the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), ratably from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time following the repayment
of the Revolving Loans and the termination or resignation of the Agents) be
imposed on, incurred by or asserted against the Agents in any way relating to
or arising out of this Agreement or any document contemplated by or referred to
herein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agents under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment to an Agent
of any portion of such liabilities, obligations, Iosses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the applicable Agent's gross negligence or willful misconduct. In
addition, each Lender shall reimburse the Agents upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agents in connection with the preparation, execution, delivery,
administration, mod)fication, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Revolving Loan
Document, or any document contemplated by or referred to herein to the extent
that the Agents are not reimbursed for such expenses by or on behalf of the
Borrower. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section 9.7, together with all related costs
and expenses (including Attorney Costs). The obligation of the Lenders in this
Section 9.7 shall survive the payment of all Obligations hereunder.
SECTION 9.8 Administrative Agent in Individual Capacity. LaSalle, First
Chicago and their Affiliates may make Revolving Loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower and its Subsidiaries and Affiliates as
<PAGE> 70
though LaSalle or First Chicago, as the case may be, were not Agents hereunder
and without notice to or consent of the Lenders. With respect to their
Revolving Loans, LaSalle and First Chicago's Affiliate, The First National Bank
of Chicago, shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not Administrative
Agent, and the terms "Lender" and "Lenders" shall include LaSalle and First
Chicago's Affiliate, The First National Bank of Chicago, in their individual
capacities.
SECTION 9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon thirty (30) days' prior notice to the
Lenders. If the Administrative Agent shall resign as Administrative Agent under
this Agreement, the successor Administrative Agent shall be First Chicago,
which shall thereupon be both Administrative Agent and Syndication Agent. If
First Chicago declines to be the Administrative Agent, the Majority Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders. If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may thereupon appoint a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor
administrative agent and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article 9 and Sections 9.4 and 9.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is thirty
(30) days following a retiring Administrative Agent's notice of resignation
(or, if later, ten (10) days after the date upon which the Administrative Agent
designates a successor administrative agent), the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Majority Lenders appoint a successor
administrative agent as provided for above.
ARTICLE 10
MISCELLANEOUS
SECTION 10. 1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Revolving Loan Document, and no
consent with respect to any departure by the Borrower therefrom, shall be
effective unless the same shall be in writing and signed by the Majority
Lenders, the Borrower and acknowledged by the Administrative Agent, and then
such waiver shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders,
the Borrower and acknowledged by the Administrative Agent, do any of the
following:
<PAGE> 71
(a) increase or extend the Revolving Loan Commitment or the Letter of Crec
Commitment of any Lender (or reinstate any Revolving Loan Commitment or Letter
of Credit Commitment terminated pursuant to subsection 8.2(a)) or subject any
Lender to any additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder
or under any Revolving Loan Document;
action by all Lenders;
(c) reduce the principal of, or the rate of interest specified herein on
any Revolving Loan, or of any fees or other amounts payable hereunder or under
any Revolving Loan Document;
(d) change the percentage of the Revolving Loan Commitment or Letter of
Credit Commitment or of the aggregate unpaid principal amount of the Revolving
Loans which shall be required for the Lenders or any of them to take any action
hereunder; or
(e) amend this Section 10.1 or any provision providing for consent or other
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Majority
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Revolving Loan
Document; and provided, further that notwithstanding anything to the contrary
contained herein or otherwise, the Administrative Agent and the Borrower may
enter into one or more amendments which have the effect of increasing the
Aggregate Revolving Loan Commitment to an amount not to exceed $350,000,000.
SECTION 10.2 Notices.
(a) All notices, requests and other communications provided for hereunder
shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any matter transmitted by
the Borrower by facsimile (i) shall be promptly confirmed by a telephone call
to the recipient at the number specified on the applicable signature page
hereof, and (ii) shall be followed promptly by a hard copy original thereof)
and mailed by certified or registered mail, faxed or delivered, to the address
or facsimile number specified for notices on the applicable signature page
hereof; or, if directed to the Borrower or the Agents, to such other address as
shall be designated by such party in a written notice to each of the other
parties hereto given in compliance herewith, or, if directed to any other party
hereto, to such other address as shall be designated by such party in a written
notice given in compliance herewith to the Borrower and the Agents.
(b) All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered for overnight
(next day) delivery, or transmitted by facsimile machine, respectively, or if
mailed, upon the third Business Day after
<PAGE> 72
the date deposited into the U.S. Mail, certified or registered, or if
delivered, upon delivery; except that notices pursuant to Article 2 or 9 shall
not be effective until actually received by the Administrative Agent.
(c) The Borrower acknowledges and agrees that any agreement of the
Administrative Agent and the Lenders in Article 2 hereof to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Borrower. The Administrative Agent and the Lenders shall be
entitled to rely on the authority of any Person purporting to be a Person
authorized by the Borrower to give such notice and the Administrative Agent and
the Lenders shall not have any liability to the Borrower or other Person on
account of any action taken or not taken by the Administrative Agent or the
Lenders in reliance upon such telephonic or facsimile notice. The obligation of
the Borrower to repay the Revolving Loans shall not be affected in any way or
to any extent by any failure by the Administrative Agent and the Lenders to
receive written confirrnation of any telephonic or facsimile notice or the
receipt by the Administrative Agent and the Lenders of a confirmation which is
at variance with the terms understood by the Administrative Agent and the
Lenders to be contained in the telephonic or facsimile notice.
SECTION 10.3 No Waiver: Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
SECTION 10.4 Costs and Expenses. Whether or not the transactions
contemplated shall be consummated, the Borrower shall pay or reimburse:
(a) LaSalle (including in its capacity as Administrative Agent) within
five (5) Business Days after demand for all costs and expenses (including
without limitation the reasonable fees and expenses of counsel) incurred by
LaSalle (including in its capacity as Administrative Agent) in connection with
the development, preparation, delivery and execution of, and any amendment,
supplement, waiver or mod)fication to (in each case, whether or not
consummated), this Agreement, any Revolving Loan Document and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including the reasonable
Attorney Costs incurred by LaSalle (including in its capacity as Administrative
Agent) with respect thereto; provided, that the fees and expenses of counsel in
connection with the initial preparation, delivery, execution and consummation
of this Agreement shall not exceed $50,000;
(b) each Lender and the Agents within five (5) Business Days after demand
for all costs and expenses (including without limitation the reasonable fees
and expenses of counsel) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies during the
existence of an Event of Default (including in connection with any "workout"
or restructuring regarding the Revolving Loans, and including in any Insolvency
<PAGE> 73
Proceeding or appellate proceeding) under this Agreement, any other Revolving
Loan Document, and any such other documents, including Attorney Costs, incurred
by the Agents and/or any
Lender; and
(c) LaSalle (including in its capacity as Administrative Agent) within
five (5) Business Days after demand for all appraisal, audit, environmental
inspection and review, search and filing costs, fees and expenses (including,
without limitation, the reasonable fees and expenses of counsel), incurred or
sustained by LaSalle (including in its capacity as Administrative Agent) in
connection with the matters referred to under subsections (a) and (b) of this
Section 10.4.
SECTION 10.5 Indemnitv. Whether or not the transactions contemplated
hereby shall be consummated, the Borrower shall indemnify, defend and hold
harmless each Lender, the Agents and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
or disbursements (including reasonable Attorney Costs):
(a) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Revolving Loan Documents, or the transactions contemplated hereby and
thereby, and with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to this
Agreement or the Revolving Loans or the use of the proceeds thereof, whether or
not any Indemnified Person is a party thereto; and
(b) which may be incurred by or asserted against such Indemnified Person
in connection with or arising out of any pending or threatened investigation,
litigation or proceeding, or any action taken by any Person, with respect to
any Environmental Claim arising out of or related to any Property of the
Borrower or its Subsidiaries;
(all the foregoing, collectively, the "Indemnified Liabilities"); provided,
that the Borrower shall have no obligation hereunder to any Indemnified Person
with respect to Indemnified Liabilities arising from the gross negligence or
willful misconduct of such Indemnified Person.
The obligations in this Section 10.5 shall survive payment of all other
Obligations. At the election of any Indemnified Person, the Borrower shall
defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section 10.5 shall be
paid within thirty (30) days after demand.
<PAGE> 74
SECTION 10.6 Marshalling: Pavments Set Aside. Neither the Administrative
Agent nor any Lender shall be under any obligation to marshal! any assets in
favor of the Borrower or any other Person or against or in payment of any or
all of the Obligations. To the extent that the Borrower makes a payment or
payments to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercise its rights of set-off, and such payment or payments or
the proceeds of such act-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent in its
discretion) to be repaid to a trustee, receiver or any other party in
connection with any Insolvency Proceeding, or otherwise, then.
(a) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such act-off had not
occurred; and
(b) each Lender severally agrees to pay to the Administrative Agent upon
demand its ratable share of the total amount so recovered from or repaid by the
Administrative Agent.
SECTION 10.7 Successors and Assigns. The provisions ofthis Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that any assignment by any Lender
shall be subject to the provisions of Section 10.8 hereof, and provided further
that the Borrower may not assign or transfer any of its rights or obligations
under this Agreement.
SECTION 10.8 Assi~nents. Participations. etc.
(a) Any Lender may, subject to the consent of the Borrower and with the
written consent of the Administrative Agent and the Issuing Bank (in any case,
which consent shall not be unreasonably withheld), at any time sell or assign
and delegate to one or more Eligible Assignees (provided that no consent of the
Borrower or Administrative Agent shall be required in connection with any
assignment and delegation by a Lender to an Eligible Assignee that is an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all,
of the Revolving Loans, the Revolving Loan Commitment, the Letter of Credit
Commitment, the rights with respect to Letters of Credit and the other rights
and obligations of such Lender hereunder, in a minimum amount of $10,000,000;
provided however, that the Borrower and the Administrative Agent may continue
to deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until:
(i) written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have been
given to the Borrower and the Administrative Agent by such Lender and the
Assignee;
<PAGE> 75
(ii) such Lender and its Assignee shall have delivered to the Borrower and
the Administrative Agent an Assignment and Acceptance in the form of Exhibit F
(an "Assignment and Acceptance"); and
(iii) the assignor Lender or the Assignee has paid to the Administrative
Agent a processing fee in the amount of $3,500; provided, however that this
section shall not be applicable to an assignment from a Lender to an Affiliate
of the assigning Lender.
(b) From and after the date that the Administrative Agent not)fies the
assign~ Lender that the Administrative Agent has received and provided its
consent with respect to an executed Assignment and Acceptance and payment of
the above-referenced processing fee:
(i) the Assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under this Agreement and the other Revolving Loan Documents; and
(ii) the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Revolving Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Revolving Loan Documents; provided.
however, that any assignor Lender shall not be released from any claims of any
kind arising from any breach or default under the Revolving Loan Documents by
the assignor Lender which occurred prior to the date of the Administrative
Agent's consent to the assignment.
(c) Immediately upon the making of the processing fee payment to the
Administrative Agent in respect of the Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Revolving Loan Commitment, and Letter of Credit Commitment arising
therefrom. The Revolving Loan Commitment and Letter of Credit Commitment
allocated to each Assignee shall reduce such Revolving Loan Commitment and
Letter of Credit Commitment of the assigning Lender Eg tanto.
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant") participating
interests in any Revolving Loans, the Revolving Loan Commitment and Letter of
Credit Commitment of that Lender and the other interests of that Lender (the
"Originating Lender") hereunder and under the other Revolving Loan Documents;
provided, however, that:
(i) remain unchanged; the Originating Lender's obligations under this
Agreement shall
(ii) the Originating Lender shall remain solely respc performance of such
obligations;
<PAGE> 76
(iii) the Borrower and the Administrative Agent shall continue to d solely
and directly with the Originating Lender in connection with the Originating
Lender's rights and obligations under this Agreement and the other Revolving
Loan Documents; and
(iv) no Lender shall transfer or grant any participating interest except
under which the Participant shall only have voting rights with respect to
approving (1) a decrease in the Facility Fee or the Applicable Margin, (2) an
increase in the Revolving Loan Commitment and Letta of Credit Commitment only
if the Participant's Revolving Loan Commitment and Letter of Credit Commitment
are increased, (3) an extension of the Termination Date, or (4) the waiver of
defaults with respect to this Agreement or any other Revolving Loan Document,
except to the extent such amendment, consent or waiver would require unanimous
consent of the Lenders as described in the first proviso to Section 10.1.
In the case of any such participation, and except with respect to the voting
rights in sub-paragraph (iv) above, the Participant shall not have any rights
under this Agreement, or any of the other Revolving Loan Documents, and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation.
(e) Notwithstanding any other provision contained in this Agreement or any
other Revolving Loan Document to the contrary, any Lender may assign all or any
portion of the Revolving Loans held by it to any Federal Reserve Lender or the
United States Treasury as collateral security pursuant to Regulation A of the
Federal Reserve Board and any Operating Circular issued by such Federal Reserve
Lender, provided that any payment in respect of such assigned Revolving Loans
made by the Borrower to or for the account of the assigning or pledging Lender
in accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect to such assigned Revolving Loans to the extent
of such payment. No such assignment shall release the assigning Lender from its
obligations hereunder.
SECTION 10.9 Confidentiality. Each of the Agents, the Lenders and their
Affiliates shall maintain in confidence in accordance with its customary
procedures for handling confidential information, all written information that
Borrower or any of its Subsidiaries, or any of their authorized
representatives, furnishes to the Agents or any Lender and its Affiliates
("Confidential Information") other than any such Confidential Information that
becomes generally available to the public other than as a result of a breach by
the Agents or any Lender of its obligations hereunder or that is or becomes
available to the Agents or such Lender from a source other than Borrower or any
of its Subsidiaries, or any of their authorized representatives, and that is
not, to the actual knowledge of the recipient thereof, subject to obligations
of confidentiality with respect thereto; provided, however, that the Agents and
each Lender shall in any event have the right to deliver copies of any such
documents, and to disclose any such information, to:
(a) its directors, officers, trustees, employees, agents, professional
consultants;
(b) any otha Lender and any successor Agents;
<PAGE> 77
(c) any Person to which such Lender offers to sell any Revolving Loan or
any part thereof or interest or participation therein (provided such Person
agrees to keep such information confidential on the terms set forth in this
Section 10.9);
(d) any federal or state regulatory authority or examiner, or any insure'
industry association, including, without limitation, the National Association
of Insurance Commissioners, regulating or having }urisdiction over the Agents
or such Lender; and
(e) any other Person to which such delivery or disclosure may be necessary
or appropriate (i) in compliance with any applicable law, rule, regulation or
order, (ii) in response to any subpoena or other legal process or informal
investigative demand, (iii) in connection with any litigation to which the
Agents or such Lender is a party, or (iv) in connection with the enforcement of
the rights and remedies of the Agents or the Lenders under this Agreement and
the other Revolving Loan Documents at any time when an Event of Default shall
have occurred and be continuing.
SECTION 10.10 Set-off. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default shall have occurred and be
continuing, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off end apply any and
all deposits (general or special, time or demand, provisional or final) and
other Property at any time held by, including any indebtedness at any time
owing to, such Lender to or for the credit or the account of the Borrower
against any and all Obligations owing to such Lender, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such
Lender shall have made demand under this Agreement or any Revolving Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such act-off end application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 10.10 are
in addition to the other rights and remedies (including other rights of
set-off) which the Lender may have, and subject to each Lender's obligations
under Section 2.13 hereof.
SECTION 10.11 Notification of Addresses Lending Offices. Etc. Each Lender
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Lender should be directed, of addresses of its Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
SECTION 10.12 Counterparts. This Agreement may be executed by one or more
ofthe parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with each of the Borrower and the Administrative Agent.
SECTION 10.13 Severabilitv. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or
<PAGE> 78
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
SECTION 10.14 Captions. The captions and headings ofthis Agreement are fo~
convenience of reference only and shall not affect the interpretation of this
Agreement.
SECTION 10.15 Independence of Provisions. The parties acknowledge that
this Agreement and other Revolving Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
SECTION 10.16 Interpretation. This Agreement is the result of negotiations
among and has been reviewed by counsel to the Administrative Agent, the
Borrower and other parties, and is the product of all parties hereto.
Accordingly, this Agreement and the other Revolving Loan Documents shall not be
construed against the Lenders or the Administrative Agent merely because of the
Administrative Agent's or Lenders' involvement in the preparation of such
documents and agreements.
SEC~ON 10.17 No Third Parties genefited. This Agreement is made and
entered into for the sole protection and legal benefit of the Borrower, the
Lenders and the Agents, and their permitted successors and assigns, and no
other Person shall be a direct or indirect legal baneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Revolving Loan Documents. Neither the Agents nor any Lender
shall have any obligation arising under the Revolving Loan Documents to any
Person not a party to this Agreement or other Revolving Loan Documents.
SECTION 10. 18 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AMD THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED 1N
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND
THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY
OTHER REVOLVING LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
lLLlNOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF lLLlNOIS, EASTERN
DIVISION, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
BORROWER, THE AGENTS AND THE LENDERS CONSENTS, FOR ITSELF AND 1N RESPECT OF ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWER, THE AGENTS AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION,
lNCLUDlNG ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS. WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING 1N SUCH
<PAGE> 79
JURISDICTION 1N RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
BORROWER, THE AGENTS AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY ILLINOIS LAW.
SECTION 10. 19 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE
AGENTS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER REVOLVING LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE
AGENTS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR 1N PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER REVOLVING LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER REVOLVING LOAN DOCUMENTS.
SECTION 10.20 Entire Agreement. This Agreement, together with the other
Revolving Loan Documents, embodies the entire agreement and understanding among
the Borrower, the Lenders and the Agents, and supersedes all prior or
contemporaneous Agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof, except for the fee
letters referenced in subsection 2.9(a), and any prior arrangements made with
respect to the payment by the Borrower of (or any indemnification for) any
fees, costs or expenses payable to or incurred (or to be incurred) by or on
behalf of the Administrative Agent or the Lenders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
dul, executed and delivered by their duly authorized officers as of the day and
year first above written.
HEALTHCARE COMPARE CORP.
By: :~ | ~ -\~
. ..~
Title: yi e President Finance & CFO
Address for notices:
3200 Highland Avenue
<PAGE> 80
Downers Grove, [L 60615
Attn: Joseph Whitters
Facsimile: (630)719-0093
Tel: (630)241-7S10
LASALLE NATIONAL BANK, as Administrative Agent
Address for Payments, Notices of Borrowing, Notices of Continuation/Conversion:
135 South LaSalle Street
Chicago, IL 60603
Attn: Administrative Services
Karen Daly
Facsimile: (312) 904-2081
Tel: (312) 904 1418
FIRST CHICAGO CAPITAL MARKETS, INC.. as Syndication Agent
By: Title:
Address for notices:
One First National Plaza
Chicago, IL 60607
Attn: Peter Bartol
Facsimile: (312)732-2740
Tel: (312)732-7455
IN WITNESS WHEREOF, the parties hereto have caused this A~eement to be
duly executed and delivered by their duly authonzed off~cers as of the day and
year first above written.
HEALTHCARE COMPARE CORP.
By:
Title: Vice President Finance & CFO
Address for notices:
3200 Highland Avenue
Downers Grove, L 60615
Attn: Joseph Whitters
Facsimile: (630)719-0093
Tel: (630)241-7510
<PAGE> 81
LASALLE ~NAL BANK, as Adminis,~atiy~ A~ent
>~/~
By: ~_ l
Title: 7 V /z=~,O
Address for Payments, Notices of Borrowing, Notices of Continuation/Conversion:
135 South LaSalle Street
Chicago, IL 60603
Attn: Administrative Services
Karen Daly
Facsimile: (312) 904-2081
Tel: (312) 904 1418
FIRST CHICAGO CAPITAL MARKETS, INC., as Syndication Agent
By: Title:
Address for notices:
One First National Plaza
Chicago, IL 60607
Attn: Peter Bartol
Facsimile: (312)732-2740
Tel: (312)732-7455
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
HEALTHCARE COMPARE CORP.
By:
Title: Vice President Finance & CFO
Address for notices:
3200 Highland Avenue
Downers Grove, IL 60615
Attn: Joseph Whitters
Facsimile: (630) 719-0093
Tel: (630) 241 -7510
LASALLE NATIONAL BANK, as Administrative Agent
<PAGE> 82
Title:
Address for Payments, Notices of Borrowing, Notices of Continuation/Conversion:
135 South LaSalle Street
Chicago, IL 60603
Attn: Administrative Services
Karen Daly
Facsimile: (312) 904-2081
Tel: (312)904 1418
FIRST CHICAGO CAPITAL MARKETS, INC., as Syndication Agent
By: p.4 ~ {~c-:
Title: ~G~c~.~5 ~ ). ~W
Address for notices:
One First National Plaza
Chicago, IL 60607
Attn: Peter Bartol
Facsimile: (312) 732-2740
Tel: (312)732-7455
LASALLE N/I9NAL BANK as Lender and Issuing Bank
By: (:':
Title: ~ / V /~/767
Address for notices:
135 South LaSalle Street
Chicago, IL 60603
Attn: Douglas. J. Lovette
Facsimile: (312) 606-8423
Tel: (312)904-8008
THE FIRST NATIONAL BANK
OF CHICAGO, as Lender
By: Title:
Address for notices:
One First National Plaza, Suite 0091
Chicago, IL 60607
<PAGE> 83
Attn: Jay Sepanski
Facsimile: (312) 732-2016
Tel: (312)732-6726
Lending Off~ce:
135 South LaSalle Street
Chicago, IL 60603
Attn: Douglas J. Lovette
Facsimile: (312)606-8423
Tel: (312)904-8008
Lending Office:
One First National Plaza, Suite 0091
Chicago, IL 60607
Attn: Ken Fecko
Facsimile: (312)732-2016
Tel: (312)7324616
LASALLE NATIONAL BANK, as Lender and Issuing Bank
By: Title:
Address for notices:
135 South LaSalle Street
Chicago, IL 60603
Attn: Douglas. J. Lovette
Facsimile: (312) 606-8423
Tel: (312)904-8008
THE F~ATIOy'AL BANK
OF C HICA(;b, as,~e~er
By:_ \/~Y ~K
Title: //~TANTVICE PRESIDENT
~ V
Address for notices:
One First National Plaza, Suite 0091
Chicago, IL 60607
Attn: Jay Sepanski
Facsimile: (312) 732-2016
Tel: (312) 732-6726
<PAGE> 84
Lending Office:
135 South LaSalle Street
Chicago, L 60603
Attn: Douglas J. Lovette
Facsimile: (312)606-8423
Tel: (312)904-8008
Lending Office:
One First National Plaza, Suite 0091
Chicago, IL 60607
Attn: Ken Fecko
Facsimile: (312)732-2016
Tel: (312)732-4616
THE INDUSTRIAL BANK OF
JAPAN, LIMITED, CHICAGO BR~.NCH, as Lender
By: 1 \)QJJ~U~d
Title: Senior Vice Presid~l[pt and
Deputy General Manager
Address for notices:
227 West Monroe Street
Suite 2600
Chicago, IL 60606
Attn: Margie Smith
Facsimile: (312) 855-8200
Tel: (312) 855-8447
CIBC, INC., as Lender
- -
T~tle:
Address for notices:
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attn: Sylvia Appleby
Facsimile: (770) 319-4950
<PAGE> 85
Tel: (770) 319-4849
Lending Off~ce:
227 West Monroe Street
Suite 2600
Chicago, L 60606
Attn: Enrique Bacalao
Facsimile: (312) 855-8491
Tel: (312) 855-8200
Lending Office:
425 Lexington Avenue
8th Floor
New York, NY 10017
Attn: Tim Doyle
Facsimile: (212) 856-3558
Tel: (212) 856-3650
THE INDUSTR]AL BANK OF
JAPAN, LIMITED, CHICAGO BR\NCH, as Lender
By:Title:
Address for notices:
227 West Monroe Street
Suite 2600
Chicago, IL 60606
Attn: Margie Smith
Facsimile: (312) 855-8200
Tel: (312) 855-8447
CIBC, INC., as Lender
Lending Office:
227 West Monroe Street
Suite 2600
Chicago, IL 60606
Attn: Enrique Bacalao
Facsimile: (312) 855-8491
Tel: (312) 855-8200
By: Ci6/~\L.2
<PAGE> 86
Title:/ TIIUO~r
~NAG, ~D GUNDy
Address for notices: P.'ASiGENT Lending Office:
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attn: Sylvia Appleby
Facsimile: (770) 319-4950
Tel: (770) 319-4849
425 Lexington Avenue
8th Floor
New York, NY 10017
Attn: Tim Doyle
Facsimile: (212) 856-3558
Tel: (212) 856-3650
UNION BANK OF CALIFORNIA, N.A., as Lender
~c~~ ~
By: PATRICIA A. SAMS~N
Title: Aeeistant Vice Precitlpnt
Address for notices:
445 South Figueroa Street
16th Floor
Los Angeles. CA 90071
Attn: Heather Mo
Facsimile: (213) 236-7636
Tel: (213) 236-4065
BANQUE NATIONALE DE PARIS
By: Title:
Address for notices:
209 South LaSalle Street
5th Floor
Chicago, [L 60604
Attn: Stephen Christie
<PAGE> 87
Facsimile: (312) 977-1380
Tel: (3 l2) 977-2250
THE BANK OF NEW YORK, as Lender
By: Title:
Address for notices:
One Wall Street
19th Floor
New York, NY 10286
Central Division
Attn: Meena Bolli
Facsimile: (212) 635-7923/24
Tel: (212) 635-8216
Lending Office:
445 South Figueroa Street
16th Floor
Los Angeles, CA 90071
Attn: Patricia Samson
Facsimile: (213) 236-7814
Tel: (213) 236-7754
Lending Office:
209 South LaSalle Street
5th Floor
Chicago, [L 60604
Attn: Christine Howatt
Facsimile: (312) 977-1380
Tel: (312) 977-1383
Lending Office:
One Wall Street
19th Floor
New York, NY 10286
Central Division
Attn: John Lokay
Facsimile: (212) 635-1208/09
Tel: (212) 635-1172
UNION BANK OF CALIFORNIA, N.A., as Lender
<PAGE> 88
Bv:
Title:
Address for notices:
445 South Figueroa Street
16th Floor
Los Angeles, CA 90071
Attn: Heather Mo
Facsimile: (2133 236-7636
Tel: (213) 236~065
BANQUE NATIONALE DE PARIS
Lending Off~ce:
445 South Figueroa Street
16th Floor
Los Angeles, CA 90071
Attn: Patricia Samson
Facsimile: (213) 236-7814
Tel: (213) 236-7754
By: Arnaud Collin du Bocage
Title: Executive Vice President and General Manager
Address for notices:
209 South LaSalle Street
5th Floor
Chicago, IL 60604
Attn: Stephen Christie
Facsimile: (312)977-1380
Tel: (312) 977-2250
THE BANK OF NEW YORK, as Lender
By: Title:
Address for notices:
One Wall Street
19th Floor
<PAGE> 89
New York, NY 10286
Central Division
Attn: Meena Bolli
Facsimile: (212) 635-7923/24
Tel: (212) 635-8216
Lending Office:
209 South LaSalle Street
5th Floor
Chicago, L 60604
Attn: Christine Howatt
Facsimile: (312) 977-1380
Tel: (312) 977-1383
Lending Office:
One Wall Street
19th Floor
New York, NY 10286
Central Division
Attn: lohn Lokay
Facsimile: (212) 63S-1208/09
Tel: (212) 635-1172
UNION BANK OF CALIFORNIA, N.A., as Lender
Bv:
Title:_
Address for notice~.
445 South Figueroa Stree.
16th Floor
Los Angeles, CA 90071
Attn: Heather Mo
Facsimile: (213) 236-7636
Tel: (213) 236-4065
BANQUE NATIONALE DE PARIS
By:Title:
Address for notices:
<PAGE> 90
209 South LaSalle Street
5th Floor
Chicago, [L 60604
Attn: Stephen Christie
Facsimile: (312) 977-1380
Tel: (312) 977-2250
THE BANK OF NEW YORK, as Lender
By: qzc~`~ - O,
Title: ~ ~ nuAV lD '/
JOHN ~,. ~v'`~.,~
Addre,\~8ESIDENT'
One Wall Street
19th Floor
New York, NY 10286
Central Division
Attn: Meena Bolli
Facsimile: (212) 635-7923/24
Tel: (212) 635-8216
Lending Officc.
445 South Figueroa Streer
16th Floor
Los Angeles, CA 90071
Attn: Patricia Samson
Facsimile: (213) 236-7814
Tel: (213) 236-7754
Lending Office:
209 South LaSalle Street
5th Floor
Chicago, [L 60604
Attn: Christine Howatt
Facsimile: (312) 977-1380
Tel: (312) 977-1383
Lending Office:
One Wall Street
19th Floor
New York, NY 10286
<PAGE> 91
Central Division
Attn: John Lokay
Facsimile: (212) 635-1208/09
Tel: (212) 635-1172
CREDIT LYONNAIS, NEW YORK BRANCH, as Lender
V;e Pre s ide ~ C
Title:
Address for notices:
1301 Avenue ofthe Americas New York, NY 10019 Attn: Kenia A. Perez Facsimile:
(2 l 2) 261 -3440 Tel: (212) 261-7313
THE NORTHERN TRUST COMPANY, as Lender
By:Title:
Address for notices:
S0 S. LaSalle Street Chicago, IL 60675 Attn: Edie Reed Facsimile: (312)
630-1566 Tel: (312) 444-3352
SUNTRUST BANK,
NASHVILLE, N.A., as Lender
By:Title:
Address for notices:
901 4th Avenue North Nashville, TN 37219 Attn: Leigh Anne Gregory Facsimile:
(615) 7484611 Tel: (615) 748-5461
Lending Office:
1301 Avenue of the Americas
New York, NY 10019
Attn: John C. Oberle
Facsimile: (212) 261 -3440
Tel: (212) 261 -7344
Lending Office:
50 S. LaSalle Street
<PAGE> 92
Chicago, IL 60675
Attn: Ron Mallicoat
Facsimile: (312) 444-7028
Tel: (312) 444-3428
Lending Office:
201 4th Avenue North
Nashville, TN 37219
Attn: Karen Cole Ahern
Facsimile: (615) 748-5161
Tel: (615) 748-5817
CREDIT LYONNAIS, NEW YORK BRANCH, as Lender
By: Title:
Address for notices:
1301 Avenue of the Americas New York, NY 10019 Attn: Kenia A. Perez Facsimile:
(212) 2613440 Tel: (212) 261-7313
THE NORTHERN TRUST COMPANY, as Lender
By: 4~/,~
Title: l/ V~
Address for notices:
50 S. LaSalle Street Chicago, lL 60675 Attn: Edie Reed Facsimile: (312)
630-1566 Tel: (312)4443352
SUNTRUST BANK,
NASHlIILLE, N.A., as Lender
By:
Title :
Address for notices:
201 4th Avenue North Nashville, TN 37219 Attn: Leigh Anne Gregory Facsimile:
(615) 7484611 Tel: (615)748-5461
Lending Off~ce:
<PAGE> 93
1301 Avenue of the Americas
New York, NY 10019
Attn: John C. Oberle
Facsimile: (212) 261 -3440
Tel: (212) 261-7344
Lending Office:
50 S. LaSalle Street
Chicago, L 60675
Attn: Ron Mallicoat
Facsimile: (312)444-7028
Tel: (312)444-3428
Lending Office:
201 4th Avenue North
Nashville, TN 37219
Attn: Karen Cole Ahem
Facsimile: (615) 748-5161
Tel: (615) 748-5817
CREDIT LYONNAIS, NEW YORK BRANCH, as Lender
By:Title:
Address for notices:
1301 Avenue ofthe Americas New York, NY 10019 Attn: Kenia A. Perez Facsimile:
(212) 2613440 Tel: (212) 261 -7313
THE NORTHERN TRUST COMPANY, as Lender
By:Title:
Address for notices:
50 S. LaSalle Street Chicago, lL 60675 Attn: Edie Reed Facsimile: (312)
630-1566 Tel: (312) 4443352
SUNTRUST BANK, NASHVILLE, N.A., as Lender
By: k'~ C~ ~.N
Title: (ir \t P
Address for notices:
<PAGE> 94
201 4th Avenue North Nashville, TN 37219 Attn: Leigh Anne Gregory Facsimile:
(615) 7484611 Tel: (615)748-5461
Lending Off~ce:
1301 Avenue of the Americas
New York, NY 10019
Attn: lohn C. Oberle
Facsimile: (212) 261 -3440
Tel: (212) 261-7344
Lending Office:
50 S. LaSalle Street
Chicago, {L 60675
Attn: Ron Mallicoat
Facsimile: (312) 1~14-7028
Tel: (312) 444-3428
Lending Office:
201 4th Avenue North
Nashville, TN 37219
Attn: Karen Cole Ahern
Facsimile: (615) 748-5161
Tel: (615) 748-5817
HARRIS TRUST & SAVINGS BANK, as Lender
By: <
Title: S,-) y'
Address for notices:
111 West Monroe Street
Chicago, IL 60603
Attn: Julia Rogers
Facsimile: (312) 461 -7365
Tel: (312) 461-2106
BANQUE PARIBAS, as Lender
By:Title:
Address for notices:
<PAGE> 95
227 West Monroe
Suite 3300
Chicago, [L 60606
Attn: Barbara Lopez
Facsimile: (312) 853-3087
Tel: (312)6032
NATIONSBANK OF TEXAS, N.A., as Lender
Title: -
Address for notices:
901 Main Street
Dallas, TX 75202
TX1492-14-05
Attn: Chris Bertel
Facsimile: (214) 508-0944
Tel: (214) 508-2354
Lending Office:
111 West Monroe Street
Chicago, IL 60603
Attn: Christopher S. Randall
Facsimile: (312) 461-7365
Tel: (312)461-5068
Lending Office:
787 Seventh Avenue
New York, NY 10019
Attn: Russell Pomerantz
Facsimile: (212) 841-2292
Tel: (212) 841-2S61
Lending Office:
444 S. Flower Street
Suite 4100
Los Angeles, CA 90071
Attn: Elizabeth Gould
Facsimile: (213) 624-5815
Tel: (213) 2364931
<PAGE> 96
HARRIS TRUST & SAVINGS BANK, as Lender
By:Title:
Address for notices:
111 West Monroe Street
Chicago, IL 60603
Attn: Julia Rogers
Facsimile: (312)461-7365
Tel: (312) 461-2106
BANQUE PARIBAS, as Lender
By: ~ i,~)
Title: RUSSELL A. POMER
VICE PRESIDENT
Address for notices:
227 West Monroe
Suite 3300
Chicago, lL 60606
Attn: Barbara Lopez
Facsimile: (312) 853-3087
Tel: (312) 6032
NATIONSBANK OF TEXAS, N.A., as Lender
By:Title:
Address for notices:
901 Main Street
Dallas, TX 75202
TX1492-14-05
Attn: Chris Bertel
Facsimile: (214) 508-0944
Tel: (214) 508-2354
Lending Office:
111 West Monroe Street
Chicago, L 60603
Attn: Christopher S. Randall
Facsimile: (312)461-7365
<PAGE> 97
Tel: (312) 461 -5068
c~
D - id R Idh,
_. _
WRiWI
Lending Office:
787 Seventh Avenue
New York, NY 10019
Attn: Russell Pomerantz
Facsimile: (212) 841-2292
Tel: (212) 841-2561
Lending Office:
444 S. Flower Street
Suite 4100
Los Angeles, CA 90071
Attn: Elizabeth Gould
Facsimile: (213) 624-5815
Tel: (213) 2364931
HARRIS TRUST & SAVINGS BANK, as Lender
By:Title:
Address fUr notices:
111 West Monroe Street
Chicago, IL 60603
Attn: Julia Rogers
Facsimile: (312) 461-7365
Tel: (312) 461-2106
BANQUE PARIBAS, as Lender
Title : -
Address for notices:
227 West Monroe
<PAGE> 98
Suite 3300
Chicago, IL 60606
Attn: Barbara Lopez
Facsimile: (312) 853-3087
Tel: (312) 6032
NATIONSBANK OF TEXAS, N.A., as Lender
By: i,~ ~& Y. ~c~d
Title: ~,'r ~ ~e5! d~:t
Address for notices:
901 Main Street
Dallas, TX 75202
TX1492-14-05
Attn: Chris Bertel
Facsimile: (214) 508-0944
Tel: (214) 508-2354
Lending Office:
111 West Monroe Street
Chicago, IL 60603
Attn: Christopher S. Randall
Facsimile: (312) 461 -7365
Tel: (312)461-5068
Lending Office:
787 Seventh Avenue
New York, NY 10019
Attn: Russell Pomerantz
Facsimile: (212) 841-2292
Tel: (212) 841-2561
Lending Office:
14q S. Flower Street
Suite 4100
Los Angeles, CA 90071
Attn: Elizabeth Gould
Facsimile: (213) 624-5815
Tel: (213) 2364931
E.~IT .\
<PAGE> 99
NOTICE OF BORROWIN'G
TO: LaSalle National Bank
135 South LaSalle Street
Chicago, ~ 60603
Attention:
Gentlemen:
HealthCare COMPARE Corp. ("HCC") hereby irrevocably gives notice pursuant
to Section 2.4 of the Credit Agreement (the "Credit Agreement"), dated as of
July ~ 1997 by and among HealthCare CO~ARE Corp., LaSalle National Bank, as
Administrative ABent and Lender, First Chicago Capital Markets, Inc., as
Syndication Agent, and the otha Financial Institutions party thereto that HCC
haeby requests a Borrowing under the Credit Agreement and, in that connection,
sets forth below the information relating to such Borrowing as required by the
Credit Agreement.
A. The Business Day of the proposed Borrowing is (the "Borrowing Date")
B. The amount o. the Borrowing, type of Borrowing (Base Rate or LIBOR
Rate), and the initial Interest Period applicable to any LIBOR Rate is as
follows:
Amount of Borro~vins Tvee of Loan Interest Period (LIBOR)
C. You are hereby authorized to deposit the proceeds of such Borrowing
into our account described below:
[Bankl, [Account Numberl, [Reference!
As of the date hereof
(a) Representations and Warranties. The representations and warranties set
forth in Article V of the Credit Agreement are true and correct in all material
respects.
(b) Events of Default. No Default or Event of Default under the Credit
Agreement, or any event which, with the passage of time or the giving of notice
or both. would constitute, mature into, or become an Event of Defauit under the
Credit Agreement, shall have occurred and be continuing or shall result from
the Borrowing requested hereunder.
(c) Maximum Interest Periods. After including the loterest Periods
requested in connection with this Borrowing, there are no more than ten ( 10)
Interest Periods in effect under the Credit Agreement.
<PAGE> 100
Unless otherwise indicated, capitalized terms used in this Borrowing
Notice have the same meaning as defined in the Credit Agreement.
Dated:,
HEALTlICARE COMPARE CORP.
By Titb:
An Authorized Officer
EXHIBIT B
NOTICE OF CONTI~rAT10N'/CON\TRSION
TO LaSalle National Bank
135 South LaSalle Street
Chicago, IL 60603
Attention:
Gentlemen:
HealthCare COMPARE Corp. ("HCC") hereby irrevocably gives notice pursuant
to Section 2.5 of the Credit Agreement (the "Credit Agreement"), dated as of
July ~ 1997 by and among HealthCare COMPARE Corp., LaSalle National Bank, as
Administrative Agent and Lender, First Chicago Capital Markets, Inc., as
Syndication Agent, and the other Financial Institutions party thereto that HCC
hereby requests a continuation/conversion of an existing Borrowing under the
Credit Agreement and, in that coMection, sets forth below the information
relating to such continuation or conversion as required by the Credit
Agreement.
A. The Business Day of the proposed continuation or conversion is (the
"Continuation or Conversion Date").
B. The aggregate amount of the existing Borrowing to be converted or
continued, the type of continued or converted Borrowing (Base Rate or LIBOR
Rate), and the Interest Period applicable to any continued or converted LIBOR
Rate Loan is as follows:
Amount of Borrowing to be continued: S
Increase (Decrease) in amount of Borrowing
Amount of Borrowing to be converted: .............
New LIBOR Rate Loan total amount ..........
<PAGE> 101
Interest Period for LIBOR Rate Loan ....
As of the date hereof
(a) Events of Default. No Default or Event of Default under the Credit
.~greement, or any event which, with the passage of time or the giving of
notice or both, would constitute, mature into, or become an Event of Default
under the Credit Agreement, shall have occurred and be continuing or shall
result from the Borrowing requested hereunder.
(b) Maximum Interest Periods. ARer including the Imerest Periods requested
in coMection with this continuation or conversion, there are no more than ten (
10) Interest Periods in effect under the Credit Agreement.
Unless otherwise indicated, capitalized terms used in this Notice of
Continuation/Conversion have the same meaning as defined in the Credit
Agreement.
Dated:
HEALTHCARE COMPARE CORP.
By: Title:
An Authorized Officer
REVOLVING NOTE
Chicago, minois luly 1, 1997
For value received, HealthCare COMPARE Corp., a D,elaware co~poration (the
"Borro~ver"), promises to pay to the order of LaSalle National Bank, as
Atministrative Agent for the benefit of the Lendas (the "Bank"), the wegate
unpaid principal amount of the Revolving Loans made by the Lenders to the
Borrower pursuant to the Credit Agreement referred to below on the maturity
date provided for in the Credit Agreemcot. The Borrower prornisa to pay
interest on the aggregate unpaid principal amount of the Revolving Loans on the
data and at the rate or rates provided for in the Credit Agreement. All such
payments of principal and interest shall be made in lawful money of the Unitet
States in Federal or otha immediately available funds at the office of LaSalle
National Bank, 135 South LaSalle Street, Chicago, Illinois.
All Revolving Loans mate by the Lenders, the respoctive types thereof and
all repayments of the princip&l thereof shall be recordet by the Bank ant, if
the Bank so elects in connection with any transfer or enforcernant hereof,
appropriate notations to evitence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part haeof; provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower haeunder or
under the Credit Agreement.
<PAGE> 102
This note is the Note referred to in the Credit Agreement dated as of July
1, 1997, among HealthCare COMPARE Corp., as Borrowa, LaSalle National Bank, u
Administrative Agent and Lenda, First Chicago Capital Markets, Inc., as
Syndication Agent and the other financial institutions party thereto (as the
same may be amended from time to time, the "Credit Agreemeot-). Tarns defined
in the Credit Agreement are used haein with the same meanings. Reference i8
made to the Credit Agreement for provisions for the prepaymcut hereof and the
acceleration of the maturity hereof.
This Note shall be governed by laws of the State of Dlinois. Presentment,
danand, protest and otha notice of any kind are hereby expressly wuved by the
Borrower.
HealthCare COMPARE Corn.
LOANS AND PAYMENTS OF PRINCIPAL
Date Made,
Renewed,
Converted,
or Paid
Type of Loan
(Base Rate,
LIBOR Rate)
Amount of
Loan
Arnoum of
Principal
Renewed,
Converted or Pait
Unpaid
Principal
Balance of Note
Name of
Person
Making
Notation
LaSalle National Bank, as Administrative Agent 135 South LaSalle Street
Chicago, Illinois 60603
The Lenders which are Parties to the Credit Agreement Referred to Below
<PAGE> 103
Re:
HealthCare COMPARE Credit Agreement
We have acted as special counsel to HealthCare COMPARE Corp.. a Delaware
corporation (the "Company"), in connection with that certain Credit Agreement
dated luly I 1997 (the "Credit Agreement") among LaSalle National Bank, as
Administrative Agent, First Chicago Capital Markets, Inc., as Syndication
Agent, and certain other lenders (collectively, the "Lender") and the Company.
This opinion is rendered to you at the request of the Company pursuant to
Section 4.1 (d) of the Credit Agreement. Capitalized terms defined in the
Credit Agreement, used herein and not otherwise defined herein, shall have the
meanings given them in the Credit Agreement.
As such counsel, we have examined such matters of fact and questions of
law as we have considered appropriate for purposes of rendering the opinions
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case we have made only the limited inquiry as specified
below. We have examined. among other things, the following:
(a)
the Credit Agreement;
(b) the Note;
(c) any lease(s), indenturets). note(s). Ioan agreement(s). mortgage(s).
deed(s) of trust. security agreement(s) and other written ayreement(s) or
instrument(s) creating, evidencine or securing indebtedness ot the Company for
borrowed money. identified to us by an officer of the Company as material to
the Company and listed on Exhibit A hereto (the Ntaterial Agreements ); and
(d) the Certificate of Incorporation and Bylaws of the ( 'Goveming
Documents"~.
The documents described in subsections (a) - (b) above are referred to
herein collectively as the 'Loan Documents." As used in this opinion, the "WCC"
shall mean the Unifomm Commercial Code as now in effect in the State of
Illinois.
In our examination, we have assumed the genuineness of all signatures
(other than those of officers of the Company on the Loan Documents). the
authenticity of all documents submitted to us as originals, and the confommity
to authentic original documents of all documents submitted to us as copies. We
have also been furnished with, and with your consent have relied upon,
certificates of off~cer(s) of the Company with respect to certain factual
matters. In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary.
<PAGE> 104
To the extent that the obligations of the Company may be dependent upon
such matters, we assume for purposes of this opinion that: all parties to the
Loan Documents other than the Company are duly incorporated, validly existing
and in good standing under the laws of their respective jurisdictions of
incorporation; all parties tO the Loan Documents other than the Company have
the requisite corporate power and authority tO execute and deliver the Loan
Documents and tO perfortn their respective obligations under the Loan Documents
tO which they are a party; and the Loan Documents to which such parties other
than the Company are a party have been duly authorized, executed and delivered
by such parties and constitute their legally valid and binding obligations,
enforceable against them in accordance with their terms.
We are opining herein as tO the effect on the subject transactions only of
the federal laws of the United States, the intemal laws of the State of
Illinois and the General Corporation Law of the State of Delaware. and we
express no opinion with respect to the applicability thereto, or the effect
thereon. of the laws of any other jurisdiction or, in the case of Delaware. any
other laws or as to any matters of municipal law or the laws of any other local
agencies within any state.
Our opinions set forth in paragraph 4 below are based upon our
consideration of only those statutes, rules and regulations which, in our
experience, are nominally applicable to unsecured lending t,ansactions.
Wl~enever a statement herein is qualified by "to the best of our knowledge''
or a similar phrase. it is intended to indicate that Stephen S Bowen (who is
the partner who has been primarily responsible for the Acquisition Transaction)
and Donald L Schwartz. Jet't'rev G Moran and Matthew D Fradin (who are the only
attomeys in this firm who have rendered any material legal services in
connection with the Credit Agreement) do not have current actual knowledge of
the inaccuracy of such statement: however. except as otherwise expressly
indicated. we have not undertaken any independent investigation to determine
the accuracy ot'any such statement. and no inference that we have any knowledge
of any matters pertaining to such statement should be drawn t'rom our
representation ot' the Company.
Subject to the foregoing and the other matters set forth herein, and in
reliance thereon. it is our opinion that, as of the date hereof and both before
and after giving effect to the Acquisition Transaction:
1 The Company is a corporation which is validly existing and in good
standing under the laws of the State of Delaware with the requisite corporate
power and authority (i) to conduct its business as now conducted, (ii) to own.
or hold under lease, its assets and (iii) to enter into the Loan Documents and
perform its obligations thereunder. Based solely on certificates from of'ficers
of the Company. we confirm that (as of the date of such certificates, the
Company is qualified to do business in all fifty (S0) States:
2. The execution, delivery and performance of the Loan Documents have been
duly authorized by all necessary corporate action of the Company and have been
duly executed and delivered by the Company.
3. Each of the Loan Documents constitutes a legally valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
<PAGE> 105
4. The execution and delivery of the Loan Documents by the Company, the
borrowing by the Company thereunder, and the payment of the Obligations of the
Company pursuant to the Loan Documents do not: (a) violate any federal or
Illinois statute, rule or regulation applicable to the Company (including,
without limitation, Regulations G, T, U or X of the Board of Govemors of the
Federal Reserve System), (b) violate the provisions of the Goveming Documents,
(c) result in the breach of or a default under any of the Material Agreements
or (d) to the best of our knowledge, require any consents, approvals,
authorizations, registrations, declarations or filings by the Company under any
federal or Illinois statute. rule or regulation applicable to the Company
except those consents. approvals, authorizations. registrations, declarations
and filings, if any. which have already been obtained.
~ The Company is not (a) an investment company'' or a company
.'controlled'' by an 'investment company," within the meaning of the Investment
Company Act of 1940. as amended. or (b) a holding company or a subsidiary
company of a holding company v.ithin the meaning of the Public Utility Holding
Company Act of 19~5. as amended
6 To the best of our knowledge. Schedule 5.5 of the Credit Agreement and
Schedule j I i or the Acquisition Documents (as amended) reflect all actions,
suits. proceedings. claims or disputes which may be required to be disclosed by
the temms of the Credit Agreement. We call to your attention the tact that
Schedule 5 5 does not contain a listing of all of the matters shown on Schedule
5.13 and we express no opinion as to the materiality of such matters or whether
they should be so listed.
In rendering the opinions expressed in paragraph 4 insofar as they require
interpretation of the Material Agreements. (i) we have assumed with your
pemmission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the intemal laws of the State of Illinois
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the intemal laws
of any other state. (ii) to the extent that any questions of legality or legal
construction have arisen in connection with our review, we have applied the
laws of thc State of Illinois in resolving such questions. and (iii) we express
no opinion with respect to the effect of any action or inaction which may be
required to be taken by the Company after the date hereof under the Loan
Documents or the Material Agreements which may result in a breach or default
under any Material Agreement. We advise you that certain of the Material
Agreements may be govemed by other laws, that such laws may vary from the law
assumed to govern for purposes of this opinion. and that this opinion may not
be relied upon as to whether or not a breach or default would occur under the
law actually goveming such Material Agreements.
Please also be advised that the opinions expressed in paragraph subject to
the following limitations, qualifications and exceptions:
(a) Such opinions are subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally (including, without limitation, the
effect on the Loan Documents of Section 548 of the
<PAGE> 106
federal Banlcruptcy Code and comparable provisions of state law, limitations on
the right to receive postpetition interest under certain circumstances and the
effect on potentially voidable preferences of Section 547 of the federal
Bankruptcy Code);
(b) The enforceability of such Loan Documents may be limited by (i)
certain equitable, legal or statutory principles affecting the enforcement of
contractual rights of the type contained in rhe Loan Documents generally.
regardless of whether such enforcement is considered in a proceeding in equity
or at law, including, without limitation. concepts of notice. materiality
reasonableness. good faith and fair dealing, requirements that waivers or
amendments be in writing, severability of contractual obligations,
jurisdiction, service of process. venue. and applicable statutes of limitation
and doctrines ot'estoppel. and (ii) judicial discretion or statutory
limitations with respect to the availabilits ot'equitable remedies or
det'enses. the calculation ot'damages and the entitlement to attorneys' tees
and other costs;
(c) The enforceability of indemnification or contribution provisions
contained in the Loan Documents under certain circumstances may be limited
under statutory law or court decisions with respect to a liability where such
indemnification or contribution is contrary to public policy or prohibited by
law;
(d) The exercise of self-help or other summary remedies by a lender or an
agent for lenders. particularly without notice or opportunity for a hearing.
may be restricted under certain circumstances by constitutional limitations
under the due process clause of the Constitution of the United States and the
Constitution of the State of Illinois. by applicable rules of civil procedure
and by the general requirements contained in the applicable UCC and other
applicable law that parties to a commercial contract must act in good faith and
in a commercially reasonable manner. but the inclusion of provisions permitting
such summary remedies does not affect the validity of the Loan Documents (each
taken as a whole); and
(e) [llinois case law calls into question the enforceability under certain
circumstances of contractual provisions of the Loan Documents providing for the
compounding of interest or the payment of interest on interest.
This opinion is rendaed only ro you. is solely for your benefit in
connection with the transactions covered hereby and may not be relied upon by
you for any other purpose. A copy of this opinion letter may be delivered by
any Lender to those financial institutions who are participants in the
financing arrangements of such Lender with Borrower, or are assignees of such
Lender. to the extent permitted by Section 10.8 of the Credit Agreement, which
institutions may rely hereon as if the same were addressed and had been
telivered to them. Subject to the foregoing, this opinion letter may be relied
upon by any Lender only in connection with the financing arrangements
contemplated by the Credit Agreement and may not be quoted, used or relied upon
by any Lender or any other person for any purpose whatsoever, without in each
instance our prior written consent, except as may be required by any court or
other govermnental or regulatory authority or in coMection with any litigation
or other proceeding to which this opinion letter may be relevant. All persons
who shall at any time rely on this opinion should recognize that this opinion
speaks only as of the date hereof and to its addressees and that we
<PAGE> 107
have no responsibility or obligation to update this opinion. to consider its
applicability or correctness to persons other than its addressees. or to take
into account changes in law. facts or anv other developments of which we may
later become aware.
Very truly yours,
EXHIBIT A
to Latharn & Watkins Opinion
Material Agreements
1. Amended and Restated System Agreement entered into September 1. 1995. by and
between Electronic Data Systems Corporation and HealthCare COMPARE Corp.
2. Utilization Review Ayreement entered into as of lanuary 1, 1989. between
HealthCare COMPARE Corp. and National Association of Letter Carriers Health
Benefit Plan;
PPO Agreement effective lanuary 1. 1996. between HealthCare COMPARE Corp. and
Government Employees Hospital Association. Inc.
EXHIBIT E
OmCER'S CERT~CAU
LaSalle ~'ational Bank '~ 3 5 South LaSalle Street Chicago, Illinois 60603
Attn:
Ladies and Gentlemcn:
to Bank that:
A. On
Y. Re: Credit Agreement dated as of July ~ 1997, (the "Credit Agreement")
between HealthCare COMPARE Corp. (the "Borrower"), LaSalle National Bank as
Administrative Agent and Lender, First Chicago Capital Markets, Inc., as
Syndication Agent, and the Other Financial Institutions Party thereto.
In accordance with Section 6.2(b) of the Credit Agreement, the Borrower hereby
certifies
, , the Fixed Charge Covcrage Ratio of the Borrower was as computed on
Attachment 1 hereto.
B. On , , the Net Worth of the Borrower was S , as computed
on Attachment 2 hereto.
<PAGE> 108
C. On , , the Leverage Ratio of the Borrower was , as computed on Attachment 3
hereto.
D. To the best of the undersigned's knowledge and except as previously
disclosed to the Lenders, during the periot commencing , through and including,
the Borrower has observet and performed all of its covenants and other
agreements, and satisfied every contition containet in the Credit Agreement to
be observed, performed or satisfied by the Borrower except as identified on
Attachment 5 hereto.
E. To the bat of the undersigned's knowledge, as of the date hereof, the
Borrower could make each of the representations and war,ranties contained in
Article V of the Credit Agreement effective as of the date hereof, except for
those representations and warranties listed (by Section number
corresponding to the Credit Agreement) in Attachment 4 hereto which explains
the Borrower's inability to make such representation or wa'Tanty.
F. The undersigned has obtained no knowledge of any Default or Event of Default
except as identified on Attachment 5 hereto.
~ WIT~'ESS WEEREOF, the Borrower has caused this Certificate tO be
executed and delivered ths _ day of
HEALTHCARE COMPARE CORP.
Attachment l
Fixed Charge Coverage Ratio
Income before income taxes (as set forth on Borrower's most recent financial
statement) .
Interest Expenses
Depreciation . .
4. Amortization
Interest Income S
6. EBITDA: the sum of Items 1, 2, 3 and 4 less Item 5 . S
Operating Lease rental payments for the period of the most recently completed
four consecutive fiscal quarters
8. Fixed Charges for the period , _ through
~ the sum, without duplication of Items 8A, 8B and 8C:
<PAGE> 109
A. Consolidated Interest Expense and fees paid on, and amortization of debt
discount in respect of, all Funded Indebtedness ........
$
S
................ J
. . $
, $
B.
Operating Lease rental payments made during such
C. The aggregate principal amount of all current maturities of long
term Funded Indebtednag (including the principal portion of remais
under Capital Leages) paid by the Borrower and its Subsidiaries
during such period (excluding payments of principal of the
Revolving Loans and payments of principal not required under the
Revolvina Loan Documentg) S
Total: ................
9. Flxed Charge Coverage Ratio: the sum of Items 6 and 7 divided by
Item 8:
10. Minimum Fixed Charge Coverage Ratio permitted under
Section 7.12 2
Attachment 2
Consolidated Net Worth
I Borrower's Net Worth
I Shareholders' equity of the Borrower determined in accordance with
<PAGE> 110
GAAP . .
. $
2. Consideration paid by Borrower for repurchase of Borrower's stock
subsequent to Closing Date or $150,000,000, whichever
is less ....
3. The aggregate of all charges incurred by Borrower subsequent to Closing
Date related to Acquisitions to the extent such charges are written off
against goodwill, or S175,000,000, whichever is less $
Net Worth: The sum of Items 1, 2 and 3 S
II. Compliance with Net Worth Covenant (Section 7.13)
1. 75% of Borrower's Net Worth as determined using Borrower's June 30,
1997 financial statements $
2. The sum of 50% of the Borrower's Consolidated Net Income earned each
fiscal quarter commencing with the fiscal quarter ending September 30,
1997 (provided that if, for any fiscal quarter, the Borrower's Consolidated
Net Income shall be less than zero, then for purposes of this calculation,
the Borrow's Consolidated Net Income shall be deemed to be zero for the
fiscalquarter) S
3. SO% of the net proceeds received from any unaffiliated third parties from
any stock offering of the Borrower S
Minimum covenanted Net Worth (pursuant to Section 7.13): The sum of
Iten~ 1, 2 and 3, or S190,000,000, whichever is greater . . . S
2
4
6.
8.
<PAGE> 111
9.
Attachment 3
Leverage Ratio
Total Funded Indebtedness of Borrower and its Subsidiaries ... .. $
Income before income taxes (as set forth on Borrower's most recent financial
statement)
Interest Expenses .
Depreciation . . .
Amortization
Interest Income
EBITDA: the sum of Items 2, 3, 4 and 5 le~s Item 6 S
Leverage ratio: Item 1 divided by Item 7 ......................
Maximum Leverage Ratio permitted under Section 7.14 .
........ 3.25
EXHIBIT F
ASSI~ENT AND ACCEPTANCE AGREEMENT
AGREEMENT dated as of , 19_ among <NAME OF ASSIGNOR> (the "Assigoor"),
<NAME OF ASSIGNEE> (the "Assignee"), HealthCare COMPARE Corp. (the "Borrower")
and LaSalle National Bank, as Administrative Agent (the "Administrative
Agent").
WHEREAS, this Assignment and Acceptance Agreement (the "Agreemeot")
relates to the Credit Agreement dated as of luly _, 1997 among the Borrower,
the Assignor and the other Financial Institutions party thereto, as Lenders,
and the Administrative Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Revolving Loan Commitment to make Revolving Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed S
WHEREAS, Revolving Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of Shereof,
are outstanding at the date
<PAGE> 112
WHEREAS, the Assignor proposes to assign to the Assignee all of the nghts of
the
Assignor under the Credit Agreement in respect of a portion of its Revolving
Loan Commitment thereunder in an amount equal to S (the "Assigned Amount"),
together with a corresponding portion of its outstanding Revolving Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms,
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the pardes hereto agree as follows:
Section 1. Dcfinftions. All capitalizet terms not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.
Section 2. Assignmcnt. The Assignor hereby assigns and sells tO the
Assignee all of the rights of the Assignor under the Credit Agreement in
respect of its Revolving Loan Commitment to the extent of the Assigned Amount,
and the Assignee hereby accepts such assignment from the Assignor and assumes
all of the related obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase from the Assignor of
the corresponding portion of the principal amount of the Revolving Loans made
bv the Assignor outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee and the Agent and the payment of the
amounts specified in Section 3 hereof required to be paid on the date hereof
(i) the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Lender under the Credit Agreement
with a Revolving Loan Commitment in an amount equal to the Assigned Amount, and
(ii) the Revolving Loan Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such Obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
Section 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.' Each
of the Assignor and the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the other party hereto,
it shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
Section 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent pursuant to Secdon
10.8(c) of the Credit Agreement. The execution of this Agreement by the
Borrower, and the Agent is evidence of this consent.
Section S. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condidon, or statements of the Borrower, or the
validity and enforceability of the obligations of the Borrower in respect of
the Cretit Agreement or any other Revolving Loan Document. The
<PAGE> 113
Assignee acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
Secdon 6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
Section 7. Countc~p~ts This Agreement may be signet in any number of
counterparts, each of which shall be an original, with the same effect as if
the sigrlatures thereto and hereto were upon the same instrument.
1/ Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee.
~ WITNESS WHEREOF, the parties have caused this Agreement tO be executed
and delivered by their duly authorized of ficers as of the date first above
wntten:
~NAME OF ASSIGNOR>
By:
.
Name Title:
~NAME OF ASSIGNEE>
By:
Name Title:
HEALTHCARE COMPARE CORP.
By:
Name Title:
LASALLE NATIONAL BANK, as
Administrative Agent
By:
Narne Title:
EXHIBIT G
<PAGE> 114
TO
CREDIT AGREEMENT
LaSalle National Bank
ntematonal Banking
200 West Monroe Street Chicago. Illinols
APPLICAT!ON FOR STANDBY LETTER OF CREDIT
LASALLE BANKS
Date
Applicant~s Phone Number
Contact Person
Designated Party (Multi-Applicant)
~For 8ank Use On~y;
Please rssue an irrevocable Standby Letter of Credit substanhally as set forth
below and forward the same to your correspondent (or advising bank, if
indicated below) for delivery to the geneficiary or directly to the genefic~ary
(as applicable) by
_ Air Maid Air Ma~l. with ~hon prelirninarY Tebtranerni~ion advice ~
Tebinnsmissicn Courar _ _
Advising Bank (if any)
Applicant (name and address)
geneficiary (name and address)
Amount (USD unless otherwise indicated)
Expiry Date
Presentation for Payment Drafts must be drawn on you and presented with
accompanying documentation at your offce se forth above on or before the expiry
date, unless otherw~se indicated below.
Available by draft(s) at sight drawn on LaSalle National Bank, Chicago,
Illinois, accompanied by the following documents(s):
<PAGE> 115
geneficiary's signed statement reading as follows:
_ Attachments (NOTE: All attachments must also be signed.)
All draft() drawn must be marked as drawn under this CREDIT. The onginal
LetQer of Credit must e presented for endorsement at the time of payment.
Partial drawings are 1 ] permitted [ | prohibited
arge our 3ccount'or 311 cayrrents and 'ees nder rhs LC. ntess
ornerw~se nd~cated
i.ur crresponc'
Account No I Our account
[ ] geneficiarv s accot tn'
PLEASE DATE AND OFFICIALLY SIGN THE AGRE iEMENT ON PAGE 8 OF THE A~CHLO
AORLEMENI
STANDBY LETIER OF CREDIT.AGREE.\IE.NT
In consideration of (the [ssuer ) issuing
an Lrrevocable standby letter of credit substantially in accordance with the
Application attached hereto (the Application') and as such letter of credit may
be amended (the Credit"). rhe undersigned (each. an Applicant"), jointly and
severally if there is more than one ot rhe undersigned. unconditionally and
irrevocably agrees as follows:
This Agreement and the Credit issued hereunder are subject to the terms
and conditions of the Amended and Restated Credit Agreement dated as of October
_ . 1997. by and among HealthCare COMPARE Corp., as Borrower. LaSalle National
Bank, as Administrative Agent, Issuing Bank and Lender, First Chicago Capital
Markets, Inc., as Syndication Agent. and the otha financial institutions party
thereto, as Lenders (the "Credit Agreement"). We refer you to the Credit
Agreement for provisions concerrung payment, commissions, fees, defaults and
remedies. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Credit Agreement.
1. ISSUER'S GENERAL OBLIGATIONS. Upon the issuance of a Credit, the
Issuer's obligations to the Applicant with respect to the Credit include good
faith and observance of general banking usage, but do NOT include liability or
responsibility of any kind arising out of or in connection with: (a)
performance of the underlying contract or otha transactions between the
Applicant and the baneficiary or any other person; (b) acts, errors, defaults
or omissions of any person other than the Issuer, including any use of the
Credit by any such person; (c) loss or
<PAGE> 116
destruction of any telegram, cable, letter, instrument or document while in
transit or in the possession of others; (d) knowledge or lack of knowledge of
any custom or usage of any particular trade; (e) transmission, delivery,
translation or interpretation of any message including any interruption, delay,
error or orrrission therein; (f) insufficiency, lack of authorization,
invalidity of, lack of genuineness, truthfulness or error or fraud in any
documents presented under the Credit or in any instructions purporting to be
from the Applicant or the Issuer's correspondent; (g) validity or correctness
of any transfer or proper identity of any transferee (if the Credit is issued
in transferable forte); (h) waiver of any requirement which exists for the
Issuer's protection and not the protection of the Applicant, or which waiver
does not in fact materially prejudice the Applicant; or (j) any other act or
omission for which banks are relieved of responsibility under the "Uniform
Customs & Practice for Documentary Credits" of the International Chamber of
Commerce (hereafter, the "UCP"), in effect on the date hereof.
2. ISSUER'S OBLIGATIONS CONCERNING DOCUMENTS.
(a) The Issuer's obligations relative to the Credit include the
examination of documents with reasonable care so as to ascertain that on their
face they appear to comply with the terms of Credit, but do NOT include
liability or responsibility of any kind arising out of or in connection with:
(i) validity, sufficiency, truthfulness, genuineness or effect of documents
which appear on Issuer's examination to be regular on their face; (ii) honor of
drafts or demands for payment which appear on Issuc,r's examination to be
regular on their face; or (iii) the ultimate correctness of Issuer's decision
regarding documentary compliance, where such decision is based on Issuer's
examination of the documents, or Issuer's exercise of judgment, in a manner not
manifestly unreasonable. The Issuer may in its discresion (but shall not be
obligated tO) accept documents which substantially or reasonably comply with
the terms of the Credit.
(b) I~'nless otherwise specified in the Application, the [ssuer mav in its
discretion accept or honor (in the case of negotiable Credits) as complying
with the Credit: (i) drafts or document signed by or issued to the purported
agent, executor, administrator. Iiquidator. receiver, trustee in bankruptcy or
other legal representative of any party designated in the Credit; (ii) drains
which fail to bear any or adequate reference to the Credit or notation to be
made on the Credit. or the Credit to be surrendered, or documents to be
forwarded apart from the draft, whether or not required by the Credit; (iii)
drafts or documents which comply under the laws, rules, regulations, and
general banking or trade customs and usages of the place of drawing or
presentation; or (iv) drafts or documents which comply with the UCP.
3. PAYMENT; COMMISSIONS.
(a) The Applicant shall pay the issuer in United States currency at the
office identified on the Application, the amount paid or to be paid by the
Issuer or the Issuer's agent or any party on Issuer's behalf on each draft or
other order, instrument or demand drawn, presented or purporting to be drawn or
presented under the Credit (the "Item") together with all other amounts owing
to the Issuer in coMection therewith, such payment to be made at the time of
honor of each Item if so demanded by the Issuer, on demand in advance of any
drawing. In the case of Items drawn in foreign currency, such payments shall be
at the Issuer's current rate of exchange for transfers to the place of payment
in the curtency in which such Item is drawn (or, if for any reason the Issuer
<PAGE> 117
is unable to establish such a rate of exchange, in an amount equal to the
Issuer's actual cost of settlement). The Applicant shall reimburse the Issuer
in the same currency in which the Item is payable, provided that at the
Issuer's option, Applicant shall reimburse Issuer in United States dollars for
Items payable in a foreign currency at the rate at which Issuer could sell such
foreign currency in exchange for United States dollars for transfer to the
place of payment of the Item, or, if there is no such rate, the United States
dollar equivalent of Applicant's actual cost of settlement. Applicant agrees to
pay Issuer on demand in United States dollars such amounts as Issuer may be
required to expend to comply with any and all governmental exchange regulations
now or hereafter applicable to the purchase of foreign currency.
(b) The Applicant shall pay the Issuer on demand, in United States
currency at the office as identiffed on the Application interest, commissions,
fees and other charges and expenses as provided for in the Credit Agreement and
all charges and fees payable under any fee schedule of the Issuer in effect
from time to time or as otherwise agreed.
(c) All amounts payable by the Applicant hereunder shall be paid at the
office of the Issua identiSed on the Application, in immediately available and
freely transferable funds at such place of payment. The Issuer is authorized to
set off or charge to any account or other funds of the Applicant in Issuer's
possession all obligations of the Applicant owing hereunder, irrespective of
the currency in which such account or funds are denonunated.
(d) If, as a result of any law, regulation, trea~ or directive introduced
aDer luly 1, 1997, or any change therein issued after luly 1, 1997, or in the
interpretation or application thereof after luly 1, 1997 or Issuer's compliance
with any request or directive (whether or not having the force of law) from any
court or governmental authority, agency, instrumentality, after July 1, 1997
anv reserve capital requirement. premium. special deposit, special assessment
or similar requirement against the Issuer s assets, deposits or credit extended
bv the Issuer. are imposed, mod)fied or deemed applicable after luly 1, 1997
and the Issuer shall determine that by reason thereof, the cost to the Issuer
of issuing or maintaining the Credit is increased. ~he .\pplicant agrees to pay
the Issuer upon demand such additional amount or amounts as will compensate the
Issuer for such additional cost. The Applicant further agrees to pav anv
applicable levies or other taxes imposed in coMection with the Credit other
than net income taxes payable by the [ssuer, and tO otherwise comply with all
domestic and foreign laws and re~ulations applicable tO all transactions under
or in connection with the Credit.
4. OBLIGATION OF APPLICANT; ASSUMPTION OF RISK BY APPLICANT;
INDEMNIFICATION OF ISSUER BY APPLICANT; SUBROGATION.
(a) The Applicant's obligations to the Issua hereunder are, and shall
remain. absolute and unconditional notwithstanding any lack of enforceability
of the Credit or the existence of any claim, counterclaim, defense or right of
set off the Applicant may have against the Issuer.
(b) The baneficiary or any other user of the Credit and any other drawer
of any draft or the presenter of any demand for payment thereunder shall be
deemed Applicant's agents, and the Applicant assumes all risk, loss, liability,
charges and expenses with respect to their acts or
<PAGE> 118
omissions and also with respect to any error, delay, misdelivay or loss in or
arising out of the transmission of telegrams, cables, letters or other
communications, documents or items forwarded in connection with the drafts or
the Credit. The Applicant shall not h relieved from any obligation or
liability, nor shall the terms of this Agreement be affected by the occurrence
of the foregoing. Any action or inaction by the Issuer or its correspondents in
connection the Credit or with instructions, drafts or documents relative to tnc
Credit, shall, if in good faith, conclusively be deemed to have been authorized
by the Applicant, and the Issuer shall have no liability therefor.
(c) Thc applicant shall indemnify the Issuer and its correspondents and
shall defend and hold the Issucr and its correspondents harmless from and
against any and all claims. darnages, loss, cos~, expenses (including
attorney's fees) and liabilities, of any nature whatever, sustained or incurred
or asserted in connection with the Credit, the payment or acceptance or refusal
tO pay or accept any draB or other demand for payment, and any other action or
inaction in reliance upon tne provisions of this Agreement except claims,
damages, loss, expenses or liabilities, armug from the wilfi~l misconduct or
gross negligence of the Issuer in connection with the Credit, the payment or
acceptance or refusal to pay or accept any draft or other demand for payment,
and any other action or inaction in reliance upon the provisions of this
Agreement. lt is understood that in making payment under the Credit the
Issuer's exclusive reliance on the documents presented to the Issuer in
accordance with the terms of the Credit as to any and all matters set forth
therein, whether or not any statement or any document presented pursuant tO the
Credit proves to be forged, fraudulent, invalid or insufficient in any respect
whatsoever, shall not be deemed w~ilful misconduct or gross negligence of the
Issuer.
(d) The Issuer shall be subrogated (for purposes of defending against the
Applicant's claims and proceeding against others to the extent of the Issuer's
liability to the Applicant) to the Applicant's rights against any person who
mav be liable to the .Applicant on any underlying transaction, to the rights of
any holder in due course or person with similar status against the Applicant
and the rights of the baneficiary or itS assignee or person with similar status
against the Applicant.
(e) The Applicant certifies that transactions in any cornrnodiries covered
bv che Application are not prohibited under the foreign assets control
regulations of the United States Treasury Deparunent and that any importation
covered by the Application conforms in every respect with all United States
regulations then in effect.
S. WAIVER BY ISSUER; ACTS NOT AFFECTING AGREEMENT. Subject to the terms of
the Credit Agreement, the Issuer shall have no duty to exercise any of its
rights hereunder, and shall not be liable for any failure or delay in doing so.
No failure or delay on the part of the Issuer or its correspondents shall
operate as a waiver, and no notice to or demand by the Issuer or its
correspondents shall be deemed a waiver of the Issuer's right to take any other
or further action without notice or demand. Issuer's rights and Applicant's
obligations and liabilities under this Agreement shall continue unimpaired and
this Agreement shall remain binding upon each party hereto signing as an
Applicant, notwithstanding: (a) extension of the maturity or time for
presentation of draf~ acceptances or documents; (b) any other mod)fication of
the terms of
<PAGE> 119
the Credit at the request of any party hereto signing as an Applicant, with or
without not)fication to any other party; or (c) any increase in the amount of
the Credit at the request of any party hereto. No delay, extension of time,
renewal, compromise or other indulgence which the Issuer may permit in
connection with any of its rights hereunder shall impair those rights, and the
Issuer shall not be deemed to have waived any rights unless such waiver is in
writing and signed by the Issuer or its authorized agent; nor shall any such
waiver constitute a waiver of any other right or of the same right at any
future time.
6. SOLE OBLIGATION OF ISSUER Without limiting any other provision herein,
the Issuer is hereby expressly authorized and directed to honor any request for
payment which is made under and in compliance with the terms of the Credit
without regard to, and without any duty on the part of the Issuer to inquire
into, the existence of any disputes or controversies between any of the
Applicant, the baneficiary of the Credit or any other person, firm or
corporation, or the respective rights, dutia or liabilitia of any of them or
whether any facts represented in any of the documents presented unda the Credit
are true or correct. Furthermore, the Applicant agrees that the Issua's
obligation to the Applicant shall be limited to honoring re~ests for payment
made under and in compliance with the terms of the Credit and this Agreement
and the Issuer's obligation remains so limited even if thc Issuer may have
assisted in the preparation of the wording of the Credit or any documents
required to be presented thereunder or the Issuc.r may otherwise be aware of
the underlying transaction giving rise to the Credit and this Agreement.
7. DURATION OF AGREEMENT; B~DING UPON SUCCESSORS; INDEMNrlY. This
Agreement shall remain in fi,ll force and effect until the Issuer has actually
received written notice to the contrary from the Applicant, and after receipt
of such written notice shall continue in full force and effect as to all
transactions between the Applicant and the Issuer commenced prior to the date
of such receipt. All indemnities, covenants, agreements. representations and
warranties made in this Agreement shall survive the issuance by the Issuer
of the Credit and shall continue in full force and effect so long as the
Credit. or anv por~ion thereof. shall be unexpired or any sums drawn thereunder
or other amounts owing hereunder shall remain unpaid, provided, however, that
the provisions of Sections 3(b). 3(d). 5(c), 9. 1 1. 12(by. I2(c) and 12(k)
shall survive the termination of this Agreement. This Agreement shall not be
revoked or impaired by the death of any party hereto, by the revocation or
release of anv obligations hereunder of any one or more parties hereto (or of
any party hereto shall be a partnership. bv anv changes in the parties
composing the partnership) [f this .~greement is terminated or revoked as to
any party for any reason, the Applicant shall indemnify and hold the Issuer
harmless from any loss incurred in acting hereunder prior to the actual receipt
of written notice of such termination or revocation. Thc invalidity or lack of
enforceability of any provision hereof shall not affect the validity or
enforceability of any other provision hereof. If this Agreement is signed by
two or more parties, it shall constitute the joint and several agreement of
such parties, provided, that the Designated Party, as defined below, shall have
the exclusive right to issue all instructions relating to the Credit including,
without limitation, instructions as to the disposition of documents and any
unutilized funds, waivers of discrepancies and to agree with the Issuer upon
any amendments, mod)fications, extensions, renewals or increases in the Credit
or the further financing or refinancing of any transaction effected hereunder,
irrespective of
<PAGE> 120
whether the same may now or hereafter affect the rights of any party hereto or
their legal representatives, heirs or assigns. The Designated Party shall have
specimen signatures on file with the Issuer and the Issuer may give any notices
to the Designated Party without notice to any other party.
8. LAW GOVERNING. The Credit and this Agreement shall be govemed by and
construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be wholly perfommed within such State. Unless
inconsistent with such state law or except so far as expressly stated in the
Credit, the Credit and this Agreement are subject to the terms of the UCP in
effect on the date of the Application, provided, however, that, without
limiting the foregoing, Articles 45 and 47 of UCP 400 and Articles 41 and 43 of
UCP 500 shall have no application to the Credit or this Agreement. In the
absence of proof expressly to the contrary, the UCP shall serve as evidence of
general banking usage.
9. GROSS-UP PROVISION. Any and all payments made tO Issuer hereunder shall
be made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, deductions, charges or withholdings
of any nature, and all liabilities with respect thereto, excluding taxed
imposed on net income of the Issuer and all income and franchise taxes of the
United States and any political subdivision thereof imposed on the Issuer (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities are referred to herein as "Taxes"). If the Applicant shall be
required by law to deduct any Taxes from or in respect to any sum payable
hereunder (i) the sum payable shall be increased as may be necessary to that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 11, the Issuer shall receive an
amount equal to the sum the Issuer would have received had no deductions been
made); (ii) the Applicant shall make all such deductions; and (iii) the
Applicant shall pay the full amount deducted to the relevant taxation authority
or other authority in compliance with applicable law. The Applicant shall
indemnify the Issuer for the fiull amount of Taxes, (including, without
limitation, and Taxes imposed by any jurisdiction on amounts payable hereunder)
paid by the Issuer and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted Payment upon this indemnification shall be
made within th~y (30) days from the date the Issuer makes written demand
therefor U ithin th~y (30) days after date of the payment of Taxes, the
Applicant shall fumish tO the issuer the original or certified copy of a
receipt evidencing payment thereof
10. OTHER TERMS.
(a) If the Credit shall contain any provision for automatic renewal. the
Applicant acknowledges and agrees that the Issuer is under no obligation to
allow such renewal to occur and any such renewal shall remain within the sole
and absolute discretion of the Issuer. The Applicant hereby irrevocably
consents to the automatic renewal of such Credit in accordance with its terms
should the Issuer decide to allow such renewal to occur; provided however, that
the Applicant shall have the right to request the issuer to disallow such
renewal on the condition that the Applicant shall give the Issuer prior written
notice of such request not less than thirty (30)
<PAGE> 121
days prior to the deadline imposed upon the Issuer for not)fication to the
baneficiary of nonrenewal of the Credit.
(b) The Applicant shall indemnify the Issuer against any loss incurred by
the Issua as a result of any judgment or order being given or made for the
payment of any amount due haeunda in a particular currency (the "Currency of
Account") and such judgment or order being expressed in a currency (the
"Judgment Currency'') other than the Currency of Account and as a result of any
variation having occurred in the rates of exchange between the date which such
amount is converted into the ludgment Currency and the date of actual payment
pursuant thereto. The foregoing indemnity shall constitute a separate and
independent obligation of the Applicant.
(c) Each party signing as Applicant and any guarantor thereof agrees that
if any amount paid to the Issuer hereunda is rescinded or must be otherwise
restored or returned by the Issuer due to the insolvency, bankruptcy,
liquidation or reorganization of any party hereto, each party's obligations
hereunder with respect to each such amount shall be reinstated to the same
extent as if such payment had not been made.
(d) The Applicant authonz~s the Issuer to set forth the teens of the
Application in the Credit in such language as the Issuer deems appropriate,
with such variations from such terms as the Issuer may in its discretion
determine to be necessary (which determination shall be conclusive) and not
materially inconsistent with the Application. If Applicant, or in the case of
more than one AppLicant, the Designated Party, does not notify the Issuer
within ten ( 10) calendar days of its issuance, Applicant agrees that such
Credit is conclusively presumed to be in proper form. Upon receipt of timely
notice of any discrepancy in the Credit, the Issuer will endeavor to obtain the
consent of the confirming bank (if any) and the baneficiary for an appropriate
mod)fication to the Credit; provided, however, that the Issuer shall assume no
liability or responsibility for its failure to obtain such consent.
(e) No Party to this Agreement may assign its rights or obligations under
this Agreement without the prior written consent of the Issuer and the
Ad~sunistrative Agent, provided that the obligations of the Issuer under this
Agreanent may be provided or furfilled by an affiliate of the Issuer so long as
the Issuer assumes full responsibility for such obligations.
(f) ll~is Agreement and any exhibits hereto and the Credit Agreement and
the exhibits and schedules thereto constitute the entire agreement among the
parties and supersede any and all prior agreements, proposals, negotiations and
representations pertaining tO the obligations and duties to be performed under
this Agreement. No amendments or mod)fications of this .Agreement shall be
valid unless in writing and signed by or on behalf of Applicant and Issuer
(g) Except as otherwise provided in this Agreement, all notices required
to be given pursuant to this Agreement, all notices required to be given
pursuant to this Agreement shall be effective when received, and shall be
aufficient if given in v~riting, hand delivered or sent by First Class United
State Mail, postage prepaid, air couner or telecopier, and addressed to the
appropriate party at its address as shown on the signature page hereof or at
such other address as the sending party shall have been advised in writing.
<PAGE> 122
(h) Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdictio4 be ineffective to the extent
of such prohibition or lack of enforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. Wherever possible, each provision of this
Agreement chs~l be interpreted in such manner as to be effective and valid
under applicable law.
(i) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
(j) Regar~ess of the expiry date of the Credit, the Applicant shall remain
liable hereunder until the Issuer is released from liability by every perso4
firm, corporation or other entity which is entitled to draw or demant paymant
unda the Credit.
(k) Applicant agrees to indemnify and hold Issuer harmless from each and
every clair4 demant, liability, loss, cost or expense (including, but not
limited to, attorneys' fees and court costs) which may arise or be created by
Issuer's acceptance of telecommunication ir~tructions in connection with the
Credit, including, but not limited to, telephone or facsimile instructions in
connection with any waiver of discrepancies.
(1) Applicant, or in the case of more than one person signing as
Applicant, the Designated Party, agrees to exanune promptly all instruments and
documents delivered to the Applicant or Designated Party, as the case may be,
from time to time and in the event the Applicant or Designated Party sball have
any claim of non-compliance with their instructions or of discrepancies or otha
irregularity, the Applicant or the Designated Party, as the case may be, shall
immediately notify the Issua thaeof in writing. The Applicant and the
Designated Party shall conclusively be deemed to hew waived any such claim
against the Issuer unless such immediate notice is given as stated above.
[N WITNESS WE~REOF. the parties have caused this Agreement tO be executed
by their duly authonzed off~cers as ot this day of
[APPLICANT]
By: Name: Title:
Address:
[APPLICANT]
By: Name: Title:
Address:
<PAGE> 123
SCHEDULE I
COMMITMENT SCIIEDULE
LENDEn~
REVOLVING
COMMITMENT
LEITER OF
CREDIT
COMMirMEN'
1. LASALLE NATIONAL BANK $35,000,000.00 $1,500,000.00
2. THE FIRST NATIONAL BANK OF
CHICAGO
$35,000,000.00
$1,500,000.00
3. CIBC, INC.
$30,000,000.00
$1,285,714.29
4. NATIONSBANK OF TEXAS, N.A.
$30,000,000.00
$1,285,714.29
5. UNION BANK OF CALIFORNIA, N.A.
$30,000,000.00
$1,285,714.29
6. BANQUE NATIONALE DE PARIS
$25,000,000.00 $1,071,428.57
<PAGE> 124
7. BANQUE PARIBAS $25,000,000.00 $1,071,428.57
8. THE BANK OF NEW YORK $25,000,000.00 $1,071,428.57
9. CREDIT LYONNAIS, NEW YORK BRANCH $25,000,000.00
$1,071,428.57
10. THE INDUSTRIAL BANK OF JAPAN,
LIMITED, CHICAGO BRANCH
$25,000,000.00
$1,071,428.57
11. THE NORTHERN TRUST COMPANY$25,000,000.00 $1,071,428.57
12. SUNTRUST BANK, NASHVILLE, N.A. $25,000,000.00 $1,071,428.57
13. HARRIS TRUST & SAVINGS BANK
$15,000,000.00
$642,857.14
TOTAL: $350,000,000.00 $15,000,000.00
MAXIMUM REVOLVING LOAN BALANCE (including outstanding Letters of Credit)
................
$350,000,000.00
SCHEDLLE','
LITIGATIO;~o'
This Schedule ~ ~ lists ~arious actions. suits. proceedings. claims or disputes
pending. or tO the bes~ kno~ led`'e ot' the Borrower. threatened or
contemplated by or against the Borrower or its Subsidiaries. Annex A reflects
actions tiled bv or against the Borrower and which Borrower believes may be
required to be disclosed. Annex B reflects actions or disputed claims f led or
made by or against Subsidiaries and is based on data collected by Borrower in
the course ot'the Acquisition Transaction. Borrower does not represent or
concede that any of the litigation on Annex B might have a Material Adverse
Et'fect: the matters are disclosed because. due to Borrower's lack of
familiarity with the litigation it is possible that some or all of the matters
listed on Annex B. if decided against the Borrower or any Subsidiary, as the
case may be, might individually or in the aggreyate have a Material Adversc
Effect.
<PAGE> 125
Annex a eo Schcdule 5, 5
Actions Filcd By or AAainse Borrower
~Case No. 94 UKlS1 (Circuit Court, Cook County Illinols). CouDsel: IaDer,
MUCDID, Dombrow, Becker' Levin and Tominber'~, Ltd. (l~hor~s Bnd~ley).
This acdon was filet on May 20, 1994 (HCCC was scrvet on June 29, 1994) by a
former HCCC employee. The complaint alleges thtt HCCC discharget Patinos in
retaliation for Ptdnos' filing of a report of HCCC's acti~itics with the
Illinois Dcpartment of Professional Reguladon. HCCC has filed counteractdons
agtinst Patinos for violatdon of the Blinois Trade Secrets Act, Brcach of
Confidendality Agreement, Conversion ant Tordous Interferencc with Contract
baset on Patinos' actions in copying HCCC confidential and proprietary
information and distribution the information to third partia without the
authorizadon and approval of HCCC. There has been essendally no activity on
this matter over the last nine monthe.
WHITNEY BELCHER v lIEALTlICME COMPARE CORP., Case No. 94 L 1780 (Circuit Court,
DuPage CouDty Illinois). COUD#I: Lar~er, Muchln, Dombrow, Becker, Levin and
Tominberg, Ltd. (ISomas Bradley) Case No. 94L0178.
A case related tO Patinos, above. Forma employee alleges she was wrongfully
terminated. The complaint consists of four counts consisting of alleges
violatdon under the minois Medical Practices Act, the minois Health Finance
Reform Act, the Illinois Eavesdropping statute and invasion of privacy.
Discovery condnua. The parties were unable to resolve the matter at the
metiation proceeding before Judge Bua on November 8, 1996. Both Belcher and
HCCC filet modons for summary judgment. Plaintiff's motion which sought summary
judgment on the eavestropping claimNwas teniet. The Court granted HCCC's
motion, ruling (1) that Plaintdff was not enthtled to back pay because she
failed to mithgate her damaga; (2) that Plaindff could not base a retaliatory
discharge claim on the Blinois Health Finance Reform Act. The Court has set a
trial date of September 22, 1997.
HEALTHCARE COMPARE CORP. v. UNITED PAYORS & UNITED PROVIDERS; Case No. 9CC
2S18; United Shtes Distrlet Court for the Northern D~ct of Illinois, Eastero
Divisiou. Counsel: ChDdress & Zdeb, Ltd. (Christopher N. Mamme0.
HCCC filed a five~count complaint aeainst UP&UP stemming from acdons conshtuhug
deceptive business prashees, intentional interference with contracts ant unfair
compeddon. UP&UP has filed a counterclaims alleging def~tion ant commercial
disparagement, ant seeking service marl: cancellation. Discovay is ongoing and
we are attempting to resolve discovery disputes.
SCHEDULE S.7
ERISA
There are no Multiemplo~ er Plans. The onl~ Qualitled Plan is:
HealthCare COMPARE Corp. Retirement Saving
<PAGE> 126
SCHEDULE 5.11
FINANCIAL CONDITION
SCHEDULE 5.12
ENVIRONMENTAL MATTERS
This schedule contains a summary of an environmental matter which mav or
may not be material to the business or Borro``er. This schedule makes no
representations or warranties with respect to the materiality of such matter.
SCHEDULE 5.13
REGELATED E,NTITIES
A=exes A and B- I reflect data provided bv the Borrower as of the Closing
Date. ~nnex B2 reelects data made relevant at the time of the Acquisition
Transaction.
STATE CERT~CATIONSIREGISTRA=ONS AS OF 6/t7t97
EIEALTElCARE COMPARE CORE.
UTLIZAT10!4 REVEW
PPO -
WORKERS' COMPENSATION -
ALABAMA
ARKANSAS
CONNECTICUT
FLORIDA
INDIANA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MINNESOTA
MISSISSIPPI
MISSOURI
NEBRASKA
NEVADA
NEW HAMPSHIRE
NORTH CAROLINA
NORTH DAKOTA
OKLAHOMA
RHODE ISLAMD
SOUTH CAROLINA
<PAGE> 127
SOUTH DAKOTA
TENNESSEE
TEXAS
VERMONT (Mental Health UR)
VIRGINIA
CONNECTICUT ILLINOIS INDIANA (File Annual Information with State) IOWA (F'led
Infonnation with State) MAINE (Hospital Network Only-7 Counties) NORTH CAROLINA
(changet regulations to regulate carrier' not PPOs, except for Workers' Comp.
network) PENNSYLVANIA (Erisa Exempt)
ALABAMA (Utilization Revew/Bill Screening)
ARKANSAS (Managed Care Organization)
KENTUCKY (UMJMedical Bill Audit)
KENTUCKY (Managed Care Health System-10 Counties)
MASSACHUSETTS (Utilization Review)
MICHIGAN (Utilization Review-On beh~f Of MISSOURI (Managed Care
Organization-29 C~`es NORTH CAROLINA (Managet Care Or~r~c OKLAHOMA (Centfied
Workplace Metical Pl" (CWM)) OREGON (Managed Care Organization-EuFne Ponland
Geographic Ser~qce Areas) SOI]TH CAROLINA (Bill Review)
OTHER -
UTILIZATION REVEW ACCREDITATION
COMMISSION (URAC) (Inclutes Work - 's C_ation
Services)
A=ex B- l tO Schedule ~ 1;
Sl~'BSIDIARJES
Insurance Companv .\uthorizations
E~
State Class of Insurance
American Life and Health Insurance Company
Califomia Life and Disability
IllinoisLife, Accident and Health
Missouri Life, Annuities. Endorsements.
Accident and Health
Wisconsin Lit'e. Accident and Health
Cambrid',e Lit'e Insurance Company
<PAGE> 128
Arizona
Arkansas
Colorado
Florida
hldiana
Kansas
Kentu,cky
Louisiana
Maryland
~lassachusetts
Mississippi
Missouri
Montana
Nebraska
Nevada
New Mexico
North Carolina
Oklahoma
South Carolina
South Dakota
Tennessee
Texas
Utah
West Virginia
Life and Disability
Life and Disability
Life
Accident and Health
Stock Lit'e
Life, Accident and Health
Life and Health
Health and Accident
Life, Annuities and Health
Life. Accident and Health
Life and Health
Life. Annuities. Endorsements.
Accident and Health
Life and Disability
Sickness and Accident
Life and Health
Life and Health
Accident and Health
Life, Accident and Health
<PAGE> 129
Life. Accident and Health
Life and Health
Life, Accident and Health
Life, Accident and Health
Life and Disability
Life. Accident and Sickness
Insurance \gencv Licenses
E~
S~e Class of Insurapce
HCC Insurance Services Corp
Colorado
I I linois
~'ew Iersey
Nevada
Virginia
\tontana
Nevada
Arl~ansas
Arizona
!`lichh~an
~larv land
Kansas
Nlebraska
Wasl~ington
vireinia
New York
Califomia
North Carolina
North Dakota
South Carolina
Oregon
Idaho
South Dakota
Louisiana
Rhode Island
Delaware
Alaska
New Hampshire
Health and Life
General
<PAGE> 130
Health and Life
Health and Life
General
Life and Disability
Life and Health
Life and Disabilitv
Life and Disability
Accident. Health and Life
General
General
General
Life and Disability
Life and Health
Accident. Health and Life
Life
General
General
General
Life and Health
Life and Disability
Life and Health
General
General
General
Life and Health
Life, Accident and Health
Third Part' ``lministratgr (TPAl Liceruses
~e Class of License
HCC Administrative Services. Inc.
Idaho
!~tontana
Nebraska
Pennsvlvania
South Dakota
Tennessee
Utah
Wisconsin
Florida
California
Indiana
Texas
South Carolina
<PAGE> 131
OreBon
Oklahoma
North Dakota
blew Mexico
Missouri
Maryland
Louisiana
Kentucky
Kansas
Illinois
Connecticut
Arl;ansas
TPA
TPA
TPA
TPA
TPA
Life and Health
TPA - Life and Disability
EBP Administrator
TPA
Registered Administrator
Administrator
TPA
Administrator
TPA
TPA
Administrator
TPA
TPA
TPA
TPA
TPA
Administrator
TPA
Producer-Life. Accident and
Health
TPA
SCHEDULE S.17
INTELLECTUAL PROPERTY
<PAGE> 132
AMex A reflects data provided by the Borrower as of the Closing Date.
Annex B reflects data made relevant at the time of the Acquisition Transaction.
Annex C reflects the only infringemenr actions knoun to be pending or
threatened as of the Closing Date.
INFRINGEMENT OF IMELLECTUAL PROPERTY
Fim wealth of Ari~ona v FIRST ~Al 1~ ttrate~eS of Ut~h. Federal Distict Court,
Arizons, 1994. PlaindL.dleged infiingement of its tnde rume by St~te~pe~. Cue
settled 12-20~ th Strate~es' egreement (expressly on behalf of itself ant not
on behlf of any other entity) u foDo~:
1. Not to use the nunes "F~st Health" or ~F=t Health Strategia" wit~n the
State of Arizona in tbe madc~ of any Medicare supplement or Mediw ~e protuct.
2. Not tO use tbe n~ne "Frst Health" or "Frst Healtb Str~a" or u2y
teriv~ve of such nama in connection with the ownership or operaion of
risk-con~ng Health Msinter~nce Organ~ion (~O") u defines by feterel la~r, or
~ntb the ownership or operuion of a Health Care ServTces Org~ation ~HCSO") ~
dednet unter Asizona law.
3.
Not to use the nane "F~rst Health" or "F~rst Health Str~ia" or any der~re of
such names in the ownership or opaaoion of a HMO-I0ce busina~ that pro~nda
d~ect medical sen~ces to the public, or tht leases physicun networla to
employer groups, self-fundet. ERISA pbas, or to otha managed care networks;
provitet however, tht Str~egies is not precludd from using the name or marlc
Fust }leaRb or Fust Heelth Sttategia un comection with its business of
providing health care mu~gement service~, including claims atmini~ion,
uti~i-.tion m~nagement, m~gd care provider networlts, "a analysi$, insurance
brokerage, and otha health care benefit seMces; or from using the names First
Health or Fust Health Strategies in conne~ion with its bu~ of pro~ding
outsourcing ser~ces to m~ged care entities thst a~nnge for the provuioa of
medical seMces (includi" but not limitet to, ~IO's, PPO'~, ~PA'~, PHO'~, in~,
healtb elli~ or other combin~ons of health care providers) if ~ itS b of clsime
adminis~udon, claim processing, utilizuion mar~ement und t" sn~
To hve printod on all Explanations of genefit' ~ to pbn enroDea raiding in
ca~in zip cota wi~a Arizona the following di~c~imm "Not ~d with Fr~t Health of
Arizon~"
SCHEDLEE s.is
SI:BSIDIARIES Al~D EQUITY INVESTNIENTS
Annex A lists Subsidiaries of the Borrower as of the Closing Date. .A=ex B
lists equity investments of the Borrower as of Mav i I. 1997 Other investments
or changes in the listed
<PAGE> 133
investments mav have been made after that date. but the aggregate of such
changes will not have a Slaterial .Ndverse Effect. Annex .A to Schedule j 18
List ot Subsidianes
PRE-CLOSING SUBSIDIARIES OF BORRO~ER
i HeaithCare COMPARE Administrative Services. Inc
2. Office Realry [n~estors. Inc.
3. COMPARE Leasing Corp.
4. HCC Insurance Services Corp.
5 CHP Administration. Inc.
6. American Life and Health Insurance Companv
7. Cambadge Life Insurance Company
POST-CLOSING NEW SUBSID[ARIES OF BORROWER
8. First Health Strategies. Inc.
9. First Health Strategies of Ohio. Inc.
10. First Health Insurance Agency, Inc.
11. First Health Review, Inc.
i2. First Health Strategies of Pennsylvania. Inc.
13. First Health of Canada. Inc.
14. U.S. Administrators, Inc.
15. First Health Strategies (TPA), Inc.
16. First Health Realty, Inc.
17. First Health Strategies of Texas
18. First Health Strategies of l~ew Mexico. Inc.
19. First Health Strategies of Utah, Inc.
<PAGE> 134
20. PRIMExtra. Inc.
21. First Health Services Corporation
22. Midwest genefits Corporation
23. First Mental Health, Inc.
SCEDULE 7.5
INDEBTEDNESS
None.
SCHEDI,'LE 7.10
LEASE OBLIGATloNS
.A=ex A reflects all Lease Obligations of the Borrower prior to the
Closing Date which are required to be disclosed. Annex B was derived by
representatives of First Health Strategies and Sersices and includes some
leases ~ith aggregate annual rent less than S50.000. For purposes of this
Schedule 7. 10, those leases on Annex B showing aggregate annual rent of less
than S50.000 shall be deemed to have been deleted from Annex B.
~.NYEX A TO SCHEDULE 7.10
HEALTHC.ARE CO \I P.\RE CO RP.
SCHEDI,LE OF LEASES
.AS OF JI!:N E 1997
PROPERTY LE.ASES
PAYEE, PROPERTY LOCATION
I Prentiss Properties
Sacramento. CA
. Hines [nterests LTD Part
Ir~inu. TX
Redico Mananement. Inc.
Livonia (Southfield). Ml
Mones Store Sers ice Corp
Atlanta. GA Office
TOTAL PROPERTY
<PAGE> 135
MONTHLY EXPIRATION
RENT DATE
S 104.066.79 December 1999
10.501 08 March 2006
10.286.73 lanuary 2002
6.230.32 Februarv 1999
5131.084 92
EQUIP\1E.NT LEASES
PAYEE/TYPE/LOCATION
..
OCE CREDIT CORP
COPYING MACHINES:
DOWNERS GROVE. IL 3 ~ 52.885.00 4 ~ $ 1.168 00 TOTAL EQUIPMENT
GRAND TOTAL
MONTHLY EXPIRATION
RENT DATE
l
58.655.00 March 19'
7.072.00 May 204
$15.727 00
S146.811.92
SCHEDULE 7.5
INDEBTEDNESS
None.
SCHEDULE 7.10
LEASE OBLIGATIO~o'S
<PAGE> 136
Annex A reflects all Lease Obligations of the Borrower prior to the
Closing Date ``hich are required tO be disclosed. Annex B was deri~ed b`:
representatives of First Health Strategies and Services and includes some
leases with aggregate annual rent less than 5S0.000. For purposes of this
Schedule 7.10, those leases on Annex B showing aggregate annual rent of less
than S50.000 shall be deemed to have been deleted trom Annex B.
`,~,iEX A TO SCHEDl:LE 7.10
HE.ALTHC.ARE Co Nl P.` RE CORP.
SCHEDI~'LE OF LEASES
~SOFJENE 1997
PROPERTY LEASES
PAYEE PROPERTY LOCATION
I Prentiss Properties
Sacramento. CA
. Hines Interests LTD P~rt
Ir~ing. TX
.~tONTHLYE.YPIRATION
RE!\iT DATE
S 104.066.79December 1999
10.501.08 .\larch 2006
3 Redico Nfanacement. Inc. 10.286.73 lanuarv '002
Livonia (Southfield). MI
4. Monev Store Ser~ice Corp. 6.230.39 Februarv 1999
Atlanta. GA Office
TOTAL PROPERTY
$ 131.084.92
EQljIP.~1E.`IT LEASES
PAYEE'TYPE'LOCATION OCE CREDIT CORP.
COPYING MACHINES:
<PAGE> 137
DOWNERS GROVE. IL
3 ~ S2.885.00
4 ~ Sl.768.00
TOTAL EQUIPMENT
GRAND TOTAL
MONTHLY E,YPIRATION
RE>IT DATE
S8.655.00 ~tarch 1'
7.072 00 May 2(
$15.727.00
$146.811.92
<PAGE> 1
BASIC LEASE INFORMATION
Lease Date: January 33 , 1998
Tenant: Pirst Health Group Corp.
Tenant's Address: 4141 N. Scottsdale Road, Suite 300
Scottsdale, Arizona 852S1
Attn: Assistant Vice President, Facilities and Administration
Copy to: Legal Department
Contact: Dennis Taute Telephone: 602-994-8500
Landlord: TCC Milwaukee 11 Limited Partnership
Landlord's Address: 2200 Ross Avenue, Suite 3700
Dallas, Texas 7S201-2997
Contaa: TC Milwaukee, ~c.Telephone: 414-359-5010
Two Park Plaz~'
Suite 190
10850 West Park Place
Mil~nuboe, WI S3224
Premises: The office building (the "Building") located or to be located
on the land described as Building No. 10 in the Park Place Business Park,
Milwaukee Counq, Wisconsin, and whose street address is 11301 West Lake
Park Drive (the "Land.) and which Land is more particularly described on
EXHIBIT A (collectively, the "Premisesn). The square footage of the
Building is hereby deemed to be 40,020 square feet.
Term: 120 months, commencing on the Commencement Date (as such term is
hereinafter defined) and ending at 5:00 p.m. on the day immediately prior
to the tenth year anniversary of the Commencement Date subject to
adjustment and earlier terroination as provided in the Lease. As more
particularly set forth in EXHIBIT E, Tenant has one option to renew the
lease for a term of S years at market rate for comparable space upon not
less than 9 months prior written notice by Tenant to Landlord of such
exercise.
Target Commencement April 1, 1998 Date:
Commencement Date: May 1, 1998
Early Occupancy: See Paragraph 28
Basic Rental: S46,690.00 per month, which is based on an annual Basic Rental of
SS60,280.00 for Lease Years (as such term is hereinafter defined) 1
through and including 3; S50,025.00 per month, which is based on an
annual Basic Rental of $600,300.00 for Lease Years 4 through 6; and
$S3,360.00 per month, which is based on an annual Basic Rental of
S640,320.00 for Lease Years 7 through 10.
<PAGE> 2
Securiq Deposit: N/A
Prepaid Rent: First month's Basic Rent in the amount of $46,690.00 due on or
before lanuary 26, 1998.
Rent: Basic Rental, Tenant's share of Excess, and all other sums that Tenant
may owe to Landlord under the Lease.
Permitted Use: Any general offce use (including sales and/or claims of
fices and corporate headquarters) permitted by applicable laws,
statutes, ordinances, codes, orders, rules and regulations and provided
said use does not create waste or nuisance and does not utilize
hazardous materials or substances in any manner which would exceed
standard offce use for any such hazardous substances or materials.
Tenant's Proportionate 100% Share:
Expense Stop: 1998 base year.
Initial Liability S2,000,000 combined
Insurance Amount:
Tenant Finish: See EXHIBIT D
Expansion Option:See EXHIBIT F
Lease Year: The term ~Lease Year" shall mean a period coromencing on the
Commencement Date or the anniversary thereof and ending on the date
exactly 36S(366 in a leap year) days thereafter.
The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD:
TENANT:
TCC ~flLWAUKEE fl LIMITED PARTNERSHIP
By: a Wisconsin limited partnership
Its: general partner
By: ~ O~__
Name: 1> ~6~br;N~ o`~.c~
Title: ~rcs`~c~t
FIRST HEALTH GROUP CORP.
By: i)~ t. . ~ ;=
Name: T~nr, i s ta~
<PAGE> 3
Title: ~41 ~A~` 1~ dir~ ~ f~lr~ i
TABL~E OF CONTENTS
DEFINITIONS
AND BASIC PROVISIONS .....
LEASE GRANT ............
TERM .... -
RENT ........
DELINQUENT PAYMENT; HANDLING CHARGES ..........
SECURITY DEPOSIT ......
LANDLORD'S OBLIGATIONS
IMPROVEMENTS; ALTERATIONS; REPAfltS; MAINTENANCE .
Paze No.
ASSIGNMENT AND
SUBLETTING . .
INSURANCE; WAIVERS; SUBROGATION; INDEMNITY
SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE . .
RULES AND REGULATIONS
CONDEMNATION
F~E OR OTHER CASUALTY . .
TAXES
EVENTS OF DEFAULT . .
REMEDES .......
PAYMENT BY
TENANT; NON
WAIVER .....................
LANDLORD'S LEN . .
SURRENDER OF PREIvflSES .
HOLDING OVER . .
CERTAIN RIGHTS RESERVED BY LANDLORD .
SUBSTITllTION SPACE .
MISCELLANEOUS . . .
SPECIAL PROVISIONS . .
EXHIBIT A
DESCRIPTION OF PREMISES ........
10 11 11 12
<PAGE> 4
13 13 13
............... A-1
EXH~IT B
BUILDING RULES AND REG11LATIONS
EX}flBIT C
OPERATING EXPENSE ESCALATOR ......
EXHIBIT D
TENANT FINISH-WORK: PLANS .......
EXHIBIT E
EXTENSION OPTION
EXH BIT F
EXPANSION OPTION
EXHIBIT G
FIRST RIGHT TO LEASE SPACb
EXHIBIT H
WAIVER OF RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES
CONSUMER PROTECTION ACT .........................
EX}flBIT I
LESSEE'S ESTOPPEL CERTfl1CATE .........
EXHIBIT J
SUBORDINATION. NON-DISTURBANCE AND ATTORNMENT AGREEMENT
. B-1
....... D-1
....... E-1
<PAGE> 5
. F-1
... G-1
......... 1-1
LEASE
{HIS LEASE AGREEMENT (this "Leasen) i8 entered into as of lanuary
~1998, between TCC Milwaukee 11 Limited Partnership, a Wisconsin limited
partnership (~Landlordn), and First Health Group Corp., a Delaware corporation
(~Tenantn).
DEFINITIONS 1. The definitions and basic provisions set forth in the Basic
AND BASIC Lease Information (the ~Bsslc Lesse InformsHon") executed by
PROVISIONS Landlord and Tenant contemporaneously herewith are incorporated
herein by reference for all purposes.
LEASE GRANT
RENT
2. Subject to the terms of this Lease, Landlord leases to Tenant, and
Tenant leases from Landlord, the Premises.
3. If the C~ Date is not the first day of a calendar month, then the
Term shall be extended by the time between the Comrna~cement Date and the first
day of the next month. If this Lease is executed before the Premises become
vacant or otherwise available and ready for occupancy by Tenant, or if any
present occupant of the Premises holds over and Landlord cannot acquire
possession of the Premises before the Commencement Date, then (a) Tenant's
obligation to pay Rent hereunder shall be waived until Landlord tenders
possession of the Premises to Tenant, (b) the Term shall be extended by the
time between the scheduled Commencement Date and the date on which Landlord
tenders possession of the Premises to Tenant (which date will then be defined
as the Commencement Date), (c) Landlord shall not be in default hereunder or be
liable for damages therefor, and (d) Tenant shall accept possession of the
Premises when Landlord tenders possession thereof to Tenant. By occupying the
Premises, Tenant shall be deemed to have accepted the Premises in their
condition as of the date of such occupancy, subject to the performance of
punch-list items that remain to be performed by Landlord, if any, in a writing
executed by Landlord and Tenant within thirty (30) days after the Commencement
Date. Tenant shall execute and deliver to Landlord, within ten days after
Landlord has requested same a letter confirming (1) the Commencement Date, (2)
that Tenant has accepted the Premises, and (3) that
<PAGE> 6
Landlord has performed all of its obligations with respect to the Premises
(except for punch-list items specified in such letter).
4. (a) Pavment. Tenant shall timely pay to Landlord the Buic Rental and
all additional sums to be paid by Tenant to Landlord under this Leue, including
the Excess Operating Expenses determined as set forth in EXHIBIT C without
deduction or set off, at Landlord's Address (or such other address as Landlord
may from time to time designate in writing to Tenant). Basic Rental, adjusted
as herein provided, shall be payable monthly in advance. The first monthly
installment of Basic Rental shall be payable contemporaneously with the
execution of this Lease; thereafter, monthly installments of Buic Rental shall
be due on the first day of the second full calendar month of the Term and
continuing on the first day of each succeeding calendar month during the Term.
Basic Rental for any fractional month at the beginning of the Term shall be
prorated bued on 1/36S of the current annual Basic Rental for each day of the
partial month this Leue is in effect, and shall be due on the Commencement
Date.
(b) IntentionsllY Deleted.
(c) Electrical Costs. Tenant shall pay directly for all electricity
consumed at the Premises on or before such costs are due and, upon request of
Landlord, shall provide Landlord with reasonable evidence of such payment.
(d) Intentionallv Deleted.
(e) Intentionsl}Y Deleted.
DELDNQUENT 5. All payments required of Tenant hereunder shall besr
PAYMENT; interest from the date due until paid at the lesser of (i) five
percent (S%)
HANDLING above the "Prime Ratea or (ii) the maximum rate permitted by
applicable
CHARGES law (the "Default Rate"). The term "Prime Rate~ as used herein shall
mean the "prime rate" announced from time to time by Firstar Bank
Milwaukee, N.A., its successors or assigns at its principal place of
business in Milwaukee, Wisconsin, which rate may not be the lowest rate
offered or announced by such bank. Alternatively, Landlord may charge
Tenant a fee equal to 10% of the delinquent payment to reimburse
Landlord for its cost and inconvenience incurred as a consequence of
Tenant's delinquency. In no event, however, shall the charges permitted
under this Section 5 or elsewhere in this Lease, to the extent the same
are considered to be interest under applicable law, exceed the maximum
lawful rate of interest.
SECURITY DEPOSIT 6. Intentionsllv Deleted
LANDLORD'S 7. (a) Services. Subject to the provisions of Section
OBLIGATIONS 7.(d) below and provided no Event of Default exists, Landlord shall
furnish to Tenant (1) water (hot and cold) at those points of supply
provided for general use of tenants of the Building, 24 hours a day, 365
days a year; (2) heated and refrigerated air conditioning as appropriate,
<PAGE> 7
24 hours a day, 365 days a year, and at such temperatures and in such
amounts as are being generally provided for normal and standard offfice
usage in the Milwaukee metropolitan area; (3) janitorial service to the
Premises on weekdays other than holidays for Building-standard
installations (Landlord reserves the right to bill Tenant separately for
extra janitorial senice required for non-standard installadons) and such
window washing as may from dme to dme in Landlord's judgment be
. reuenably required; (4) replacement of Building standard light bulbs and
fluorescent tubes, provided that Landlord's standard charge for such bulbs
and tubes shall be paid by Tenant; (5) security services, if any, provided
by Landlord to the other single tenant buildings owned by Landlord in the
Park Place Business Park; and (6) electrical current, 24 hours a day, 365
days a year, other than for computers, electronic data processing
equipment, special lighting, equipment that requires more than the
electricity provided by the existing electrical service servicing the
Building as the same may be upgraded pursuant to EXHIBIT D hereof, or
other equipment whose electrical energy consumption exceeds normal
office usage; provided, however, it is understood and agreed that Tenant
is to contract for and obtain electricity directly from the Building's
current provider, Wisconsin Electric Power Company (nWEPCO"). If
Tenant's use of the Premises requires upgrades to the electrical service
to safely operate the Premises in compliance with all applicable laws, any
such upgrades shall be covered by Section 8 hereof and shall be at
Tenant's sole cost and expense. Landlord may change electricity
providers for the Premises at any time upon thirty (30) days prior written
notice to Tenant. If Tenant desires to change electricity providers, then
Tenant shall notify Landlord at least sixty (60) days prior to any
proposed change, which notice shall set forth the proposed provider, the
cost of the proposed service and any other benefits of changing to the
proposed provider and Tenant shall have the right to change providers to
the named proposed provider and on terms consistent with those set forth
in the notice unless Landlord reasonably objects thereto within 45 days of
such nodce. It is agreed that it will be reasonable for Landlord to object,
among other reasons, to Tenant's choice of providers if Landlord has
selected a different provider that has agreed to provide a volume discount
in connection with other buildings in the Park Place Business Park.
Landlord shall maintain the common areas of the Building, such as the
parking area, including reasonable snow removal therefrom, in a manner
consistent with similar facilities in the Milwaukee area and shall
order and condition, except for damage occasioned by Tenant, or its
maintain the plumbing, HVAC and electrical systems in reasonably good
employees, agents, contractors or invitees. All costs incurred in
connection therewith shall be included u Operadog Expenses (as such term
is defined in EXHIBIT C). If Tenant desires any of the services specified in
this Section 7.(a) at any time other than dmes herein designated, such
services shall be supplied to Tenant upon the written request of Tenant
<PAGE> 8
delivered to Landlord before 3:00 pm. on the business day preceding such extra
usage, and Tenant shall pay to Landlord the cost of such services within ten
days aRer Landlord has delivered to Tenant an invoice therefor.
(b) DisraDtlon of Services. Notwithstanding anytlung to the contrary
contained herein, Landlord shall have no liability, whatsoever, for any failure
to provide any such service described in this Section 7 or for any disruption
of such services, including, without limitation, arising out of the tortious or
criminal acts of third parties, and Tenant's only rights and remedies in
comecdon therewith shall be as expressly set forth in subsections (d) and (e)
of this Section 7.
(c) Discontinuance. Landlord's obligation to furnish services under Secdon
7.(a) shall be suyect to the rules and regulations of the supplier of such
services and goverMmental rules and regulations. Tenant shall, however, be
responsible for contracting with the supplier of electricity service and for
paying all deposits for, and costs relating to, such service.
(d) Restoraffon of Services: Abatement. Landlord shall use reasonable
efforts to restore any service that becomes unavailable; however, such
unavailability shall not render Landlord liable for any damages caused thereby,
be a constructive eviction of Tenant, constitute a breach of any implied
warranty, or, except as provided in the next sentence, entitle Tenant to any
abatement of Tenant's obligations hereunder. However, if the restoration of
such service is within Landlord's reasonable control and Landlord fails to
commence reasonable efforts to restore such service within five (5) business
days aRer actual notice to Landlord of such failure, then Tenant shall have the
right to notify Landlord and Landlord's Mortgagee (as such term is hereinafter
defined) in writing of such failure by Landlord and if neither Landlord nor
Landlord's Mortgagee commence reasonable efforts to restore such service within
five (5) business days afler the giving of said written notice, then Tenant
shall, as its exclusive remedy therefor, be entitled to a reasonable abatement
of Rent for each consecutive day (afler such second five (5) business day
period) that Tenant is so prevented from making reasonable use of the Premises.
(e) Tenant's RiEht to Provide Services. If Landlord fails to provide such
services and such failure is not a result of events or causes beyond Landlord's
reasonable control, then, afler five (5) business days' prior written notice to
Landlord and at Landlord's request, to any Landlord's Mortgagee, setting forth,
with specificity, such failure and provided Landlord does not within such five
(5) business day period commence reasonable efforts to provide such senice,
Tenant may cause such service to be provided to the Premises and the actual
reasonable costs of such service may be invoiced to Landlord, together with
reasonable evidence thereof, for reimbursement. To the extent that the costs of
such services reimbursed by Landlord exceed the cost of such service for the
1998 Operating Expense Year (nBase Year Costsn), then any costs in excess of
the Base Year Costs shall be included as part of the Excess and shall be paid
by Tenant at the time or times such Excess is payable by Tenant hereunder. All
such costs shall be included as part of Operating Expenses.
(f) Access. Tenant shall have access to the Premises 24 hours a day and
365 days per year.
IMPROVEMENTS;
<PAGE> 9
ALTERATIONS;
REPAIRS;
MAINTENANCE
8. ( ) bnDrovernents: Alteradons. Improvements to the Premises shall be
installed at the expense of Tenant and only in accordance with plans and
specifications which have been previously submitted to and approved in writing
by Landlord. Afler the initial Tenant improvements are made, no alterations or
physical additions in or to the Premises may be made without Landlord's prior
written consent. Notwithstanding the above, Tenant shall not be required to
obtain the approval of Landlord for interior improvements or alterations which
do not affect the systems serving the Building; do not affect the structural
components of the Building; and do not exceed a cost of S5,000.00; provided
that notice of such alteration or improvement is given to Landlord at least
five (5) days prior to commencement of any work in the Premises in coMection
therewith and Landlord does not object to such alteradon or improvement within
five (5) days afler notice thereof. Tenant shall not paint or install lighting
or decorations, signs, window or door lettering, or advertising media of any
type on or about the Premises without the prior written consent of Landlord
except as set forth in Section 35 hereof. All alteradons, additions, or
improvements (whether temporary or permanent in character, and, including,
without limitation, all air-condidoning equipment and all other equipment that
is in any manner connected to the Building's plumbing system) made in or upon
the Premises, either by Landlord or Tenant, shall be Landlord's property at the
end of the Term and shall remain on the Premises without compensadon t o
Tenant. Approval by Landlord of any of Tenant's drawings and plans and
specifications prepared in connecdon with any improvements in the Premises
shall not consHtute a representation or warranty of Landlord as to the adequacy
or suffficiency of such drawings, plans and specifications, or the improvements
to which they relate, for any use, purpose, or condition, but such approval
shall merely be the consent of Landlord as required hereunder. Tenant shall
have the right without obtaining the prior written consent of Landlord to
rearrange and install its furniture systems provided such furniture systems
will not be attached to the Premises; will not be categorized as fixtures of
any type; and the removal thereof will not cause any damage to the Premises.
Notwithstanding anything in this Lease to the contrary, Tenant shall be
responsible for the cost of all work required to comply with the retrofit
requirements of the Americans with Disabilities Act of 1990 ("ADA"), and all
rules, regulations, and guidelines promulgated thereunder, as the same may be
amended from time to time, necessitated by any installations, additions, or
alterations made in or to the Premises at the request of or by Tenant or by
Tenant's use of the Premises (other than retrofit work whose cost has been
particularly identified as being payable by Landlord in an instrument signed by
Landlord and Tenant), regardless of whether such cost is incurred in connecdon
with retrofit work required in the Premises (including the Work described in
EXHIBIT D except as set forth therein) or in other areas of the Building;
provided, however, that if the Building is not in suffficient compliance with
the ADA on the date Landlord substantially completes the work to be performed
by Landlord as described in (the "Substantial Completion Date") to obtain an
occupancy cerdficate for the Building, then Landlord shall be responsible in
accordance with EXHIBIT D for any work required to correct any such failure to
so comply based on the Building design as of the Substandal Completion Date.
<PAGE> 10
(b) Repairs: Maintenance. (i) Tenant's Obligations. Tenant shall operate
its business at the Premises and operate the Premises in a clean, safe,
attracdve condidon and manner, and shall not pernnit or allow to remain any
waste or damage to any pordon of the Premises. Tenant shall repair or replace,
subject to Landlord's direcdon and supervision, any damage to the Building
caused by Tenant or Tenant's agents, contractors, or invitees. If Tenant fails
to make such repairs or replacements necessitated by Tenant or Tenant's agents,
contractors or invitees within 15 days afler the occurrence of such damage,
then Landlord may make the same at Tenant's cost. In lieu of having Tenant
repair any such damage so caused by Tenant or Tenant's agenB, contractors
or invitees outside of the Premises, Landlord may repair such damage at
Tenant's cost. The cost of any repair or replacemeM work performed by Landlord
under this Secdon 8 shall be paid by Tenant to Landlord within ten (10) days
afler Landlord has delivered to Tenant an invoice therefor or at Landlord's
option Landlord may include such costs as Operating Expenses.
(ii) Landlord's Oblieations. Landlord shall be responsible for the
maintenance, repair and/or replacement of the Premises, including without
limitation the plumbing, electrical and HVAC systems located in the Building
and the parking area, lighdng and all landscaping included as part of the
Premises. Except as specifically set forth on EXHIBIT D. all costs incurred by
Landlord pursuant to this subsection (b)(ii) shall be included as Operadug
Expenses.
(c) Performance Or Work. All work described in this Secdon 8 which is to
be paid for or undertaken by Tenant shall be performed only by Landlord or by
contractors and subcontractors approved in writing by Landlord, which consent
shall not be unreasonably withheld. Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage against such risks,
in such amounts, and with such companies as Landlord may reasonably require,
and to procure payment and performance bonds reasonably sadsfactory to Landlord
covering the cost of the work. All such work shall be performed in accordance
with all legal requirements and in a good and workmanlike manner so as not to
damage the Premises, the primary structure or structural qualities of the
Building, or plumbing, dectrical lines, or other utility transmission facility.
All such work which may affect the HVAC, electrical system, or plumbing must be
approved by Landlord.
(d) Mechanic's Liens. Tenant shall not permit any mechanic's liens to be
filed against the Premises or the Building for any work performed, materials
furnished, or any obligadon incurred by or at the request of Tenant. Prior to
undertaking any work on the Premises, Tenant shall post signs stipuladng that
Tenant is not acting as the agent of Landlord. If such a lien is filed, then
Tenant shall, within ten (10) days afler Landlord has delivered notice of the
filing to Tenant, either pay the amount of the lien or diligently contest such
lien and deliver to Landlord a bond or other security reasonably satisfactory
to Landlord. If Tenant fails to timely take either such action, then Landlord
may pay the lien claim without inquiry as to the validity thereof, and any
amounts so paid, including expenses and interest, shall be paid by Tenant to
Landlord within ten days afler Landlord has delivered to Tenant an invoice
therefor.
9. Tenant shall continuously occupy and use the Premises only for the
Permitted Use and shall comply with all laws, statutes, codes, orders,
ordinances, rules, and regulations relating to
<PAGE> 11
the use, condition, and occupancy of the Premises. The Premises shall
not be used for any use which is disreputable or creates extraordinary fire
hazards or results in an increased rate of insurance on the Building or its
contents or the storage of any hazardous materials or substances. If, because
of Tenant's acts, the rate of insurance on the Building or its contents
increases, then such acts shall be an Event of Default, Tenant shall pay to
Landlord the amount of such increase on demand, and acceptance of such payment
shall not constitute a waiver of any of Landlord's other rights. Tenant shall
conduct its business and control its agents, employees, and invitees in such a
manner as not to create any nuisance or interfere with other tenants or
Landlord in its management of the Building.
ASSIGNMENT AND SUBLETTING
10. (a) Transfers: Consent. Tenant shall not, without the prior
written consent of Landlord (which consent shall not be unreasonably withheld),
(1) advertise that any portion of the Premises is available for lease, (2)
assign, transfer, or encumber this Lease or any estate or interest herein,
whether directly or by operation of law, (3) permit any other entity to become
Tenant hereunder by merger, consolidation, or other reorganization, (4) if
Tenant is an entity other than a corporation whose stock is publicly traded,
permit the transfer of an ownership interest in Tenant so as to result in a
change in the current control of Tenant, (5) sublet any pordon of the Premises,
(6) grant any license, concession, or other right of occupancy of any portion
of the Premises, or (7) permit the use of the Premises by any parties other
than Tenant (any of the events listed in Sections lO.(a)(2) through lO.(a)(7)
being a ~Transfer~). Notwithstanding anything to the contrary contained in this
Lease, Tenant may assign or sublet its rights under this Lease to any
subsidiary or affiliate which is at least fifly percent owned by or under
common ownership with, Tenant or which owns fifly percent of Tenant. Such
Transfer shall not release Tenant from its obligations under the Lease,
including without limitation, the obligation to pay Basic Rental. It shall not
be unreasonable for Landlord to withhold its consent to any Transfer based on,
among other items, a change in the use of the Premises; the reputation of the
proposed transferee; the financial status of the proposed transferee; the form
of the Transfer document; or the status of the proposed transferee as either a
current tenant of property owned controlled or managed by Landlord or any
afffiliate of Landlord or a party to which contact has been made or
negotiations have been commenced (as evidenced by either a walk through of
premises or a written lease proposal) either with said transferee or with any
affliate of said transferee in connecdon with the lease of any property which
is owned, controlled or managed by Landlord or any afffiliate of Landlord. If
Tenant requests Landlord's consent to a Transfer, then Tenant shall provide
Landlord with a written descriphon of all terms and conditions of the proposed
Transfer, copies of the proposed documentation, and the following informadon
about the proposed transferee: name and address; reasonably satisfactory
information about its business and business history; its proposed use of the
Premises; banking, financial, and other credit information; and general
references sufficient to enable Landlord to determine the proposed transferee's
creditworthiness and character. Tenant shall reimburse Landlord for its
reasonable attorneys' fees and other expenses incurred in connection with
considering any request for its consent to a Transfer. If Landlord consents to
a proposed Transfer, then the proposed transferee shall deliver to Landlord a
written agreement whereby it expressly assumes the Tenant's obligations
hereunder; however, any transferee of less than all of the space in the
Premises shall be liable only for obligations under this Lease that are
properly allocable to the
<PAGE> 12
space subject to the Transfer, and only to the extent of the rent it has
agreed to pay Tenant therefor. Landlord's consent to a Transfer shall not
release Tenant from performing its obligations under this Lease, but rather
Tenant and its transferee shall be jointly and severally liable therefor.
Landlord's consent to any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. If an Event of Default occurs while the Premises or any
part thereof are subject to a Transfer, then Landlord, in addition to its other
remedies, may collect directly from such transferee all rents becoming due to
Tenant and apply such rents against Rent and, if such an Event of Default
occurs, then Tenant hereby authorizes its transferees to make payments of rent
directly to Landlord upon receipt of notice from Landlord to do so.
(b) l~n - Uations. Landlord may, within 30 days
after submission of Tenant's written request for Landlord's consent to a
Tr~fer consisting of a Transfer of more than twenty-five percent (2S%)
of the rentable square feet of the Premises, cancel this Lease (or, as to a
sublethug, cancel as to the portion of the Premises proposed to be sublet)
as of the date the proposed Transfer was to be effective. If Landlord
cancels this Lease as to any pordon of the Premises, then this Lease shall
cease for such pordon of the Premises and Tenant shall pay to Landlord
all Rent accrued through the cancellation date relating to the portion of
the Premises covered by the proposed Transfer and all brokerage
commissions paid or payable by Landlord in connecdon with this Lease
that are allocable to such portion of the Premises. Thereafler, Landlord
may lease such portion of the Premises to the prospective transferee (or to
any other person) without liability to Tenant. Notwithstanding the
foregoing, provided tbat: (a) Tenant is in full compliance with the terms
of this Lease and is not in default hereunder; (b) Tenant is occupying not
less tban 75% of the rentable square feet of the Premises; and (c) Tenant
is operadng its claims operadons from all of the Premises so occupied,
then this right of Landlord to cancel shall not apply to an assignment of
the Lease to an endty or person that acquires from Tenant all or
substandally all of the claims operadons business operating at the
Premises and said business continues to so operate from the Premises for
at least one year afler such assignment.
(c) Additional Comnensation. Tenant shall pay to Landlord, immediately
upon receipt thereof, fifly percent (50%) of all compensation received by
Tenant for a Transfer (less leasing/brokerage commissions, attorneys' fees for
lease or sublease negotiations and Tenant improvements costs to the Premises,
to the extent incurred by Tenant as a direct result of such Transfer and
amortized over the term of said sublease or this Lease, as applicable) that
exceeds the Basic Rental and Tenant's share of Excess allocable to the portion
of the Premises covered thereby.
INSURANCE;
WAIVERS;
SUBROGATION;
INDEMNITY
<PAGE> 13
11. (a) Illeurance. Tenant shall at its expense procure and maintain
tbroughout the Term the following insurance policies: (1) comprehensive general
liability insurance in amounts of not less than a combined single limit of
$2,000,000 (the "Initial Liabilitv Insurance Amountn) or such other amounts as
Landlord or Landlord's Mortgagee may from time to time reasonably require,
insuring Tenant, Landlord, Landlord's agents and their respective affiliates
against all liability for injury to or death of a person or persons or damage
to property arising from the use and occupancy of the Premises, (2) contractual
liability insurance coverage sufficient to cover Tenant's indemnity obligadons
hereunder, (3) insurance covering the full replacement value of Tenant's
property and improvements, and other property (including property of others),
in the Premises, (4) workman's compensation insurance, containing a waiver of
subrogation endorsement reasonably acceptable to Landlord, and (5) business
interruption insurance. Tenant's insurance shall provide primary coverage to
Landlord when any policy issued to Landlord provides duplicate or similar
coverage, and in such circumstance Landlord's policy will be excess over
Tenant's policy. Tenant shall furnish cardficates of such insurance and such
other evidence satisfactory to Landlord of the maintenance of all insurance
coverages required hereunder, and Tenant shall obtain a written obligation on
the part of each insurance company to notify Landlord at least 30 days before
cancellation or a material change of any such insurance. All such insurance
policies shall be in form, and issued by companies, reasonably satisfactory to
Landlord. For purposes of this Section 11, the term "affiliate" shall mean any
person or entity which, directly or indirectly, controls, is controlled by, or
is under common control with the party in quesdon. All insurance required to be
carried by Tenant may be carried by "blanket" insurance policies; provided said
policies comply with the requirements of this Paragraph 11 with respect to the
Premises.
(b) Mutual Waiver of Subrosation. Landlord and Tenant each waives any
claim it might have against the other for any damage to or theft, destrucdon,
loss, or loss of use of any property, to the extent the same is insured against
under any insurance policy that covers the Building, the Premises, Landlord's
or Tenant's fixtures, personal property, leasehold improvements, or business,
or is required to be insured against under the terms hereof, and regardless of
whether or not the party waiving such claim actually recovers from an insurance
provider; however, Landlord's waiver shall not include any deductible amounts
on insurance policies carried by Landlord or apply to any coinsurance penalty
which Landlord might sustain. Each party shall cause its insurance carrier to
endorse all applicable policies waiving the carrier's rights of recovery under
subrogation or otherwise against the other party. Tenant shall provide Landlord
with a copy of said endorsements in form reasonably acceptable to Landlord
prior to commencement by Tenant, or on Tenant's behalf, of any work on the
Premises.
(c) lademnilv. Subject to Section ll.(b), Tenant shall defend,
indemnify, and hold harmless Landlord and its agents from and against all
claims, demands, liabilities, causes of action, suits, judgments, and expenses
(including attorneys' fees) arising from any occurrence on the Premises or from
Tenant's failure to perform its obligations under this Lease (other than
matters arising from the negligence or willful misconduct of Landlord or its
agents). This indemnity provision shall survive terminatdon or expiration of
this Lease. All personal property on the Premises shall be at Tenant's sole
risk and Landlord shall not be liable for any damage
<PAGE> 14
done to or loss of such personal property or from damage or loss
suffered by Tenant, other than, subject to Section ll.(b) hereof, arising out
of the negligence or willful misconduct of Landlord.
(d) Landlord's Insurance. Landlord shall, as part of Operating Expenses,
procure and maintain throughout the Term the following insurance policies: (1)
comprehensive general liability insurance in a combined single amount of not
less than $2,000,000 insuring Landlord and Tenant against liability for injury
to or death or a person or persons or damage to property arising from
Landlord's activities on the Premises and (2) fire and casualty insurance
covering loss or damage to the Premises for the full replacement cost and
containing a "Special Causes of Loss" endorsement or similar "all risk"
coverage to the extent then reasonably available, insuring Landlord and naming
Tenant as an additional insured. All insurance required to be carried by
Landlord may be carried by "blanket" insurance policies. Tenant shall have the
right, upon written request, to review Landlord's insurance policies. Tenant
may elect, at its sole cost and expense, to provide substitute policies of
equal or higher quality and coverage provided such coverage is with an
insurance company with a radng equivalent or higher in all respects to
Landlord's insurance company and is less expensive than Landlord's insurance
and provided that Tenant shall have not)fied Landlord in writing of such
election and shall have provided Landlord with evidence reasonably satisfactory
to Landlord of its ability to obtain such insurance policies at a lower cost
and Landlord shall not have not)fied Tenant within thirty (30) days thereafler
that Landlord has obtained such insurance at a cost no greater than 105% of the
cost of Tenant's proposed insurance. If Landlord provides such notice, then
Tenant shall not be entitled to obtain its own insurance. If Landlord does not
provide such notice, Tenant may obtain such substitute policies at its sole
cost and expense.
(e) Landlord's Indemnitv. Subject to Section 1 l.(b), Landlord shall
defend, indemnify, and hold harmless Tenant and its agents from and against all
claims, demands, liabilities, causes of action, suits, judgments, and expenses
(including reasonable attorneys fees) arising out of injury to or death to
persons or damage to property resuldng from the negligence or willful
misconduct of Landlord, its agents, contractors, or employees on the Premises
during the term of this Lease; provided, however, this indemnity shall not
apply to matters arising out of the negligence or willful misconduct of Tenant,
its agents, employees, contractors or invitees. This indemnity shall survive
the termination or expiradon of this Lease.
SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE
12. (a) Subordination. This Lease shall be subordinate to any deed of
trust, mortgage, or other security instrument (a "Mortgagen), or any ground
lease, master lease, or primary lease (a "Primaq Leasen), that now or hereafter
covers all or any part of the Premises (the mortgagee under any Mortgage or the
lessor under any Primary Lease is referred to herein as "Landlord's Mortgagee"
or as "Landlord's Lender").
(b) Attomment. Tenant shall attorn to any party succeeding to Landlord~s
interest in the Premises. whether by purchase, foreclosure, deed in lieu of
foreclosure, power of sale, termination of lease, or otherwise, upon such
party's request, and shall execure such agreements confirming such attornment
as such party may reasonably request.
<PAGE> 15
(c) Notice to Landlord's Mort~a~ee. Tenant shall not seek to enforce any
remedy it may have for any default on the part of the Landlord without first
giving written notice by certified mail return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
(d) Non-Disturbance. At Landlord's request, Tenant shall enter into a
Subordination Non-Disturbance and Attornment Agreement with Landlord's
Mortgagee within ten (10) days afler request therefor. Said agreement shall
contain such terms and provisions as may be reasonably requested by Landlord's
Mortgagee consistent with Landlord's Mortgagee's standard or typical form of
said agreement. A copy of the standard form of Subordination, Non-Disturbance
and Attornment Agreement of the current Landlord's Mortgagee is attached hereto
as EXHIBIT J and Tenant hereby agrees to execute and deliver said agreement
promptly upon request therefor. At Tenant's request, Landlord shall use
reasonable efforts to obtain an executed copy of said agreement or an agreement
subsrantially similar thereto from the current Landlord's Mortgagee. If
Landlord is unable to obtain such Agreement on or before the seventh (7th) day
afler the date Tenant delivers to Landlord four original copies of this Lease
executed by Tenant, then Tenant shall have the right for fourteen (14) days
afler the expiration of such seven day period and prior to the delivery by
Landlord of such agreement executed by Landlord's Mortgagee to terminate this
Lease by written notice to Landlord; whereupon this Lease shall terminate,
Prepaid Rent shall be refunded to Tenant and the parties shall have no further
rights or obligations hereunder.
RULES AND
REGULATIONS
13. Tenant shall comply with the rules and regulations of the Building
which are attached hereto as EXHIBIT B. Landlord may, from dme to time, change
such rules and regulations for the safety, care, or cleanliness of the Building
and related facilities, provided that such changes are applicable to all
tenants of the Building and will not unreasonably interfere with Tenant's use
of the Premises. Tenant shall be responsible for the compliance with such rules
and regulations by its employees, agents, and invitees.
CONDEMNATION
14. (a) Taklns - Landlord's and Tenant's RiEhts. If
any part of the Building is taken by right of eminent domain or conveyed in
lieu thereof (a "Taldne.), and such Taking prevents Tenant from conducting its
business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking, then Landlord may, at its expense, relocate
Tenant to office space reasonably comparable to the Premises, provided that
Landlord not)fies Tenant of its intention to do so within 30 days before the
Taking. Such relocadon may be for a portion of the remaining Term or the entire
Term. Landlord shall complete any such relocadon within 180 days after Landlord
has not)fied Tenant of its intention to relocate Tenant and in any event prior
to the date that Tenant is required by applicable law to vacate the Premises.
If Landlord does not elect to relocate Tenant following such Taking, then
Tenant may terminate this Lease as of the date of such Taking by giving written
notice to
<PAGE> 16
Landlord within 60 days after the Taking, and Rent shall be appordoned as of
the date of such Taking. If Landlord does not relocate Tenant and Tenant does
not terminate this Lease, then Rent shall be abated on a reasonable basis as to
that portion of the Premises rendered untenantable by the Taking.
(b) Taldng - Landlord's Rishts. If any material portion, but less than
all, of the Building becomes subject to a Taking, or if Landlord is required to
pay any of the proceeds received for a Taking to Landlord's Mortgagee, then
this Lease, at the option of Landlord, exercised by written notice to Tenant
within 30 days after such Taking, shall terminate and Rent shall be appordoned
as of the date of such Taking. If Landlord does not so terminate this Lease and
does not elect to relocate Tenant, then this Lease will continue, but if any
portion of the Premises has been taken, Basic Rental shall abate as provided in
the last sentence of Section 14.(a).
(c) Takin~ - Tenant's RiEhts. If Landlord elects not to terminate the
Lease, but Landlord is unable, within 90 days after such taking, to restore the
Premises so that it is usable by Tenant for the conduct of Tenant's business in
a manner reasonably comparable to the condua of Tenant's business from the
Premises immediately before such taking, then Tenant may terminate this Lease
by written notice to Landlord given within 30 days after the earlier of (i)
notice from Landlord that it will be unable to complete the restoration of the
Premises within said 90 day period or (ii) the 90th day after any such taking.
(d) Award. If any Taking occurs, then Landlord shall receive the entire
award or other compensation for the Land. the Building, and other improvements
taken. Landlord shall not be entitled to Tenant's personal property or to the
value of Tenant's personal property, and Tenant may separately pursue a claim
against the condemnor for the value of Tenant's personal property which Tenant
is entitled to remove under this Lease, moving costs, loss of business, and
other claims it may have. Landlord, at Tenant's request and at no cost to
Landlord, shall use reasonable efforts to cooperate with Tenant in any such
action by Tenant in connection with Tenant's personal property.
FIRE OR OTHER CASUALTY
1S. (a) ReDair Estimate. If the Premises or the Building are damaged by
fire or other casualty (a "Casualty"), Landlord shall, within 45 days after
such Casualty, deliver to Tenimt a good faith estimate (the ~DamaEe Notice") of
the time needed to repair the damage caused by such Casualty.
(b) l~dlord's and Tenant's Rights. If a material pordon of the
Premises or the Building is damaged by Casualty such that Tenant is prevented
from conducting its business in the Premises in a manner reasonably comparable
to that conducted immediately before such Casualty and Landlord eshmates that
the damage caused thereby cannot be repaired within 180 days after the
commencement of repair, then Landlord may, at its expense, relocate Tenant to
offfice space reasonably comparable to the Premises, provided that Landlord
not)fies Tenant of its intention to do so in the Damage Notice. Such relocation
may be for a portion of the remaining Term or the entire Term. Landlord shall
complete any such relocation within 180 days after Landlord has delivered the
Damage Notice to Tenant. If Landlord does not elect to relocate Tenant
following
<PAGE> 17
such Casualty, then Tenant may terminate this Lease by delivering written
notice to Landlord of its election to terminate within 30 days after the
Damage Notice has been delivered to Tenant. If Landlord does not relocate
Tenant and Tenant does not terminate this Lease, then (subject to Landlord's
rights under Section 15.(c)) Landlord shall repair the Building or the
Premises, as the case may be, as provided below, and Rent for the portion of
the Premises rendered untenantable by the damage shall be abated on a
reasonable basis from the date of damage undl the compledon of the repair,
unless Tenant caused such damage, in which case, Tenant shall continue to pay
Rent without abatement.
(c) Landlord's RiEhts. If a Casualq damages a material pordon of the
Building, amd Landlord makes a good faith detertnination that restoring the
Premises would be uneconomical, or if Landlord is required to pay any insurance
proceeds arising out of the Casualq to Landlord's Mortgagee, then Landlord may
terminate this Lease by giving written notice of its election to terminate
within 30 days afler the Damage Notice has been delivered to Tenant, and Basic
Rental hereunder shall be abated as of the date of the Casualq.
(d) Repair Obligadon. If neither parq elects to terminate this Lease
following a Casualq, then Landlord shall, within a reasonable time afler such
Casualq, commence to repair the Building amd the Premises and shall proceed
with reasonable diligence to restore the Building and Premises to substantially
the same condition as they existed immediately before such Casualq; however.
Landlord shall not be required to repair or replace any part of the furniture,
equipment, fixtures, and other improvements which may have been placed by, or
at the request of, Tenant or other occupants in the Building or the Premises,
amd Landlord's obligation to repair or restore the Building or Premises shall
be limited to the extent of the insurance proceeds actually received by
Landlord for the Casualq in question.
TAXES
16. Tenant shall be liable for all taxes levied or assessed against
personal properq, furniture, or fixtures placed by Tenant in the Premises. If
any taxes for which Tenant is liable are levied or assessed against Landlord or
Landlord's properq amd Landlord elects to pay the same, or if the assessed
value of Landlord's properq is increased by inclusion of such personal properq,
furniture or fixtures and Landlord elects to pay the taxes based on such
increase, then Tenant shall pay to Landlord, upon demand, that part of such
taxes for which Tenamt is primarily liable hereunder.
EVENTS OF DEFAULT
17. Each of the following occurrences shall constitute an "Event of
Default":
(a) Tenant's failure to pay ReM, or any other sums due from Tenant to
Landlord under the Lease (or any other lease executed by Tenant for space in
the Park Place Business Park), withm five (5) days afler written notice &om
Landlord of such failure to pay Rent or such other sums when due; provided,
however, that if Tenant fails to pay Rent or any other such sums when due twice
in any twelve month period, then it shall thereafler be an Event of Default
hereunder upon
<PAGE> 18
any failure by Tenant to pay Rent or any such other sums when due and
Landlord shall not be required to give any notice of default hereunder;
(b) Tenant's failure to perform, comply with, or observe any other
agreement or obligation of Tenant under this Lease (or any other lease executed
by Tenant for space in the Park Place Business Park) within thirq (30) days
afler written notice from Landlord of such default (or such longer period of
dme as may be mutually agreed upon in wridug by Landlord and Tenant);
(c) the filing of a petidon by or against Tenant (the term "Tenant~ shall
include, for the purpose of this Section 17.(c), amy guarantor of the Tenant's
obligations hereunder) (1) in any bankruptcy or other insolvency proceeding;
(2) seeking any relief under any state or federal debtor relief law; (3) for
the appointment of a liquidator or receiver for all or substantially all of
Tenant's properq or for Tenant's interest in this Lease; or (4) for the
reorganization or mod)fication of Tenant's capital structure; and
(d) the admission by Tenant that it =ot meet its obligations as they
become due or the making by Tenant of an assignment for the benefit of its
creditors.
REMEDES
18. Upon any default hereunder beyond any applicable grace period,
Landlord may, in addidon to all other rights and remedies afforded Landlord
hereunder or by law or equiq, take any of the following acdons:
(a) Terminate tbis lP~ce by giving Tenant written nodce thereof, in which
event Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder
through the date of termination, (2) all amounts due under Section l9.(a), and
(3) an amount equal to (A) the total Rent that Tenant would have been required
to pay for the remainder of the Term discounted to present value at a per annum
rate equal to the "Prime Rate" as published on the date this Lease is
terminated by The Wall Street Journal, Southwest Edition, in its lisdog of
"Money Rates", minus (B) the then present fair rental value of the Premises for
such period, similarly discounted; or
(b) Terminate Tenant's right to possession of the Premises without
terminating this Lease by giving written notice thereof to Tenant, in which
event Tenant shall pay to Landlord (1) all Rent and other amounts accrued
hereunder to the date of termination of possession, (2) all amounts due from
time to dme under Section 19.(a), and (3) all Rent and other sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafler received by Landlord tbrough reletting the Premises
during such period. Landlord shall use reasonable efforts to relet the Premises
on such terms and condidons as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of, the Premises and for space consisting of less than all
or more tban all of the Premises); however, Landlord shall not be obligated
to relet the Premises before leasing other portions of the Building or other
premises controlled or managed by Landlord or any of its affiliates. Landlord
shall not be liable for, nor shall Tenant's obligadons hereunder be diminished
because of, Landlord's failure to relet the Premises or to collect rent due
<PAGE> 19
for such relethng. Tenant shall not be entitled to the excess of any
consideration obtained by rdetting over the Rent due hereunder. Reentry by
Landlord in the Premises shall not affect Tenant's obligations hereunder for
the unexpired Term; rather, Landlord may, from time to time, bring action
against Tenant to collect amounts due by Tenant, without the necessiq of
Landlord's waiting until the expiration of the Term. Unless Landlord delivers
written notice to Tenant expressly stating that it has elected to terminate
this Lease, all actions taken by Landlord to exclude or dispossess Tenant of
the Premises shall be deemed to be taken under this Section 18.(b). If Landlord
elects to proceed under this Section 18.(b), it may at any time elect to
terminate this Lease under Section 18.(a).
Additdonally, without notice, Landlord may alter locks or other securiq
devices at the Premises to deprive Tenant of access thereto, and Landlord shall
not be required to provide a new key or right of access to Tenant.
PAYMENT BY
TENANT; NON
WAIVER
19. (a) Pavment bv Tenant. Upon any Event of Default, Tenant shall pay to
Landlord all costs incurred by Landlord (including court costs and reasonable
attomeys' fees and expenses) in (1) obtaining possession of the Premises, (2)
removing and storing Tenant's or any other occupant's properq, (3) repairing,
restoring, altering, remodeling, or otherwise puking the Premises into
condition acceptable to a new tenant, (4) if Tenant is dispossessed of the
Premises and this Lease is not temlinated, reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work,
attomeys' fees and other costs incidental to such reletting), (5) perfomling
Tenant's obligadons which Tenant failed to perfomm, and (6) enforcing, or
advising Landlord of, its rights, remedies, and recourses arising out of the
Event of Default.
(b) No Wdver. Landlord's acceptance of Rent following an Evem of Default
shall not waive Landlord's rights regarding such Event of Default. No waiver by
Landlord of any violadon or breach of any of the temls contained herein shall
waive Landlord's rights regarding any future violation of such temm or
violation of any other temm.
LANDLORD'S LEN
SURRENDER OF PREMISES
20. Intentionallv Deleted.
21. No act by Landlord shall be deemed an acceptance of a surrender of
the Premises. and no agreement to accept a surrender of the Premises shall be
valid unless the same is made in writing and signed by Landlord. At the
expiration or temlination of this Lease, Tenant shall deliver to Landlord the
Premises with all improvements located thereon in good repair and condition,
reasonable wear and tear (and condemnation and fire or other casualq dannage
not
<PAGE> 20
caused by Tenant, as to which Sections 14 and 15 shall control) excepted, and
shall deliver to Landlord all keys to the Premises. Provided that Tenant has
perfomled all of its obligations hereunder, Tenant may remove all unattached
trade fixtures, fumiture, and personal properq placed in the Premises by
Tenant (but Tenant shall not remove any such item which was paid for, in whole
or in part, by Landlord). Additionally, Tenant shall remove such alteratdon~l
additioo., improvomontl, t~de fixtwo8' oquipmontl winngl end furniture U
LLandlord may request. Tenant shall repair all damage caused by such removal.
Prior to Tenant undertaking any alteradons, addidons or improvements to the
Premises, Tenant may request in writing that Landlord deterrfline at that time
whether or not Landlord will require tbat any such alterations, additions or
improvements be removed upon expiration or temlination of the Lease. Any such
request shall include detailed plans and specificadons for any such alteration,
addition or improvement. If Landlord responds in writing that Landlord will not
require such alteration, addition or improvement to be so removed, then such
alteration, addition or improvement will not be required to be so removed. All
items not so removed shall be deemed to have been abandoned by Tenant and may
be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and at Tenant's sole cost and without any obligadon to
account for such items. The provisions of this Section 21 shall survive the end
of the Term.
HOLDING OVER
22. If Tenant fails to vacate the Premises at the end of the Temm, then
Tenant shall be a tenant at will, but on the same temls and conditions as this
Lease, except Basic Rental shall be as set forth in this Section 22 and except
that no options shall be applicable thereto and, in addition to all other
damages and remedies to which Landlord may be entitled for such holding over,
Tenant shall pay, in addition to the other Rent, a daily Basic Rental equal to
the greater of (a) 150% of the daily Basic Rental payable during the last month
of the Temm, or (b) the prevailing rental rate prorated on a daily basis in
similar buildings for similar space.
CERTAIN RIGHTS RESERVED BY LANDLORD
23. Provided that the exercise of such rights does not unreasonably
interfere with Tenant's occupancy of the Premises, Landlord shall have the
following rights:
(a) upon reasonable notice, to make inspectdons, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Building, or any part thereof; for such purposes, to enter upon the
Premises and, during the condnuance of any such work, to temporarily close
doors, entryways, public space, and corridors in the Building; to interrupt or
temporarily suspend Building services and facilities; and to change the
arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, or other public parts of the Building;
(b) to take such reasonable measures as Landlord deems advisable for
the securiq of the Building and its occupants, including, without limitation,
searching all persons entering or leaving the Building; evacuating the Building
for cause, suspected cause, or for drill purposes; temporarily denying access
to the Building; and closing the Building after nomlal business hours
<PAGE> 21
and on Saturdays, Sundays, and holidays, subject, however, to Tenant's
right to enter when the Building is closed after nomlal business hours under
such reasonable regulations as Landlord may prescribe from time to time which
may include by way of example, but not of limitation, that persons entering or
leaving the Building, whether or not during nomlal business hours, identify
themselves to a securiq officer by registratdon or otherwise and that such
persons establish their right to enter or leave the Building;
(c) designated; and
to change the name by which the Building is
(d) upon not less than twenq-four (24) hours' notice to Tenant, to enter
the Premises at all reasonable hours to show the Premises to prospective
purchasers, lenders, or tenants and Landlord shall be provided with all keys,
codes, combinations and such similar items and infomladon as Landlord may need
to access all or any part of the Premises and the items contained therein.
SUBSTITUTION SPACE
MISCELLANEOUS
24. Intentionallv Deleted.
2S. (a) Landlord Transfer. Landlord may transfer. in whole or in part, the
Building and any of its rights under this Lease. If Landlord assigns its rights
under this Lease, then Landlord shall thereby be released from any further
obligadons hereunder.
(b) Landlord's Liabilitv. The liabiliq of Landlord to Tenant for any
default by Landlord under the temls of this Lease shall be limited to Tenant's
actual direct, but not consequential, damages therefor and shall be recoverable
from the interest of Landlord in the Building and the Land, and ndther Landlord
nor any of its partners shall be personally liable for any deficiency. This
section shall not be deemed to limit or deny any remedies which Tenant may have
in the event of default by Landlord hereunder which do not involve the personal
liabiliq of Landlord or its partners.
(c) Force Maieure. Other than for Tenant's monetary obligations under tbis
Lease and obligations which can be cured by the payment of money (e.g.,
maintaining insurance), whenever a period of time is herein prescribed for
action to be taken by either parq hereto, such parq shall not be liable or
responsible for, and there shall be excluded from the computation for any such
period of dme, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, govemmental laws, regulations, or restricdons, or any
other causes of any kind whatsoever which are beyond the control of such parq.
(d) Brokerane. Landlord and Tenant each warrant to the other that it has
not dealt with any broker or agent in connection with the negotiation or
execution of this Lease other than TC Milwaukee, Inc. and Fischer & Company
(collectively, the "Brokers"). Tenant and Landlord shall
<PAGE> 22
each indemnify the other against all costs, expenses, attomeys' fees, and
other liabiliq for commissions or other compensation claimed by any broker
or agent claiming the same by, through, or under the indemnifying parq, other
than the Brokers. Landlord shall be responsible for the payment to Brokers for
any commission due Brokers in connection with this Lease.
(e) Estoppel Certiflcates. From time to dme, Tenant shall fumish to any
parq designated by Landlord, within ten (10) days after Landlord has made a
request therefor, a certificate signed by Tenant confimling and containing such
factual certifications and representations as to this Lease as Landlord may
reasonably request. If Tenant fails to provide such estoppel certificate within
such ten (10) day period, Landlord shall have the right to complete said
Cerdficate and forward said Certificate to Tenant and if Tenant does not
provide an estoppel certificate in compliance with the temls hereof within five
(5) days after a copy of the certificate prepared by Landlord has been given to
Tenant, then Tenant shall be deemed to have consented and agreed to all matters
contained in the certificate so prepared by Landlord and Landlord and any
purchaser or lender in connection with the Premises shall be entitled to rely
thereon. Tenant shall, within ten (10) days after Landlord has made a request
therefor, fumish to Landlord and Landlord's Lender (as such temm is defined in
Secdon 12 hereof) a Lessee's Estoppel Certificate in the fomm attached hereto
as EXHIBIT 1, mod)fied as necessary to accurately reflect the facts and
infomlation themin requested. In addition and notwithstanding anything to the
contrary contained herein, Tenant shall be liable for all damages incurred by
Landlord as a result of Tenant's failure to execute such estoppel certificates,
including, without limitation, any delays or cancellations of sale or financing
transactions affecting the Building or other properdes owned by Landlord.
(f) Notices. All notices and other communicadons given pursuant to this
Lease shall be in wridng and shall be (1) mailed by first class, United States
Mail, postage prepaid, cerdfied, with retum receipt requested, and addressed to
the parties hereto at the address specified in the Basic Lease Infomlation, (2)
hand delivered to the intended address, (3) by reputable ovemight delivery
services, or (4) sent by prepaid telegram, cable, facsimile transmission, or
telex followed by a confimlatory letter. Notice sent by certified mail, postage
prepaid, shall be effective three business days after being deposited in the
United States Mail; all other notices shall be effective upon delivery to the
address of the addressee. The parties hereto may change their addresses by
giving nodce thereof to the other in confomliq with this provision.
(g) Separabilitv. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws, then the remainder of
this Lease shall not be affected thereby and in lieu of such clause or
provision, there shall be added as a part of this Lease a clause or provision
as similar in temls to such illegal, invalid, or unenforceable clause or
provision as may be possible and be legal, valid, and enforceable.
(h) Amendments: and BindinQ Effect. This Lease may not be amended
except by instrument in wridug signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver
is in writing signed by Landlord, and no custom or pracdce which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord to insist upon the perfomlance by Tenant in
strict accordance with the temls hereof. The temls and conditions contained in
this Lease shall inure to the benefit of and be binding upon the parties
hereto, and upon their respective
<PAGE> 23
successors in interest and legal representatives, except as otherwise herein
expressly provided. This Lease is for the sole benefit of Landlord and Tenant,
and, other than Landlord's Mortgagee, no third parq shall be deemed a third
parq baneficiary hereof.
(i) Ouiet En,iownent. Provided Tenant has perfomled ail of the temls and
conditions of this Lease to be perfomled by Tenant, Tenant shall peaceably and
quietIy hold and enjoy the Premises for the Temm, without hindrance from
Landlord or any parq claiming by, through, or under Landlord, subject to the
temls and condidons of this Lease. Landlord hereby warrants it has title to the
Premises and the land upon which the Premises is situated, subject to such
liens and encumbrances and other matters as do not materially adversely affect
or restrict Tenant's use and occupancy of the Premises for Tenant's specified
business purposes (collectively, ~Pemlitted Encumbrances~). Prior to the
Commencement Date, Landlord shall provide Tenant, at Tenant's sole cost and
expense, with a Leasehold Title Insurance Policy insuring Tenant's interest
under this Lease subject to the temls and provisions of this Lease and
Pemlitted Encumbrances, including, without limitadon, any mortgage held by
Landlord's Mortgagee. On the Commencement Date, the Premises shall be delivered
to Tenant, subject to existing Pemlitted Encumbrances (including and subject to
the mortgage or other securiq interest of any Landlord's Mortgagee or any other
holder of a mortgage, provided such other mortgage holders have granted Tenant
a non-disturbance agreement by the temls of such mortgage holder's mortgage or
by a separate agreement with Tenant) and free from all construcdon liens
arising out of the acts of Landlord other tban inchoate liens for the Work, the
cost of which is not yet due and payable, or liens which Landlord is contesdag
in good faith. Notwithstanding the foregoing, Tenant consents to the granting
by Landlord of licenses, easements and other similar agreements for the
provision of utilities, cable or similar items and for access in connection
therewith or as may otherwise be necessary for the Premises or the adjacent
properq to comply with applicable laws, statutes, codes, rules, reguladons, or
ordinances; provided that any such licenses, easements or agreements shall not
materially adversely affect Tenant's use and occupancy of the Premises for its
specified business purposes.
(j) Joint and Several Liabilitv. If there is more than one Tenant. then
the obligations hereunder imposed upon Tenant shall be joint and several. If
there is a guarantor of Tenant's obligations hereunder, then the obligadons
hereunder imposed upon Tenant shall be the joint and several obligations of
Tenant and such guarantor, and Landlord need not first proceed against Tenant
before proceeding against such guarantor nor shall any such guarantor be
released from its guaranty for any reason whatsoever.
(k) CaDtions. The captions contained in this Lease are for convenience of
reference only, and do not limit or enlarge the temls and conditions of this
Lease.
(1) No MerEer. There shall be no merger of the leasehold estate hereby
created with the fee estate in the Premises or any part thereof if the same
person acquires or holds, directly or indirectly, this Lease or any interest in
this Lease and the fee estate in the leasehold Premises or any interest in such
fee estate.
<PAGE> 24
(m) No Oner. The submission of this Lease to Tenant shall not be construed
as an offer, nor shall Tenant have any rights under tbis Lease unless Landlord
executes a copy of this Lease and delivers it to Tenant.
(n) Exhiblts. All exhibits and attachments attached hereto are
incorporated herein by this reference.
EXHIB~ ~ - Outline of Premises
EXHIBIT B - Building Rules and Reguladons EXHIBIT C - Operating Expense
Escalator
EXHIBIT D - Tenant Finish-Work; Plans EXHIBIT E - Extension Option EXHIBIT F -
Expansion Option EXHIBIT G - Tenant's Preferential Right to Lease EXHIBIT H -
Waiver
EXHIBIT I - Lessee's Estoppel Certificate
EXHIBIT J - Subordinadon, Non-Disturbance and Attomment Agreement
(o) Entire Aoreement. This Lease constitutes the endre agreement between
Landiord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. Except for those set forth in
this Lease, no representations, warranties, or agreements have been made by
Landlord or Tenant to the other with respect to tbis Lease or the obligadons of
Landlord or Tenant in connecdon therewith.
SPECIAL PROVISIONS:
26. SeverabilitY of Rent. LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY
IMPLED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL
PURPOSE, AND TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON
THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS
HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL
CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, SETOFF, OR DEDUCTION,
NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER,
WHETHER EXPRESS OR IMPLED.
27. EarlY Terminadon Right. If Tenant and all of its afffiliates cease
operations in the metropolitan Milwaukee area, which for purposes of this
Section 27 shall include, without limitation, Milwaukee, Ozaukee, Washington
and Waukesha Coundes for a period of not less than six consecutive months, then
Tenant shall have the one time right to terminate this Lease by written notice
to Landlord (the "Termination Nodcen) given at any time during the first six
months of Lease Year 6 but only if (a) Tenant is not in default under the terms
of this Lease; (b) said Terminadon Nodce sets forth a terminadon date that is
at least nine full months after the date Landlord receives said Terminadon
Nodce and is effecdve as of the last day of a calendar month; (c) Tenant
delivers to Landlord satisfactory evidence of Tenant's and all of its
affiliates' cessadon of operadons in the metropolitan Milwaukee area as set
forth above (satisfactory
<PAGE> 25
evidence would include, but not necessarily be limited to, a sworn
affdavit executed by an authorized offcer of Tenant that the only operadons of
Tenant or any of its affliates in the metropolitan Milwaukee area are the
operations located at the PremiNs which operations are either being eliminated
or relocated outside of the metropolitan Milwaukee area kxcePt for the up to
8000 square feet of sales office space described below]); (d) Tenant delivers
to Landlord with said Terminadon Notice by wire transfer or certified or
cashiers check, a termination fee equal to (i) Landlord's unamortized
transaction costs, including, without limitation, all costs of Tenant
improvements, alterations and finish costs, anorneys' fees incurred in
connection with this Lease and maners reladog thereto, brokerage commissions,
architectural and engineering fees, and all similar costs and expenses as
reasonably determined by Landlord discounted over a 120 month period at a rate
of ten percent (10%) plus (ii) three months of Rent based on the Rent
attributable to the first three months of Lease Year 7; and (e) Tenant does not
default under the terms of this Lease during the period commencing on the date
of the giving of said Termination Notice and ending on the expiration or
terminadon of this Lease; provided, however, that Tenant may continue to
conduct sales operadons in up to 8000 square feet of premises within the
metropolitan Milwaukee area as above described so long as (a) Landlord or its
affliates shall have the exclusive right to lease to Tenant, or its affiliates
in buildings owned or controlled by f~ndlord or its affliates within the Park
Place Development (the ~Park Place Buildings~) premises reasonably comparable
to space in the Building (~Comparable Sales Premises"); or (b) if Landlord is
unable to provide the Comparable Sales Premises in any of the Park Place
Buildings, then TC Milwaukee, Inc. or an affiliate thereof or any successor in
interest thereto (collectively "Crow") shall have the exclusive right to lease
to Tenant such Comparable Sales Premises in buildings owned, managed or
controlled by Crow in the metropolitan Milwaukee area (the "Crow Buildings");
or (c) if Crow is unable to so provide the Comparable Sales Premises in any of
the Crow Buildings, then Crow (working in cooperation with Fischer & Company or
other broker appointed by Tenant) shall have the exclusive right to locate and
arrange for the lease to Tenant of such Comparable Sales Premises in any
buildings situated in the metropolitan Milwaukee area, regardless of ownership
or management and to receive a market rate com~nission in connection therewith.
Any such lease shall be on prevailing market terms for all space needed by such
sales operations for not less than the period commencing on the effective date
of termination of this Lease tbrough and including the date on which the term
of this Lease would have expired but for the termination. If for any reason
Tenant or any of its affiliates conduct business operations within the
metropolitan Milwaukee area as herein defined within the earlier of one (1)
year from the date of terminadon of this Lease or the date this Lease would
have expired but for the termination, then, notwithstanding anything to the
contrary contained herein, Tenant shall be responsible for and shall pay to
Landlord all damages, losses, costs and expenses incurred by Landlord as a
result of Tenant's exercise of this terminadon right.
2g. Farlv Oca~pancY. Tenant shall be entitled to occupy available portions
of the Premises as designated by Landlord on or after the date which is thirty
(30) days prior to Landlord's esHmated Commencement Date for the installation
by Tenant of systems, furniture, and telecommunications as such pordons become
ready for Tenant's occupancy in Landlord's reasonable discretion. Tenant's
activity on the Premises shall not unreasonably interfere with Landlord's Work.
Tenant, its agents, employees and contractors shall enter upon the Premises at
their own risk and Landlord shall have no obligation or liability in connecdon
therewith and such occupancy shall be in compliance with and subject to all of
the applicable terms of this Lease, in
<PAGE> 26
particular, but, without limitation, the insurance and indemnity provisions;
provided, however, that no Basic Rental shall be payable undl the Commencement
Date.
29. ~Parldne. Tenant and Tenant's employees and visitors shall have
unrestricted access (except as access may be restricted for repair and
maintenance to the parking lot or as a result of governmental or court law,
order, ordinance, rule or regulation) to all parking available in the parking
lot serving the Premises and located on the property with respect to which the
Premises is a part at no additional charge. Landlord represents that, to its
actual knowledge, there are currently 355 surface parking spaces located within
said parking lot. At such time as Tenant not)fies Landlord in writing that it
is in need of additional parking, Landlord shall lease to Tenant any additional
parking situated within other parking lots located on property then owned by
Landlord within the Park Place Business Park which becomes available within
sixty (60) days afler the giving of such notice, subject to the rights of other
occupants and tenants of the Park Place Business Park to such parking. After
such sixty (60) day period, Landlord shall have no obligation to Tenant with
respect to the leasing of any additional parking (other than with respect to
those parking spaces which Tenant is then leasing) unless and until Tenant
provides Landlord with another such notice. If any such parking is available
and Tenant elects to lease such parking, then the terms and provisions of the
leases for such parking shall be on a month-to-month basis, on a first come
first serve nonassigned basis, on substantially similar terms to the terms of
parking leases on other private lots in the metropolitan Milwaukee area, and at
a cost of $20.00 per parking space for the initial term of this Lease and at a
cost of the greater of $20.00 per space or the prevailing market rate in the
area per month for any extensions or renewals of the inidal term; provided,
however, that Tenant's rights to such parking shall condoue to be subject to
the rights of other tenants and occupants of the Park Place Business Park.
30. Tenant Self ManaEement ODtion. If Landlord conveys the Premises to an
unaffliated party (defined, for purposes hereof, as any entity in which neither
Landlord (or such other entity to which this definition is applied) nor any of
its affiliates has or have any ownership interest, direct or indirect) and such
unafflliated party elects to hire management services from a party (i) which is
both an unaffliated party with respect to Landlord or Crow and an unaffiliated
party with respect to the then owner of the Premises, and (ii) which is neither
a party that typically manages or has managed certain of said owner's or its
affiliates managed property nor a party which manages substantially all of said
owner's managed properdes, then Tenant shall thereafter, but only so long as
the above conditions remain sadsfied, have the right, upon sixty (60) days
prior written notice to the then owner of the Premises, to assume
responsibility for any services provided by the then landlord to the Premises;
whereupon the cost of such services shall be paid directly by Tenant and shall
not be deemed Operating Expenses hereunder.
31. ~r_m of Lease. Upon the written request of the other party, the
parties hewto agree to execute and record a memorandum of lease setting forth
the basic terms of this Lease, including, without limitadon, the term and
renewal options, and Tenant's right to terminate in the event of certain
casualdes and condemnation. Said memorandum shall not include the Rent payable
under the Lease or any of the terms and provisions with respect to Operating
Expenses or similar costs and expenses. Recording fees for such memorandum
shall be paid by Tenant. Tenant shall simultaneously execute a termination of
Memorandum of Lease in recordable form which termination shall be held in
escrow by the title company issuing the Leasehold Title Insurance
<PAGE> 27
Policy to Tenant (the "Title Company~) undl such time as the Lease is
ter~ninated; whereupon said termination of Memorandum of Lease shall be
recorded by said Title Company at the dimcdon and cost of I qndlord.
32. Intendonallr Deleted.
33. Enrlron rental. Tenant shall not use, store or introduce onto the
Premises or the land surrounding the Premises or any part or part thereof, or
permit the use, storage or introduction of any hazardous, toxic, dangerous or
otherwise regulated materials, substances or waste as such terms are defined in
any applicable law, statute, code, ordinance, order, guideline, rule or
regulation (collectively, "Environmental Laws~) nor permit any such materials,
substances or waste (collectively, ~hazardous substances or materials~) to be
brought onto the Premises. Tenant hereby indemnifies and holds Landlord
harmless from and against any and all claims, demands, liabilities, causes of
action, suits, judgments, penalties, costs, fees or expenses, including,
without limitation, court costs and anorneys and consultants fees, arising out
of any bmach by Tenant of this Secdon 33.
To the best of Landlord's actual knowledge, without any independent
invesUgation, the Premises and land upon which the Premises is situated and the
other properdes owned by Landlord within the Park Place Business Park are not
in violation of any applicable Environmental Law. Furthermore, to the best of
Landlord's actual knowledge, the Premises and the land upon which the Premises
is situated do not contain any asbestos or any asbestos containing material and
do not contain underground or above ground storage tanks. Tenant may obtain, at
its sole cost and expense, a Phase I environmental assessment of the property
of which the Premises is a part within thirty (30) days after the date of this
Lease. Upon receipt of said assessment by Tenant, Tenant shall promptly forward
a copy of said assessment to Landlord and said assessment shall be addressed to
Landlord and may be relied upon by Landlord. If Tenant does not object to any
matter disclosed by such assessment within ten (10) days after the earlier of
(i) receipt by Tenant of such assessment, or (ii) the expiration of such thirty
(30) day period, then Tenant shall be deemed to have approved and accepted the
condition, environmental and otherwise, of the Premises and the property of
which the Premises is a part and the surrounding property owned by Landlord and
shall have waived its right to object thereto. If said assessment discloses any
matter to which Tenant reasonably objects, then Tenant may terminate this Lease
by written notice to Landlord given within the aforementioned ten (10) day
period and specifying the reason for such termination; whereupon this Lease
shall terminate and the parties shall have no further rights or obligadons
hereunder; provided, however, that Tenant shall reimburse Landlord for any
costs Landlord may have incurred with respect to the Work.
34. A'nericans with Disabilides Act. Landlord represents that, as of the
Commencement Date, the Premises shall be in aufficient compliance with the
Americans with Disabilities Act so that an occupancy cerdficate or permit will
be issued for the Premises.
3S. Sl~e. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall be entitled, at Tenant's expense, and, witb respect to any
exterior signage, after written notice to Landlord, to install interior and
exterior signage (including external diroctional signage on the
<PAGE> 28
Premises); provided that all such signage shall be in compliance with all
applicable laws, statutes, codes, orders, ordinances, rules, regulations and
guidelines.
36. Tenant Cure RiEht. If, within thirty (30) days after written notice
from Tenant specifying a default by Landlord hereunder, Landlord fails to
commence and diligently commence and pursue the cure of such default then, upon
five (5) business days written notice to Landlord, Tenant shall be entitled to
cure tne same and to charge Landlord the reasonable cost of such cure.
37. Buildine Condition. Landlord hereby represents to
Tenant that (i) to Landlord's actual knowledge, there are no construction
defects in the Premises; (ii) to Landlords actual knowledge, all
equipment, machinery and facilities, including, without limitation,
heating, air conditioning, plumbing, ventilation, electrical systems used in
connecdon with the operadon of the Premises, are or will be as of the
Commencement Date, in working condition; and (iii) to Landlord's actual
knowledge, without independent investigation, the Premises will be in
compliance on the Commencement Date with all applicable laws,
ordinances and regulations as may be necessary for Tenant to operate the
Premises for its standard of fice purposes. For purposes of tbis Lease, the
term ~Landlords actual knowledge" means the actual conscious
knowledge without independent investigation of D. Patrick O'Brien.
38. Recanture. In tbe event tbat Tenant abandons or vacates the Premises
for more tban 90 consecutive days for reasons other tban casualty or
condemnadon, tben Landlord shall have tbe right to terminate his Lease by
written notice to Tenant sethng forth tbe termination date, which date must be
at least 60 days after the giving of such notice; provided, however, that if
Tenant within 60 days after the giving by Landlord of said notice either (i)
reoccupies and recommences business operations from the majority of tbe
Premises or (ii) commits in wridng to Landlord to reoccupy and commence
business operations from a majority of the Premises within 120 days of the
giving by Tenant of said notice of reco~nencement, then Landlord's terminadon
notice shall be void and of no force and effect. If Tenant does not so reoccupy
and recommence business operations from tbe Premises within the applicable time
period, tben Landlord shall have the right at its sole option to terminate this
Lease at any time by written notice to Tenant setting fortb tbe effective date
of termination.
DATED ~ of tbe dete nr~t written above.
LANDLORD: TCC MILWAUKEE II
LIMITED PARTNERSHIP
By: a Wisconsin limited
Its: generalpartne'
By: 17 /~= O ~ -
Naine t. ~G_t~-~ 0'8(' ~
<PAGE> 29
Title: Prc~,,lev`'
TENANT: FIRST HEALTH GROUP CORP.
By: io ~ -
Name: i~nn ~ ~ ~63. ~
Title: Av~ ~ililies'Azin>4
DX8CRIPTION OF PRZNISXS
Sltuated on Weat Lake Park Drlve, in the City of Hilwaukee, Wlaconaln
Parcel 2 of CertlEled 8urvey Map No 4995 dated July 22, 1987 and recorded on
Auguat 10, 1987 in the Offlce of the Regiater of Deeda for
Mllwaukee County, Wiaconain at Reel 2128, Zmage 2023 aa Document No
6093397, being a redivialon of Parcel 2 Certified Survey Map No 4863, recorded
on January 14, 1987 aa Document No 6009771 Lota 3 and 4 ln slOck 1, Lota 1 thru
14 and part of Lot 1S ln slOck 2 and all of Blocka 3, 4, 5 and 6 and Lot 8
Block 8 in LeFever Meighta, vacated Nortb 108th Street and part of vacated
North 113th Street and Weat Fountain Avenue, adJoining vacated public aervlce
atreet along North 107th 8treet, and landa all being in the NX 1/4, SX 1/4, NW
1/4 and the 8W 1/4 of the NX 1/4 of Section 18, T 8 N, R 21 X, ln the Clty of
Mllwaukee, Mllwaukee County, Wlaconain, which ia bounded and deacribed aa
followa'
CoaaseclagOat the Northweat Corner of the NZ lt4 of Sectlon 18;
7hence South 00 32' 33~ Veat alon6 the Heat line of aa~t l/4 Sectlon
1825 15 feee to a poloe;
Thenec 9outh 89! 27' 27- Zast 101.83 feet to the polat of beglnnl~g
of the land to ba deacrlbed;
Contlnuing thence South 89~ 27' 27- E ac 154.17 feet to a polat;
7henee Noreh 45 32' 33~ Zact 56.57 feeL. to a poine;
Thence south 89 27' 27. Z at 170 00 Eeee to a polne;
7hence North 00! 32' 33~ East 363.00 feet to a poLnt; '
Thence Southesatarly 355.46 feee alone the are of a curve whose
canter la to the Ngrthecat vhone ratlua la 340.00 feet and whose
chort boara SouOh 29 24' 29- Zaae 339.49 fcee to a polne;
<PAGE> 30
Thence South 00 32' 33' Ueat 558 S5 laet to e polne;
7hence South 86 S0' 4S. Vast 534.77 feae to a polat;
Shenca Nortb 00! 32' 33. Bese 484 16 feet to the point of bcginal~g
tur~a7 No l5l447-S-2
EXHIBIT B
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply to the Prenuses, the
Building, the parking garage associatod tberewith, the Land and the
appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by tenants or used by any tenant for purposes
other than ingress and egress to and from their respective leased premises and
for going from one to another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or deposited therein. Damage resulting to any such
fixtures or appliances from misuse by a tenant or its agents, employees or
invitees, shall be paid by such tenant.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other part of the Building without the prior written
consent of Landlord. No curtains or other window treatments shall be placed
between the glass and the Building standard window treatments.
4. Intentionally Deleted.
5. Landlord shall provide all door locks in each tenant's leased premises,
at the cost of such tenant, and no tenant shall place any additional door locks
in its leased premises without Landlord's prior written consent. Landlord shall
furnish to each tenant a reasonable number of keys to such tenant's leased
premises, at such tenant's cost, and no tenant shall make a duplicate tbereof.
6. Each tenant assumes all risks of and shall be liable for all damage to
articles moved and injury to persons or public engaged or not engaged in any
movement of furniture or office equipment, or any bulky material, merchandise
or materials, including equipment, property and personnel of Landlord.
7. Landlord may prescribe weight limitations and determine the locations
for safes and other heavy equipment or items, which shall in all cases be
placed in the Building so as to distribute weight in a manner acceptable to
Landlord which may include tbe use of such supporting devices as Landlord may
require. All damages to tbe Building caused by tbe
<PAGE> 31
installation or removal of any property of a tenant, or done by a tenant's
property while in the Building, shall be repaired at the expense of such tenant.
8. Corridor doors, when not in use, shall be kept closed. Nothing shall be
swept or tbrown into the corridors, halls, elevator shafts or stairways. No
birds or animals shall be brought into or kept in, on or about any tenant's
leased premises. No portion of any tenant's leased premises shall at any time
be used or occupied as sleeping or lodging quarters.
neat and clean.
9. Tenant shall cooperate witb Landlord's employees in keeping its leased
premises
10. Intentionally Deleted.
11. Tenant shall not make or permit any improper, objectionable or
unpleasant noises or odors in tbe Building or otberwise interfere in any way
witb otber tenants or persons having business witb them.
12. No machinery of any kind (otber than normal office equipment) shall be
operated by any tenant on its leased area witbout Landlord's prior written
consent, nor shall any tenant use or keep in the Building any flamrnable or
explosive fluid or substance.
13. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from tenant's leased premises or public or common areas
regardless of whether such loss occurs when the area is locked against entry or
not.
14. Intentionally Deleted.
15. All mail chutea located in the Building shall be available for use by
Landlord and all tenants of tbe Building according to tbe rules of the United
States Postal Service.
EXHIBIT C
OPERATING EXPENSE ESCALATOR
Tenant shall pay an amount equal to tbe excess (nExcess") from time to
time of actual Operating Expenses for tbe Building over tbe Operating Expenses
for the calendar year 1998 (the "EXDa~e StoDn). Landlord may make a good faitb
estimate of the Excess to be due by Ter~ant for any calendar year or part
thereof during the Term, and, unless Landlord delivers to Tenant a revision of
the estimated Excess (which Landlord shall have tbe right to do twice in any
calendar year), Tenant shall pay to Landlord, on tbe Commencement Date and on
tbe first day of each calendar month thereafter, an amount equal to the
estimated Excess for such calendar year or part tbereof divided by the number
of months in such calendar year during tbe Term. From time to time during any
calendar year, Landlord may estimate and re-estimate the Excess to be due by
Tenant for tbat calendar year and deliver a copy of the estimate or reestimate
to Tenant. TbereaRer, tbe monthly installments of Excess payable by Tenant
shall be appropriately adjusted in accordance witb tbe estimations so tbat, by
the end of the calendar year in question, Tenant shall have paid all of tbe
Excess as estimated by Landlord. Any amounts paid based on such an
<PAGE> 32
estimate shall be subject to adjustment pursuant to paragraph 3 of this Exhibit
when actual Operating Expenses is available for each calendar year.
2. For tbe purposes of this Exhibit, tbe term "Ooeratine ExDenses" shall
mean all expenses and disbursements of every kind (subject to the limitations
set forth below) which Landlord incurs, pays or becomes obligated to pay in
connection witb tbe ownership, operation, and maintenance of the Premises,
including tbe Building and the property of which tbe Building is a part of
(including tbe associated parking facilities), determined in accordance witb
generally accepted federal income tax basis accounting principles consistently
applied, including but not limited to the following:
(a) Wages and salaries (including management fees up to an amount equal to
five percent (S%) of Rent per applicable Lease Year) of all employees engaged
in the operation, management, repair, replacement, maintenance, and security of
tbe Building, including taxes, insurance and benefits relating tbereto;
(b) All supplies and materials used in tbe operation, maintenance, repair,
replacement, and security of the Building;
(c) Amual cost of all capital improvements made to the Building which
although capital in nature can reasonably be expected to reduce the normal
operating costs of the Building, as well as all capital improvements made in
order to comply with any law hereafter promulgated by any goverMmental
authority, as amortized over the useful economic life of such improvements as
determined by Landlord in its reasonable discretion (without regard to the
period over which such improvements may be depreciated or amortized for federal
income tax purposes);
(d) Cost of all utilities, other than the cost of utilides actually
reimbursed to Landlord by the Building's tenants (including Tenant under
Section 7 of this Lease or paid directly by Tenant to the utility provider);
(e) Cost of any insurance or insurance related expense applicable to the
Building and Landlord's personal property used in COMeCtion therewith;
(f) All taxes and assessments and goverMmental charges whether federal,
state, county or municipal, and whether they be by taxing or management
districts or authorities presently taxing or by others, subsequently created or
otherwise, and any other taxes and assessments attributable to the Building (or
its operation), and the grounds, parking areas, driveways, and alleys around
the Building, excluding, however, federal and state taxes on income
(collectively, "Taxes"); if the present method of taxation changes so that in
lieu of the whole or any part of any Taxes levied on the Land or Building,
there is levied on Landlord a capital tax directly on the rents received
therefrom or a franchise tax, assessment, or charge based, in whole or in part,
upon such rents for the Building; then all such taxes, assessments, or charges,
or the part thereof so based, shall be deemed to be included within the term
"Taxes" for the purposes hereof;
<PAGE> 33
(g) Cost of repairs, replacements, and general maintenance of the
Building, other than repair, replacement, and general maintenance of the roof,
foundation and exterior walls of the Building; and
(h) Cost of service or maintenance contracts with independent contractors
for the operation, maintenance, repair, replacement, or security of the
Building (including, without limitation, alarm service, window cleaning, and
elevator maintenance).
Operadag Expenses shall not include, whether or not such items might otherwise
be deemed included in the description of Operating Expenses, and Tenant shall
not bo obligated to pay Tenant's Proportionate Share of: (1) costs of preparing
any space in the Building for occupancy by a tenant or costs of allowances or
concessions provided to tenants; (2) wages, salaries, or fees paid to executive
persomel of Landlord other than u set forth in paragraph 2(a) above; (3)
renting and leasing commissions and legal fees and expenses in connoction
therewith; (4) franchise or partnership taxes, gross receipts taxes, income
taxes, iMeritance taxes or any similar or like taxes on Landlord which are not
a substitute or supplement for real estate taxes or a tax on rental income or
otherwise included within the term "Taxes"; (5) the cost of any items for which
Landlord is directly reimbursed by Tenant or other occupant of the Building or
any other tenant (other than unda operating expenses pass-through lease
provisions) or any other third party or parties, or by insurance proceeds or
condemnation awards; (6) the cost of performing any special services (including
redecorating and painting) furnished to other tenants and not furnished to
Tenant or costs of providing a greater level or amount of services to other
tenants than furnished to Tenant; (7) amounts paid for legal, arbitration, a
ccounting, brokerage or other professional services in coMection with the
leasing of space or in coMection with relationship or disputes with tenants or
former tenants which are not undertaken at Tenant's request or for Tenant's
benefit; (8) the cost of installing, operating and maintaining any special
amenity which is not in existence or being provided generally to other tenants
of Landlord as of the date of this Lease, such as a covered or underground
parking facilities or a luncheon, athletic, or recreational club, unless
approved by Tenant as an applicable Operating Expense (9) any insurance premium
to the extent that Landlord is separately reimbursed therefor by Tenant or by
any other tenant or occupant of the Building; (10) the cost of any work or
senices performed for, or facilities furnished to, any tenant (including
Tenant) at such tenant's cost or at no cost (where such free work, senices of
facilities do not benefit Tenant and are neither available to Tenant nor usable
by Tenant); (11) any costs paid by Landlord to a corporation, entity, or person
related to Landlord to the extent that such costs are in excess of the costs
that would have been paid by Landlord normally to any unrelated party for the
same quality senice or item; (12) interest, amortization and other charges paid
in respect of a mortgage or other loans; (13) rent, additional rent and other
charges payable under any ground lease or any lease superior to this Lease;
(14) depreciation, amortization and other non-cash charges; (15) expenditures
for capital improvements, except that Tenant s hall be obligated for Tenant's
Proponionate Share of the cost of capital improvements which although capital
in nature can reasonably be expected to reduce the normal operating costs of
the Building, as well as the cost of all capital improvements made in order to
comply with any law hereafter promulgated or mod)fied or reinterpreted by any
gover='ental authority, as amortized over the useful economic life of such
improvements as determined by Landlord in its reasonable discretion (without
regard to the period over which such improvements may be depreciated or
amortized for federal income tax purposes) with only each year's amortized
<PAGE> 34
amount to be included u part of Operating Expenses for that year and except for
items which, though capital for accounting purposes, are properly considered
maintenance and repair items, such as painting of common areas, replacement of
carpet in elevator lobbies, and the like; (16) increases in insurance cost on
account of maintenance of special insurance requirements or policies at the
request or requirement of other tenants; (17) marketing or advertising costs;
(18) any costs, fines or penalties incurred due to violation by Landlord or
another tenant of any goverMmental rule or authority, unless in either such
case such violation arises out of Tenant's acts or its failure to timely
perform hereunder; (19) any repairs, replacements or other expenses resulting
from the negligence or willful misconduct of Landlord or its employees or
agents; (20) expenses which are properly allocated to property other than the
Building of which the Premises is a part; (21) accounting fees incurred in
comection with the preparation of Landlord's tax returns; (22) financing or
refinancing costs; (23) costs and expenses for sculptures, paindngs or other
works of an, including costs incurred with respect to the purchase, ownership,
leasing, showing, promotion, repair and/or maintenance of same unless consented
to or requested by Tenant; and (24) contributions to charitable organizations.
3. The A=ual Cost Statement shall include a statement of Landlord's actual
Operating Expenses for the previous year adjusted as provided in paragraph 4 of
this Exhibit. If the A=ual Cost Statement reveals that Tenant paid more for
Operating Expenses than the actual Excess in the year for which such statement
was prepared, then Landlord shall credit or reimburse Tenant for such excess
within 30 days after delivery of the A=ual Cost Statement; likewise, if Tenant
paid less than the actual Excess, then Tenant shall pay Landlord such
deficiency within 30 days after delivery of the Annual Cost Statement.
4. Tenant shall have the right to audit Landlord's Annual Cost Statement
within 36S days after receipt of said A=ual Cost Statement and the supporting
documents by engaging, at Tenant's sole cost, a centfied public accountant
whose compensation caMot be on a coMingency basis. If Tenant does not so audit
Landlord's A=ual Cost Statement within said 365 day period, then Tenant shall
be deemed to have accepted said A=ual Cost Statement. Such audit shall be
conducted during reasonable business hours and after reuonable notice to
Landlord and an original copy of said audit shall be delivered to Landlord. If
said audit reveals that Tenant hu overpaid Tenant's share of Excess Operating
Expenses in an amount which is equal to or greater than five percent (5%) of
the total annual Operating Expenses for said calendar year then, if the Lease
is still in effect, Tenant shall be entitled to a credit for such overpayment
together with the reasonable costs of such audit and, if the Lease has expired
or terminated, then Landlord shall refund any such overpayment to Tenant within
shiny (30) days after written request therefor from Tenant together with
evidence of such overpayment. If such audit reveals Tenant has underpaid
Tenant's share of Excess Operating Expenses then Tenant shall pay such
underpayment to Landlord within shiny (30) days after written request therefor.
EXHIBIT D
TENANT PlNISH-WORK: PLANS
1. Except as set forth in this Exhibit, Tenant accepts the Premises in
their "AS IS" condition on the date that this Lease is entered into.
<PAGE> 35
2. As soon as possible after the execution of this Lease, Tenant will
deliver to Landlord a space plan depicting improvements to be installed in the
Premises, which plans will be prepared by Wellrnan Architects, Inc., and Arnold
and O'Sheriden, Inc. ("the "Soace Pl&ncn). As soon as reasonably possible after
the date of this Lease, Tenant shall provide to Landlord for its approval final
working drawings, prepared in accordance with the Space Plans by an architect
that has been approved by Landlord (which approval shall not unreasonably be
withheld), of all improvements that Tenant proposes to install in the Premises;
such working drawings shall include the partition layout, ceiling plan,
electrical outlets and switches, telephone outlets, drawings for any
mod)fications to the mechanical and plumbing systems of the Building, and
detailed plans and specifications for the construction of the improvements
called for under this Exhibit in accordance with all applicable governmental
laws, codes, rules, and regulations. Funher, if any of Tenant's proposed
construction work will affect the Building's heating, ventilation and air
conditioning, electrical, mechanical, or plumbing systems, then the working
drawings pertaining thereto shall be prepared by Landlord or its engineer, whom
at Landlord's request, Tenant shall at its cost engage for such purpose.
Landlord's approval of such working drawings shall not be unreasonably
withheld, provided that (a) they comply with all applicable governmental laws,
codes, rules, and regulations, (b) such working drawings are sufficiently d
etailed to allow construction of the improvements in a good and workmanlike
maMer, and (c) the improvements depicted thereon conform to the rules and
regulations promulgated from time to time by Landlord for the construction of
tenant improvements (a copy of which has been delivered to Tenant). As used
herein, "Working Dra~nes" shall mean the final working drawings approved by
Landlord, as amended from time to time by any approved changes thereto, and
"Work" shall mean all improvements to be constructed in accordance with and as
indicated on the Working Drawings. Approval by Landlord of the Working Drawings
shall not be a representation or warranty of Landlord that such drawings are
adequate for any use, purpose, or condition, or that such drawings comply with
any applicable law or code, but shall merely be the consent of Landlord to the
performance of the Work. Tenant shall, at Landlord's request, sign the Working
Drawings to evidence its review and approval thereof. All changes in the Work
must receive the prior written approval of Landlord, which approval shall not
be unreasonably withheld, and in the event of any such approved change Tenant
shall, upon completion of the Work, furnish Landlord with an accurate,
reproducible "as-built" plan (e.g., sepia) of the improvements as constructed,
which plan shall be incorporated into this Lease by this reference for all
purposes. After the Working Drawings have been approved, Landlord shall cause
the Work to be performed in accordance with the Working Drawings. Landlord and
Tenant agree that the general contractor for the Work shall be Pierce
Construction. Tenant shall have the opHon, assuming it is mutually acceptable
to Pierce Construction, to negotiate with Pierce Construction for, and to enter
directly into with Pierce Construction, an expedited construction contract
format (fast-track, guaranteed maximum, design-build, etc.). Tenant and
Landlord shall require Pierce Construction to competitively bid out each line
item of the Work to not less than three subcontracts, all of which must be
approved in writing by Landlord, which approval shall not be unreasonably
withheld. Tenant may suggest to Landlord subcontractors for inclusion in the
bidder's list and Landlord's approval to such subcontractors shall not be
unreasonably withheld. Tenant may elect to employ independent contractors for
the furniture erection and communication "bring trades. Tenant may request the
general contractor to coordinate with the work of these trades. Landlord and
Tenant will review said bids together and, after input from the
<PAGE> 36
general contractor, shall mutually select the subcontractors. Landlord
agrees to consent to minor mod)fications to the Working Drawings as may be
necessary to meet Tenant's finish work requirements. The Work shall be
performed only by contractors and subcontractors approved in writing by
Landlord, which approval shall not be unreasonably withheld.
3. Except as otherwise set forth in this paragraph 3, the Commencement
Date shall be the Commencement Date set forth as part of BASIC LEASE
INFORMATION. If a delay or delays are caused solely by Landlord or by Pierce
Construcdon, as general contractor, and said delay or delays do not arise out
of and/or are not contributed to by the acts or omissions of Tenant, its
employees, agents, representatives and/or contractors (including, without
limitation, requests by Tenant for changes to the Work or failure by Tenant to
timely submit drawings or grant approvals or consents), acts or omissions of
subcontractors or material or service providers, material shortages or material
delivery delays, reasons of force majeure or any other matters which are not
within the reasonable control of Landlord and Pierce Construction, then if the
Premises are not ready for occupancy and the Work is not substantially complete
(as reasonably determined by Landlord) on the Commencement Date as a direct
result of any such delay so caused by Landlord or Pierce Construction
(collectively, ~Landlord Delays"), then the obligadons of Landlord and Tenant
shall condoue in full force and effect and the Commencement Date shall be
delayed one day for each day that the substandal completion of the Work is
delayed beyond the Commencement Date set forth as part of the BASIC LEASE
INFORMATION as a direct result of any such Landiord Delay and Landlord shall
also pay any actual and documented holdover penalty paid by Tenant to its
current landlord and incurred as a result of any delay in the substantial
completion of the Work beyond the Commencement Date set forth as part of the
BASIC LEASE INFORMATION as a direct result of a Landlord Delay. Tenant shall
also be entitled to terminate this Lease upon written notice to Landlord given
at any dme prior to substandal completion of the Work if all or substantially
all of the Premises has not be made available for Tenant's operation of its
business within ninety (90) days after the Target Commencement Date as a direct
result of a Landlord Delay. Notwithstanding anything to the contrary contained
in the foregoing, if Tenant occupies any portion of the Premises and also
commences to operate its business from any portion of the Premises, then the
Commencement Date shall be deemed to be the earlier of the Commencement Date
set forth as part of BASIC LEASE INFORMATION or the date of such occupancy and
commencement of operations and Tenant shall be obligated to pay Basic Rental,
Tenant's share of Excess and other Rent pursuant to the terms hereof.
4. Tenant shall bear the endre cost of performing the Work. If Tenant
does not contract directly with Pierce Construcdon or other contractor
affiliated with Landlord and designated by Landlord and acceptable to Tenant
for the Work, then: (a) Tenant shall pay Landlord: (i) within thirty (30) days
after written request therefor, the cost of the Work as reasonably estimated by
Landlord (said estimate shall be broken down generally by major subcontract or
trade and shall be presented to Tenant for approval, which approval shall not
be Dasonably withheld or delayed), and (ii) within thirty (30) days after
request therefor, the estimated increased cost of any changes or mod)fications
made to the Work; and (b) within sixty (60) days after the Commencement Date,
Landlord shall provide Tenant with reasonable evidence of the costs of the Work
and Landlord shall either reimburse Tenant for any excess costs deposited by
Tenant with Landlord
<PAGE> 37
or Tenant shall, within thirty (30) days thereafter, pay Landlord any
addidonal costs incurred in connection with such Work.
5. To the extent not inconsistent with this Exhibit, Secdon 8.(a) of this
Lease shall govern the performance of the Work and the Landlord's and Tenant's
respective rights and obligations regarding the improvements installed pursuant
thereto.
6. The contract with the general contractor shall provide that all such
work shall be undertaken and completed with strict compliance with all
applicable laws, reguladons, rules, ordinances, zoning requirements and
covenants, conditions and restriaions applicable to the Premises.
7. Tenant and Tenant's representatives shall be entitled, during
reasonable business hours and after reasonable notice to Landlord, to visit and
inspect the Premises provided that such entry shall be at Tenant's and its
representative's own risk,and Landlord shall have no liability or obligadon in
connection therewith and provided further that such inspection alone shall not
reduce or change Landlord's obligations pursuant to this EXHIBIT D.
8. Landlord shall be endtled to rely upon the written orders and
directions of Warren Rouse who shall act as "Tenant's representadve~ hereunder.
EXHIBIT E
~SION OPTION
Provided Tenant is in compliance with the terms and provisions of this
Lease and Tenant is occupying the endre Premises at the time of such election,
Tenant may renew this Lease for one addidonai period of five years on the same
terms as provided in this Lease (except as set forth below), by delivering
written notice of the exercise thereof to Landlord not later than nine months
before the expiMtion of the Term. On or before the commencement date of the
extended Term, Landlord and Tenant shall execute an amendment to this Lease
extending the Term on the same terms provided in this Lease, except as follows:
(a) The Basic Rental payable for each month during each such extended Term
shall be the greater of (1) the prevailing rental rate in the Building or in
similar buildings within the Park Place Business Park, at the commencement of
such extended Term, for space of equivalent quality, size, utility and locadon,
with the length of the extended Term and the credit standing of Tenant to be
taken into account, or (2) the Basic Rental which would otherwise be payable
hereunder for the first full calendar month of such extended Term, as adjusted
in the =er provided in this Lease;
(b) Landlord in wridog; and
Tenant shall have no further renewal ophons unless expressly gMnted by
(c) I ~dlord shall lease to Tenant the Premises in their then-current
condition, and Landlord shall not be required to perform any Work or Tenant
finish or provide to Tenant any
<PAGE> 38
allowances (e.g., moving allowance, construction allowance, and the like) or
other tenant inducements.
Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is terminated, (2) Tenant assigns
any of its interest in this Lease or sublets more than twenty-five percent
(25%) of the mntable square footage of the Premises other than an assignment or
sublet to an affiliate with respect to which Landlord's consent is not required
pursuant to Section 10(a) hereof, or (3) Tenant fails to timely exercise its
option under this Exhibit, dme being of the essence with respect to Tenant's
exercise thereof.
EXHIBIT F
EXP,LNSION OPIION
Provided Termot is in compliance with the terms and provisions of this ~e
and Tenant is occupying the endre Premises at the dme of such election, Tenant
shall have the right to expand ~he existio' buildin~ by approximately 20,000
squaro foot ttho ~13xp~ion Preinisos") subject to compliance wito all of toe
term' ~nd provigions of this EXHIBIT F.
A. Intentionalh Deleted.
B. Tenant's Election. Tenant, at its sole option, may elect to expand the
Premises pursuant hereto by written notice to Landlord given on or before the
ninth annual anniversary of this Lease (the ~ExDsosion Nodcen). Said Expansion
Notice shall include a site plan, complete plans and specificadons, complete
Working Drawings, copies of the final bid packages, complete cost and pricing
information, including all bids and any bid selecdons made by Tenant,
architectural renderings, together with any pricing or other information Tenant
may have in its possession or to which Tenant otherwise has access, and current
audited financial statements, any interim financial statements and such other
financial informadon of Tenaot as Landlord may reasonably request. Tenant shall
also provide evidence that the Expansion Premises shall be in compliance with
any applicable Legal Requirements (as such term is hereinafler defined).
Notwithstanding anything to the contrary contained herein, if Tenaot's then
current net worth as determined in accordance with generally accepted accoundag
principals by an independent cerdfied public accountant reasonably acceptable
to Landlord and Landlord's Lender is less than S100,000,000.00, then Landlord
shall have the sole right and option, but not the obligation, to reject
Tenant's election to expand by providing Tenant with written notice of such
rejection (the "Rejecdon Noticen) within 30 days after receipt by Landlord of
the Expansion Nodce. Upon the sending of such Rejection Nodce, Tenant shall
have no further rights pursuant to this EXHIBIT F uotil such time as Tenant's
then current net worth determined as set forth above is at least
S100,000,000.00.
C. Landlord's Options. (i) Alternatives. If Landlord does not send the
Rejection Nodce, Landlord shall have thirty (30) days after receipt from Tenant
of the Expansion Notice to determine whether or not Landlord would like to fund
such expansion.
(ii) Alternative 1: Landlord Funds Construction. If Landlord does not
send the Rejecdon Nodce and Landlord would like to fund such expansion, then
Landlord shall, by written notice to
<PAGE> 39
Tenant given within said thirty (30) day period, propose to Tenant that
Landlord fund the Total Construcdon Cost and receive a net return (the
~Returnn) on the Total Construction Cost, in which event the notice shall set
forth Landlord's proposed rate of Return. If Tenant objects to Landlord's rate
of Return, then Tenant shall nodfy Landlord in writing of such objection within
five (5) business days after receipt of Landlord's notice, which objection may
set forth a rate of Return that would be acceptable to Tenant. If Tenant
provides to Landlord a rate of Return that would be acceptable to Tenant in
said objection notice, then Landlord and Tenant shall have ten (10) business
days after receipt of Tenant's notice to endeavor to agree upon a rate of
Return. If the parties agree upon a rate of Return, then the Total Construction
Cost and Return shall be amortized over the remaining term of the Lease and any
properly exercised extensions thereof or any extensions otherwise agreed to by
the parties in writing. If Landlord and Tenant cannot agree upon a rate of
Return, or if Tenant does not provide Landlord with a rate of Return that would
be acceptable to Tenant in said objection nodce, or if Landlord does not
respond after receipt of Tenant's notice objechug to Landlord's rate of Return,
then Tenant shall have the right to and shall pay for the Total Construction
Cost as set forth below.
(iii) Alternative 2: Prolect Manazement. If Landlord does not send the
Rejection Nodce and if Landlord does not fund construction for any reason, then
Landlord shall be entitled to receive a project management fee (the "Project
Management Fee") equal to ten percent (10%) of the first $100,000 of Total
Construcdon Cost (less the Project Management Fee) and five percent (5 %) of
all Total Construction Cost (less the Project Management Fee) over $100,000.
Said Project Management Fee shall be paid as costs are paid out in connecdon
with the Expansion Premises. This Project Management Fee shall compensate
Landlord for, among other items, review of plans and specifications and
construction inspections and review. Notwithstanding anything to the contrary
set forth in this subparagraph (iii), if Tenant elects to contract for the
construction of the entire Expansion Premises with Pierce Construction
(provided Pierce Construcdon condaues to be an affiliate of Landlord) or with
another geneMI contMctor affiliated with Landlord, then no Project Management
Fee shall be payable to Landlord hereunder.
D. Tenant's Work. If Landlord does not send the Rejection Notice and if
the parties do not agree to have Landlord fund the construction, Tenant shall
have the right to expand the existing
Building at its sole cost and expense and shall be responsible for payment
of all Total Construction Cost. Any such expansion shall be in strict
compliance with all applicable laws, statutes, codes, ordinances, rules and
regulatioos, including, without limitadon, wning and building codes,
ordinances, restrictions and regulatioos (collecdvely, "Lesal Reauirementsn).
All contractors, subcontractors and materialmen shall be subject to the
approval of Landiord and Landlord's Lender (as such term is hereinafter
defined), which approval shall not be
unreasonably withheld or delayed. All costs incurred by Landlord in connecdon
with such approval, including, without limitadon, attorneys', consultants',
architects' and engineers' fees shall be promptly paid by Tenant and shall be
deemed Rent hereunder. Tenant shall be obligated to deposit the eshmated cost
for completing the Expansion Premises as reasonably determined by Landlord in
an escrow account with a title company (the "Construction Title Company")
mutually acceptable to Tenant, Landlord and Landlord's Lender and shall be
entitled to disbursements therefrom in accordance
<PAGE> 40
with a standard construcdon disbursement agreement entered into by Landlord,
Tenant and Landlord's Lender providing, among other matters, that the interest
on any such account shall accrue to Tenant, that Landlord's Owners Policy of
Title Insurance and Landlord's Lender's Mortgagees Policy of Title Insurance
for the Premises shall be updated, increased to reflect the value of the
Expansion Premises and endorsed upon each such disbursement, all at Tenant's
sole cost and expense, and that each such endorsement shall insure L andlord
and Landlord's Lender over any and all construction and material liens arising
out of the Expansion Premises at the time of each draw from the escrow account.
Each such draw request shall be on the standard AIA form and shall also include
general contractor cardficates and owners certificates, and shall require that
each draw request be approved by Landlord and Landlord's Lender and, in the
event that the cost to complete the construedon of the Expansion Premises
exceeds the cost remaining in the escrow account, Tenant shall promptly deposit
additional funds in the escrow account so that the escrow account is equal to
or exceeds the eshmated cost to complete construction, as reasonably determined
by Landlord. Tenant acknowledges that Landlord shall have the right to
collateMlly assign all of its rights in, to and under said escrow and escrow
agreement to Landlord's Lender. Tenant shall complete the Expansion Premises in
compliance with all applicable Legal Requirements and in a good and workmanlike
manner using new materials and in strict accordance with the Approved Plaos and
Specificadons. Tenant shall promptly, and in any event prior to the
commencement of any construction as to the Expansion Premises, provide to
Landlord such bonds, guaranties or other assurances in connection with the
Expansion Premises and the construction thereof, as Landlord may request, all
of which shall be in such amount, form and substance as Landlord may request.
Tenant shall obtain such iosurance, including without limitation, builders risk
insurance, in connection with such expansion and Expansion Premises as Landlord
may reasonably request. All such insurance shall name Landlord and Landlord's
Lender as additional insureds and shall provide Landlord and Landlord's Lender
with not less than 30 days nodce of any cancellation, mod)fication, recision or
terminadon thereof. Any and all warranties applicable to Landlord's obligadons
under this Lease shall be assignable to and shall be assigned to Landlord upon
the mn= = of any Landlord obligadons in connecdon therewith. Landlord shall not
be liable under this Lease or otherwise for any construction or other defects
and Tenant shall prompfly undertake to repair and correct any such construction
or related defects. Upon cornpledon of the Premises, Tenant shall provide
Landlord with an as-built survey, as-built plans and specifications, blueprints
and such other informadon as Landlord may reasonably request with respect to
the Expansion Premises. Once Tenant commences construction of the Expansion
Premises, then Tenant shall diligenfly pursue the compledon of such Expansion
Premises and shall complete the Expansion Premises within one year after the
commencement of construction thereof.
E. Terms ADDlicable to ExDansion Premises. The following provisi' whether
Landlord or Tenant undertakes to construct the Expansion Premises:
(i) Construcdon shall not commence on the Expansion Premises until
Landlord and Landlord's Lender has approved the site plan, all plans,
specificadons, materials, architectural design and Working Drawings, all
contractors and subcontMctors, and such other matters as Landlord and
Landlord's Lender may reasonably request in connection therewith, which
approval shall not be unreasonably wifllheld (collectively, the "ADDrOVed PlanS
and SDecificadonsn)
<PAGE> 41
and until the lease amendment described in subparagMph (iii) has been
executed and delivered. If Landlord and Tenant cannot agree on the design and
plans and specifications for the Expansion Premises within sixty (60) days
after the giving of the Expansion Notice, Tenant, upon reimbursement to
Landlord of all costs incurred by Landlord in connecdon with the Expansion
Premises, including, without limitation, the review and approval of the design
and plans therefor, may by written notice to Landlord withdraw the Expansion
Nodce and this Lease shall continue in full force and effect as if said
Expeosion Nodee had not been given.
(ii) All major contractors (defined as contractors providing work cosdng
in excess of $50,000) shall be subject to the reasonable approval of Landlord,
Tenant and Landlord's Lender and Landlord and Tenant shall mutually review the
bids and, acting reasonably and in good faith, shall select
a bid. Landlord and Landlord's Lender shall h~re the right, achng
reasonably, to review and approve all construcdon and materials contracts.
(iii) Landlord and Tenant shall enter into a Lease Amendment amending this
Lease so that the Expansion Premises are included as part of the Premises and
if Landlord funded the costs of the Expansion Premises, then Basic Rental is
adjusted accordingly, and such other provisions are mod)fied or revised to
reflect the ter ns and provisions of this expansion. Said amendment shall be
executed by the parties on or prior to commencement of construcdon of the
Bxpansion Premises.
(iv) Except for minor field change orders which do not affect the cost or
quality of the Expansion Premises, all change orders shall be approved by both
Landlord, Tenant and Landlord's Lender, which approval shall not be
unreasonably wifl'held or delayed.
(v) Upon teruninadon or expiradon of this Lease, the entire Expansion
Premises shall be deemed to be the property of Landlord, and Tenant shall have
no further rights with respect thereto and Tenant shall execute such document
and instruments as Landlord may reasonably request, including, without
limitadon, quit claim deeds, bills of sale and/or assignment, in order to
effectuate such intent.
(vi) Approval by Landlord and/or Landlord's Lender of the plans and
specificadons and working drawings shall not be a representadon or warranty of
either Landlord or Landlord's Lender that such drawings are adequate for any
use, purpose, or condition, or that such drawings comply with any applicable
law or code, but shall merely be the consent of Landlord and/or Landlord's
Lender to the performance of the work and any inspections by Landlord and/or
Landlord's Lender shall not be a representation or warranty that the work is in
compliance with the Approved Plans and Specificadons or any applicable law or
code.
(vii) Landlord and Landlord's Lender shall have the right to inspect the
of the Expansion Premises and all work associated therewith.
Premises.
<PAGE> 42
(viii) Landlord's Lender shall have the right to hire an independent
construction monitor and the cost of such independent construcdon monitor shall
be included as part of Total Construction Cost; provided, however, fl~at such
cost shall not exceed $12,000.00.
(ix) To the extent applicable, Sections 8(a), 8(c) and (d) shall also apply to
the Expansion
F. Total Construedon Cost. The term "Total Construction Cost" as used
herein shall include all costs and expenses associated with the design and
construction of the Expansion Premises, including, without limitadon, the
Project Management Fee to Landlord, costs of preparing all plans and drawings,
architect and engineering, consultants and legal fees, the cost of all permits
and governmental approvals, cost of funds, including, without limitation,
interest, points and lenders fees, and any and all costs and expenses
whatsoever associated with the construction of the Expansion Premises,
including, without limitation, amending this Lease to reflect such expansion.
G. Punch List. Upon substantial completion of the Premises as evidenced by
the issuance of an occupancy percnit or certificate for the Expansion Premises,
Landlord and Tenant shall inspect the Premises and develop a punch list. If
Landlord undertook the construction, Landlord shall undertake to complete such
punch list items within thirty (30) days after preparation of the punch list
and shall diligenfly pursue the compledon of all such punch list items. If
Tenant undertook such construction, then Tenant shall undertake to complete
such punch list items within thirty (30) days after the preparation of the
punch list and shall diligenfly pursue completion of all such punch list items.
If certain items to be completed by Tenant are not completed at least six (6)
months prior to the expiradon or terminadon date of the term of this Lease,
then Landlord shall have the right to complete all such punch list items and to
charge Tenant the reasonable cost thereof, which costs shall be due and payable
as additional Rent under this Lease. This provision shall survive the
expiration or termination of this Lease.
H. Cooperadon. Landlord agrees, upon request by Tenant, to execute permit
applicadons and detailed plan amendments, and to cooperate with Tenant, at no
cost or liability to Landlord, to obtain building permits, plan change
approvals and similar approvals and consents from governmental authorides in
connecdon with the construction of the Expansion Premises in accordance with
Approved Plans and Specificadons.
1. Rights. Tenant's rights under this EXHIBIT shall terminate if (a) this
Lease or Tenant's right to possession of the Premises is terminated or
(b)Tenant assigns any of its interest in this
Leae or sublea more than t~anty-flw pacent (25 % ) of the rentable square
footago of the Premises other tb" 8n srd~nrnont or rublot to ~o effilhto with
roq~oct to which 1=dlort'' con~ont i' not roquirot pursuant to Secdon lO(a)
hereof.
EXHIBIT G
FIRST RIGHT TO LEASE SPACE
1. Tenant shall have a first right to lease any addidonal space in
Building IX (1145 West Lake Park Drive, Milwaukee, Wisconsin) which becomes
available during the Lease Term (the
<PAGE> 43
"First Right to Lease~), subject to any encumbrances which may exist with
respect thereto or in other tenants' leases in the Park Place Business
Park, including, without limitation, renewal or expansion ophons of such
tenants. In the event fl~at such space becomes available during the Lease Term
(such availability may accrue to Tenant as a result of, among other reasons, a
tenants' failure to exercise expansion or renewal rights), prior to entering
into an obligadon to lease such space to another prospecdve tenant, Landlord
shall provide notice thereof to Tenant sethng forth the availability of such
space, at which dme Tenant shall have five (5) business days after receipt
thereof in which to exercise its First Right to Lease by electing in writing to
lease the space, all on an "AS IS" basis, at the prevailing market terms with
respect to any such space which is so offered to Tenant; provided, however,
that in no event shall the "Basic Rental~ under such lease be less than the
then Basic Rental under the terms of this Lease. If not so exercised, Landlord
shall be free to enter into a lease with a prospecdve tenant. If, at any dme,
after the date which is five (S) months after Tenant's last elecdon not to
lease any such space, Landlord has not leased such space and desires to enter
into a lease with a prospective tenant (other than a prospective tenant with
which Landlord was negodadug to lease such space during said five (5) month
period and with respect to which prospective tenant Landlord shall have the
right to enter into a lease for such space afler said five (5) month period),
Landlord shall, prior to entering into an obligation to lease such space to
another prospective tenant, again offer the space to Tenant as more
particularly set forth above. Tenant may not exercise its rights under this
EXHIBIT if Tenant is not in compliance with the terms and provisions of this
Lease or if Tenant is not then occupying the endre Premises.
2. The terms and provisions of any T esqe for space which is for premises
consisdng of less than all of the building in which said premises are located
shall include among other provisions the following: "With respect to any
calendar year or partial calendar year in which the building is not occupied to
the extent of 95 % of rentable area thereof, the Operadag Expenses for such
period shall, for the pur,ooses hereof, be increased to the amount which would
have been incurred had the Building been occupied to the extent of 95 % of the
rentable area thereof. n
3. Tenant's rights under this EXHIBIT shall terminate if (a) at any time
during the term of this Lease the owner of Premises and the owner of Building
IX are no longer at the same entity; (b) this Lease or Tenant's right to
possession of the Premises is terminated or (c) Tenant assigns any of its
interest in this Lease or sublets any portion of the Premises other than an
assignment or sublet to an afffiliate with respect to which Landlord's consent
is not required pursuant to Section 10(a) hereof; provided, however, that if
Tenant's rights under this EXHIBIT were terminated solely because Tenant sublet
a portion of the Premises and (i) Tenant has, in the aggregate, sublet a
portion of the Premises consisdng of twenty-five percent (2596) or less of the
rentable square footage of the Premises and (ii) Tenant provides Landlord with
written notice that Tenant is interested in leasing addidonal space, then
Tenant's rights under this EXHIBIT shall be reinstated suyoct to the terms,
provisions, limitations and restriedons contained herein.
EXHIBIT H
WAIVER OF RIGHTS UNDER THE
DECEPTIVE TRADE PRACTICES -
CONSUMER PROTECTION ACT
<PAGE> 44
Pursuant to, and to the extent permitted by Section 17.42 of the Texas
Deceptive Trade Pracdces - Consumer Protection Act (Text Bus. &c Com. Code Ann.
$ 17.41, et q.), Landlord and Tenant hereby agree that the Texas Deceptive
Trade Practices Consumer Protection Act is waived and shall have no
applicability to this Lease, except that such waiver shall not apply to Section
17.555 of such Act.
LANDLORD:
TCC MIILWAUKEE n LIMITED PARTNERSHIIP
BY: a Wisconsin limited partnership
Its: general partner
TENANT:
By: /'d 04
Name: b c: o' R`-;'
Title: i>oei<A
FIIRST HEALTH GROUP CORP.
By:
Name: c;, G
Title: Ji\Jli Qc;[,l; Pn;
TENANT'S LEGAL COUNSEL
By: 5 5 n, 17
Name:
Title: (* .ru l () /l
<PAGE> 1
FILE
ADDENDUM 111 TO LEASE AGREEMENT
Doted Septembsr 17, 1993,
By and Between
WHP-II, INC. [successor-in-interest to WHP, Inc.), as Landlord,
snd
FIRST HEALTH STRATEGIES ITPAl, INC., as Tanant
This Addendum Ithis "Addendum") is, for all purposes, annexed to and made
a part of that certain Lease Agreemont by and between WHP, INC., a Texas
corporation, as Landlord ["Landlord"), and FIRST HEALTH STRATEGIES ITPA), INC.,
a corporation, as Tenant ("Tenant"), with an execution date of September 17,
1993 Itho "Lease") for space in the office building _H' John F. Kennedy
Boulevard, Houston, Texas. All terms used herein shall have the meanings
assigned therefor in the Lease, except as specifically otherwise set forth
herein.
Notwithstanding any con~rary provisions curtained elsewhere in the Lease,
Landk Tenant agree that the Lease is hereby modified and supplemented as set
forth hereinbelow:
ExDansion of tho Leased Premises. An area of space of approximately 8.993 net
rentable square feet on floor six (6) of the Building as shown on Exhibit Y.A.
hereto Ithe "Expansion Area") shall be added to the Leased Premises as of the
earlier of June 1, 1996, or (ii) the date of Substantial Completion of the
tenant improvements in the Expansion Area (the "Expansion Area Commancement
Date"). The total net rentable area ("NRA") of the Leased Premises after the
Expansion Area Commencement Date shall be 47.021 net rentable square feet.
Improvements shall be made to the Expansion Area as shown in the construction
drawings set forth in Exhibit ~A. hereto (the "Tenant Expansion Improvements").
2. Tenant ExDansion ImDrovement Allowance.
1a) Landlord shall pay an amount in respect of any and all actual costs
associated with the construction of the Tenant Expansion Improvements, as shown
in the construction drawings set forth in Exhibit ~A. hereto, equal to Six and
20/100 Dollars ($6.20) per square foot of NRA Ithe "Expansion Improvement
Allowance"). The total allowance shall not exceed Fifty-five Thousand Seven
Hundred Fifty-six and 60/100 Dollars (S55,756.60). All construction costs for
the Tenant Expansion Improvements which exceed $6.20 per square foot of NRA
shall be due and payable to Landlord on a pro rata basis for each respective
expansion area at the time of substantial completion of
<PAGE> 2
such respective expansion area, as reasonably certified by Darin Jones or his
designated successor (hereinafter referred to as "Tenant's Representative") and
by Landlord's Representative.
lb) The Tenant Expansion Improvements shall be performed by Landlord. Tenant
currently has in its possession construction drawings for the Expansion Area.
Tenant shall approve in writing and return the signed-off final construction
drawings to Landlord no later than May 13, 1996. Landlord shall have five (51
days from its receipt of said drawings, as approved, to modify or amend such
drawings. Should Landlord fail to deliver to Tenant the modified or amended
drawings as described herein within such 5-day time period, it shall be
presumed that the drawings have been accepted by Landlord as approved by
Tenant without further modification by Landlord.
3. Exoansion Area Term. The lease term for the Expansion Area shall commence
on the date set forth above for the Expansion Area Commencement Date, and the
lease term shall expire on the expiration date of the primary term of the Lease.
r~a
Addendum lil - Page 1 of 3 Pages
4. ExDansion Araa Basa Rantal Pavment Schedule. The base rental payment
schedule for the
Expansion Area over the term of the Lease shall be as follows:
The first eleven 111) calendar months at the Expanelon Araa Tarm'
The second twelve 112) calendar months of the Expansion Area Term:
The following soven (7) calendar months of the Expansion Area Term:
614.00 Annual Rata par NRA: $115,410.17 for such 11month period; $10,491.83 per
Month.
$14.50 Annual Rate per NRA; $130,398.50 for such 12month period; $10,866.54 per
Month.
$15.00 Annual Rate per NRA; $78,688.75 for such 7-month period; $11,241.25 per
Month.
Exhibit Y.B. to this Addendum shall contain a recapitulation of the schedule of
payments for all areas covered by the Leasa and this Addendum.
5. Waivar of ExDansion ODtion. This agreement for expansion of the Leased
Premises to include
<PAGE> 3
the additional expansion area of 8 993 square feet of NRA constitutes
exercise of all of the expansion rights and options granted to Tenant under the
Lease and hereunder. Tenant hereby permanently waives and relinquishes any
further expansion options or rights to be exercised under the Lease, as
amended, including, without limitation, those which would otherwise be
exercisable on the third, fourth and fihh annual anniversaries of the
Commencement Date of the Lease under Section 9.03 thereof.
6. ExDansion Area Parkino Permits. As of the Expansion Area Commencement Date,
Landlord
hereby agrees to make available to Tenant, and Tenant hereby agrees to
take, three 13) parking permits for every one thousand (1,000) square feet of
NRA of the Expansion Area [i.e., twenty seven (27) parking permits! to park
vehicles in the unassigned and unreserved spaces in the Garage. The parking
permits granted hereunder, together wish those granted under the Lease as set
forth in Exhibit ~H. thereto, shall total two hundred ninety-three (293)
parking permits, shall be at no charge, and shall entitle Tenant to utilize a
maximum of 293 parking spaces in the Garage. It is acknowledged by the parties
hereto that it may be necessary to issue more than 293 magnetic parking cards
because of the number of Tenant's overlapping work shibs and that Tenant's
current parking usage exceed the 293 permits granted hereunder, and, therefore,
Landlord and Tenant further agree as follows:
(a) Any agreements regarding Additional Parking Permits, whether oral or
written, currently
in effect shall be modified as of the Expansion Area Commencement Date
to reflect the limitations and restrictions on numbers of permits set forth
herein; and
(b) At no time shall the total number of parking permits, including Initial
Parking Permits,
Additional Parking Permits and/or parking permits related to the Expansion
Area, issued to Tenant by Landlord exceed two hundred ninety-three 1293)
parking permits, with one hundred forty-five (145) of the total 293 parking
permits being for unassigned and unreserved spaces in the Garage and one
hundred forty-eight (148) of the parking permits being designated and
restricted only to the parking spaces on ramp 4 and level 5 of the Garage; and
(c) As of the Expansion Area Commencement Date, Tenant, at its sole expense,
shall be
responsible for enforcing the restrictions on parking in the Garage set
forth herein, including, without limitation, the arranging of alternate
transportation for its employees, such as van pools or other multi-passenger
transportation and the immediate removal of vehicles shou)d Tenant's usage
exceed the amount of parking spaces permitted hereunder; and
Addendum lil - Page 2 of 3 Pages
<PAGE> 4
Id) Should Tanant or its employees lin this paragraph, herein collectively
referred to as
"Tenant") violate the parking restrictions set fonh herein, Landlord
shall be entitled to charge Tenant its reasonable out-of-pocket costs for
removing Tenant's vehicles, including, without limitation, reasonable towing
fees and a reasonable fee per vehicle to cover Landlord's extra overhead
expense, if any, in enforcing the parking restrictions; provided, however,
Landlord shall not undertake to tow any vehicle, unless such vehicle or the
permit holder in whose name such vahicl6 is registered with Landlord is not
promptly moved aher reasonable notice and the same permit holder or vehicle has
been the subject of three (3) or more violations. Should Tenant violate these
parking restrictions (hereinaher, a "Parking Violation"), Landlord shall
provide written notice to Tenant at the Laased Premises with a copy to Mr.
Keith Kinghorn, Senior Vice President, First Health Strategies (TPA), Inc.,
6975 Union Park Center, Suite 600, Salt Lake City. Utah 84047. Should Tenant's
Parking Violations exceed three (3) in any calendar month, in addition to any
other fees, costs or overhead reimbursement provided above, Tenant, at
Landloro"s option, shall pay to Landlord a penalty in the amount of $100.00 per
violation for each Parking Violation in excess of three (3) per calendar month.
This penalty is agreed by the panics hereto to be reasonable and as
consideration for Landlord waiving any rights to declare a default by Tenant
under the Lease for any such Parking Violations.
7. Lease Remainino in Effect. To the extant that terms, contents and
conditions of the Lease and
any amendments, addenda or exhibits thereto, executed prior to the date
hereof conflict with the terms of this Addendum, this instrument shall control,
otherwise the terms contents and conditions of the Lease shall remain in full
force and effect and are hereby ratified and confirmed.
LANDLORD:
TENANT:
WHP-II. INC.
homas J. Trzano (i, President
Date: /3 . 1996
FIRST HEALTH STRATEGIES ITPA), INC.
By:
<PAGE> 5
Nams:
Data: 1996
Addendum lil - Page 3 of 3 Pages
Month 1 07-9b 39,745.83 10,491.83 50,237.66
Month 2 08-96 39,745.83 10,491.83 50,237.66
Month 3 09-96 39,745.83 10,491.83 50,237.66
Month4 10-96 39,745.83 1O,491.83 50,237.66
Mondl 5 11-96 39,745.83 10,491.83 50,237.66
Montb 6* 12-96 40,S38.08 10,491.83 S1,029.91
Step nte Increase Prlmary Space
Prlmary Area Expanebn Area
Base Rental Base Rental
Total |
Payment |
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year 1997
Month7 01-97 40,538.08 10,491.83 51,029.91
Mond 8 02-97 40,538.08 10,491.83 51,029.91
Month 9 03-97 40,538.08 10,491.83 51,029.91
Month 10 04-97 40,538.08 10,491.83 51,029.91
Month 11 05-97 40,538.08 10,491.83 51,029.91
Month 12* OrS-97 40,538.08 10,866.S4 5l,404.62
Month 13 07-97 40,538.08 10,866.54 51,404.62
Mond 14 08-97 40,538.08 10,866.54 51,404.62
Month 15 09-97 40,538.08 10,866.54 51,404.62
Month 16 10-97 40,538.08 10,866.54 51,404.62
Month 17 11-97 40,538.08 10,866.54 51,404.62
Month 18** 12-97 41,330.3S 10,866.54 52,196.89
</TABLE>
*Step rate Increase Expandon Space
*Step rate Increase Primary Space
Prlmary Area Expaerhn Area Total
Base Rental Base Rental Payment
Year 1998
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Month 19 01-98 41,330.35 10,866.54 52,196.89
Month20 02-98 41,330.35 10,866.54 52,196.89
Month 21 03-98 41,330.35 10,866.54 52,196.89
Man 22 04-98 41,330.35 10,866.54 52,196.89
Mond 23 05-98 41,330.35 10,866.54 52,196.89
Month 24* 06-98 41,330.35 11,241,2S S2,S71.60
Month 25 07-98 41,330.35 11,241.25 52,571.60
Month 26 08-98 41,330.35 11,241.25 52,571.60
Month 27 09-98 41,330.35 11,241.25 52,571.60
Month28 10-98 41,330.35 11,241.25 52,571.60
Month 29 11 -98 41,330.35 11,241.25 52,571.60
</TABLE>
*Step rate Increase Expanshn Space
DIRECT GLUE DOWN - cur FILE (TENANT WARRANrr WArVER)
MMSTRONG IMFERIALTEXTIIRE#51941 FOLAR WHITE
AREAS NOTED
BREAlt AREA AS NOTED
NEWTHROUGHOqT
ON ALL EXFOSED MILLWDRI SURFACES
NEW THROUGHOUT
VINYL COMFOSmON
RUBBER BA5E
ROF E 2 12 RUBBER CDVE BASE #X
FLASlIC LAMINATE
FAINT
<PAGE> 7
_ WIL50NMT FLATINUM #D 315-60
DEVOE #2 H 39F NICICEL - FLAT BUILDING I
STANDARD FINISH
NOTE: 1) NEW BUILDING STANDARD FINISHES THROUGHOUT A5 SPEaFIED - FXIS11NG SLAB
SFACE
2) FLOORING MUSt BE FREPARED AS REQUIRED FDR NEW FINISHES THROUGHOUT
~ ~:~_
# 8IZE DE8CRIPTION 1~ REMARI;S
..
BUILDING 5TANDMD rLASTIC LAMINATE PAS~AClt SET IIISH D"D NBl' SO HASCH
~J 3~-0. X 9~-0. E'INISH, SOLID CORE RACO DOOR IIITN BOLT IIISB 5 L'B.
DOOR 8UILDINC :ISAIIDARD
WILDING 5SANDMD RACO DOOR I1IAHE CLOSISR ~
BUILDING 5TAIIDMD PBA5SIe LAMINATE DlileSY PASSAC8i 5ET5 FOR NEH - SO OPEN
lE0
\~ 6~-0- X 9~~0- FINI5N, 50LID CORZ RACO DDUBLE DCORS DWBLIt DOORS IIISH IALL
BOTH DOORS
IIITH WILDING STANDARD RACO DOOR ).UNSED DOOlt I'UHPBRS OrERASIONAL
PRAHESWLI./PUSH LATCH AT TOP
OP DOOR AIID TRAeX
BUILDING 5SANDMD PLaSTIC LUlINATZ PASSACN SOT IItTH 5 LB,. NEII TO MATCH
~J 3~~0. X 9~~0- FINI511, 50LID CORB RACO DOOR IlITH DOOR CLOSER MD IU.LL
BNILDIDG STANDARD
BUILDING SSANDARD RACO DOOR FRAME I~NTED DOOR B8HPZR
WILDING STAYDMD ELASTIC LAHINASr PASSACN SET IIISN IUIL NEII SO MASCH
3~-0- X 9~-0- FINISN' SOLID CORe RACO DOOR NISH HWNSIlD DOOR BIIHPBR BIIILDDIG
SSANDARD WTLDING 5.rAllDAR3 RACO BO;DR FRA - F -
W
<PAGE> 8
NOTZ 1)G.C. SO PROVIDE LBVBR SYPB BUILDING STANDARD NARDNARB T~ICNODT. SBRG~T
IIB115 5BiRCtS5 POI~SH CHRt~ FINISH
_~ SOLID CORE DOOR, PLASTIC LAMINATE FINISN ~ FIGURBD MAROGANY
#7040A
~_rc~ ~u n~. ~ - - r~
~ i~
<PAGE> 9
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<PAGE> 10
.o~@ ~ Q~o
`~,Y~Y.~. I his amount is to be amortized monthly over the primary temm of
the Lease at an annual interest rate of nine percent (9%) according to
Attachment 1. "Amortization Schedule".
ITEM #2. It shall be furthermore understood and agreed by both Landlord and
Tenant that the Base Rental rate set forth in Section 2.01 and Addendum II of
the Lease shall be increased by such monthly amortization, and the Base Rental
Payment Schedule has been revised as follows, effective as of June 1, 1994:
0~01-94 through 11-30-94: S10.S4 Rate. S400,093.98 Annual Rental. S33,407.83
per Month.
12-01-94 through 11-30-95: S11.54 Rate. S438,921.96 Annual Rental. S36,576.83
per Month.
12-01-95 through 11-30-96: S12.54 Rate. S476,949.96 Annual Rental. S39,745.83
per Month.
12-01-96 through 11-30-97: S12.79 Rate. s48e,458.98 Annual Rental. S40,S38.08
per Month.
12-01-97through11-30-98: S13.04 Rate. S495,964.19 AnnualRontal. S41,330.35 per
Month.
All other temms, contents, and conditions as outlined in the Lease
Agreement, as amended, will remain in full force and effect as heretofore
agreed.
ACCEPTED AND AGREED TO THIS lo DAY OP~ 1994:
LANDLORD: WHP, Inc., a Texas Corporation
~mas J. Trzanowsid~asurer
ACCEPTED AND AGREED TO THIS /~ DAY OF ~r~ 1994:
TENANT: First Health Strategies (TPA), Inc.
BY:
Barry W. urt, Vice President
<PAGE> 11
'.~; ~' .~'l~l''~ lelial~sol ,,7 ~ l9Yb.
The Landbrd hereby agrees to make available to Tenant, and Tenant hereby
accepts, an
Y.rea to be used for the purpose of storage under the following terms and
conditions:
1. Storagie Area. The net rentable area of approximately 938 square feet on
Floor Six of the Buliding as shown on Exhibit "A..
2. Term. The term of this Agreemont shall be on a monthto-month basis for a
period not to exceed one (1) year, commendng as of May 1, 1g95.
3. Rer~l. The rentd for such storage space shall be Two Hundred and 00/100
Dollars (S200.00) on a monthly basis, due and payable to i andlord on the first
day of each calendar month. Failure of Tenant to pay rental in a timeb manner
shall canrel this Agreement.
4. Cancei-atbn. Either iandbrd or Tenant may cancel this Agreement with wriUen
notification to the other, and the Tenant shall have ten (10) days from the
date of either (i) receipt from i andlord, or (ii) notice to i andbrd of
cancellation, to vacate the Storage Area. Any storeci items that remain in the
Storage Area afler the tenth (10th) day will be disposed of by the i andlord at
the Tenant's expense. At the time of cancellation the rental amount due or paid
by Tenant shall be prorated or refunded by Landlord.
5. i andbrd i iabil4 The Landiord shall not be responsible for, nor have any
liability in regard to the stored Hems.
6. Condidon. The 8tora''e Area Is raw space and is accepted by the Tenant in
"AS IS" condition. The Landlord shall have locking hardware Installed at the
ontry door at the Tenant's oxpense, which cost shaii not exceed the amount of
Fifty Dollars (S50.00). Upon removal of the stored items the Tenant shall be
responsible for leaving the area in broom swept condition.
Agireed and accepted:
LANDLORD: WHP-'I, Ir~
i~ A ~oJ
~~7A. Ier, ge Owner
Agreed and accepted:
TENANT: Fint Hesith (TPA) St~bgbs, Inc.
<PAGE> 12
Sft~AL(/{J GNc.e
lle6/~1J~ i/lC~ '/,Wd ll)~t~
Please print Name and Titl
\
en a~e l.lty ot Huu~`on, nairia Loulity lexas Inereinarter sorrietiq~es
caller' tne ~Lano`~); tne Lano r~elilr, ll~le particularly described on Exhibit
"A";ttached hereto and made a part hereof for all purposes and the leased
prem1aes being s~ore particularly described as follows:
38.028 aquare teet of net rentable area (defined below) on all of floor 5 and
part of floor 6 of the 8ui [ding;
and as reflected on the floor plan(s) of the leased premises attached hereto
and made a part hereof for all pur',oses as Exhlbit '18."
"llet rentable area," as used herein, shall refer to (1) in the case of a
single tenancy floor, all floor area measured frora the inside aurface of the
outer glass line of the Building to the inside surface of the opposite outer
glass line excluding only Vertical Penetrations (defined below), plus an
allocation of the General Comnon Areas (defined below) of the Building, based
upon the ratio which the tenant's net rentable area (excluding Common Areas
Idefined below]) bears to the aggregate net rentable area (excluding Canmon
Areas) of the Building and (ii) In the case of a floor to h occupied by more
than one tenant, all floor areas within the Insida surfica of the outer glass
walls enclosing the leased premises and measured to the mid-point of the walls
separating areaa leased by or held for lease to other tenants or On-Floor
Common Areas (defined belor`)
but including a proportionate part of the On-Floor Common Areas locateo on such
floor, based upon the ratio which the tenant's net rentable area (excluding
Common Areas) on uuch floor beara to the aggregate net rentable area (excluding
Connon Arees) on such floor, plus an allocation of the square footage of the
General Common Areas of the Building based upon the ratio which the tenant's
net rentable area (exclud/ng Common Areas) bears to the aggregate net ;entable
eree (excluding Common Areas) of the Buliding. lt is understood and agreed that
a fifteen percent (1SX) add-on factor has been used to calculate the ratios for
multi-tenant floor occupancy
ard a six percent t6X) add-on factor has been used to calculate the ratios for
a single-tenant floor occupancy.
The term "Vertical PenetrationsU shall mean the areas with/e (and measured
from the mid-point of the walls enclosing) Building stairs, fire towers,
elevator shafts, fluea, vents, stacks, pipe shafts, and wrtical ducts. Areas
for the specific use of Tenant and installed at the request of Tenant such as
special stairs or elevators are not included within the definition of Vertical
Penetrations. No deductions from net usable area shall be made for columns or
proJections necessary to the Building.
<PAGE> 13
The term ~General Comron Areasil shell mean those areas within (and
measured from the mid-point of the walls enclosing) the Buliding's elevator
rachine rooms, main mechanical and electrical rooms, ground floor pubilc
lobbies, management off/cc, rest rooms, rechanical rooms, janitor closets,
telephone and eouipment rooms, and other similar facilities and other areas not
leased or held for lease within the Building but which are necessary or
desirable for the proper utilization of the Building or to provide customary
services to the Bui ldin9.
Tha teres l'On-Floar Co_on Areas" shall mean all areas located above the
ground floor of the tulidina and within tend _asured from the enid-point of the
walls enclosing) public corridors and elevator fayers for the use of all
tenants on the floor on which the leased premises are located
the auilding.
The term ~Common Areas" shall mean all General Common Areas and On-Floor Common
Areas within
The foregoing definition of net rentable erect has been used In
calculating the net rentable area of the leased premises and the net rentable
area of the Building hereunder, and Tenant and Landlord hereby stipulate and
agree that the net rentable area of the leased premises is 3~028 square feet
and the net rentable area of the Building is 216,306 square feet,
notwithstanding any minor variations in measurement or other minor variations
that may have been incurred in the calculation thereof. If the Building is ever
at Landlord's election demolished, altered, remcdeled, renovated, expanded, or
otherwise changed in such a manner as to alter the amount of space contained
therein, then the above calculation for the net rentable area of the Building
shall be adjusted and recalculated by using the foregoing method of determining
net rentable area.
1.02 T~ (a) SubJect to ar,d upon the terms and conditions set forth
herein, or in any exhibit hereto, the term of this lease shall comnence on the
Commencement Date (defined below) and shall expire on llovenber 30. 1990.
(b) As used herein, "Commencement Datel' means December 1. 1993.
Notwithstanding the foregoing, except es hereinafter provided, if Tenant
occupies all or any part of the leased premises prior to the ebove date, the
C~nenca~nt Date shell ba the date of such occupancy. Notw/thstanding any
contrary provlalon contained in this Section 1.02(b) of this Lease, or the Uork
Agreement set forth In Exhlbit "c" attached hereto and Incorporated herein by
reference, Tenant shall be permitted access to the Leased Premises for a period
of thirty (30) days after Landlord's Issuance of the Certificate of Substantial
Completion and prior to the Commencement Date tor the Installatlon of Tenant's
eouipment (including computers
telecommunJcatlon and date line and cables and wiring for same) and modular
furniture, prov(ded, however, (i; Tenant shall secure Insurance coverage during
such period satisfactory to Landlord and submit a Certificate of Insurance to
Landlord prior to such access, (il) any and all damage to the Leased Premises
during such Instellatlon shall be repaired at Tenant's expense, and (iii) the
provisions of Sectlon 5.01 hereof shall expressly apply to any ot such
Installation work.
<PAGE> 14
(c) Within five (s) business days after the Commencement Date, and at any
time thereafter upon the reouest of Landlord, Tenant shall execute and deliver
to Landlord a declaration (in the form to be submitted by Landlord) specifying
the date upon which the same occurred.
1.03 Usa. The leased premises are to be used and occupied by Tenant (and
its permitted assignees and subtenants) solely for the purpose ot general
office space (including claims processing) and for no other purpose. UIthout
limiting the foregoing, the leased premises shall not be used for any purpose
Nhich would tend to lower the first-class character ot the Buliding, or create
unreasonable elevator loads or otherwise interfere
~a~ -
installrent or installments so proreted shall be paid in advance. The payment
for auch prorated nonth shall be calculated by multiplying the annthly
Installerant by a fraction, the numerator of which shall be the nunber of days
of the lease term occurring during said commencement or tarminatlon month, as
the case may be, ard the denominator of which shall be the total nurfoer of
days occurring In said commenceorent or termination month. Also, If the term of
this lease comnences or terminates rn other than the first day of a calendar
year, the Base Kental and Tenant's Forecast Additirnal Rent shall be prorated
for such commencement or termination year, as the case ray be, by aultiplying
earh by a fraction, the numerator of which shall be the number of days ot the
leeae term during the cte.lmence_nt or termination year, as the case may be,
and the denominator of which shall be 365, and the calculation desctibed In
Sectlon 2.03(c) below shall be made as soon as reasonably possible atter the
terrinst/on of this lease, Lardlord ard Tenant hereby agreeing that the
provisions relating to said calculation shall aurvive the terralnatlon of this
Lease.
(c) Tenant ahall pay all rent and other aums of money as shall become due
trom and payable by Tenant to Landlord under this lease et the times and In the
manner provided in this lease, without demand, set-off or counterclaim. All
rent and other sums of whatever nature owed by Tenant to Landlord under this
leese shall bear Interest from the data due until paid at the rata of twalva
percent (12X) or the Prl_ Rate plus four percent (4X), whichever Is the greater
per annum; provided, however, In no event shall the rate of Interest hereunder
exceed the maximum non-wurlous rate ot Interest (herelnatter called the
"Maximum Rate") permitted by the appilcable laws ot the State ot Texas or the
United States ot America whichavar shall permit the higher non-wurlous rate,
and as to wh/ch Tenant could not successfully assert a cl;lm or defense of
usury, and to the extent that the Maxlmum Rate Is determined by reference to
the laws of the State of Texas, the Maxl~ Rate shall be the Indlcated rate
celilng (as defined and desccibed In Texas Revised Clvil Statutes
Articla 5069-1 04, as amended) at the awilcable tl_ In effect.
(d) Notulthstanding any provision contalnad herein to the contrary,
Tenant shall be entitled to a ten (10) day 'Igrace perlodH one time during each
12-month lease year during the pelmary term hereof, In the event that Tanant
does not tirely pay the rental due hereunder, before Landlord _y declare Tenant
In default or be able to assess Intarest per Sectlon 2.02(c) hereof. To
<PAGE> 15
conply with such ligrace period,.' Landlord shall give Tenant ten (10) days
pelor weltten notice and opportunity to cure such default In rental payment,
atter which Lsndlord may exercise Its remedies tor any uncured default.
2.03 Additlonal Rental. (a) For each calendar year during the tull term ot
this lease, Landlord shall present to Tenant pelor to the beginning ot said
calendar year (or for the calendar year In which the term cr~encee, prior to
the co_enceeent ot seld terra) e statement of Tenant's Forecast Additional
Rental (defined below) attcibutabla to aald calendar year. Tenant egrees to pay
Tenantia Forecast Additlonal Rental according to the tarms ot Sectlon 2.02
(that Is, In equal rronthly Install~nts In advance). As used herein, "Tenant's
Forecast Additlonal Rental" shall mean Landlord's good talth estimate ot
Tenant's Additlonal Rental (defined below) tor the calendar year In question.
{b) ~Tenant'a Additlonal Rental," as that term Is wed herein, shall mean
tor each calendar year the amount by which the Operating Expense Amount
(defined below) exceeds Base year 1993 per square toot NRA multipiled by the
nunber ot square feet of net rentable area within the leased premises. As wed
herein, "Operating Expense Amount" shall nean an amount equal to the Actual
0perating Expenses (defined below) for the entire ProJact (defined below) for
such year divided by ninety-five percent (ffX) of the nundoer of square feet of
net rentable erect In the Buliding.
(c) Vlthin one hundred fifty (150) days after the end of each calendar
year during the terea of this lease, or es soon es reasonably possible
thereafter, Landlord shall provide Tenant a statement ahowing the Actual
Operating Expenses for said calendar year, prepared In accordance with
generally accepted accounting pelnciples ard a statement prepared by Landlord
conparlng Tenant's Forecast Additlonal Rental paid by Tenant with Tenant s
Additional Rental. In the event that Tenant's Forecast Additlonsl Rental paid
by Tenant exceeds Tenant's Additlonal Rental for said calendar year, Landlord
shall pay Tenant an amount equal to such excess, at Landlord's option by either
giving a credit against rentals next due, If any, or by direct payment to
Tenant within thirty (30; days of the dste of such statement. In the event that
the Tenant's Additlonal Rental exceeds Tanant'a Forecast Additlonal Rental for
said calendar year, Tenant shall pay Landlord, within thirty (30) days of
receipt of the stetenent, en amount eoual to such difference.
(d) Landlord shall we Its best efforts to assure that all acontrollable
expenses" ll.e., those set forth In Sectlons 2.04(a), 2.K(b), 2.04(d) and
2.04(e) hereafter! are comparable to expenses for other similar bulidings In
the area (such efforts to Include, without limitation, the obtaining of
competitive bids from unaffiliated third parties for service contracts where
appropriate).
2.04 Actwl Or~erating 6xcenses. "Actual Operating Expenses,U es that
term Is wed herein, shall consist of all operating expenses, conputed on the
accrual basis for the Buliding the Land and such edditlonal facilltles to
service any of the foregoing In subsequent years;s may be necessa;y or
desirable In Landlord's reasonable discretion (the Buliding, the Land and said
facilltles being hereinafter sometimes collectively called the "ProJectn). The
term "operating expenses" as used herein shall mean all expenses, costs, and
disbursementa (but not replacements of capital Investment Items, except as set
forth In 2.04(f) below, or specific costs billed to
<PAGE> 16
specific tenants) of every kind and nature relating to or incurred or
paid in connection with the ownership and operation of the ProJect, Including,
but not limited to, the following:
(a) wages and selerles of all persons directly engaged In the operation
ralntenance, security, or access control for the ProJect, Including taxes,
Insurance, and benefits relating tharato.
(b) ralntenance of the Pro]ect.
_~
All auppiles, tools, equipment, and materials used In the operation and
2
~ ~ ~ N ~ . ~ ~ ~
to, the cost of casualty Insurance, rental abatement Insurence, and llabillty
Insurance appilcable to the ProJect and Landlord's personal property wed In
connection therewith.
herein:
(h) All taxes, assassrents, sad governmental charges, whether or not
directly paid by Landlord, whether federal, state, county, or municipal, and
whether they be by taxing districts or authorities presently taxing the ProJect
or by others subseouently created or otherwise and any other taxes and
assessments attcibutable to the ProJect or thelr operation excluding, however,
fedeial and state taxes on Income, death taxes franchise taxes, and any taxes
Imposed o; measured on or by the Income ot Landlord trom the operation ot th;
ProJect; provided, however, that It at any time during the term ot thla lease
the present method ot taxation or assessment shall be so changed that the whole
or any part ot the taxes, assessments
levies, Impositlons, or charges now levied, assessed, or Imposed on real estate
and the Irprovements thereof shall be discontinued and as a substitute theretor
or In lieu ot en addition thereto, taxes, assessments, lavles, Impositlons, or
charges shall be levied, assissed, and/or Imposed wholly or partially as a
capital levy or otherwise on the rents received fron the ProJect or the rents
reserved herein or any part thereof, then such substitute or additional taxea,
assessnents, levies, Impositlons, or charges, to the extent so levied, assessed
or Imposed, shall be deemed to be Included within operating expenses to the
extent that such substitute o; additional tax would be payable If the ProJect
were the only property of the Lendlord subJect to such tax. It Is agreed that
Tenant will be responsible for ad valorem taxes on its personal property and on
the value of the leasehold Improvements In the leased premises to the extent
that the same exceed Buliding standard allowances.
Notulthatending any other provision herein to the contrary, it is agreed
that in the event the Buliding is not tully occupied during any calendar year,
or in the event the entire Buliding Is
<PAGE> 17
not provided with Buliding standard services during any calendar year, an
adJustment ahall be made In conputing each component of the Actual operating
Expenses (Including those described In (a) through (h) above) tor such year so
that the Actual Operating Expenses shall be conputed for such year as though
the Buliding had been ninetytive percent (ffX) occupied during such year and as
though the entire Buliding had been provided with Buliding standard services
during such year.
The following shall be expressly excluded trom the term "Actual Operating
Expenses" as defined
(1) Leasingcommissions, attorneys' fees, costsanddisbursements and other
expenses Incurred In connection with leasing, renovating or improving space for
tenants or prospactlw tenants ot the Buliding or, unless Incurred on behalf of
the tenants of the Buliding (Including Tenant), costs Incurred In lease
disputes to the extent that such fees, costs and expenses are paid by such
tenants or prospective tenants;
(2) Costs llncluding permit, license and Inspectlon fees) Incurred In
renovating or otherulse Improving or decorating, painting or redecorating space
tor tenants or vacant space;
(3) Landlord's costs ot any services sold to tenants for which Landlord Is
entitled to be reimbursed by such tenants as an additional charge rental over
and above the base or rlninum rent or operating costs payable under the lease
with such tenant or other occupant;
(4) expressly permitted heraln;
Any depreclatlon snd amortization on the Buliding except as
(5) Costs incurred due to violation by Landlord of any of the terms and
conditions ot thla Lease or any other lease relating to the Buliding;
(6) All Items and services for which Tenant reimburses Landlord outelde of
Actual Operating Expenses or pays third persons or which Landlord provides
selectively to one or more tenants or occupants of the Building (other than
Tenant) without relmburserent;
(7) Advertising and promotional expenditures;
other than the Buliding;
(8) Costs for which Landlord actually receives relmoursement by Insuranee,
cor~natlon awards, warnantles or otherulse;
(9) The cost of any work or service performed tor any tacillty
(10) Rental under any ground lease or other underlying lease;
<PAGE> 18
(11) Any costs representing an amount paid to any person or entity related
to Landlord (or any partner in or affiliate of Landlord) that Is In excess of
the amount which would hew been paid In the absence of such relationship;
(12) Costs or expenses of containing or removing any toxic or hazardous
_tarlals trom the auliding or the Land which materials were present in the
Building or the Land pelor to the Executlon Date hereof; and/or
(13) Costs or expenses related to Landlord's construction to coaply with
the requirenents ot the Americans Ulth Disabilltles Act, which reouirements
have arisen after the date of this Lease and which costs exceed SS,OOO.OO per
construction Item
3
tL) tteCtRlC tl911tln9 S6l'VICe tor atl pubtic areas ano specrat service
areas o1
the Buliding In the asnner and to the extent deemed by Landlord to be In
keeping with the standards of a first
class office buliding.
(d) Janitor service on a five (S) days week basla In a _nner consistent
with the standards of a first class ottice buliding es more tully set forth on
Exhibit nEU- provided, however, If Tenant's floor coverings or other
Improvements are other than Buliding standard, Tenant shall pay the additional
cleaning cost, If any, attelbutable thereto, plus ten percent (10X) to cover
overhand.
(e) Equlperent and approprlata uniformed personnel (such personnel to be
licensed and bonded employees of an unaffiliated third-party security company
and comparable to those employed by other bulidings In the area providing such
11mited access) to limit access to the Buliding twenty-four (24) hours per day,
seven (7) days per week. provided however, Landlord shall have no
responsibility to prevent, and shall not be liable to Tenant for and shal; be
Indemnifled by Tenant against, 11abillty or loss to Tenant, Its agents,
employees, and visitors arising out of losses due to theft burglary, or damage
or InJury to persons or property cawed by persons gaining access to the
Buliding o; the leased premises Including without llmitatlon, the Storage Area
and Parking 6arage, and Tenent hereby releeses Lanolord from ail llabilltj
releting thereto. Bhould such personnel not ba otherwise occupied, and If
prearranged by Tenant such personnel shell be made available for "after dark
escort" of Tenant's employees to the Parking Garaje provided, however
Landlord shall not be required to provide more than one person et any time,
without an ;Witlonal reasonable charge to Tenent for additional personnel.
(f) Sufficlent electricity to operate (1) typewriters, calculating
machines, photocopying machines, and other machines of similar low electcical
consuTptlon (120/208 volts); provided,
<PAGE> 19
however, total rated power consuTptlon by said machines of low electrical
consumption shall not exceed five (s) watts per sqwre foot of the net rentable
area In the leased premises. and (il) equipment of high electrical consuTptlon
(277/280 wits). provided, however, total rated power consunptlon by said
equipment of high electrical consu~ptlon ahal; not exceed five (S) watts per
square foot of net rentable srea In the leased premises. Tenant shall pay to
Lardlord, monthly as billed, such charges as may be separately metered or as
Landlord's engineer shall reasonably compute for any electrical service usage
In excess of that stated above. If any electrical equipment requires alr
conditlonin9 In excess of 9ulidin9 standard, the same shall be Instelled et
Tenant's expense and Tenant shall pay all operating costs relating thereto.
(~) All Buliding standard fluorescent bulb replacement In all areas and
all Incandescent bulb replacement In pubilc areas, toilet and rest room erects
and stairwells.
(h) Keasonably adequate non-exclmlve passenger elevator service to the
leased pre~alses twenty-tour (24) hours per day and non-exclusive freight
elevator service during normal business hours.
To the extent any ot the services described above require electcicity,
gas, and water suppiled by pubilc utilities, Landlord's covenants hereurder
shall only Impose on Landlord the obligation to use Its good talth ettorts to
cawe the appilcable pubilc utilltles to furnish the same. Fallure by Landlord
to furnish the services desccibed In this Sectlon 3.01 to any extent, or any
cessation thereof, shall not render Landlord liable In any respect for damages
to either person or property, nor be construed as an eviction of Tenant, nor
work an abatement of rent ror relieve Tenant from fulfillment of any covenant
or agreement hereof. In addition to the foregoing, should ;ny ot Landlord's
equipment or machinery break down, or for any cause cease to function properly,
Tenant shall have no claim tor rebate ot rent or damages on account of an
Interruption in service occaaloned thereby or resulting therefrom; provided,
however, Landlord agrees to we diligent efforts to promptly repair said
equipment or rachinery and to restore said services during normal business
hours.
Notulthstanding any contrary provision contained herein, should Landlord
fail to furnish heeling, ventilating and alr conditioning services to Tenant
tor a period ot three (3) consecutive working days, and such failure not be due
to the failure of pubilc utilltles to furnish necessary services tor the
operation ot Lardlord'a IIVAC system, or other Force MaJeure (as defined In
Sectlon 6.02 ot the Lease), Tenant shall be entitled to an abatement ot rental
unless Landlord shall furnish to Tenant, et Landlord's sole cost and expense,
to the extent such expense exceeds the uswl expense tor such bul lding standard
service, such temporary services as shall be reasonably necessery tor Tenant to
conduct Its business In the Leased Premises.
3.02 Kevs and Locks. Landlord shall furnish Tenant with up to twenty
(20) sets of keys for the Buliding corridor doors entering the leased premises,
and keys to the remainder of premises as discussed in Exhibit "G" attached
hereto and Incorporated herein by reference. Additlonal keys will be furnished
by Landlord, at Landlord's actual cost, upon an order signed by Tenant and at
Tenant's expense. All such keys shall remain the property ot Landlord. No
additional locks shall be ellowed on any door ot the leased premises without
Landlord's
<PAGE> 20
permission and Tenant shall not make or permit to be eeede any dupilcate keys,
except those furnished by Landlord. Upon t;rminatlon of this lease Tenant shall
surrender to Landlord all keys to any locks on doors entering or within the
leased premises, and jive to Landlord the explanation of the combination of all
locks for sates, sate cabinets, and vault doors, It any, In the leased premises.
Landlord shall furnish Tenant with up to ninety (90) Cardkeys at no charge
to Tenant. Additlonal Cardkeys will be furnished by Landlord upon an order
signed by Tenant and at a cost ot Ten and No/100 Dollars (S10.00) per Cerdkey.
3.03 Grarhics. Bulidino Dlrectorv and Neme. (a) Landlord shall provide and
Install all letters or numerals at entrance doors to the leased premises at
Landlord's sole cost and expense; all such letters and numerals shall be In the
euliding standard graphics and within Landlord's standard allowances. No signs
numerals, letters, or other graphics shall be used or permitted on the exterior
of, or which may be visible from outside, the leased premises, unless approved
In advanced and in writing by Landlord.
(b) Landlord, at Its sole expense, shall Install a stcip containing a
listing ot Tanant's name on the Buliding directory board to be placed In the
main lobby ot the Buliding.
4
._ ~ ~ _. ~.~ ~ ~ ~ ~e~c~ ~ ~e~l~l ~l lell~ u~ ICdO~lI~ Lllele~l. ~lUtUlU
Oll~6 ~:~:~IOC
its best afforta to eelni~alza 1ntertaranca with Tenant's business, use, and
enJoyment of the premises.
4.03 h~uisance. Tenant shall conduct Its business and control its agents,
employees, Invitees, contractors, and visitors in such "nner as not to create
any nuisance, or Interfere with, annoy or disturb any other tenant or Landlord
in its operat10n of the Bultding.
4.04 Laws and Reoulations: Itules of 8uliding. Tenant shall comply with,
and Tenant shall cause Its visitors, employees, contractors, agents, and
Imitees to conply with, all laws, ordinances, orders, rules, and regulations
(state, federal, municipal and other agencies or bodies having any Jurledlction
thereof) relating to the use, condition, or occupancy of the leesed premises,
and with the rules of the Buliding reasonably adopted and altered by Landlord
from time to time for the safety, care and cleanilness of the leased premises
and the Buliding and for preservation of good order therein, all of which
Building rules will be sent by Landlord to Tenant In writing and shall be
thereafter carried out and observed by Tenant, Its employees
contractors, agent, Imitees and visitors. The Initlal rules of the Buliding are
attached hereto as Exhlbit ~E, and made a part hereof for all purposes.
<PAGE> 21
4.05 Legal Dse end Vlolatlons of Insurance Coverace. Tenant shall not
occupy or use the leased premises, or pere~lt any portion of the leased pr_Ises
to be occupied or used, for any business or purpose which Is unlawful,
disreputable or deemed to be hazardous on account of fire or other hazards, or
permit anything to be done which would In any way Increase the rate of fire or
liability or any other insurance coverage on the Buliding and/or Its contents.
V.
5.01 Leesehold IeDrov~acnts. (a) Lendlord's and Tenant's obilgations with
respect to Tenant's laesdold improvements whether currently existin9 or to be
constructed, shall be as set forth In Exhlbit "C. attached hereto and made a
part hereof for all purposes. It Is stipulated and agreed that time Is of the
essence in connection with Tenant's compilance with the terms of Exhlbit "CR.
(b) If the leased premises should not be ready for occupancy for any
reason by the Conenencement Date, Landlord shall not be lieble or responsible
for any claims, damages, or llabilltles In connection therewith or by reason
thereof.
(c) Tenant shall not make or allow to be made (except as otherulse
provided In this lease) eny alterations or physical additions (Including
fixtures) In or to the leased premises or place safes
vaults, or other heavy furniture or equipment within the leased premises,
without first obtaining the written consent of Landlord. Tenant shall deliver
to Landlord a copy of the "as-built" plans and specifications for all
alterations or physical additions so made in or to the leased premises. Tenant
agrees specifically that no food, soft drink or other vending machine will be
Installed within the leased premises without the prior written consent of
;andlord. Landlord shall not unreasonably withhold approval of these written
requests.
(d) All alterations, physical additions, or Improvements In or to the
leased pr_Ises (Including fixtures) shall when made become the property of
Landlord and shall be surrendered to Landlord upon termination of this leisa,
whethe; by lapse of time or otherwise; provided, however, this clause shall not
apply to enoveable equipaent or furniture owned by Tenant.
(e) Tenant shall indemnify and hold herwless Landlord from and against all
costs (Including attorney' fees and costs of suit), losses, llabillties, or
causes of action arising out of or relating to any alterations, additions, or
Improvements made by Tenant to the leased premises, including, but not limited
to, any rechanics' or materlalmen's liens asserted in connection therewith.
(f) Should any mechanic's or other liens bo filed against any portion
of the Buliding and/or the Land or any Interest therein by reason of Tenant's
acts or omissions or because of a claim against Tenant or its contractors,
Tenant shall cause the same to be cancelled or discharged of record by bond or
otherulse within ten (10) days after notice by Landlord. If Tenant shall fail
<PAGE> 22
to cancel or discharge said lien or liens, within said ten (10) day period,
which failure shall be deemed to be a default hereunder
Landlord _Y, at its sola option and in addition to anY other remedY of Landlord
hereunder, cancel or discharge the same and upon Landlord's demend Tenant shall
pronptly relnburse Landlord for all costs Incurred in cancell/n. or discharging
such lien o; liens.
5.02 llar~air8 bv Landlord. Unless otherulse expressly stipulated herein,
Landlord shall not be required to nake any inprovements to or repairs of any
kind or character to the leased premises during the term of this lease, except
such repairs to Buliding standard Improvements as may be deemed necessary by
Landlord for normal _intenance operations In a marner consistent with
comparable Class A buildings in the North Houston area; provided, however,
non-Buliding standard leasehold Improvements will, at Tenant's written request,
be malntalned by Landlord at Tenant's expense, at a cost or charge equal to the
costs Incurred In such maintenance plus an additional charge of ten percent
(10X). Notwithstanding any provisions of this lease to the contrary
all repairs, alterations, or additions to the base Buliding or Its systems (as
opposed to those involving only Tenant's leasehold inprovements), and all
repairs, alterations, or additions to Tenant's non-Buliding standard leasehold
Improve~ents which affect the Buliding~s structural conponents or mayor
mechanical, electrical, or plu~bing systems, nade by or for or on behalf of
Tenant and any other tenants in the Building shall be mede by Landlord or its
contractor only, and, In the case of Tenant, shall be paid for by Tenant In an
amount equal to Lendlord's costs plus ten percent (10X).
5.03 xeDairs bv Tenant. Tenant shall, at Its own cost and expense, repair
or replace anY damage or InJury done to Its leasehold Improvements, or any part
thereof, caused bY Tenant or Tenant's agents, contractors, employees, Invitees,
or visitors. If Tenant fells to make such repairs or replacements to Its
leasehold Improvements promptly, Landlord may, at its option make such repairs
or replacements, and Tenant shaU repay the cost thereof plus a charge of ten
percent (10%; to the Landlord on demand. Any damage or InJury
s
~t - ~lO I~IOVe~lt. It any, tne cost ot wnich were borne solely by such
tenant, and such tenant~s personal property taken; and tie remainder of the
award shall then be paid to Landlord.
6.0Z D_oes from Certaln Causes. Provided that both parties _Intaln the
Insurence coverage as required hereunder, neither party shall ba liable or
responsible to the other for any loss or damage to any property or person
occasioned by theft, fire, act of God, pubilc enemy, InJunctlon, riot, stclke,
Insurrectlon, Nar, court order, requlsitlon or order of governmental body or
authority, or any cawe beyond either party's control (all of which acts are
hereby defined as ~Force liaJeure") or for any damage or inconvenience which
may arise through repair or alteratlor, of eny part of the Buliding beyond the
pyments contemplated under the provlalons of such pollcles of Insuranca.
<PAGE> 23
6.D3 Elra Clausal In the event of a fire or other casualty In the leased
premiaes, Tanant shall Imeedlately give notice thereof to Landlord. If the
leased premises shall be partially destroyed by fire or other casualty so as to
render the leased premises untenantable In whole or in part, the rental
provided for hareln ahall abate thereafter as to the portion of the leased
pr_Isas rendered untenantable until such time aa the leased preselsea ara e~ade
tenantable as reasonably detarRminad by Landlord, and Tanant. Landlord agrees
to comTence and prosecute such repair work promptly and with all due diligence;
provided, however, in the event such destruction (a) results In total or
substantial damages to or destruction of the Building and Landlord shall decide
not to rebulid, or (b) results In the leased premises being untenantable In
whole or In substantial part end the reasonable estinatlon of a responsible
contractor selected by Landlord as to the amount of time necessary to rebulid
or restore such destruction to the leased premises and all other portions of
the Buliding Is six (6) months or wre, then, In either event, all rent owed up
to the time of such destruction or termination shell be paid by Tenant end
thenceforth this lease shall cease and come to an end. Landlord shall give
Tanant weltten notice of Its decisions, estimates, or electlons under this
Sectlon 6.03 within thirty (30) days after eny such damage or destruction.
Notwithstanding anything contained in this Section 6.03, Landlord shall only be
obilgated to restore or rebulid the leased premises to a Buliding standard
condition, and In no event shall Landlord be required to expend more sums than
received from the proceeds of any insurance carried by Landlord, which proceeds
are not required by the holder of a lien on the Buliding to be applied to the
payrant of the Indebtedness secured thereby. provided however, Tenant shall
have the right to cause Landlord to rebulid or restore the leased premises to
the condition they were in pclor to such damage or destruction
In which avant Tanant ahall bear the cost (including rentals wNlch are lost due
to any excess construction tl - ; of auch rastoratlon or rabuliding to the
extent the ssme exceeds the costs Landlord would have Incurred had only
Buliding standaro le~provements basn used.
6.04 Casualtv Insurance. Landlord shall maintain standard fire and
extended coverage Insurance on the Buliding (excluding nonBuliding standard
leasehold Improvements) and on all Building standard leasehold Improvementa.
Sald Insurance shall be nalntalned with an Insurance company authorized to do
business in Texas
In amounta desired by Lendlord, and at the expense of Landlord (but with the
same to be included in th; operating expenses of the Buliding as described In
Section 2.04) and payments for losses thereunder shall be nade solely to
Lendlord. If the ennual premiums to be paid by Landlord shall exceed the
standard rates because of Tenant's operations within or contenta of the leased
premises or because the improvements to the leased premises are beyond euliding
stendard, Tenant shall promptly pay the excess amount of the premium upon
request by Landlord (and, If necessary, Landlord may allocate the insurance
costs of the Building to give effect to this sentence). Alternatively Landlord
may meet Its Insurance coverage hereunder through self-insurance coverage,
provided that the coverag; thereunder Is substantially similar to the coverage
which would otherwise have been prowided by a third party Insurance carcler in
order to comply Nith this Section 6.D4. Tenant shall maintain at Its expense
standard fire and extended coverage Insurance on all of Its personal property,
Including removable trade fixtures located In the leased
<PAGE> 24
premises and on Its non-Buliding standard leasehold improvements and all other
additions ;nd Improvements (Including fixtures) made by Tenant and not required
to be Insured by Landlord above. All such Insurance required to be malntalned
by Tenant shall naK Landlord as an additional Insured thereunder, and shall
provide that It shall not be cancellable and/or the coverage thereunder shall
not be reduced without at least ten (10) days edvanee written notice to
Landlord. Tenant shell deliver or fax eoples of sueh polieles or eertifieates
of insurance In a form satisfactory to Landlord not less than ten (10) days
pelor to (a) the Comaneeeeent Date, and (b) the expiration of old polleies.
provided, howewr, should Landlord not timely reeelve such polleles or
eertifieates before It may declare Ten;nt In default, Landlord must give Tenant
thirty (30) days prior written notice and opportunity to cure.
6.05 Liabilltv Insurance. Landlord and Tenant shall each, at thelr
respective expense, malnteln a policy or pollcles of comprehensive general
llabillty Insuranee with the premiums thereon fully paid on or before the due
dates, Issued by and binding upon a solvent Insurance company, such insurance
to afford minimum protection (which may be effected by primary and/or excess
coverage) of not less than S1,000 000.00 for personal InJury or death In eny
one occurrence and of not less than SSOO,000.00 for property dsmag; in any one
occurrence, provided Tenant shall carry such greater limits of coverage as
Landlord may reasonably request from time to tine. Alternatively, Landlord nay
meet Its Insurance coverage hereunder through self-insurance coverage provided
that the coverage thereunder Is substantially similar to the coverage which
would otherwise have been provided by a third party Insuranee earrler In order
to comply with this Section 6.05. All such insurance required to be _Intalned
by Tenant shall ne" Landlord as an additional Insured thereunder, and shall
provide that It shall not be eaneellable and/or the coverage thereurder shall
not be reduced without at least ten (10) daye advance written notice to
Lendlord. Tenant shall deliver eoples of such polleles or certificates of
Insuranee In a fore' satisfactory to Landlord not less than ten (10) days pclor
to (a) the CommeneeKnt Date
end (b) the expiration of old polleles; provided, however, should Landlord not
timely reeelve sueh pollcles o; '//l: certificates before It may declare Tenant
In default, Landlord must give Tenant thirty (30) days prior written//// '~
notice and opportunity to cure. / ' ~ / ~~
6.06 Hold Harmless. Landlord shall not be liable to Tenant, Its agents,
se~vants, employees contractors, customers, or Invitees, for any damage to
person or property caused by am~aet.Lomisslon,_r~
_~t of Tenant, Its agents, servants, or employees, and Tenant agrees to
Indemnify and hold Landlord harmless from all llabillty and elalFs for any such
damage. Tenant shall not be liable to Landlord, or to Landlord's agents,
servants, employees, contractors, eustoKrs, or Imitees for any daTage to person
or property caused
6
Landlord tor payment ot all rant and other sums agreed to be paid by
Tenant herein. ~provisions of this Sectlon 7.01 relating to said lien end
security Interest shall constitute a securit_se~ement
<PAGE> 25
under the Uniform Co_erclal Code so that Landlord ahall have end nay enforce a
security Interes~n all property of Tenant now or hereafter placed In or on the
I - sad premises, Including, but not,~ted to all fixtures, machinery
equipment, furnishings, and other articles of personal property qo - Fhereafter
piaced In or upon the leased
premises by Tenant. Tenant egrees to execute as debtor sucJ~ncing stateKnt or
statements as Landlord ray
now or hereafter reasonably request from tl" to time~rder that such security
Interest or Interests may be
perfected pursuant to said Code. Landlord ma~ts electlon at any time file a
copy of this lease as a financin_ statenant. Landlord, as secures~fy, shall be
entitled to all of the rights and remedies afforded a sacurad party under said
Code In~lon to end cumulative of the landlord's liens and rights provided by
law or by the other tares an_pP+alons of this Leaso; provided, however, should
Tenant secure purchase money financine froa a non-affUffted third-party lender
for personal property of Tenant (but not fixtures) noN or hereafter placed
l~pon the ;aased Premises, and provides to Landlord a subordination agreement
spec(f ical ly descrlbing~ucl~ersonal property, In forn and substance
acceptable to Landlord, subordinating Landlord's lien srd s~ty Interest to such
third-p_rty's lien on such personal property, Landlord agrees to execute same
..~_ ._ ,4~, _~_ _..~ .~
_._ __ _. __~_ - . --- ~ --- r-=
7.02 Default bv Tenant. If default shall be made In the payment of eny
sum to be paid by Tenant under this lease and such default shall continue for
ten (10) days after written notice to Tenant, or default shall be made In the
performance of any of the other covenants or conditions which Tenant Is
required to observe and to perform and such default shall continue for thirty
(30) days after written notice to Tenant, or If the Interest of Tenant under
this lease shall be levied on under execution or other legal process or If any
petition shall be filed by or sealost Tenant to declare Tenant a bankrupt or to
delay, reduce or m-edify Tenant's debts or obileatlons, or If sny petition
shall be filed or other action taken to reorganize or modify Tenent's capital
atructwe, or If Tenant be declared Insolvent according to laN, or If any
assignment of Tenant's property shall be made for the benefit of creditors or
If a receiver or trustee Is appoloted for Tenant or Its property, or If Tenant
shall vacate or abandon th; leased premises or any part thereof at any time
during the term of this lease or any renewals or extensions hereof for a period
of fifteen (15) or more continuous days, or If Tenant be a corporation and
Tenant shall cease to exist as a
<PAGE> 26
corporation In good standing In the State of Its Incorporatlon, or If Tenant
be a partnership or other entity and Tenant shall be dissolved or otherNise
liquidated, then Landlord may treat the occurrence of any one or more of the
foregoing events as a breach of this lease snd thereupon, at Landlord's option
eisy, have any one or more of the folloNing desccibed remedies In addition to
all other rights and remedle; prowided at laN or In equity:
(a) La, dlord easy teralnste this lease snd forthulth repossess the leased
premises and be entitled to recever forthulth as daesges a aua of money aqusl
to the total of (1) the cost of recovering the leased prIses (Includine
attorneys' fees and costs of sult), (11) the unpaid rent earned at the time of
teralnstlon, plus Interest thereon st the rate described In Sectlon 2.02(c),
(111) the present value (discounted at the rate of eight percent (8%) per
annum) of the belance of the rent for the remainder of the lease term less the
present value (discounted at the se" rate) of the falr market rental value of
the leased premises for said parlod; and (Iv) eny other sum or roney and
damages owed by Tenant to Landlord.
(b) Landlord may elect to receive liquidated damages In an amount equal to
the monthly Base Rental and monthly Forecast AWltloral Rental payable hereunder
for the month during which this lease is terminated times a nultiple based upon
the date of default as follows:
(1) If during the first 12-north period of the Lease term
(primary ar rsnawal), the multiple shall be ZQO ( D );
(2) If during the second 12 nonth nerlod of the Lease term
(primary sr rerawL), the elultiple shall be s\)C ( t7 );
(3) If during the third 12-wnth period of the Lease term
(pcl_ry_), the ~Itiple shall be 1E,J ( 1O );
(4) If during th~ fourth 12-month period of the Lease term
(primaryr rsnau - ), the rultiple shall be 16Ht
which amount shall be In lieu of the payment of damages Landlord may suffer by
reason of such termination but which sksil not be In lieu of or reduce In any
way any amount due from Tenant (Includin9 accrued rental) or daeages Incurred
by Lsndlord due to breach by Tenant of any covenant or other obilgatlon herein
(whether or not liquidated) which accrued prior to the terelnstlon of this
lease. Nothing contained In this lease shall limit or preJudlce the right of
Landlord to prove for and obtain In any proceedings to enforce Landlord's
rights hereunder, Including Nlthout llmitatlon any proceedings for bankruptcy
or Insolvency by reason of the
<PAGE> 27
termination of this ;ease an amount equal to the maximum allowed by any statute
or rule of law In effect at the time Nhen, and governing the proceedings In
which, the damages are to be proved, whether or not the amount be greater,
equal to, or lass than the amount of the loss or damages reforred to above.
Should Landlord seek and be awardod a final |udo~nt for liquidated damages
under this section 7.02(b), the remedy In section 7.02(a) haraof shall not be
sought by Landlord.
(c) Landlord may terminate Tenant's right of possession (but not this
lesse) and may repossess the fessed premises by forcible entry and detalner
suit or otherwise, without thereby releasing Tenant from any llabillty
hereunder and Nlthout demand or notice of any kind to Tenant and without
terminating this lesse, In which event Lendlord may, but shall be under no
obilgatlon to do so, relet the se" for the account of Tenant for such rent and
upon such terms as shall be satisfactory to Landlord. For the purpose of such
reletting, Landlord Is authorized to decorate or to mske any repairs, changes,
alterations, or aWltions In or to leased premises as may be reasonably
necessary or desirable, end (1) If Landlord shall fail or refuse
r
Rotwlthstanding any contrary provision contained herein Tenant shall not
be declared In default should It move out of all or any portion of the Leased
Premises, jrovided that Tenant continues to tl_ly pay the rental and other
monetary suns due here~ndar and honor the other provisions of the Lease.
7.03 Ran-wolver. Fallura of Landlord to declare any default Immedlately
upon occurrence thereof, or delay In takine any action In connection therewith,
or the acceptance of a partial payment or full payment of the dellnquant
rentals, shall not waive such default, but Landlord shall have the right to
declare any such default at any tine and take such action aa might be lawful or
authorized hereunder, either In laN or In equity.
7.04 Holding Over. In the event of holding over by Tenant after
expiration or tars~lnatlon of this lease Nlthout the pclor weltten consent of
Landlord, Tenant shall pay, as liquidated damages, the amount of one hundred
fifty percent (150X) of the nonthly rental (Including all tase Rental and
Tenant's Additlonal Rental) Nhich was due end peyable l~ediately pclor to the
expiration or termination of this Lease, for the entire holdover period. Ro
holdine over by Tenant after the term of this lease ahall be construed to
extend the lease; In the event of eny unauthorized holding over, Tenant shall
also Indemnify Landlord against all claims or de~agea by eny other tenant to
whon Landlord a~ay have leased all or any part of the leased premises effective
upon the termination of this lease. Any holding over with the prior consent of
Landlord in writing shall thereafter constitute thla lease e leese from
e;onth-to-month any holding over without the prior consent of Landlord In
writing shall create a temncy at sufferance relationship with Tenant. As used
In this lease, the tera aMarket Base Rental Rate" shall _an the annual rental
rates then being charged in the "North Belt" area of Houston, Texas, for space
comparable to the space for which the Market Base Rental Rate is being
determined (taking Into consideration age,
<PAGE> 28
Improvements ptovided quality and location of the applicable building,
rental concessions tsuch a; abatements or lease assurptlonsi, and the tl_ the
particular rate under consideration became effective). It Is agreed that bona
fide Nritten offers to lease the relevant space nade to Landlord by third
parties (at arm's-length) nay be used by Landlord as an Indlcatlon of Market
Base Rental Rate.
7.05 Attornevs' Fees. If, by reason of any default on the part of Tenant,
Landlord shall bring suit to recover any rent due hereunder, or for breach of
any provision of this Lease or to recover possession of the Laased Pr_Isaa, or
If Tenant shall bring any action for any relief against Landlord, declaratory
or otherNlse, arlelng out of this Leasa, the prevalilng party shall have and
recover against the other party, In aWition to the costs allowed by law, such
sums as the court nay Judge to be reasonable attorneys' fees.
7.06 Stbordlmtlon. Tamnt covemnts and agrees Nlth Landlord that this lease
Is subJect and subordlmte to any Isortgage, deed of truat, ground lease, and/or
aecurity agreement which may nou or hereafter encumber the Buliding or the Land
or any Interest of Landlord therein and/or the contents of the Buliding, and to
any advances nade on the security thereof and to any and all Increases
renewals, modifications
consolidations replacements, and extensions thereof. This clause shall be
se;f-operative and no furthe; Instrument of ;ubordinatlon need be required by
am oNner or holder of any such ground lease, mortgage deed of tewt, or security
agreement. In confirmation of such subordination, however, at Landlord's
request ;enant shall execute promptly am appropriate certificate or Instru~ent
that Landlord may request. In the event of the enforcement by the ground
lessor, the trustee the beneficiary or the secured creditor under any such
ground lease mortgage deed of trwt, or securitj agreement of th; remedies
provided for by law or by such ground lease rortgage deed of trwt, or security
agreement, Tenant, upon request of the ground lessor or am person or party
succeeding to the Interest of Landlord as a result of such enforcement, will
automatically become the Tenant of such ground lessor or successor In Interest
without a ny change In the terms or other provisions of this leese. provided,
however that such ground lessor or successor In Interest shall not be bound by
(a) any payment of rent or additional ;ent for more than one month In advance
except prepayments In the nature of security for the performance by Tenant of
Its obilgatlons under this lease, or (b) any amendment or modification of this
lease made without the written consent of such ground lessor or such successor
In Interest. Upon request by such ground lessor or successor In interest,
whether before or after the enforcement of Its renedles, Tenant shall execute
and deliver an Instrument or Instruments confirming and evidencing the
attornment herein set forth. NotNlthstanding anything contained In this lease
to the contrary In the event of any default by Lsndlord In perforning Its
covenants or obilgatlons hereunder which would give ;enant the right to
terminate this lease, Tenant shall not exercise such right unless and until (a)
Tenant gives written notice of such default (which notice shall specify the
exact nature of said defeult and how the same may be cured) to the lessor under
am such lend or ground lease and the holder(s) of any such mortgage or deed of
trust or security agre~ent who haa theretofore notified Tenant In writing of
Its Interest and the address to which notices are to be send, and (b) said
lessor and holder(s) fall to cure or cawe to be cured said default within
thirty (30) days from the receipt of such not1ce from Tenant. If any mortgagee,
trustee, beneficiary, ground lessor, or
<PAGE> 29
secured party shall elect to have this lease prior to the lien of Its mortgage,
deed of trust or security agreement, or prior to Its ground lease, and shall
give written notice thereof to Tenant this l;ase shall be deemed pclor to such
Isortgage, deed of trust, ground lease, or security agreement, whethe; this
lease is dated prior or subsequent to the date of said mortgage, deed of trust,
security agreement, or ground lease, or the recording thereof. Further, Tenant
hereby consents and agrees to any reasonable changes In this lease agreement
which are requested by the holder of any mortgage, ground lease or security
agreement of Landlord, provided that such changes do not Increase the financial
obilgatlons of any tenant, and Tenant agrees to execute any written
Y.odificatlons reflecting such change Immedlately upon notice thereof. This
lease Is further subJect to and subordinate to ell _tters of record In Harcis
County, Texas. #otwlthstanding any contrary provision contained herein, any
subordination of Tenant's Interest In this Lease to the lien or Interest of the
holder of a rortgage, ground lease or security Interest on the Bu/lding or the
Land or any interest of Landlord therein as described herein, shall be also
conditioned upon such holder's agreement not to disturb Tenant's peaceful
possession snd occupancy, prowided that Tenant attorns to such holder after
written notice of such holder's succession to Landlord's Interest and Tenant's
compilance with the other provisions contained In this Sectlon
e__
8
agle~wil. /U'y aucn certiricate ~ay De rellerJ upon Dy any grouno lessor,
pror`Dective purchaser, secw-eu party, sortgagee, or any beneficiary under any
siortgage, dead of trust on the Buliding or the Lend, or eny part thereof, or
Intarast of Landlord theraln.
7.08 Relocatlon. Landlord shall have the option to relocate the Tenant to
alternative space In the Buliding Nhich alternative space shall be of
corparable size or larger to the leased premises, In accordance with thl;
Sectlon 7.08. Landlord shall give Tenant not less than ninety (.!O) days pelor
written notice of such relocation which notice shall Include the date on which
the Tenant shall be required to relocate or teove end a description of the
space to which Tenant will be relocated. Landlord shall pay all reasonable
out-of-pocket costs and expenses of relocating Tenant (Including the cost of
preparlag such comparable space for occupancy). In the event of such
relocation, such alternative space shall for all purposes be deemed the leased
premises hereunder, and this lease shall continue In full force and effect
Nlthout any change In the other terms or conditions hereof. Landlord hereDby
expressly walvea Its right and option In this Sectlon to relocate Tenant or Its
affiliated sublesseea and assigns to alternative space In the Buliding.
Landlord, however, expressly retains such relocation rights and options for
non-affiliated, permitted sublessees and assigns, If such permitted sublease or
assignnent Is for esore than twenty-five percent (25%) of the Leased Premises.
7.0! Lend~ord Atterations or Modificatlons. Notulthstending anything
herein to the contrary, Landlord hereby expressly reserves the right In Its
sole discretion to (a) temporarily or permanently change the location of,
close, block, or otherwise alter any entrances, corcidors, skyNalka, tunnsis,
doorways, or
<PAGE> 30
walkways leading to or providing access to the Buliding or any part thereof or
otherulse restrict the use of same provided such activities do not unreasonably
Impalr Tenant's acces; to the leased prenises; end (b) demoilsh, rebulid,
Inprove, remodel, eW aWltlonal floors to, or otherulse alter any of the
bulidinga located on the Land and Identiflad In the first paragraph of Sectlon
1.01, other than the buliding In wNlch the leased premises are located
(provided Landlord shall have the right to Improve, remodel, and/or alter said
buliding). snd It Is agreed that Landlord shall not Incur any llabillty
whatsoever to Tenant as a consequence thereof, and such activities shall not be
deemed to be a breach of any of Landlord's obilgatlons hereunder. Landlord
agrees to exercise good faith In notifying Tenant within a reasonable time in
advance of any alterations, nodificatlons, or other actions of Landlord under
this Sectlon 7.09.
7.10 N_ thenoe. Landlord and Tenant mutually covenant and agree that
Landlord hereby reserves and ehall have the right at sny tine and from time to
time to change the name of the Buliding as Landlord may dean advisable, and
Landlord shall not Incur any liability whatsoever to Tenant as a consequence
thereof.
Vlil.
8.01 Asslonment or Sublease bv Tenant. (a) In the event Tenant should
desire to assign this lease or sublet the leased premises or any part thereof,
or allow se_ to be used or occupied by others, Tenant shall give Landlord
written notice (which shall specify the duration of said desired sublease or
assignment, the date same Is to occur, the exact location of the space affected
thereby and the proposed rentals on a square foot basis chargeable thereunder)
of such desire at least thirty (30) days In advance of the date on which Tenant
desires to nake such assl9nment or sublease or allow such a use or occupancy.
Landlord shall then have a period of fifteen (15) days followIng receipt of
such notice within wNlch to notify Tenant in writing that Landlord
Y.lects (1) to ters8 - te this lease as to the space so affected as of the date
so speciflad by Tenant In which event Tenant shall be rellevad of all
obilgatlons hereunder as to such space arising from and after such date
"provided, however, If less than twenty-five percent (25X) of the Leased
Premises Is proposed to be assigned or subleased by Tamnt, then Subsactlon
8.01(a)(111) shall apply]; or (11) to swpend this lease as to the space so
affected as of the date and for the duration so specified by Temnt In Its
notice, In which event Tenant Nlil be relieved of all obilgatlons hereunder as
to such space during said suspension, Including a swpenslon of the rentals
hereunder In proportion to the portion of the leased premises affected thereby
(but after said suspension If the suspension Is not for the full term hereof,
Tenant shall once again become liable hereunder as to the ;ppilcable space), or
(111) subJect to the terms and provisions of 8.01(b) below, to permit Tenant to
assign this lease or sublet such space for the duration so specified by Tenant
In Its notice, subJect
however, to the subsequent written approval of the proposed assignee or
sublessee by Landlord, which approve; shall not be unreasonably withheld If (1)
the proposed assignee or sublessee Is a respectable party of substentlal
financial worth (as determined solely by Landlord) and Tenant shall have
provided Landlord with proof thereof, (2) the nature and character of the
proposed
<PAGE> 31
assignee or sublessee, Its bwiness and activities and Intended use of the
leased premises are In Landlord's reasonable Judgment consistent with the
standards of the Buliding and the floor or floors on which the leased premises
are located, (3) neither the proposed assignee or sublessee (nor any party
which, directly or indirectly, controls or Is controlled by or Is under common
control with the proposed assignee or sublessee) Is then an occupant of any
part of the Building or a party with whom Landlord Is then negotiating to lease
space In the Building, (4) the form and substance of the proposed sublease or
Instrument of asslenment Is acceptable to Landlord (which acceptance by
Landlord shal l not be unreasonably ulthheld) and Is expressly subJect to all
of the terms and provisions of this lease and to any mstters to which this
lease Is subJect, (S) the proposed occupancy would not Increase the office
cleaning requirements or Impose an extra burden upon the services to be
suppiled by Landlord to Tenant hereunder, and (6) Tenant enters Into a written
agreement with Landlord whereby It Is agreed that any profit realized by Tenant
as a result of said sublease or assignment and any and all sums and other
considerations of whatsoever nature paid to Tenant by the assignee or sublessee
for or by reason of such assignment or sublease, Including, but not llrited to,
sums paid for the sale of Tenant's fixtures, leasehold Improvements equipment,
furniture
furnishings, or other personal property (that li, after deducting and giving
Ten;nt credit for Tenant's reasonable costs directly associated therewith,
Including reasonable brokerage fees and the reasonable cost of remodeling or
otherulse Improving the leased premises for said assignee or sublessee but
excluding any free rentals or the like offered to any such sublessee or
assignee) shall be payable to L;ndlord as it accrues as additional rent
hereunder. Notwithstanding anything contained In this Sectlon 8.01(a) to the
contrary, in the event Tenant wishes to sublease all or any portion of the
Leased Premises, or assign this Lease to any affiliate or subeldlary of Tenant,
then Tenant shall not be obilgated to secure Landlord's approval or consent for
same and Tenant shall be entitled to all profits, If any, derived therefrom.
For purposes of this Lease, an "affiliate" or "suDsidlary" of Tenant Is any
corporation, partnership or other entity controlilng, controlled
e,
Ul ~i~le tU 1~1~1~ Ut L4~dlUIUIU. 'al~lt snall Lael~tlel t~a DUUIIU by the
telillS tilelsol. I~llallL S11~11 1~1 r~ required to pay any brokerage
comisslons to Lendlord or Landlord's lassir,g agent In connection with the
exerutlon of a aublassa under the tarms of this subparagraph. As additional
rental hereunder, Landlord shall be entitled (end the sublease shall so
provide) to be paid, as It accrues, any profit to be realized as a result of
eny sublaese entered Into under this subparagraph after deduction of and giving
Tenant credit for Tenant~s reasonable costs directly associated therewith,
Including the reasonable cost of remodeling or otherwIse Improving the lassed
premisea for such sublessee, amortized over the remaining term of this lease,
but excluding eny free rentals or the like offered to any such sublessee under
this subparagraph. If Nlthin the forty-five (45) day parlod after Landlord
racelves Tenant's notice of Tenant's desire to assign this lease or sublet the
leesed premises or any part theraef, Landlord falls to notify Tenant (1) of Its
election to suspend this lease In whole or In pset as set forth In 8.01(a)(11)
above, or (11) that Landlord has obtained a uritten commitment for a sublease
from a third party under this subparagraph then Landlord shall be deemed to
have elected the option set forth In 8.01(a)(111) above, free and clear of
;andlordis rights ur~der this subparagraph, subject
<PAGE> 32
however, to Landlord's subsequent Nritten approval of the proposed assignee or
sublessee as set forth in 8.01(a)(111) above. Landlord's rights to sublease the
Leased Pr_laes on Tenant's behalf as provided In this Bectlon 8.01(b) are
hereby Nalved In full Nlth respect to Tenant end Its affiliated assigns or
sublessess.
(c) Each sublessee or assignee shall fully observe all covenants of this
lease, Including, ulthout llnitatlon, the provisions of Sectlon 1.03 of this
lease and no consent by Landlord to an assignment or sublease shall bs deemed
In any manner to be a consent to a us; not permitted under Sectlon 1.03. No
assignment or subletting by Tenant (or by Landlord on behalf of Tenant under
8.01(b) above) shall relieve Tenant of any obilgatlon under this lease, and
Tenant shall remain fully liable hereunder. Any attempted assignment or
sublease by Tenant In violation of the terms and covenants of this Sectlon 8.01
shall be void and shall constitute an event of default under this lease. Any
consent by Landlord to a particular assignment or sublasse shall not constitute
Landlord's consent to any other or subsequent assignment or sublease, and any
proposed sublease or assigreaent by sny assignee or sublessee shall be subJect
to the provisions of this Sectlon 8.01, as If It were a proposed sublease or
assignment by Tenant. The prohlbitlon against an assignment or subleese
descrlbad In this Sectlon 8.01 shall be deemed to Include a prohlbitlon against
Tenant's mortgaging or otherulse encumbering Its leasehold estate, as well as
against an assignment or sublease which may occur by operation of law, or a
_rger transfer or sale of stock, partnership interest, or other equitable
Interest
resulting In a change of owne;ship Interest In Tenant of more than fifty
percent (SOX), each of which shall be Ineffective and void and shall constitute
an event of default under this lease unless consented to by Landlord In Nriting
In advence.
(d) In any situation In which Landlord consents to an assignment or
sublease hereunder, Tenant shall promptly deliver to Landlord a fully executed
copy of the final sublease agreement or assignment Instrument and all ancillary
agreements relating thereto. In the case of an assignment, same shall not be
affective unless the assignee has agreed within the assignment Instrument to
assune the obligations of Tenant hereunder all of the covenants, terms, and
conditions hereof on the part of Tenant to be performed or observed hereunder.
8.02 Assignment bv Landlord. Landlord shall have the right to transfer and
assign In whole or In part all Its rights and obilgatlons hereunder and In the
Buliding, the Land and all other p;operty referred to hireln, and In such event
snd upon such transfer (any such transferee to hive the benefit of, and be
subJect to, the provisions of Sectlon 8.03 and 8.04 hereof) no further
llabillty or obilgatlon shall thereafter accrue against Lsadlord hereunder.
8.03 Peaceful Eniovment. Landlord covenants that Tenant shall and may
peacefully have, hold, and enJoy the leased premises, subJect to the other
terms hereof, provided that Tenant pays the rental and other sums herein
recited to be paid bY Tenant and performs all of Tenant'a covenants and
agreements herein contained. It Is understood and agreed that this covenant and
sny and all other covenants of Landlord contained in this lease shall be
binding upon Landlord and Its successors only with respect to breaches
occurring during Its and thelr respective ownership of the Landlord's Interest
hereunder.
<PAGE> 33
8.04 Llmitatlon of Landlord's Personal Llabilltv. Tenant specifically
agrees to look solely to Landlord's Interast In the Buliding and the Lend for
the recovery of any Judgment against Landlord It being agreed that Lendlord Its
officers directors, and employees shall never be personally liable fo; any such
Judgment. The prowlsion contained ;n the foregoing sentence Is not Intended to
and shall not limit any right that Tenant might otherulse have to obtain
inJunctive relief against Landlord or Landlord s successors in interest or any
suit or action In connection with enforcement or collection of amounts which
may become owing or payable under or on eccount of Insurance ralntained by
Landlord.
IX.
9.01 #otices. Any notice or other communications to Landlord or Tenant
required or permitted to be given under this lease (and copies of the same to
be given to the parties as below desccibed) must be in Nriting end shall be
effectively given If delivered to the sUdresses for Landlord and Tenant set
forth below, or If sent by United States rail, certiflad or registered, return
receipt requested, or any llovernight mallN or delivery service, to said
addresses:
The addreas for Landlord Is:
wHP, Inc. c/o spire Realty Croup, Inc. 15710 JFK Blvd., Suite 100 Howton, Texas
77032
~CIIah~O.
10
1~6 aUUleYD IU ~IICII l~ricerr silalt lilereattel De sent Dy giving tne
other Nritten notice tnereot. xrmitionalty, Tenant shall send copies of all
notices required or permitted to be given to Landlord to each lessor under any
ground or land lease covering all or part of the Land, and each holder of a
mortgage or deed of trust ancusberlng the s'ulidins. and/or the Land who
notifies Tenant In writing of Its Interest and the address to which notices ara
to be sent.
9.02 Mlecellaneous. (a) This lease shall be binding upon and inure to the
benefit of the successors and assigns of Landlord, and shall be binding upon
and Inure to the benefit of Tenant, its successors, and, to the extent
assignment may be approved by Landlord hereunder, Tenant's assigns. The
pronouns of any gender shall Include the other genders, and either the singular
or the plural shall Include the other.
(b) All rights and remedies of Landlord under this lease shall be
cumulative end none shall exclude eny other rights or renedlas allowed by law,
and this lease is declared to be a Texas contract, and all of the terms thereof
shall be construed according to the laws of the State of Texas.
(c) This lease may not be altered, changed, or amended, except by an
Instrument In writing executed by all parties hereto. Further the terms and
provisions of this lease shall not be
<PAGE> 34
construed agalast or in favor of a party hereto _reiy because such
party Is the l'Landlord'l or the HTenant
hereunder, or such party or Its counsel Is the draftsman of this lease.
(d) The terms and provisions of all Exhlbits desccibed herein and attached
hereto are hereby rsde a part hereof for all purposes.
(e) If Tenant Is a corporation, partnership, or other entity, Tenant
warrants that all consents or approvals required of third parties (including
but not limited to, its Board of Dlrectors or partners) for the execution,
delivery, and performance of this iease have been obtained and that Tenant has
the right and authority to enter Into sod perfoms Its covenants contained In
this lease.
(f) whenever In this lease there Is Imposed upon Landlord the obilgation
to use Its best efforts reasonable efforts, or dlilgence, Landlord shall be
required to do so only to the extent the s_ Is economictily feasible and
otherulse will not lapose upon Landlord extreme financial or other business
burdens.
(9) If any term or provision of this lease, or the appilcation thereof to
any person or circumstance, shall to any extent be Invalid or unenforceable,
the remainder of this lease, or the appilcatlon of such provision to persons or
circumstances other than those as to which It Is Invalid or unenforceable shall
not be affected thereby, and each provision of this lease shall be valid and
shall be enforceabis t; the extant permitted by law.
(h) Parking spaces for the leased premises shall be governed by the terms
and prowlelona of Exhlbit ~R~ attached hereto and made a part hereof for all
purposes.
(1) Lsndlord agrees to pay to CB Co_erclal Croup, Inc., and Flecher IL
Company, a real astata brokaraeae ce~alsslon as set forth In a separate listing
agreement between Landlord and CB C~aerclal 6r~ Inc., and Flscher L Company.
Landlord and Tenant hereby represent and warrant each to the other that they
[ave not employed any other agents, brokers, or other such parties in
connection with this lease, and each agrees that theY shall hold the other
harmless from and against any and all claims of all other sgents, brokers, or
other such parties claiming by, through, or under the respective Indemnifying
party.
(J) This contract represents the entire agreement of the parties, and all
other pelor agrs*aents, whether written or oral, are hereby rerged Into and are
superseded by this Instrument.
(k) Tenant has had the opportunity to Inspect the leased premises
prior to exacutlon of this agraemant to lease end pclor to Its occupancy of the
leased premises. Tenant hereby acknowledges that Landlord disclalma any and all
warranties regarding the leased premises, whether expressed or Impiled,
Including, without llmitatlon, any warranties of sultabillty or habitability,
and Tenant agrees that It hereby waives any snd all such Narrantles, express or
impiled, and further agrees to repair, at its own expense, any and all defects
which may
<PAGE> 35
subsequently arlsa or be discovered In the Leased Premises, except for
latent or existing defects at the time of Inspection.
9.03 ExDsnsion ODtlon. On each of the first, second, third fourth and
fifth annual anniversaries of the Co_encement Date of this Lease (collectively,
the Y.Expanslon D;tes- and, Individually, the ~Expansion Dataa), and provided
that Tenant Is not In default under this Lease, Tenant shall have the sole and
exclusive option (collectively, the Y.Expanslon Optlons- end Individually, the
Y.Expanslon Optlon ) to expand into an sdditlonal 3,000 square feet of net
rentable are; located upon the sixth (6th) floor of the Building (the
Y.Expanslon Spacs-). The location of the space to be occupied pursuant to the
first exercised Expanslon Option shall be determined by Landlord In Its
reasonable discretion. Landlord shall use Its best efforts to ensure that any
space to be occupied pursuant to any subsequently exercised Expanslon Optlon
shall be adJacent to Tenent's then occupied space. Tenant shall exercise any
Expanslon Optlon by giving Landlord at least six (6)
onths written notice prior to the respective Expanslon Date. Durlng the
period prior to Tenant's exercise of eny Expanslon Optlon, Landlord shall be
entitled to lease all or any psrt of such Expansion Space, so long as the term
of any auch lease expires on or before the commencement of such expansion. In
the event Tenant falls to exercise any Expenslon Optlon, then such right Nlil
expire and the Expanslon Space shall be subJect only to auch remaining
Expanslon Optlons and rights of first refwal as ray exist at such time. Should
Tenant notify Landlord of Its desire to exercise any of such Expanslon Optlons,
then such Expanslon Space shall become part of the Leased Premises on the same
terms and conditions as provided in this Lease upon the respective Expansion
Date. Tenant shall take any such Expanslon Space on an 'AS IS' basis at the
rates then appilcable to the remaining portion of the Leased Premises, together
Nlth a Tenant Improvement Allowance equal to S12.00 per square foot of Net
Rentable Area ti_s a fraction whose denominator Is 60 and whose numerator Is
the number of months remaining In the pcimary term of this Lease at the
Expanslon Date for such space. Construction of any
"MC~L~IL~
11
UU.~ .~111~ Y.11~1~ ~V1 `~. `11. ~dLa L~V~I eu Ut ..IU bLdid r lue u1 1el
. I I lelidllL ULles IIL'L II~L I I I L - ~t L. U
with(n said S-day period, then Tenent shatl conclusively be deemed to have
elected not to take such space and walvad Its first refusal rights as to such
space. If Tenent notifies Landlord of Tenant's Intention to lease
Y.uch space within said S-day period, then Tenant shall lease such space upon
the terms and conditions atated In the Bona Fide Offer. If Tenant elects not to
lease the space covered by the Bona Flde Offer, and Landlord eccepts the Bona
Flde Otter, then Tenant's rights to lease such space will have terminated. If
Offeror subsequently falls to execute a lease with Landlord for
<PAGE> 36
auch space, or if the terms of such lease to Offeror are e~nended to be
materially e~ore favorable to Offeror than the original Bona Flde Offer,
Tenant's continuing right of first refusal for such space shall continue.
thereafter revoke such electlon.
(c) Any space leased by Tenant pursuant to this Section shall be taken in
Y.'AS Isil condition, without any remodeling or fix-up work to be performed by
Landlord except as otherwise provided in such Bona F1de Offer.
(d) If Tenant elects to take ary space pursuent to this 5ectlon, Tenent eesy
not
(e) Such right of refusal shall be exercisable r,nly during the primary
term of this Lease and not during any renewal period.
(f) This right of first refusal Is subordinate to rights and options to
third parties of lesses or third party negotlatlons arlelng pelor to the time
Tenant becomes entitled to this superior right of first refusal.
9.05 Honument. Tenant shall have the non-exclusive right to Include, on a
monunent sign to be placed on the side of the Buliding adJacent to JFK
80ulevard, Its neme in design end location subJect to Landlord~s sole approval
and at Landlord's sole cost. Such sign shall Include other tenant
identification, and prowided that such other tenant shall not have
substantially more net rentable area than Tenant and be a direct competitor of
Tenant's, such other tenant Identificatlon shall be no larger than that of
Tenant.
9.06 Restaurent Services. Landlord shall use its best efforts to secure
delicatessen/restaurant services for the Buliding; provided, however, that such
services shall be upon customary terms and conditions In the enerket end shall
not require eny peyments to or other subsidies of such services by Landlord.
9.07 ~ental Restcictlons.
(a) Nelther Landlord nor Tenant shall transport, use, store, malntaln,
generate, manufacture, handle, dispose release or discharge any Hazardous
Haterlal (hereinafter defined) upon or about the euliding, nor permit thel;
erployees agents and contractors to engage In swh activities upon or about the
Buliding. Nr,wever, the foregoing provisions shall not prohibit the
transportation to end from, and use, storage, _Intenance end handling within,
the Buliding of substances customarily used In owning, managing
repairing leasing or operating real estate similar to the Buliding provided (1)
swh substances shall be used and malntilned only Sn swh quantitles as are
reasonably necessarj and in accordance with awlicable law and the
manufacturers' Instrwtlons therefor and (11) such substances may be disposed
of, released ore discharged at the Buliding If permitted by and In compilance
with applicable laws, arid shall be transported to and from the Buliding in
<PAGE> 37
compilance with all appilcable laws. The term Y.Nazardous Naterial- shall mean
any chemical, substance, _terlal or waste or comporent thereof which is now or
hereafter listed, defined or regulated as a hazardous or toxic chemical,
substance material or waste or component thereof by any federal, state or local
governing or regulatory body having Ju;ledlctlon.
(b) If any Nazardous Materlal Is released, discharged or disposed of by
either Landlord or Tenant or Its employees agents or contractors on or about
the Bul lding In violation of the foregoing prowlelons, swh psrty shall
immedlataly properly and In compilence with all applicable laws and ordinances,
cleen up end remove the Razardous Nate;lal from the Leased Premises, the
Building and any other affected property, at surh party'a sole cost and
expense.
(c) Should Landlord fall to clean up and remove any such Hazardous
Material so released discharged or disposed of by It, Tenant, after thirty (30)
days prior written notice (or such reasonably longer period as necessary, If
Landlord begins such clean up and/or removal, imaediately upon receipt of such
notice and continues to proceed with dlilgence) and opportunity to cure, shall
have the right to terminate this Lease.
IN TESTIMONy "HEREOF, the parties hereof have executed this lease as of the
date aforesaid.
LANDLORD:
WHP, I NC
Trzanowski, Tre urer7_Z/_93
TENANT:
A),
FIRST HEALTH 57RATEGIES} INC.
By:
12
u tor th co_on
aouth t corner of thet certain 3 Z7.1Z t t to Y. 5/8 Inch iron rod
File Number D048665 Y.n t_ct ot record under Herris County Clerk r.
d the northwest corner of the herein ecribed tract;
<PAGE> 38
0 8609 THENCE North 87 degrees 40 59 Eeat departing Y.eld Y.e t R 011 1 ron rod
Y.et for th aouthee;t corn r ot Y.elel 0 8609 Y.cre tr ct
THENCE North OZ degr 19 01 Ihat SO.OO fe t to Y. 3/4 inch iron pipe found for
an exterior corner
THENCE N rth 87 degreea 40 59" Eeat
corner of the herein dercribed tract203 39 feet to Y. 3/4 inch Iron pipe found
for the northeast
H11 20 East 344 1 feet to s 3/4 inch Ircn pipe fdi h
Y.n91 t 09NdCE 33 t t aloe. the erc ot aeld curw toll i id
9 r 30 1 Y. redlua ot 1255 orth R O line heving Y. centrel
207 95 t et to Y. 3/ ' tron pip tound et tOO '. dtot and
THE CE South 87 d gr 40 59 weat continuln
pipe found tor th beginnin9 ot Y.8'd North R O 9; line
249 37 teet to 3/4
ot SO W t Y. id curv havin9 Y. centrel Y.n I
5 037 sr4uere h 4; de9reea 19 09 ot 90 d greea 00 OOradius
containi teet) ot land 1 weat 70 71 te t to th POINT OF EG;NNING and
1. Defined Terms
The following terms have the respective defin
indicated for purposes of this Work Agreement:
(a) "Co=.enc-.ent Date" means the later of (i) thir (31) days after Substantial
Completion, exc Tenant Delay, or (ii) December 1, 1993. By
example, if Substantial Completion occurr November 20, 1993 and Tenant had
caused ten (10) Tenant Delay, the Commencement Date would be De 11, 1993.
(b) "Completion Date" means the date on which the
Premises will be delivered to Tenant by Landlc
<PAGE> 39
(c) "Construction Drawings" means the plane specifications including
architectural drawin mechanical, electrical and plumbing drawings f
construction of Leasehold Improvements to the
Premises to be prepared by Landlord's Archite delivered to Tenant for approval.
(d) "Construction Drawings Bign-Off Date" means fi days after receipt by Tenant
unless otherwise e~ by Tenant Delay.
(e) "Demolition" means the removal of all e~ improvements from the bottom of
the floor slat to the top of the existing floor slab below
Leased Premises as per the demolition plan.
"General Contractor" means the person or fir time to time selected or approved
by Landlo Tenant as herein provided to construct and inste Leasehold
Improvements in the Leased Premises.
C-1
aspect of the Leasehold Improvements after the Construction Drawings Sign-Off
Date (including any delay in preparing any of the documents or drawings
described herein), (iii) of delay caused by Landlord, its agents, or
contractors' interference (if any) in the construction or delay in processing
General Contractor's submittals as provided herein and (iv) of delay caused by
the inclusion of any work or materials not shown on the Construction Drawings
which causes Substantial Completion to be delayed beyond December 1, 1993.
(i) "Landlord's Representative" means the individual assigned by Landlord to
coordinate the plans and specifications for the Leasehold Improvements as
contemplated herein.
(~) "Leeaehold Improvement" means the complete construction of the Leased
Premises in accordance with the Construction Drawings.
(k) "Plan Delivery Date" means the date that Landlord delivers to Tenant the
proposed Construction Drawings.
(1) "Product Data" means illustrations, standard schedules, performance charts,
instructions, brochures, diagrams and other information which may be furnished
by the General Contractor to illustrate a material, product or system for some
portion of the construction of the Leasehold Improvements.
(m) "8amples" means physical examples which illustrate materials, equipment or
workmanship and establish
_cNe
C-2
<PAGE> 40
the cons,truction of the Leasehold Improvement
(o) "8ubstantial Completion" means the date the Le
Improvements are certified by Landlord's archi
sufficiently complete in accordance herewith e:
noted in the punch list (and except for thos
not shown on the Construction Drawings
construction debris except for the debris ass
with ongoing final completion has been removed
Leased Premises are clean, such that the Ten
reasonably occupy or utilize the Leased Premi
the Permitted Use.
(p) "Tenant Delay" means the sum of number of days whiah Tenant was late in
providing Tenant's re contemplated in this Exhibit "C", (ii) of dela, by
changes requested by Tenant to any aspect Leasehold Improvements after the
Construction C Sign-Off Date (including any delay in preparin' the documents or
drawings described herein
delay or halting of construction), (iii) o caused by Tenant, its agents, or
contr interference (if any) in the construction or c processing General
Contractor's submittals asE herein, and (iv) of delay caused by the inclt any
work or materials not shown on the Const Drawings which caused Substantial
Completio' delayed beyond December 1, 1993.
2. Improvements by Landlord
(a) Exhibit "G" attached hereto and made a part contains a list of improvements
that establ
~ e
C-3
Construction Drawings.
(c) Landlord shall engage an architect or engineer to design the Leasehold
Improvements and to prepare Construction Drawings. Once approved by Landlord
and Tenant as required under Section 3(b) hereof, the Construction Drawings
will be incorporated in the Lease by reference as Exhibit "C-1" (Final
Construction Drawings).
(d) Tenant shall assume the existing improvements in the Leased Premises in
their "AS IS" condition.
(e) Landlord shall provide Tenant, at no cost to Tenant, all requested
utilities during the initial move-in phase.
3. Schedule of Critical Dates
<PAGE> 41
(a) Landlord will complete the Construction Drawings no later than September
10, 1993 (unless otherwise extended due to Tenant Delay).
(b) Tenant agrees to review promptly the Construction Drawings prepared by
Landlord's architect and respond to Landlord no later than September 15, 1993
with its approval of or comments to the drawings for construction of the Leased
Premises. If Tenant does not approve certain items included on the proposed
Construction Drawings, then Tenant shall note such items on the sign-off set of
proposed Construction Drawings and shall approve the proposed Construction
Drawings "As Noted" or "As Amended".
(c) Upon receipt of Tenant's written request and/or authorization to make any
change to the Construction
C-4
number of days and revised cost (if any) required to complete the
Leasehold Improvements occasioned by such change, or (B) inform Tenant of the
number of days it will take to make such a determination, in which case if
Tenant still desires to request such change(s), Landlord shall use due
diligence to provide Tenant with the information in (A). The actual delay
beyond December 1, 1993 which any such change causes, whether more or less than
estimated, shall constitute Tenant Delay. Tenant agrees that Landlord will not
stop any construction in progress while Landlord is evaluating or calculating
the time required to implement a change unlesa requested by Tenant or unless in
Landlord's and in General Contractor's reasonable judgment construction should
be stopped. Any such change order shall be subject to Landlord's approval,
which shall not be unreasonably withheld. After Landlord has approved the
change and provided the information described above, Tenant shall then advise
Landlord in writing of the acceptance or rejection of the change order. The
number of days from the date Tenant requests a construction stop to the day
construction is resumed shall be Tenant Delay.
(d) In the event a change to the Construction Drawings after the Construction
Drawings Sign-Off Date is
a result of any unforeseen condition within the existing Leased Premises,
such a change shall be treated as a Landlord change, Landlord will provide
written notice to Tenant
determined to be required as a
~.~.
C-5
(e) Landlord's Representative will coordinate with
Tenant's representative (Darin Jones and/or Dave
English) during construction of the Leasehold
Improvements and until the items on the punch list are
completed or settled, Landlord's Representative and
Tenant's Representative shall at all times have access
<PAGE> 42
to the Leased Premises during construction of the
Landlord's Representative
charge of and will be
Leasehold Improvements.
will have control or
responsible for construction means, methods,
techniques, sequences or procedures, or for safety
precautions and programs in connection with the
construction of the Leasehold Improvements,and he
will be responsible for the General Contractor's
failure to carry out the construction in accordance
with the Construction Drawings. Landlord's
Representative and Tenant will review, approve,
approve as noted or disapprove within two (2) business
days of the receipt of same, the General Contractor's
submittal such as Shop Drawings,Product Data and
Samples, but only for conformance with the design
concept of the Leasehold Improvements and with the
information given in the Construction Drawings.
(f) Any responses required within a certain time period under this Exhibit "C"
shall be in writing and shall be due by 5:00 p.m. on the date specified
therefor. Any such response received by either party after 5:00 p.m. on any day
shall be deemed to be received on the next day.
_c.~
C-6
Drawings including the cost of Leasehold Improvements.
(b) For purposes of this Work Agreement, the cost of construction of the
Leasehold Improvements shall include, without limitation, the cost of
preliminary space planning and final space planning, to the extent that such
space planning costs exceed $0.08 per square foot of Net Rentable Area;
Construction Documents; mechanical engineering design and documentation;
electrical design and documentation; Landlord coordinated field observation and
follow-up; Landlord coordination of design and construction; demolition;
construction management costs including fees; special consultants costs
(structural, acoustical, vibration, etc), direct costs of construction; and all
required permits and fees.
(c) All construction costs for the Leased Premises which exceed $12.00 per
square foot of net rentable area shall be advanced by Landlord on behalf of
Tenant and amortized monthly over the primary term of this Lease at an annual
interest rate of nine percent (9.0%) and the Base Rental rate set forth in
Section 2.01 and Addendum II of this Lease shall be increased by such monthly
amortization.
<PAGE> 43
Substantial Completion, Construction Warranty and Rental
Commencement Date
(a) Tenant's obligation to pay Rent under the Lease shall not commence until
the Commencement Date as defined above. To the extent the Commencement Date may
be
construction of
_e.~o
C-7
unless otherwise delayed by reason of strikes, lockouts or other labor
disputes (whether or not with employees of Landlord's contractor or any
subcontractor and regardless of whether the dispute could be settled by
acceding to the demands of any labor group), acts of God, inability to obtain
sufficient labor or materials or reasonable substitutes therefor, governmental
control or compliance with applicable governmental laws, rules or regulations,
enemy or hostile governmental action, civil com~otion, fire, floods, stormy or
inclement weather or other conditions or caused beyond the reasonable control
of Landlord (hereinafter referred to as "Events of Force NaJeure").
(c) Should a Certificate of Occupancy not be provided by Landlord to Tenant
within one hundred twenty (120) days (exclusive of days of Tenant Delay) after
the date of execution of this Lease by all parties as set forth in the preamble
(the "Execution Date"), Tenant shall have the right and option to terminate
this Lease within three (3) business days after the expiration of such 120-day
period by providing written notice to Landlord of its election to so terminate
during such 3-business day period. Should Tenant fail to so notify Landlord
during such period, it shall be deemed to have waived such right to terminate.
(d) When the Landlord considers the Leasehold Improvements to be approaching
Substantial Completion as defined in Section l(o) hereof, the Landlord shall
notify the
~c~cre
C-8
list with items agreed to by Tenant and Landlord listed therein. The
inspection and issuance of the Certificate of Substantial Completion shall be
conducted within two (2) business days after Landlord's notification.
Warranties required by this Work Agreement shall commence on the date of
Substantial Completion of the Leasehold Improvements. The Certificate of
Substantial Completion shall be submitted to Tenant, Landlord and the General
Contractor for their written acceptance of the responsibilities assigned to
them in such certificate. Tenant shall have five (5) business days from receipt
of said certificate to approve and return same to Landlord. Tenant shall not
take possession of the Leased Premises until Tenant has accepted the
Certificate of Substantial Completion. Landlord shall use all reasonable
efforts to complete the items on the punch list within thirty (30) days of
receipt from Tenant. Landlord shall use all reasonable efforts
<PAGE> 44
to complete the items on the punch list which was developed by Landlord and
Tenant immediately after issuance of the Certificate of Substantial Completion
(hereinafter called the "'Initial Punch List") within thirty (30) days after
issuance of such Certificate of Substantial Completion and before the
Commencement Date. Immediately after the Commencement Date, Landlord and Tenant
shall develop a final punch list of items to be completed (the "Final Punch
List") and Landlord shall use all reasonable efforts to complete
a~e
CN9
which failure could not reasonably have been discovered upon the date the
Certificate of Substantial Completion was issued, and (3) Landlord's failure to
complete in due course the incomplete items, if any, described in the
Certificate of Substantial Completion (including the punch list items).
Landlord shall be responsible for (2) only for a period of one year from and
after the Certificate of Substantial Completion is issued. Landlord shall
exercise due diligence in completing any item in (3) of this Section 5(e) and
shall use its good faith efforts to minimize any disturbance to Tenant's
operation in the Leased Premises. Additionally, Landlord shall provide Tenant
with any equipment warranties obtained in connection with the purchase of
equipment which is incorporated into Tenant's Leasehold Improvements and Tenant
shall look solely to such warranties and not to Landlord for defects and/or
failures of such equipment. THE FOREGOING CONSTITUTES LANDLORD'S ONLY WARRANTY.
ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY,
HABITABILITY, SUITABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY
NEGATED AND WAIVED.
(f) Notwithstanding the above, at Tenant's request made at any time after
Substantial Completion, Landlord may permit Tenant to occupy so much of the
Leased Premises as Tenant wishes to occupy prior to the Commencement Date.
Landlord will cooperate with Tenant in order to
aY~c.~e
C-10
r ~
Landlord's actual costs (but in no event more than the base monthly rent which
would have been due in the absence of any applicable abatements) incurred by
reason of the Tenant's early occupancy.
(g) The above dates in this Exhibit "C", including, without limitation, the
Commencement Date and Completion Date are predicated and conditioned upon the
execution of the Lease on or before September 15, 1993. To the extent that such
date of execution of the Lease is delayed beyond September 15, 1993, each of
said dates shall be delayed by the number of days of delay in execution after
September 15, 1993.
<PAGE> 45
Landlord and Tenant have executed this Work Agreement contemporaneously
with execution of the Lease.
LANDLORD: WHP, INC.
as J. Trzan6ski, Treasurer
TENANT: (rPA)'
FIR8T HBALTH 8TRATEGIES] INC.
By:
Name:
Title:
C-11
For example. It the Kllowatt Hour iate increases by 10X over the Base Rate,
saii rate shall automatically Increase by tOX. The "Kilowatt Nour Rate"
shall mean the actual average cost per kilowatt hour charged by the pubilc
utilltiea providing electricity to the Buliding or it said public utilities
shall cease charging for electricity or, the bears of a kilowatt hour, then the
Kilowatt Hour Rate shall mean the actual average cost per equivalent unit of
reasurement substituted therefor by said pubilc utilities. The Base Rate is
hereby stipulated to be S0.0600 per kilowatt hour.
The following dates dall constitute "Holidays" as aald term Is used In this
Lease:
(1) New Ycars' Day
(2) President's Day
(3) Good Frlday
(4) Hemorlal Day
(5) Indqndence day
(6) Labor Day
(7) Vetcran's Day
(B) Thanksgiving Day
(9) Frlday following Thankagiving Day
(10) Chrlat~s Dey
If, in the case of any Holiday described in (1) through (10) above a different
day shall be observed than the respective day abovedescribed, then the day
which constitutes th; day observed by national banks in Houston, Texas, on
account of such holiday shall constitute the Holiday urder this Lease.
<PAGE> 46
Notwithstanding any contrary provision contained in the Lease, should
Landlord install (at Tenant's expense) a separate individual heating, air
conditioning and ventilating unit exclusively for Tenant's use, Landlord shall
furnish Buliding Standard heating, ventilating and air conditioning during
Tenant's business hours of 7:00 a.m. through 12:00 p.m. (midnight), Honday
through Frlday, and on Saturday between 7:00 a.m. and 1:00 p.m., all exclusive
of Holidays (defined below), without any additional hourly charge for
after hours' UBe.
For the purposes of this IIVAC Schadule only, the following shall not be
treated as Holidays for purposes of furnishing eir conditioning and heating:
(1) Presidents' Day; (11) Good Frlday; and (I i i) Veterans' Day.
D-1
/Thomas J. Trzanowskl, ~reasurer
TENANT: a4) 1
FIRST HEALTH STRATEGIESl_INC
By:
NaTe: 422,
Tltle:
closets In a clean and orderly condition. i. Leave
designated lights on.
2. Elevators
a. Floors will be vacuumed, and spot cleaned as needed.
b. Ualls and rail wiped clean.
c. Elevator Y.tainless steel and glasa wiped cleaned and poliahed.
3. Restrooms
Y. Ceramic tile floors will be oopped Nlth disinfecting aoap and machined
acrubbed as needed
ParticulOr attention to be paid to clean grout and wallifloor
b Clean and polish mirrors, and clean enameled aurfaces and anY shelvina
a-n Y.n polisn mirrors, and clean teo aunaces and any shelving. weah
basins, urinals and toilet bowls thoroughly cleaned and disinfected, remove
stains and rake certain to clean under side and rles of comrodes and urinals.
wash both sides of commode seats with disinfecting soap.
<PAGE> 47
d. Damp wipe ar,d wash eil car_Ic tile with disinfectant and wipe down and
spot clean vinyl walls and partitions near urinals.
e. Clean and polish bright metal piping, toilet seat hinges, ash trays and
other metal work.
f. Disposal can to be emptied, cleaned and disinfected as needed
9. 8anitarv napkin receptacles will be e~ptied, cleaned and disinfected
h. Stall partitions will be clomp cleaned as needed. Notify
Supervisor and Building Manager of any writing, etc, that cannot be
removed. Ualls will be spot cleaned and /or completely washed as needed.
Low ladgea, sills, tops of partitions will be dusted and d~p cleaned.
Paper towel and toilet dispensers will be wiped clean, polished and
refilled es ne deaf. Soap dispensers will be wiped clean end refilled es
needed.
4. Entrance Areas
a. Entry grill la to be kept clean.
b. Empty end dry polish eil sand urna
c. Spot clean all Nall surfaces.
d. Clean and polish glass and facinga on both sides of all entrance
f. Check sidewalka and remowe any trash.
S. Tenant Areas
a. Vacuun clean all cOrpeted areas and spot clean minor stalna.
b. Sweep and/or duet mop all tile floora.
c. Empty ash trays and wipe with damp cloth.
d. Empty all waste baskets and wipe with damp cloth or wash, If necessary.
e. Desks, counters, tables, office furniture, filing cabinets, chairs,
leoges, equipment and flat surface will be dusted with treated cloth.
All paper trach Nlil be collected and carried to the freight elevator for
dispoaltlon at
Llghts to be turned off. . Doors to be locked.
f.
<PAGE> 48
B. WEEKLY SERVICE
1. Elevaton
a. Elevator door tracks cieanad.
b. Clean and polish exterior of eil elevator doors and trim.
2. Stalewells
e. All steirueils, landing and steirs to be swept,and ~wpped es required
b. All stairwell corrers to be cleanod out.
c. All hendreils to be wiped cleaned.
3. Janitortel Clossts e. Cleaned and any trash renoved.
4. Corcidors and Lobby
a. Buliding directory wiped clean ot all amudges and fingerprint-.
b. Spot clean eil vinyl wall covering end palnted aurfaces.
c. Flre hose cabinets to be duated.
d. Aggregate floors to be buffed to Inaure even aheen.
e. Level Two glass and chrome raliln. to be spot cleaned.
1
- `.r#~h. I`U~I. ~lit ~ cleaned and polished.
b. All high duating, tops of door frame
okCaSeS. Y.nd filln9 cabinet. (taller than`6PiCttUrboS.dand other hangin9 itemS
topS of
c. Drawer fronts, desk fronts and desk aides to be duated
d. 9ase plates will be wipod clean with treoted cloth
e All doors,top to br,tto and hinge topa will be wl ad
f Spot carpet cleaning aa needed. p clean with treated cloth.
2. Pubilc Areas
a. Lobby floors to be stcipped waxed and buffed tulce yearly
b. Exterlor euliding windows tr be cleaned three times yearly
E. PARKING GARAGE
1. w~eekly
a. Remove eil lltter ard leash from garege eeea
b. Swaep and dust elevator Interlors
c. 8waep and keep free from leash elf steirueys.
<PAGE> 49
2
4. Hovement In or out of the 8uliding of furniture, office equlprent, or
anv other bulky or heavy mat
shall be restricted to such hours as Lendlord designatea. Landlord will
determine the mesh, rou ng of sal It_ so as to ensure the safety of all persons
and property concerned. Advance N not ce of Intent to rove auch Items mst be
made to the Buliding _Ngamant office.
5. All routir,e dellwries to c tenant's Ieased pr_lees during b:OO a.r. to
5:00 p.m. Neekdays ski'
Y.ade through the freight elevators. Passengar elevators ara to be used only
for the moveme persons, unless an exception Is approwd In Nriting by the
Buliding _nagement office.
6. 8uildir~ _Ng_~t hal' have the euthority to preacrlbe the weight and manner
that heavy furr
7. Corcidor doors, when not In use, shell be kept closed.
8.
Tenant spece that Is visible from pubilc areas must be kept neat and clean.
9. All freight eiewtor lobbies ere to be kept neat and clean. The disposal of
trash or stor
_terieis In these ereea la prohibited.
10.
11.
No animals shall be brrught Into or kept In, on, or abr,ut the Buliding.
Tenant shall not tamper with or ettempt to adluat temperature control
thermostats in the leased premises. Landlord shall adJuat thermostats as
required to malataln the Buliding standard temperature. Landlord requeats that
all ulndow bilnds remain down and tilted at e 45 degree angle toward the street
to help ralntaln comfortable room teeparetures end conearw energy.
12. Tenant Nlil comply with eil security proceoures during business hours end
after hours and on Nee
13. Tenants shall lock eil office doors leading to corridors and turn out eil
lights at the close o1
14. All reqiests for overtl_ eir conditlonin. or heating rust be submitted In
writing to the su
<PAGE> 50
management office by 2:00 pUR. on the day desired for weekday requests, by 2:DO
p.m. Frlday for N
requests, end by 2:00 p.a. on the preceding business day for Holiday requests.
15. No fl_bie or explosive fluids or matecieis shell be kept or used within the
Buliding except I
epprowd by Lsndlord, and Tenant shall comply with all appilcable buliding and
fire codes n thereto.
16. Tenant wy not pisee any It_ on the belconies of the euliding without
obtaining Landlord
17. Tenant shall eeploy no person or persons other than the eTployees or
contractors hired or appr~
writing by Landlord to perfonn eny cleaning or Janitorlal services on the
Ieased premises. Ar employee or contractor must wet Lendlord's qieilficstlons
end ba ur,der the control and super
Lendlord resarws the right to rescind eny of these rules and regulations,
Y.nd to make such other end further rules and regulations Y.s In Its reasonable
Judgment ahell from time to time be required for the aefety, protection, care,
end cleanilness of the euliding, and the ope;atlon thereof, th; preservation of
good order therein, and the protection and comfort of the tenant and thelr
agents, employees, and invitees Such rules and regulations, when wde snd
written notice thereof Is glwn to e tenant, shall be binding upon It In like
manner aa If origineily herein prescribed.
Parking Spaces. Lsadlord shell use good faith efforts to Inaura that the
parking apaces r~veeed by the Initlal Parking Permits ara avallabla to Tenant
throughout the term of this Lesse.
(2) In the event Tenant shall dealre to lease additional parking permits
(hereinafter called Y.AWltional Parking Pemits-) for wssigned and unreserved
spaces In the Garage, Tenant shall notify Landlord In writing of Tenant's
desire to do so Following Landlord'a receipt of such written notice, Landlord
shall make available to Tenant auch nucber of AWltlonal Parking Permits aa
Landlord deema reasonable, If same are available All AWltlonal Parking Permita
shall ba made available to Tenant on a month-to-month basis only
Landlord hereby ageees that Tenant may at any time and from time to time during
the term of this Lease eieet to discontinue leasing or taking any or all of the
Additlonal Parking Permits (but not the Initlal Parking Permits) bv giving
written notice thereof to Landlord Tenant hereby agrees that Landlord _y at any
time and from time to tl~e during the term of this Lease elect to cancel any or
all of the AWltlonal Parking Permita (but not the Initial Parking Permits) by
giving written notice thereof to Tenant Any auch election bv Tenant or Landlord
aa the case may be ahall be effective as of the firat day of the first full
calendar month following the expl;etlon of thirty (30) days after the date auch
notice Is given (the Initlal Parking Peemits snd the AWltlonal Parking Permits
being hereinafter collectively ceiled the ~Parking Permita.)
<PAGE> 51
(3) In the ewnt the parking speces covered by the Initlal Perking Permits
are not aval labie or become uneval Isbie to Tanant (due to causes beyond the
reasonable control of Landlord) during any portion of the term of this Lease,
then Landlord ahall make available to Tenant sufficient parking spaces (but not
to exceed the nucber of apacea not then available to Tenant) to meet Tenant's
nseds located reasonably near the 8uliding until the parking spaces cowred by
the Initlal Parking Permits ete made available to Tenant, said substitute
spaces to be at a rental rate not to exceed the rate then being charged by the
operator of the Garage
Landlord shall use good faith efforts to Insure that the parking spaces covered
bv the Initial Parking Per~alts are available to Tenant throughout the term of
thla Lease
(4) If thc term of this Lease commences on other than the first day of a
calendar month, or terminatea on other than the last day of a calendar month,
then rentala for Parking Permits shall be proreted on e dsily beala
LANDLORD
,~ Trzanowski, Treas~
TEN`NT
- ~)1
FIRST HEALTn SIUITEGIESAI C
By
Name R~ ~ ~v /CD ats ~:
Tl t le: ~ ~ ~c ' ~ c 5 li>
a~r~hilxR ~L~'-
H-1
1 -I
~'H~
1. Base Renta]
The Base Rental payment schedule for the term of the Lease shall be as follows:
Year Annual Rate Annual Rental
Monthly Payment
One $10.50 S399,294.00 $33,274.50
Two $11.50 $437,322.00 $36,443.50
<PAGE> 52
Three $12.50 $475,350.00 $39,612.50
Four $12.75 $484,857.00 340,404.75
Five $13.00 $4g4,364.00 $41,197.00
2. Storeae Rental
Tenant agrees to pay an Annual Rate of Five and No/100 Dollars ($5.00) per
square foot for five hundred (500) square feet of Storage Area in the amount of
$2,500.00 Annual Base Rental, or a Monthly Base Amount of $208.33, which
Storage Area shall be accessible by a door with lock, with Landlord to have
access for emergency and safety purposes only.
Movina Allowance.
On the Commencement Date, Landlord shall reimburse Tenant an amount equal
to Two and Notl00 Dollars ($2.00) per Net Rentable Square Foot for Tenant's
moving costs associated with Tenant's move to the Building. Net Rentable Square
Footage of the premises is 38,028, therefore, the total Moving Allowance shall
not exceed Seventy-six Thousand Fifty-six and Notl00 Dollars ($76,056.00).
4.
Roof Access.
Landlord shall allow Tenant to place the necessary microwave transmission
equipment on the roof of the parking garage or Building, provided that any such
installation complies with all city, state and federal government regulations,
specifications and codes; installation, maintenance and repair costs shall be
paid by Tenant; and, upon removal, the location shall be returned to it's
original condition at Tenant's cost.
5. Space Plannina Allowance.
Upon completion of the Tenant Improvements, Landlord shall reimburse Tenant an
amount equal to $0.08 (eight cents) per
_Nr~ma~,~n
J-1
By:
Name: B~ea~ ~. 8
Title: \l`~c Hzc
, . .
..
<PAGE> 53
JN2
Aa used In this Lahe tara ~Harkat 9asa Rantal Rata" shall aean the
annual rental rates then being charged In the "North "aalt. area of Nouston,
Taxas, for space comparable to the apace for which the Harket Base Rantal Rata
Is being daterminad [taking Into consideration age use, location and/or floor
level within the applicable building, definition of net rentable area,
leasehold ;mprovaments provided, quality and location of ths appilcable
buliding, rental corcesslons leuch as abatements or lassa assunptlonsl and the
time the particular rata under conaideratlon became affective). It Is agreed
that bona fide written offers to lease the ralavant apace rada to Landlord by
third partlas (at ar'R's-langth) may be used by Landlord as an Indlcation of
Harkat a~ase Rantal Rata.
whanevar In thia Laaaa a provision calls for a rental rata to ba, or be
adJustad to, the Market Base Rcntal Rata, Tanant shall continua to pay Tenant's
Foracast Additlonal Renta( and Tenant's Additional Rental with reapect thereto.
In the event the Harket Basa Rental Rate Is deterorined to be a "groas" rate
(I.e., the rate Includes an allowance for operating expenses), the Base Rental
payable by Tanant during the Renewal Term shall be equal to the Market Base
Rental Rate reduced by an amount equal to the operating Expenr,as Amount for
the calendar year Smnediately preceding the year in which the Market Base
Rental Rate is being determined.
LANDLORD:
UHP, INC
Thomas J. Trzanowskl, Treasurer
TE#AUT:
FIRST ilERLTR STRATEGIES, INC.
By:
Uame:
Tltle:
EXRISIT
WILDING STANDARD ALLOwAIICES:
<PAGE> 54
1. Buliding standard alr conditioning syst_ throughout the leesed premises, as
per the Construction Drawings.
'. Building standard grid ceiling system throughout the leased pr_Isea.
3. Bulidin' standard lights as required, not to exceed ore (I) 110t per
eight-five (85) square feet, as per the Construction Drawinga.
4. Building standard window coverings on all exterior window openings.
5. euliding standard carpet throughout office areas, aa per the Constructlon
Drawings.
6. One (1) linear foot of suliding standard finiahed partitioning (with
Buliding standard paint and base) per ten ard one-half (I0 1/2) square
feet of "Allowable Area~.
7. One (1) Building standard door (with latchaet) per three hurdred (300)
square feet of Allowable Area. provided, however, one lockset (with two (2)
keys) shall be prowided in 11eu of latchset for each Building code required
door opening into a public area.
8. One (I) Building standard light switch per allowed 300 square feet
Allowable Area.
9. One (1) Buliding standard electrical wall outlet per one hundred forty
(140) square feet of Allowable Area, as per the Conatruction 0rawings.
10. One (1) Buliding standard tele,ohone wall out per two hundred twenty-five
(225) square feet of Allowable Area, as per the Construction Drawings.
II. Building standard coffee bar is four (4) 11near foot plastic lamir~ate
lower cabinet. Lease space exceeding 2700 square feet shall receive Building
atandard coffee bar four (4) feet long with bar sink and cold water only.
Laminated selections to include white or almond color. Ar per the Construction
Orawings.
"AIIowable Area" shall mean the net rentable area of the leased premises
minus all On-Floor Common Areas and General Common Areas which were included
therein and, In the case of a full floor, minus the areas included in the
definition of On-Floor Common Area.
<PAGE> 1
~RAm AGREEM~
b~een
TR~ET ESSEPmAL FAC~ 2r, INC.
as ~ andlo~
FIR~ ~ALTR S~TEGIES, INC.
as T=ant
dated as of Noveniber 1, 1994
- --2--
TABLE OF CONTBNTS
~ge
1. DEMISE OF PREMISES . . . . . . . . . . . . . . . .
. . . 1
2. USE . . . . . . . . . . . . . . . . . . . . . . . .
. . 1
3. TERM
2
4. RENTAL
3
5. NET LEASE; NON-TERMINABILITY . . . . . . . . . . . .
. . 3
6. QUIET ENJOYMENT . . . . . . . . . . . ... . . . . .
. . 4
7. UTILITY BILLS . . . . . . . . . . . . . . . . . . .
. . 5
8. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . .
. . 5
9. IMPOSITIONS . . . . . . . . . . . . . . . . . . . .
. . 6
10. DESTRUCTION OF OR DAMAGE TO PREMISES . . . . . . .
. . . 8
11. INSURANCE
10
12. GOVERNMENTAL ORDERS; COVENANTS: LANDLORD CURE;
PERMITTED CONTEST . . . . .. . . . . . . . . .
<PAGE> 2
16
13. EMINBNT DOMAIN
19
14. DEFAULT: Events of Default . . . . . . . . . . . .
. . . 22
15. REMEDIES . . . . . . . . . . . . . . . . . . . . .
. . . 24
16. SUBORDINATION . . . . . . . . . . . . ; . . . . . .
. . 25
17. LANDLORD'S RIGHT OF ENTRY . . . . . . . . . . . . .
. . 27
18. NOTICES
27
19. STATUS OF LEASE; FINANCIAL DATA . . . . . . . . . .
. . 28
20. MECHANICS' LIENS . .. . . . . . . . . . . . . . . .
. . . 28
21. END OF TERM
30
22. ALTERATIONS . . . . . . . . . . . . . . . . . . . .
. . 31
- --3--
23. MEMORANDUM OF LEASE . . . . . . . . . . . . . . . . . . 32
24. SUBLETTING/ASSIGNMENT . . . . . . . . . . . . . . . . . 32
25. HAZARDOUS MATERIAL . . . . . . . . . . . . . . . . . . . 33
26. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . 37
Bxhibit A-1 Description of Land
Exhibit A-2 Description of Personal Property
Exhibit A-3 Site Plan
Exhibit B Rent Payments
Bxhibit C Repurchase Schedule
Exhibit D Form of Estoppel Certificate
Exhibit E Permitted Exceptions
THIS LEASE, made and entered into as of November 1, 1994 (together with
all amendments and supplements hereto, this "Leasen), by and between TRINET
<PAGE> 3
ESSENTIAL FACILITIES X, INC., a Maryland corporation (together, with any
successor or assigns, hereinafter called the "Landlordn) and FIRST HEALTH
STRATEGIES, INC., a Delaware corporation (together with any permitted successor
or ensigns, hereinafter called the "Tenant"). Capitalized terms used herein not
otherwise defined shall have the meanings specified in Annex I hereto.
WITNESSETH
In consideration of the covenants and agreements herein contained, the
parties hereto mutually agree as follows:
1. DEMISE OF PREMISBS: Landlord hereby demises and leases to Tenant and
Tenant hereby lea~es and rents from Landlord the Premises, in its "as is"
condition, subject to the existing state of title (without express or implied
warranty of Landlord with respect to the condition or fitness of the Premises
for a particular use or title thereto, except that Landlord warrants that it
did not convey or encumber the Premises prior to entering into this Lease
except by a mortgage to which Tenant has subordinated its interest hereunder),
consisting of the land parcel more particularly described in Exhibit A-1
attached hereto and incorporated herein by reference and located at 2569, 2575,
2602, 2614, 2650 and 2686 South Decker Lake Lane and 2601 South Redwood Road,
Salt Lake City, Utah, and the buildings, structures, improvements now or
hereafter located on said land and the personal property used in connection
with the building~ and listed on Exhibit A-2 hereto and incorporated herein by
reference (but excluding Tenant's trade fixtures), parking areas and driveways,
together with any easements, rights, and appurtenances in connection therewith
or belonging thereto all being collectively hereinafter referred to as "the
Premises". No easement for light, air or view included with or appurtenant to
the Premises. Exhibit A-3 is a lot map identifying the four buildings (each, a
"Buildingn) which comprise the Premises, and the land allocated to each (each,
together with the related Building, a ~Property Unit"). For certain purposes
hereinafter set forth, Fixed Rent and Landlord's Investment in each Property
Unit are allocated a~ follows:
Property Unit Fixed Rent ~ Landlord's Investment
Building 1 14.73` $ 1.900,170
Building 2 12.52' $ 1,615,080
Building ~ 45.31` $ 5,844,g9O
Building 4 27.44' $_ 3,539,760
2. USE: Tenant shall use and occupy the Premises for general office
purposes, including computer operations and related functions or for such other
purposes as are consistent with all applicable laws and restrictions. Tenant
shall not use or occupy the same, or knowingly permit them to be used or
occupied, contrary to any statute, rule, order, ordinance, requirement or
regulation applicable thereto, or in any manner which would violate any
certificate of occupancy affecting the same or which would make void or
<PAGE> 4
voidable any insurance then in force with respect thereto or which would make
it impossible to obtain fire or other insurance thereon required to be
furnished hereunder by Tenant, or which would cause structural injury to the
Premises or cause the value or usefulness of the Premises, or any portion
thereof, to materially diminish, or which would constitute a public or private
nuisance or waste, and Tenant agrees that it will promptly, upon discovery of
any such use, take all necessary steps to compel the discontinuance of such
use. Tenant shall not use, suffer or permit the Premises, or any portion
thereof, to be used by Tenant third party or the public, as such, without
restriction or in such manner as might reasonably tend to impair Landlord's
title to the Premises, or in such manner as might reasonably make possible a
claim or claims of adverse usage or adverse possession by the public, as such,
or third persons, or of implied dedication of the Premises, or any portion
thereof. Nothing contained in this Lease and no action or inaction by Landlord
shall be deemed or construed to mean that Landlord has granted to Tenant any
right, power or permission to do any act or make any agreement that may create,
or give rise to or be the foundation for any such right, title, interest, lien,
charge or other encumbrance upon the estate of the Landlord in the Premises.
3. TERM:
A. The initial term of this Lease (the UInitial Term") shall be for a
period of approximately fifteen (15) years, which term shall begin on the
Commencement Date (as-that term is hereinafter defined) and shall end on
November 30, 2009 (the "Lease Expiration Date").
D~
B. me term "Commencement Date" shall mean P~
_, 1994-(the "Closing").
C. Unless Tenant elects, at its option, to terminate this Lease, this
Lease will be automatically renewed for three (3) renewal terms (each, a
''Renewal Termn) of five (5) years each (individually, the First, Second and
mird Renewal Terms). The First Renewal Term shall commence on the day after the
Lease Bxpiration Date and shall terminate on the fifth (Sth) anniversary of the
Lease Expiration Date. Each of the Second and Third Renewal Terms shall
commence on the day after the date of expiration of the immediately preceding
Renewal Term and shall
- --2--
terminate on the fifth (5th) anniversary of the termination of the immediately
preceding Renewal Term. (Each such Renewal Term commencement date shall be
referred to herein as the "Renewal Term Commencement Date" with respect to the
related Renewal Term and each such Renewal Term expiration date shall be
referred to herein as the "Renewal Term Expiration Date" with respect to the
related Renewal Term.) The option to renew the Term of this Lease as described
above shall be by written notice to Landlord at least 12 months prior to the
Lease Expiration Date or 12 months prior to the Renewal Term Expiration Date of
the then current term, as the case may be. If Landlord has not received notice
of termination by the twelfth month prior to the Lease Expiration Date or
Renewal
<PAGE> 5
Term Expiration Date, as the case may be, this Lease shall be automatically
extended for the next succeeding Renewal Term, provided that if Tenant gives a
notice of termination prior to the scheduled expiration of the Initial Term or
the then existing Renewal Term, as the case may be but less than twelve months
prior to such scheduled expiration date, this Lease shall terminate on such
scheduled expiration date upon payment by Tenant to Landlord of an amount equal
to the excess of one year's Fixed Rent (measured from the date such notice of
termination is received by Landlord) over the amount of Fixed Rent paid to
Landlord subsequent to the delivery of such notice. All of the terms, covenants
and conditions of this Lease shall continue in full force and effect during the
Renewal Term, except that the minimum rent shall be as provided for in
Paragraph 4. The Initial Term, together with any Renewal Terms, shall
constitute the "Term" of this Lease.
4. RENTAL:
Tenant agrees to pay Landlord without notice, by payments to be sent to
Landlord at its address set forth above, or to such other person or address as
Landlord shall specify by notice during the Term of this Lease, fixed rent
("Fixed Rent") in advance on or before the first day of each month in the
amounts specified on Exhibit B hereto and hereby incorporated herein. If Fixed
Rent is not paid when due, interest shall accrue thereon at the Overdue Rate
from the third day after its due date until payment is made. Under the
circumstances specified in Paragraph 15E, an additional late charge may also be
payable. Whenever in this Lease a payment is due on a date which is not a
business day, such payment shall be due, without penalty for the delay, on the
next succeeding business day.
5. NET LEASE: NON-TERMINABILITY: (a) This is an -
absolutely net lease and the Fixed Rent, Additional Rent and all
other sums payable hereunder by Tenant, whether as the purchase
price for the Premises or otherwise, shall be paid without notice
- --3--
(except as expressly provided herein), demand, setoff, counterclaim, abatement,
suspension, deduction or defense.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease (except as provided in Paragraphs 10 and 13), nor shall
Tenant be entitled to any abatement or reduction of rent hereunder (except as
otherwise expressly provided herein), nor shall the obligations of Tenant under
this Lease be affected, by reason of (i) any damage to or destruction of all or
any part of the Premises from whatever cause, (ii) the taking of the Premises
or any portion thereof by condemnation, requisition or otherwise, (iii) the
prohibition, limitation or restriction of Tenant's use of all or any part of
the Premises, or any interference with such use, (iv) any eviction by paramount
title or otherwise, (v) Tenant's acquisition or ownership of all or any part of
the Premises otherwise than as expressly provided herein, (vi) any default on
the part of Landlord under this Lease, or under any other agreement to which
Landlord and Tenant may be parties, (vii) the failure of Landlord to deliver
possession of the Premises on the
<PAGE> 6
commencement of the term hereof or (viii) any other cause whether similar or
dissimilar to the foregoing, any present or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the obligations
of Tenant hereunder shall be separate and independent covenants and agreements,
that the Fixed Rent, the Additional Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events and that the obligations
of Tenant hereunder shall continue unaffected unless the requirement to pay or
perform the same shall have been terminated pursuant to-any express provision
of this Lease.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
rescind or avoid tAis Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up or other proceeding affecting Landlord or its successor in interest,
or (ii) any action with respect to this Lease which may be taken by any trustee
or receiver of Landlord or its successor in interest or by any court in any
such proceeding.
(d) Except as otherwise expressly provided herein, Tenant waives all
rights which may now or hereafter be conferred by law (i) to quit, terminate or
surrender this Lease or the Premises or any part thereof, or (ii) to any
abatement, suspension, deferment or reduction of the Fixed Rent, Additional
Rent or any other sums payable under this Lease.
6. QUIET ENJOYMENT: Landlord covenants with Tenant, that
- --4--
upon the payment of the Fixed Rent and Additional Rent and the performance
of all the terms of this Lease, Tenant shall at all times during the Term,
peaceably and quietly enjoy the Premises without any disturbance from Landlord
or from any person claiming by, through, or under Landlord, except as provided
in Paragraph 17 of this Lease.
7.
UTILITY BILLS:
Tenant shall pay before delinquency water, sewer, gas, fuel, electricity,
light, heat power and all other utility bills for the Premises and the business
conducted thereon.
8. REPAIRS AND MAINTENANCE:
(a) Tenant shall, at its own sole cost and expense, keep the Premises in
good order and condition, normal wear and tear and damage covered by insurance
excepted, at all times on and after commencement of the Term to and including
the date of the termination of the Term, by lapse of time or otherwise. Tenant
shall promptly and adequately repair and replace all damage to the Premises and
all its component parts, and
<PAGE> 7
replace or repair all landscaping and all damaged or broken fixtures, equipment
and appurtenances.
In addition, Tenant shall timely and properly maintain all of the Premises
including, but not necessarily limited to mechanical systems, electrical
systems, plumbing and sewage systems, foundations and floor slabs, glazing
systems, structural steel, masonry walls and wall enclosures, and water
tightness of all curtain walls by a qualified stationary engineer or otherwise,
so as to preserve and protect the useful life, utility and value of such
component.
In addition, Tenant shall maintain and repair, or cause others to maintain and
repair the roof, and repair any material defect in materials or workmanship
relating to the foundation, columns, and structural steel which comprise a part
of the Premises. me time permitted by Tenant to effectuate such repairs shall
be extended for such period as may be necessary provided Tenant is
continuously, diligently and in good faith prosecuting the same. Landlord, not
more frequently than annually during the Term upon prior notice to Tenant
(except in the event of an emergency or extraordinary condition), may cause, at
Landlord's expense, independent private inspectors, qualified in the specific
discipline and reasonably insured (in Tenant's reasonable judgment), to make
inspections of the Buildings and building systems or segments thereof (during
business hours and in a manner so as to minimize the disturbance of Tenant's
business) to
- --5--
determine Tenant's compliance under this Paragraph.
If the Tenant does not timely or properly perform repairs as above
provided, Landlord may, but need not, after ten (10) days' notice to Tenant,
make such repairs, replacements or maintenance in a reasonably diligent
fashion, and Tenant shall pay Landlord forthwith upon being billed for same by
Landlord.
Landlord may, but shall not be required to, enter the Premises personally or
through independent inspectors, at all reasonable times upon reasonable notice
(except in the case of an emergency) to inspect the Premises, and to make such
repairs, alterations, improvements and additions to the Premises or to any
equipment or fixtures located on the Premises as Landlord deems reasonably
necessary and w-hich Tenant failed to do as required in this Lease.
(b) It is intended by Tenant and Landlord that Landlord shall have no
obligation, in any manner whatsoever, to repair or maintain the Premises (or
the equipment therein), whether structural or nonstructural, all of which
obligations are intended, as between Landlord and Tenant, to be those of
Tenant. Tenant expressly waives the benefit of any statute now or in the future
in effect which would otherwise afford Tenant the right to make repairs at
Landlord's expense or to terminate this Lease because of Landlord's failure to
keep the Premises in good order, condition and repair.
<PAGE> 8
9. IMPOSITIONS: (a) Tenant covenants and agrees to pay, during the Term,
as Additional Rent, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof, all real estate taxes, special assessments,
utility bills referred to in Paragraph 7, street lighting, excise levies,
personal property taxes, licenses, permits, inspection fees, other governmental
charges, and all other charges or burdens of whatsoever kind and nature
(including costs, fees, and expenses of complying with any restrictive
covenants or similar agreements to which the Premises are subject incurred in
the use, occupancy, operation, leasing or possession of the Premises (excluding
any income taxes on the Fixed Rent imposed on Landlord, it being the intent of
the parties hereto that any tax on the net income derived from the Fixed Rent
payable in respect to the Premises imposed by any governmental authority shall
be paid by Landlord), without particularizing by any known name or by whatever
name hereafter called, and whether any of the foregoing be general or special,
ordinary or extraordinary, foreseen or unforseen, which at any time during the
Term may be payable. Tenant shall pay all special (or similar) assessments or
installments thereof (including interest thereon) for public improvements or
benefits
- --6--
which, during the Term shall be laid, assessed, levied or imposed upon or
become a lien upon the Premises and which are payable during the Term, or any
portion thereof; provided, however, that if by law any special assessment is
payable or, at the option of the party obligated to make such payment, may be
paid in installments (whether or not interest shall accrue on the unpaid
balance of such special assessment), Tenant may pay the same, together with any
interest accrued on the unpaid balance of such special assessment in
installments as the same respectively become payable and before any fine,
penalty, interest or cost may be added thereto for the nonpayment of any such
installment and the interest thereon. Tenant shall pay all real estate taxes,
whether heretofore or hereafter levied or assessed upon the Premises, or any
portion thereof, which are due and payable during the Term. At the end of the
Term of the Lease, Tenant's obligation to pay such taxes shall be prorated in
the event the tax period and the Term are not coextensive. If Landlord receives
any bill for taxes for which Tenant is responsible hereunder, Landlord shall
deliver such bill to Tenant within 30 days of its receipt. Within 30 days after
payment thereof, Tenant shall deliver to Landlord evidence of payment of all
taxes payable by Tenant hereunder.
(b) Except for any tax on the net income derived from the Fixed Rent, if
at any time during the Term, any method of taxation shall be such that there
shall be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent, or on the Premises, or any portion thereof, a capital levy,
gross receipts tax or other tax on the rents received therefrom, or a franchise
tax, or an assessment, gross levy or charge measured by or based in whole or in
part upon such gross Rents, Tenant, to the extent permitted by law, covenants
to pay and discharge the same, it being the intention of the parties hereto
that the Fixed Rent to be paid hereunder shall be paid to Landlord absolutely
net without deduction or charge of any nature whatsoever, foreseeable or
unforeseeable, ordinary or extraordinary, or of any nature, kind, or
description, except as otherwise expressly provided in thi~ Lease.
<PAGE> 9
(c) Tenant covenants to furnish Landlord, within thirty (30) days after
the date upon which any Imposition or other tax, assessment, levy or charge is
payable by Tenant, official receipts of the appropriate taxing authority, or
other appropriate proof satisfactory to Landlord, evidencing the payment of the
same. The certificate, advice or bill of the appropriate official designated by
1-aw to make or issue the same or to receive payment of any Imposition may be
relied upon by Landlord as sufficient evidence that such Imposition, is due and
unpaid at the time of making or issuance of such certificate,
- --7--
advice or bill.
(d) 'At Landlord's written demand, upon the occurrence of an Event of
Default hereunder and until there shall have elapsed 18 consecutive months
within which no Event of Default has occurred or continued hereunder, Tenant
shall pay into an interest-bearing escrow account controlled by Landlord the
known or estimated yearly real estate taxes and assessments, payable with
resp~ct to the Premises in monthly payments equal to one-twelfth (1/12) of the
known or estimated yearly real estate taxes and assessments, next payable with
respect to the Premises. Interest on such escrow account shall belong to
Tenant. From time to time, after a default hereunder, Landlord may re-estimate
the amount of real estate taxes and assessments, and in such event Landlord
shall notify Tenant, in writing, of such re-estimate and fix future monthly
installments for the remaining period prior to the next tax and assessment due
date in an amount sufficient to pay the reestimated amount over the balance of
such period after giving credit for payments made by Tenant on the previous
estimate.
If the total monthly payments made by Tenant pursuant to this Paragraph
shall exceed the amount of payments necessary for said taxes and assessments,
such excess over $1,000.00 shall be promptly paid to the Tenant and the balance
shall be credited on subsequent monthly payments of the same nature. However,
if the total of such monthly payments so made under this Paragraph-shall be
insufficient to pay such taxes and assessments when due, then Tenant shall pay
to Landlord such amount as may be necessary to make up the deficiency. All such
deposits made by Tenant pursuant to this Paragraph 9(d) shall be deposite'd in
a federally insured institution reasonably satisfactory to Landlord and Tenant,
and all interest earned thereon shall accrue to the benefit of Tenant. Payment
by Tenant of real estate taxes, assessments, under this Paragraph shall be
considered as performance of such obligation under the provisions of Paragraph
9(a) hereof.
10. DESTRUCTION OF OR DAMAGE TO PREMISES:
(a) Tenant covenants that in case of damage to or destruction of any or
all of the improvements upon the Premises by fire or any other cause, insured
or uninsured, Tenant will promptly, at its sole cost and expense, restore,
repair, replace or rebuild the improvements so damaged or destroyed as nearly
as practicable to substantially the same condition as existed immediately prior
to such damage or destruction, or with such
<PAGE> 10
changes or alterations as Tenant shall elect to make in conformity with
Paragraph 23 of this Lease. In performing its obligations under this Paragraph
10, Tenant shall be entitled to
- --8--
insurance proceeds under the terms and conditions set forth in Paragraph
11 hereof. Landlord shall have the right to approve the plans and
specifications for the work of repair, replacement or rebuilding, such approval
not to be unreasonably withheld or delayed. Tenant shall diligently obtain all
necessary permits for such work or repair and shall maintain builder risk
insurance in amounts reasonably satisfactory to Landlord until completion of
such work. Such restoration, repairs, replacement or - rebuilding shall be
commenced promptly and prosecuted with diligence, subject to unavoidable delays
and force majeure.
(b) Notwithstanding Paragraph lO(a), during the last two years of the
Initial Term and of each Renewal Term, in the case of damage expected to cost
more than $1 million to repair, Tenant shall have the option of either (x)
restoring, repairing, replacing or rebuilding as provided above, or (y)
delivering to Landlord within 60 days of such casualty a notice of termination
of this Lease, which notice shall be accompanied by an irrevocable offer by
Tenant to purchase on the next due date for the Fixed Rent payment, (the
"Termination Date") which occurs not less than 45 days after the delivery of
such notice, any remaining portion of the Premises at a price determined in
accordance with Exhibit C hereto, plus all costs of transferring title to the
Premises to Tenant, including without limitation all transfer taxes, recording
fees and any unwind costs resulting from a prepayment of debt secured in part
by the Premises (but not including prepayment premiums or yield maintenance
premiums). Landlord shall accept or reject such offer by notice given to Tenant
not later than thirty (30) days after receipt of Tenant's notice, and if
Landlord fails to act, it shall be presumed to have accepted the offer. If
Landlord shall have accepted such offer, on the Termination Date, Landlord
shall convey by special warranty deed to Tenant any remaining portion of the
Premises free of liens and encumbrances (except those existing on the
Commencement Date or thereafter created with the written consent of the
Tenant), along with the right to receive any insurance proceeds to which
Landlord is entitled. If Landlord rejects such offer, this Lease shall
terminate on the Termination Date except for liabilities which accrued prior
thereto insurance proceeds shall be allocated as follows: the first dollars up
to the then applicable amount determined in accordance with Exhibit C shall be
paid to Landlord, Tenant shall be entitled to receive the next dollars up to an
amount equal to the present value (discounted at 9t per annum) of the excess,
if any, of the fair market net rental value of the Premises for the remainder
of the then existing Term over the Fixed Rent for the remainder of such Term,
similarly discounted and any remaining proceeds shall be shared equally by
Landlord and Tenant.
_9 _
11. INSURANCE:
<PAGE> 11
(a) Tenant at its own cost and expense shall obtain and continuously
maintain in full force and effect during the Term policies of insurance
covering the improvements constructed, installed or located on the Premises
which insurance shall be for the benefit of Tenant and/or Tenant's parent
company as named insured and loss payee, and Landlord and Landlord's designated
mortgagee or trust deed holder, as the additional insureds and loss payees,
against
(i) loss or damage by fire and from such other risks or hazards now or
hereafter covered by an "Extended Coverage Bndorsement", including, but not
limited to, windstorm, hail, explosion, vandalism, riot and civil commotion,
damage from vehicles, smoke damage, water damage and debris removal;
(ii) loss from flood if the Premises are in a designated flood or flood hazard
area; and
(iii) loss from so-called explosion, collapse, earth movement and underground
hazards; and
(iv) loss or damage from such other risks or hazards of a similar or dissimilar
nature which are now or may hereafter be customarily insured against with
respect t improvements similar in construction, design, general location, use
and occupanc to the improvements or the Premises (hereinafter referred to as
~Casualty
Insurance")..
Such Casualty Insurance shall:
(a) be written with companies licensed to do business in the State of Utah,
having an [A.M. Best '~ "General Policy Holding Rating" of [B+] or better and a
financial rating class of XII] or better and reasonably acceptable to Landlord;
(b) insure the interest of Landlord's mortgagee(s) or trust deed holder(s)
under standard mortgagee clauses effective as of the Commencement Date;
(c) be maintained continuously through the Term hereof; and
- -10
(d) provide for a deductible no greater than $100,000.
At all times, the Casualty Insurance coverage shall be in an amount equal
to one hundred percent (100~) of the then "Full Replacement Cost" of the
Improvements and shall include a socalled "Agreed Amount Endorsement". Full
Replacement Cost shall be interpreted to mean the cost of replacing the
improvements on the Premises without deduction for depreciation or wear and
tear, and it shall include a reasonable sum for architectural, engineering,
legal, interest charges, administrative and supervisory fees connected with the
restoration or replacement of Landlord's Improvements in the event of damage
thereto or destruction thereof. Full Replacement Cost shall be determined from
<PAGE> 12
time to time (but not more frequently than once in any two (2) year period), by
the insurer without cost to Landlord. If the insurer is unable or unwilling to
make such determination, the determination shall be made by the mutual
agreement of Landlord and Tenant, and if they shall fail to agree within thirty
days, then Landlord and Tenant shall each appoint a disinterested appraiser,
each of whom shall provide their opinion of Full Replacement Cost. If the lower
of the two appraiser's numbers is at least 90` of the higher, then the average
of such numbers shall be Full Replacement Value. If the lower number is less
than 90t of the higher number, the two appraisers shall select a third
appraiser whose determination shall be final. The cost of the appraisers shall
be paid by Tenant.
If a sprinkler system shall be located in the improvements on the
Premises, sprinkler leakage coverage, shall be procured by Tenant as part of
the Casualty Insurance, and be in form and amount reasonably satisfactory to
Landlord and shall be continuously maintained during the Tenm, at Tenant's sole
cost and expense.
(b) During the Term, Tenant, at its sole cost and expense, but for the
benefit of Landlord, Landlord's beneficiary, designated agent and mortgagee or
trust deed holder, and for the benefit of Tenant, shall obtain and continuously
maintain, in full force and effect, the following insurance coverage written by
a reputable and financially sound insurance company authorized to insure and
such risks in the State of Utah:
(i) Comprehensive general liability
insurance with broaa form liability
endorsement for personal injury or property
damage for any loss, liability or damage on,
about or relating to the Premises, or any
portion thereof, with limits of not less than
Five Million Dollars ($5,000,000.00) single
- -11
limit coverage on an occurrence basis. Such insurance shall specifically
insure (by contractual liability endorsement) Tenant's obligations under
Paragraph 11 of this Lease.
(ii) Rental interruption insurance for a period of not less than one (1)
full calendar year for the full and complete obligation of Tenant, during said
period, to pay Rent hereunder.
(iii) Boiler and pressure vessel (including, but not limited to, pressure
pipes, steam pipes and condensation return pipes) insurance, provided the
Building contains a boiler or other pressure vessel or pressure pipes, in an
amount reasonably satisfactory to Landlord.
(iv) Such other insurance, and in such amounts as may from time to time be
reasonably required by Landlord, against other insurable hazards which at the
time are commonly insured against in the case of premises and/or buildings or
improvements
<PAGE> 13
similar in construction, design, general location, use and occupancy to those
on or appurtenant to the Premises.
The insurance set forth in this Paragraph ll(b) shall be maintained by
Tenant at not less than the limits set forth herein until reasonably required
to be changed from time to time by Landlord, in writing, whereupon Tenant
covenants to obtain and maintain thereafter such protection in the amount or
amounts so required by Landlord.
Tenant shall maintain a policy or policies of workers' compensation
insurance in amounts required by applicable state law or, to the extent
permitted by state law, self insure the workers compensation liability.
Bach policy of insurance required under this Article 11 shall have
attached thereto
(i) an endorsement that such policy shall
not be cancelled or coverage reduced without
at least thirty (30) days prior written
notice to Landlord except that only ten (10)
days notice of cancellation will be given in
- -12
the case of cancellation for nonpayment of
premium, and -
(ii) an endorsement to the effect that the insurance as to the interest of
Landlord, and Landlord's beneficiary, designated agent, mortgagee or trust deed
holder shall not be invalidated by any act or neglect of any person, the use of
the Premises for a more hazardous purpose than contemplated by the insurer or a
change in ownership of the Premises (by foreclosure or otherwise).
To the extent the foregoing endorsements are not obtainable in precisely
the form prescribed, Tenant shall obtain reasonably similar endorsements. All
policies of insurance shall be written in such form and shall be distributed in
such companies as shall be reasonably satisfactory to Landlord. Certificates of
insurance acceptable to Landlord shall be delivered to Landlord by the company
or agent issuing the same or accompanied by other evidence satisfactory to
Landlord that the premiums thereon have been paid. Certificates of insurance
acceptable to Landlord shall be delivered to Landlord on or before the
Commencement Date. Prior to the expiration of such policy, a new certificate of
insurance acceptable to Landlord shall be delivered to Landlord not less than
five (5) days prior to the expiration of the then current policy teem.
All insurance coverage required hereunder shall have a socalled "waiver of
subrogation clause" as to Tenant and Landlord.
Nothing in this Paragraph 11 shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs of this Article
<PAGE> 14
under a blanket insurance policy or policies (copies of which or certificates
thereof satisfactory to Landlord shall be delivered to Landlord) which may
cover other properties owned, operated, leased or occupied by Tenant as well as
the Premises; provided, however, that any such policy of blanket insurance of
the kind provided for shall:
(i) contain an "Agreed Amount" endorsement
which provides for settlement on a
replacement cost basis for all real and
personal property; and
(ii) not contain any clause which would result in the insured thereunder
being required to carry any insurance with respect
- -13
to the property covered thereby in an amount not less than any specific
percentage of the Full Replacement Cost of such property in order to prevent
the insureds named from becoming a co-insurer of any loss with the
insurer under such policy. -
Further, such policies of blanket insurance shall, as respects the Premises,
contain the various provisions required of such an insurance policy by the
foregoing provisions of this Paragraph 11.
(c) In the event of loss or damage to the Premises or in the event of a
claim in connection with the injury or death of any person at the Premises or
by reason of operations at the Premises, Tenant shall promptly notify Landlord
thereof in writing, shall prepare and present timely claims to the appropriate
insurers on behalf of Tenant, Landlord and any assignee or mortgagee of
Landlord and shall adjust and, in the case of claims involving net proceeds of
not more than $100,000, settle such claim. In the case of property damage
claims involving net proceeds of more than $100,000, Tenant shall have control
of the settlement process so long as no Event of Default is continuing
hereunder.
(d) In the event the net proceeds of any property claim are not in excess
of $100,000, such proceeds shall be payable to Tenant. In the event the net
proceeds are in excess of $100,000 but equal to or less than the apportioned
value of the damaged Building as allocated in Paragraph 1 hereof, such sum
shall be paid to or deposited with either a bank or trust company having an
office in the State of Utah and designated by Tenant, subject to the reasonable
approval of Landlord (herein called the "Proceeds TrusteeN) in the name of the
Proceeds Trustee as trustee for Landlord and Tenant and disbursed in the manner
hereinafter provided. In the event Landlord mortgages the Premises with a First
Mortgage, the mortgagee thereunder (regardless of its location) may, at its
option, be appointed Proceeds Trustee for so long as such First Mortgage
remains outstanding and such Mortgagee does not control Landlord or is not
controlled by or under common control with Landlord. Insurance proceeds shall
be deposited in an interest bearing account (if available)-and interest shall
be distributed to Tenant upon
<PAGE> 15
completion of said installation, repair, replacement or rebuilding, provided
no default has occurred and is continuing hereunder. All checks drawn on said
account shall be co-signed by the Proceeds Trustee and Tenant. Insurance
proceeds shall be disbursed to Tenant by the Proceeds Trustee under the
following procedure:
- -14
(i) No more frequently than once per calendar month, Tenant may request
reimbursement for costs incurred by Tenant for work in place to repair and
restore the Premises during the immediately preceding calendar month. Tenant's
request shall certify that all work for which reimbursement is requested was
performed in compliance with the plans and specifications approved by Landlord
pursuant to Paragraph 32 and all applicable laws, and shall include reasonably
satisfactory evidence of the costs incurred by Tenant and unconditional lien
releases in form and substance executed by all mechanics, materialmen,
laborers, suppliers and contractors who performed any portion of the repair
work or applied materials as required to enable the title insurance company
issuing endorsements to Landlord and Mortgagee to issue current endorsements
without exception for mechanic's, materialmen's, laborer's, supplier's or
contractor's liens.
(ii) Within ten (~0) days after receiving Tenant's request, Landlord shall
approve or disapprove Tenant's request, which approval shall not be
unreasonably withheld, by written notice to Tenant and the Proceeds Trustee. If
Landlord approves all or any portion of a request and Landlord has received
(and not previously disbursed) insurance proceeds, then Proceeds Trustee shall
pay to or upon the order of Tenant the amount approved by Landlord. If Landlord
disapproves all or any portion of a request, then Landlord's notice shall state
the reasons for that disapproval. In addition, Landlord shall have the right to
impose other conditions upon disbursement so long as they are consistent with
customary construction loan disbursement practices.
(iii) Upon completion of the repair and restoration of the Premises in a
manner reasonably satisfactory to Landlord, any remaining proceeds received on
account of such casualty shall be paid to Tenant.
(e) Tenant shall protect, defend, indemnify and hold Landlord, its direct
or indirect partners, the Mortgagee and their respective successors and assigns
(collectively, the Landlord Group) harmless from and against any and all
claims, losses, costs and judgments (including reasonable costs of
investigation and defense) arising from Tenant's use of the Premises, or from
the conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant in or about the Premises or elsewhere and shall
further protect, defend, indemnify and hold Landlord Group harmless from and
against any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any negligence of Tenant, or any of Tenant's
agents, contractors or
- -15
employees, and from and against all costs, reasonable attorney~s fees
actually incurred, expenses and liability incurred in the defense of any such
claim or any action or
<PAGE> 16
proceeding brought thereon; and in case any action or proceeding be brought
against a member of Landlord Group by reason of any such claim, Tenant upon
notice from a member of Landlord Group shall defend the same at Tenant's
expense by counsel reasonably satisfactory to Landlord Group or selected by the
insurance carrier. Tenant, as a material part of the consideration to Landlord,
assumes all risk of damage to property or injury to or death of persons, in,
upon or about the Premises arising from any cause and Tenant waives all claims
in respect thereof against Landlord unless caused by the willful or negligent
act of Landlord or its agents.
12. GOVERNMENTAL ORDBRS: COVENANTS: LANDLORD CURE:
PERMITTED
CONTBST: -
A. Tenant shall throughout the Term promptly comply or cause
compliance with or remove or cure any violation of any and all
present and future laws, ordinances (zoning or otherwise),
orders, rules, regulations and requirements of all Federal,
State, Municipal and other governmental bodies having
jurisdiction over the Premises and the appropriate departments,
commissions, boards and officers thereof, and the orders, rules
and regulations of the Board of Fire Underwriters where the
Premises are situated, or any other body now or hereafter
constituted exercising lawful or valid authority over the
Premises, or any portion thereof, or the sidewalks, curbs,
roadways, alleys or entrances adjacent or appurtenant thereto, or
exercising authority with respect to the use or manner of use of
the Premises, or such adjacent or appurtenant facilities, and
whether the compliance, curing or removal of any such violation
and the costs and expenses necessitated thereby shall have been
foreseen or unforeseen, ordinary or extraordinary, and whether or
not the same shall be presently within the contemplation of
Landlord or Tenant or shall involve any change in governmental
policy, or require structural or extraordinary repairs,
alterations or additions by Tenant and irrespective of the amount
of the costs thereof. Tenant, at its sole cost and expense,
shall comply with all agreements, contracts, easements,
restrictions, reservations or covenants, if any, running with the
Land, now existing or hereafter created by Tenant or consented to
in writing by Tenant or requested in writing by Tenant including
without limitation the Restrictive Covenant~ recorded as Entry
No. 2955455 in Book 4532, Page 768 and as Entry No. 3506515 in
Book 5182, Page 528 and the obligations under the Easement
Agreement recorded as Bntry No. 5623353 in Book 6771, page 1056
and Easement Relocation Agreement recorded as Bntry No. 5841345
in Book 6955, page 291, in each case of Official Records of Salt
<PAGE> 17
- -16
Lake City, Utah. Tenant shall also comply with, observe and perform all
provisions and request of all policies of insurance at any time in force with
respect to the Premises and required to be obtained and maintained under the
terms of Paragraph 11 hereof and shall comply with all development permits
issued by governmental authorities issued in connection with development of the
Premises.
B. If Tenant shall at any time fail to pay any Imposition in
accordance with the provisions of Paragraph 9, or to take out,
pay for, maintain and deliver any of the insurance policies or
certificates of insurance provided for in Paragraph 11, or shall
fail to make any other payment or perform any other act on its
part to be made or performed, then Landlord, after ten (10) days
prior written notice to Tenant (or without notice in case of
emergency), and without waiving or releasing Tenant from any
obligation of Tenant contained in this Lease, may, but shall be
under no obligation to do so,
(i) pay after said ten (10) days' written notice to Tenant, any Imposition
payable by Tenant pursuant to the provisions of Paragraph 9;
(ii) take out, pay for and maintain any of the insurance policies provided for
in this Lease; or
(iii) make any other payment or perform any other act on Tenant's part to be
paid or performed hereunder, except that any time permitted to Tenant to
perform any act required to be performed by Tenant hereunder shall be extended
for such period as may be necessary to effectuate such performance provided
Tenant is continuously, diligently and in good faith prosecuting such
performance.
Landlord may enter upon the Premises for any such purpo~e and take all such
action therein or thereon as may be necessary therefor and all such action
taken by Landlord shall be in a reasonably diligent fashion. All sums so paid
by Landlord and all costs and expenses, including a reasonable attorney's fees,
reasonably incurred by Landlord in connection with the performance of any such
act, together with interest thereon at the Overdue Rate from the respective
dates of Landlord's making of each payment of such cost and expense, including
reasonable
attorney's fees, shall be paid by Tenant to Landlord on demand. Landlord
shall not be limited in the proof of any damages which Landlord may claim
against Tenant arising out of or by reason of Tenant's failure to provide and
keep in force insurance as aforesaid, to the amount of the insurance premium or
premiums not paid or incurred by Tenant, and which would have been payable upon
such insurance, but Landlord shall also be entitled to recover, as damages for
such breech, the uninsured amount of any loss (to the extent of any deficiency
between the dollar limits of insurance required by the provisions of this
<PAGE> 18
Lease and the dollar limits of the insurance actually carried by Tenant),
damages, costs and expenses of suit,including reasonable attorney's fees,
suffered or incurred by reason of damage to or destruction of the Premises, or
any portion thereof or other damage or loss-which Tenant is required to insure
against hereunder, occurring during any period when Tenant shall have failed or
neglected to provide insurance as aforesaid.
C. If Tenant desires to contest the validity, amount,
propriety, or accuracy of any Imposition, Tenant shall notify
Landlord of same which notice shall state the nature of the
Imposition being contested and the grounds for such contest.
Tenant shall thereupon have the right, at its own expense, to
contest the amount, propriety, accuracy, or validity, in whole or
in part, of any Imposition by appropriate proceedings diligently
conducted in good faith, but only after payment of such
Imposition, unless non-payment would not cause a lien to be filed
against title to the Premises or would not otherwise jeopardize
title to the Premises in which event, notwithstanding the
provisions of Paragraph 9(a) hereof, Tenant may postpone or defer
payment of such Imposition. Until the last two years of the then
existing Term hereof, Tenant shall have the sole right to
contest Impositions; thereafter, either Landlord or Tenant may
contest the same, subject in the case of Tenant to the terms of
this Paragraph. If nonpayment of such Imposition would result in
a lien being filed (or continued) against the Premises, Tenant
shall deposit with Landlord cash or letter of credit issued by an
investment grade bank in the amount of the Impositions so
contested and unpaid, together with all interest and penalties
which may accrue, in landlord's reasonable judgment, in
connection therewith, and all charges that may or might be
assessed against or become a charge on the Premises, or any
portion thereof, during the pendency of such proceedings. If,
during the continuance of such proceedings, Landlord shall, from
time to time, reasonably deem the amount deposited, as aforesaid,
insufficient, Tenant shall, upon demand of Landlord, make
additional deposits of such additional sums of money or such
additional letter of credit as Landlord may reasonably request.
Upon failure of Tenant to make such additional deposits, the
- -18
amount theretofore deposited may be applied by Landlord to the payment,
removal and discharge of such Imposition, and the interest, fines and penalties
in connection therewith, and any costs, fees (including reasonable attorney's
fees) and other liability (including reasonable costs incurred by Landlord)
accruing in any such proceedings.
<PAGE> 19
Upon the termination of any such proceedings, Tenant shall pay the amount
of such Imposition or part thereof, if any, as finally determined in such
proceedings, the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability in connection therewith. Upon
such payment, Landlord shall return all cash or letter of credit of deposited
with it in respect to the contest of such Imposition, as aforesaid along with
any interest earned thereon as a result of an investment thereof, at Tenant's
request and expense, in a Federally insured security or account. However, at
the written direction of Tenant, Landlord shall make such payment out of the
funds on deposit with Landlord and the balance, if any, shall be returned to
Tenant. Tenant shall be entitled to the refund of any Imposition, penalty, fine
and interest thereon received by Landlord which have been paid by Tenant or
which have been paid by Landlord but for which Landlord has been previously
reimbursed in full by Tenant.
At Tenant's request and sole expense, Landlord shall join in such
proceedings or permit the same to be brought in Landlord' 6 name upon
compliance with such conditions as Landlord may reasonably require. Landlord
shall not ultimately be subject to any liability for the payment of any fees,
including attorney's fees, costs and expenses in connection with such
proceedings. Tenant agrees to pay all such fees (including reasonable
attorney's fees), costs and expenses or, on demand, to make reimbursement to
Landlord for such payment. During the time when any such cash or letter of
credit is on deposit with Landlord, and prior to the time when the same is
returned to Tenant or applied against the payment, removal or discharge of
Impositions, as above provided, Tenant shall be entitled to receive all
interest paid thereon. Cash deposits shall bear i-merest as above provided if
the investment thereof is so requested by Tenant.
13. EMINENT DOMAIN:
A. If all or substantially all of the Premi~es shall be taken for public
or quasi-public purposes, or if Tenant, after any taking, determines that such
event has rendered the Premises unavailable for use or unsuitable for
restoration for continued use and occupancy in Tenant's business, then Tenant,
in lieu of
- -19
rebuilding as contemplated by Paragraph 13C, shall, not later than 90 days
after such occurrence, deliver to Landlord (i) notice of its intention to
terminate this Lease on a date occurring not more than 95 days nor less than 60
days after such notice (the Termination Date), and (ii) a certificate by the
president or a vice president of Tenant describing the event giving rise to
such termination and stating that such event has rendered the Premises
unavailable for use or unsuitable for restoration for continued use and
occupancy in Tenant's business. Upon payment of all Fixed Rent and Additional
Rent payable through the Termination Date, this Lease shall terminate on the
Termination Date, except with respect to liabilities which arose on or prior to
the Termination Date. Landlord and Tenant may both participate in the
condemnation proceedings and no settlement thereof for an amount less than the
amount of the then applicable purchase price set forth on Exhibit C shall be
entered into without Landlord's consent. Nothing
<PAGE> 20
herein contained shall prevent Tenant from pursuing its own remedies with
respect to business interruption, moving expenses, and Tenant's trade fixtures,
provided that such remedies do not result in a decrease in any award to
Landlord. In the case of termination of this Lease, condemnation proceeds shall
be shared as follows: (~) the first dollars up to the then applicable purchase
price set forth on Exhibit C thereof shall belong to Landlord, (2) the next
dollars, up to an amount equal to the present value (discounted at 9' per
annum) of the excess, if any, of fair market net rental value of the Premises
immediately prior to such condemnation for the balance of the then existing
Term over the Fixed Rent for the balance of such Term similarly discounted
shall belong to Tenant, and (3) the excess, if any, shall be shared equally by
Landlord and Tenant. If the amount of the proceeds, after deducting the cost of
obtaining the same, shall be less than the then applicable amount determined in
accordance with Exhibit C, then in lieu of the foregoing allocation, Tenant
shall make and is hereby deemed to make an irrevocable offer to purchase the
Premises on the next date for the payment of Fixed Rent (the "Termination Date
n) which occurs not less than 45 days after the delivery of such notice, at a
price determined in accordance with Exhibit C hereto, plus all costs of
transferring title to the Premises to Tenant, including without limitation all
transfer taxes, recording fees and any unwind costs resulting from a prepayment
of debt secured in part by the Premises (but not including prepayment premiums
or make whole amounts). Landlord shall accept or reject such offer by notice
given to Tenant not later than thirty (30) days after receipt of Tenant's
notice, and if Landlord fails to act, it shall be presumed to have accepted the
offer. If Landlord shall have accepted such offer or is deemed to have accepted
such offer, on the Termination Date, Landlord shall convey by special warranty
deed to Tenant any
- -20
remaining portion of the Premises free of liens and encumbrances (except
those existing on the Commencement Date or thereafter created with the written
consent of the Tenant), along with the right to receive any condemnation award
to which Landlord is entitled. If Landlord rejects such offer, this Lease shall
terminate on the Termination Date except for liabilities which accrued prior
thereto.
B. If one or more Buildings are condemned or so substantially taken as to
make their continued use in Tenant's business uneconomic, but other Buildings
constituting part of the Premises will continue to be used by Tenant, then in
lieu of terminating this Lease in its entirety, Tenant may elect to terminate
this Lease only with respect to the condemned Property Units. In that event,
Tenant shall reduce the condemned Property Unit(s) to grade and be reimbursed
for the cost thereof out of the condemnation award, and Fixed Rent allocated by
Paragraph 1 hereof to the condemned Property Units shall cease to accrue, but
shall continue unabated with respect to the rest of the Premises. The
condemnation award will be shared as follows: (1) the first dollars up to
Landlord's Investment allocated by Paragraph 1 hereof to Property Units as-to
which this Lease is to be terminated shall belong to Landlord, (2) the next
dollars up to the present value (discounted at 9t per annum) of the excess, if
any, of the fair market net rental value for the remainder of the then existing
Term of the condemned Property Units immediately before the condemnation, over
the Fixed Rent of such Property Units for the
<PAGE> 21
same Term similarly discounted shall belong to Tenant, and (3) any excess shall
be shared equally by Landlord and Tenant. Notwithstanding the foregoing, if the
amount of the condemnation award available for distribution is less than
Landlord's Investment allocation by Paragraph 1 hereof to the Property Units as
to which this Lease is to be terminated, then this Lease shall not terminate as
to such Property, but Lessee may make an offer to purchase the affected
Property Units at a price equal to Landlord's Investment therein under the
procedures and with the consequences set forth in Paragraph lOA.
C. If this Lease shall not be terminated as provided above, then it shall
continue with no abatement or other reduction of Fixed Rent or Additional Rent,
and Tenant shall restore the Premises with all reasonable dispatch to a
complete architectural and mechanical unit as nearly as practicable to the
condition and value of the Premises immediately prior to said taking but in any
event not later than six (6) months from the date of such taking.
D. In the event the net proceeds from such taking are not in excess of
$100,000, such taking proceeds shall be payable or
- -21
turned over to Tenant. In the event the net proceeds are in excess of
$100,000 and this Lease is not terminated pursuant to Paragraph 13A, such sum
shall be paid to or deposited with the Proceeds Trustee, in the name of the
Proceeds Trustee as trustee for Landlord and Tenant and disbursed in the manner
provided in Paragraph ll(d), except that any amount remaining after restoration
of the Premises shall be paid to Landlord.
14. DEFAULT: Events of Default.
The following events, following the expiration of the applicable cure
periods, in this Article are sometimes referred to as an ~Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such default
shall continue for ten (10) days after notice, provided that after notice has
been given twice in any eighteen month period, such default in payment shall
constitute an Event of Default after ten (10) days without the giving of
notice;
(b) If default shall be made in the payment of Additional Rent or in the
payment of any other sum required to be paid by Tenant under this Lease and
such default shall continue for ten (10) days after written notice to Tenant;
If default shall be made by Tenant under the provisions of Article 24 hereof
relating to assignment, sublease, mortgage or other transfer of Tenant's
interest in this Lease or in the Premises or in the income arising therefrom;
(d) If default shall be made in the observance or performance of any of the
other covenants or conditions in this Lease which Tenant is required to observe
and perform and ~uch default shall continue for thirty (30) days after written
notice to Tenant,
<PAGE> 22
provided that the time within which Tenant is permitted to cure the same shall
be extended for such period as may be necessary for the curing provided Tenant
is continuously, diligently and in good faith prosecuting such cure;
(e) If any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant hereto proves to be incorrect in
any material respect when made and the representation or warranty continues to
be incorrect for a period of thirty (30) days after written notice from
Landlord, or if the facts cannot be changed so as to make the representation or
warranty correct within
- -22
such thirty day period, Tenant fails to provide Landlord
.with protection (including, by way of example, additional collateral or
letters of credit) against loss arising from breach of such representation or
warranty, such protection to be satisfactory to Landlord in its sole
discretion; or
(f) If the interests of Tenant in this Lease shall be levied on under execution
or other legal process and same is not removed or stayed within ninety (90)
days;
(g) If any voluntary petition of bankruptcy or for corporate reorganization or
any similar relief shall be filed by Tenant;
(h) If any involuntary petition of bankruptcy shall be filed against Tenant
under any Federal or state bankruptcy or insolvency act and shall not have been
dismissed within ninety (90) days of the filing thereof;
(i) If a receiver shall be appointed for Tenant or any of the property of
Tenant by any court and any such receiver shall not have been discharged within
ninety (90) days from the date of his appointment;
(j) If Tenant shall make an assignment for the benefit of creditors;
(k) If Tenant vacates two or more Buildings for twelve consecutive months and
fails to make a rejectable offer to purchase the Premises for the amount
determined in accordance with Exhibit C (subject to the terms and procedures
set forth in Paragraph lO(b)) by the end of such twelve month period, or having
made ~uch offer, fails to make payment if Landlord accepts the offer and
tenders a deed;
(l) If Tenant shall admit, in writing, Tenant's inability to
meet Tenant's debts as they mature; or -
(m) If a default shall occur under the Guaranty of Lease, dated as of the date
hereof, from First Financial Management Corporation to Landlord.
<PAGE> 23
Landlord may treat the occurrence of any one or more of the foregoing
Events of Default as a breach of this Lease. For so long as such event of
Default continues the Landlord, at it~ option and with or without notice or
demand of any kind to Tenant or any other person, may have any one or more of
the remedies provided in this Article 14 or elsewhere in this lease, in
- -23
addition to all other remedies and rights provided at law or in equity.
15. REMEDIES: In the event of any such Event of Default,
Landlord may, in addition to, and not in derogation of any
remedies for any preceding breach or covenant, with or without
notice of demand (except as otherwise expressly provided herein)
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default or breach:
A. Immediately or at any time thereafter while such Event of Default
continues, mail a notice of termination addressed to Tenant and proceed
pursuant to and with due process of law, to repossess the same as of Landlord's
former estate without prejudice to any remedies which might otherwise be used
for arrears of rent or prior to breach of covenant, and upon such notice as
aforesaid this Lease shall terminate, but Tenant shall remain liable for its
default hereunder as hereinafter provided. Tenant shall have the right to cure
any default until the expiration of the applicable cure period, if any,
following notice by Landlord, as specified above. Where Landlord has given
notice as provided for above, no further notice shall be required to effectuate
a termination of the Lease, which termination shall occur automatically unless
the default is cured within the time periods provided.
B. Terminate Tenant's right to possession of the Premises by court order
or any lawful means, in which case Tenant's right to possession under this
Lease shall terminate, and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default, the cost
of recovering possession of the Premises; reasonable expenses of reletting,
including renovation and alteration of the Premise~ necessary to put them in
the condition required by Paragraph 8 hereof; reasonable attorney's fees and
any real estate commissions actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount, if any but not less than
zero, by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that
Tenant proves could be reasonably avoided; and that portion of any leasing
commissions paid by Landlord applicable to the unexpired Term of this Lease.
<PAGE> 24
C. Maintain Tenant's right to po~ession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Premises. In
such event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under
- -24
thi~ Lease, including the right to recover the Rent as it becomes due
hereunder.
D. Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the State of Illinois. Unpaid installments of
Rent and other unpaid monetary obligations of Tenant under the terms of this
Lease shall bear interest from the date due until paid at the Overdue Rate.
E. Tenant hereby acknowledges that late payment by Tenant to Landlord of
Fixed Rent, Additional Rent and other sums due under this Lease will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Fixed Rent or any other sum due to
Landlord from Tenant shall not have been received by Landlord or Landlord's
designee within fifteen (15) days after such amount shall be due, then, without
any requirement for notice to Tenant, Tenant shall pay to Landlord a late
charge equal to four percent (~) of such overdue amount, together with interest
on such overdue amount at the Overdue Rate. The parties agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder; provided that nothing contained herein
shall relieve Landlord of a duty to mitigate damages under applicable law.
16. SUBORDINATION:
(a) Subordination. Non-Di~turbance. Tenant agrees at any time hereafter,
and from time to time on demand of Landlord, to promptly execute and deliver to
Landlord any instruments, releases or other documents that may be reasonably
required for the purpose of subjecting and subordinating this Lease to the lien
of any mortgage, deed of trust, security instrument, ground or underlying lease
or other document of like nature (hereinafter collectively referred to as
"Mortgagen) which at any time may be placed upon the Premises, or any portion
thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof, and to each and every advance
made under any Mortgage. It is agreed, nevertheless, that so long as there
exists no Default, such subordination agreement or other instrument, release or
document (herein "Subordination
- -25
<PAGE> 25
Agreement") shall not interfere with, hinder or reduce Tenant's right to quiet
enjoyment under this Lease, nor the right of Tenant to continue to occupy the
Premises, and all portions thereof, and to conduct its business thereon in
accordance with the covenants, conditions, provisions, terms and agreements of
this Lease. Such Subordination Agreement shall provide for a nondisturbance of
Tenant's rights hereunder provided Tenant attorns to the holder of such
Mortgage. The lien of any such Mortgage shall not cover Tenant's Trade Fixtures
or other personal property located in or on the Demised Premises.
(b) Mortqaqee Protection Clau~e. In the event of any act or omission of
Landlord constituting a default by Landlord, Tenant shall not exercise any
remedy until Tenant has given Landlord and any mortgagee of the Premises a
thirty (30) day prior written notice of such act or omission, and until a
reasonable period of time (e.g., 30 days) to allow Landlord or the mortgagee to
remedy such act or omission shall have elapsed following the giving of such
notice. However, if act or omission cannot, with due diligence and in good
faith, be remedied within such thirty (30) day period, the Landlord and the
mortgagee shall be allowed such further period of time as may be reasonably
necessary provided that it commence remedying the same with due diligence and
in good faith within said thirty (30) day period. Nothing herein contained
shall be construed or interpreted as requiring any mortgagee to remedy such act
or omission.
(c) Attossment. If any mortgagee shall succeed to the rights of Landlord
under this Lease or to ownership of the Premises, whether through possession or
foreclosure or the delivery of a deed to the Premises in lieu of foreclosure,
then, upon the written request of such mortgagee so succeeding to landlord's
rights hereunder, provided such mortgagee assumes, in writing, the obligations
of Landlord hereunder accruing on and after the date such mortgagee acquired
title to the Premises, Tenant shall attorn to and recognize such mortgagee as
Tenant's landlord under this Lease, and shall promptly execute and deliver any
instrument that such mortgagee may reasonably request to evidence such
attornment (whether before or after making of the Mortgage). In the event of
any other transfer of Landlord's interest hereunder, upon the written request
of the transferee and Landlord, provided such transferee assumes, in writing,
the obligations of Landlord hereunder accruing on and after the date of such
transfer, Tenant shall attorn to and recognize such transferee as Tenant's
landlord under this lease and shall promptly execute and deliver any instrument
that such transferee and Landlord may reasonably request to evidence such
attornment.
(d) Upon ten business days advance written notice, Tenant
- -26
agrees to execute, acknowledge and deliver a document substantially in the
form of the Assignment of Lease dated as of the date hereof from Landlord to a
Mortgagee and consented to by Tenant, with such changes therein as may be
reasonably requested by an institutional lender, provided no such change alters
the rights of Tenant hereunder.
17. LANDLORD'S RIGHT OF ENTRY: In addition to rights set forth
<PAGE> 26
in Paragraph 25D hereof, upon reasonable notice, from time to
time during normal business hours, such persons as Landlord or
any assignee of Landlord shall designate shall have the right to
enter upon the Premises and to inspect same, exhibit the Premises
to prospective purchasers and mortgagees, and examine Tenant's
books and records pertaining to the Premises, insurance policies,
certificates of occupancy and other documents, records and
permits in Tenant's possession with respect to the Premises, all
of which shall be customary and adequate and reasonably
satisfactory to Landlord, provided, however, that such activities
by Landlord shall be conducted in such a manner as not to
interfere with the conduct of business by Tenant at the Premises.
If no Event of Default exists hereunder, any such inspections
shall be at the expense of Landlord. If an Event of Default
exists hereunder, such inspections shall be at the reasonable
expense of Tenant. During the final one (1) year of the Term,
Landlord shall be entitled to place customary "For Rent" or "For
Sale" signs on the Premises. Such persons as Landlord or any
assignee of Landlord shall designate shall also have the right to
enter upon the Premises for the purpose of making repairs which
Landlord is authorized to make under the provisions of this
Lease, provided.
18. NOTICES: Notices, statements, demands, or other
communications required or permitted to be given, rendered or
made by either party to the-other pursuant to this Lease or
pursuant to any applicable law or requirement of public
authority, shall be in writing (whether or not so stated
elsewhere in this Lease) and shall be deemed to have been
properly given, rendered or made, when received by overnight
delivery or overnight courier delivery or facsimile transmission
with a confirmation copy sent by overnight delivery or by
overnight courier delivery addressed to the other parties as
follows:
To Landlord: TriNet Essential Facilities X, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mark Whiting, President
Fax: (415)391-6259
- -27
With a copy (which shall not constitute notice) to:
TriNet Corporate Realty Trust, Inc.
Four Embarcadero Center, Suite 3150
<PAGE> 27
San Francisco, California 94111
Attention: Charles S. Swanson
Fax: (415)391-6259
With a copy (which shall not constitute notice) to:
Day, Berry & Howard 260 Franklin Street Boston, Massachusetts Attention: Lewis
A. Burleigh, Esq.
Fax: (617) 345-4745
To Tenant
FIRST HEALTH Strategies, Inc.
c/o First Financial Management Corporation
3 Corporate Square, Suite 700
Atlanta, Georgia 30319
Attention: Legal Department
Fax: (404)636-7632
With a copy (which shall not constitute notice) to:
Sutherland, Asbill & Brennan 999 Peachtree Street, N.E. Atlanta, Georgia 30309
Attention: H. Bdward Hales, Jr., Esq.
Fax: (404)853-8806
Either party may, by notices as aforesaid, designate a different address for
addresses for notice, statements, demands or other communications intended for
it.
19. STATUS OF LEASE: FINANCIAL DATA:
Upon written request of either party, the other party agrees, within
twenty (20) days, to deliver a written status report of this Lease, in the form
provided on attached Exhibit D, provided that neither party shall be obligated
to provide more than four (4) such status reports per year.
20. MECHANICS' LIENS:
Liens and Riabt of Contest. (a) Tenant shall not suffer or permit any
mechanic's lien or other lien to be filed against the Premises, equipment or
materials supplied or claimed to have
- -28
been supplied to the premises at the request of Tenant, or anyone holding
the Premises, or any portion thereof, through or under Tenant. If any such
mechanic's lien or other lien
<PAGE> 28
shall at any time be filed against the Premises, or any portion thereof,
Tenant shall cause the same to be discharged of record within thirty (30) days
after the date of filing the same. However, in the event Tenant desires to
contest the validity of any lien it shall (i) on or before thirty (30) days
prior to the due date thereof, notify Landlord, in writing, that Tenant intends
to so contest same; (ii) on or before the due date thereof, if the amount in
controversy exceeds $100,000 or if any mortgagee or Trust Deed holder of
Landlord so requires, deposit with Landlord security (in form and content
reasonably satisfactory to Landlord or Landlord's mortgagee or trust deed
holder) for the payment of the full amount of such lien and, from time to time,
deposit additional security or indemnity so that, at all times, adequate
security or indemnity will be available for the payment of the full amount of
the lien together with all interest, penalties, costs and charges accrued or
accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues, in
good faith, to contest the validity of such lien by appropriate
legal proceedings which shall operate to prevent the collection
thereof and the sale or forfeiture of the Premises, or any part
thereof, to satisfy the same, Tenant shall be under no obligation
to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises. Any surplus
deposit retained by Landlord, after the payment of the lien shall
be repaid to Tenant. Provided that nonpayment of such lien does
not cause Landlord to be in violation of any of its contractual
undertakings, Landlord agrees not to pay such lien during the
period of Tenant's contest. However, if Landlord pays for the
discharge of a lien or any part thereof from funds of Landlord,
any amount paid by Landlord, together with all costs, fees and
expenses in connection therewith (including reasonable attorney's
fees of Landlord) together with interest thereon at the Overdue
Rate, shall be repaid by Tenant to Landlord on demand by
Landlord. Tenant shall indemnify and defend Landlord against and
save Landlord and the Premises, and any portion thereof, harmless
from and against all losses, costs, damages, expenses,
liabilities, suits, penalties, claims, demands and obligations,
including, without limitation, reasonable attorney's fees,
resulting from the assertion, filing, foreclosure or other legal
proceedings with respect to any such mechanic's lien or other
lien or the attempt by Tenant to discharge same as above
provided. -
(b) All materialmen, contractors, artisans, mechanics, laborers and any
other person now or hereafter furnishing any labor,
- -29
services, materials, supplies or equipment to Tenant with respect to the
Premises, or any portion thereof, are hereby charged with notice that they must
look exclusively to Tenant
<PAGE> 29
to obtain payment for the same. Notice is hereby given that Landlord shall not
be liable for any labor, services, materials, supplies, skill, machinery,
fixtures or equipment furnished or to be furnished to Tenant upon credit, and
that no mechanic's lien or other lien for any such labor, services, materials,
supplies, machinery, fixtures or equipment shall attach to or affect the estate
or interest of Landlord in and to the Premises, or any portion thereof.
(c) Tenant shall not create, permit or suffer,-and, subject to the
provisions of Paragraph 21(a) hereof, shall promptly discharge and s-atisfy of
record, any other lien, encumbrance, charge, security interest, or other right
or interest which, as a result of Tenant's action or inaction contrary to the
provisions hereof, shall be or become a lien, encumbrance, charge or security
interest upon the Premises, or any portion thereof, or the income therefrom.
21. END OF TERM: (a) Upon the expiration or earlier
termination of the Term of this Lease, Tenant shall surrender the
Premises to Landlord in the same condition and suitable for the
same use in which the Premises was originally received from
Landlord except as repaired, rebuilt or altered as required or
permitted by this Lease (and/or except for such casualty damage
as Tenant shall not be required to repair or restore hereunder),
and except for normal wear and tear, and shall surrender all keys
to the Premises to Landlord at the place then fixed for the
payment of Fixed Rent and shall inform Landlord of all
combinations on locks, safes and vaults, if any. Except as
otherwi~e provided herein, Tenant shall at such time remove all
of its property (including Tenant's trade fixtures) therefrom and
all alterations and improvements placed thereon by Tenant if so
requested by Landlord. Tenant shall repair any damage to the
Premises caused by such removal, and any and all such property
not so removed when required shall, at Landlord's option, become
the exclusive property of Landlord or be disposed of by Landlord,
at Tenant's cost and expense, without further notice to or demand
upon Tenant.
(b) If the Premises are not surrendered as above set forth, Tenant shall
indemnify, defend and hold Landlord harmless from and against loss or liability
resulting from the delay by Tenant in so surrendering Premises, including,
without limitation any claim made by any succeeding occupant founded on such
delay. Tenant's obligation to observe or perform this covenant shall survive
the expiration or other termination of this Lease. In
- -30
addition to the foregoing, and in addition to the Additional Rent, Tenant
shall pay to Landlord a sum equal to 150` of the Fixed Rent herein provided
during each month or portion thereof for which Tenant shall remain in
possession of the Premises or any part
<PAGE> 30
thereof after the termination of the Term or of Tenant's rights of possession,
whether by lapse of time or otherwise. The provisions of this Paragraph 22(b)
shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein at law or at equity.
(c) All property of Tenant not removed on or before the last day of the
term of this Lease shall be deemed abandoned. Tenant hereby appoints Landlord
its agent to remove all property of Tenant from the Premises upon termination
of this Lease and to cause its transportation and storage for Tenant's benefit,
all at the sole cost and risk of Tenant and Landlord shall not be liable for
damage, theft, misappropriation or loss thereof and Landlord shall not be
liable in any maDner in respect thereto. Tenant shall pay all costs and
expenses of such removal, transportation and storage. Tenant shall reimburse
Landlord upon demand for any expenses incurred by Landlord with respect to
removal or storage of abandoned property and with respect to restoring said
Premises to good order, condition and repair.
(d) Except for surrender upon the expiration or earlier termination of the
term hereof, no surrender to Landlord of this Lease or of the Leased Property
shall be valid or effective unless agreed to and accepted in writing by
Landlord.
22. ALTERATIONS:
(a) At any time during the Term of this Lease, Tenant shall have the right
without Landlord's consent to make alterations in and to the Premises, provided
such alterations do not adversely affect the value of the Premises and are not
estimated to cost more than $200,000.
(b) In the case of alterations exceeding the limits of clause (a), Tenant
shall submit to Landlord plans and specifications showing the nature and extent
of such alterations. Landlord shall have a period of thirty (30) days, time
being of the essence, to approve such plans and specifications, such approval
not to be unreasonably withheld.
If Landlord has not responded in said 30 day period, Tenant may deliver to
Landlord a duplicate notice, prominently marked to indicate that failure to
respond within ten (10) days shall constitute approval of the plans, and if
Landlord shall fail to respond within ten (10) days of its receipt of such
duplicate
- -31
notice, the plan shall be deemed approved by Landlord.
If Landlord approves or is deemed to have approved such plans and
specifications, Tenant shall have the right to have such work performed as
approved. If Landlord disapproves such alterations, Tenant shall not perform
the work, but may resubmit plans and specifications designed to meet the
objections raised by Landlord. Prior to commencing work, Tenant shall obtain at
its expense all necessary permits and builder's risk insurance in an amount
reasonably satisfactory to Landlord. Paragraph 21
<PAGE> 31
hereof is applicable in connection with Alterations. Upon completion of
any alteration, Tenant shall deliver to Landlord updated plans and
specifications reflecting such alterations and a final certificate of occupancy
issued subsequent to the completion of the Alteration.- Landlord shall have
title to and ownership of all alterations, and all alterations shall be subject
to the provisions of this Lease. All such alterations shall be at Tenant's
expense. All such alterations referred to in this Paragraph shall be referred
to herein as "Alterations." In any event, the making of Alterations shall be
expeditiously completed in a god and workmanlike manner and in compliance with
all applicable laws, rules, regulations, ordinances and restrictions then in
effect.
23. MEMORANDUM OF LBASB: The parties agree to promptly execute
a Memorandum of Lease in recordable form and either of the
parties shall have the right, without notice to the other party,
to record such Memorandum of Lease.
24. S~3LETTING/ASSIGNMENT: (a) Tenant shall not assign its
interest in this Lease, but shall have the right, without
Landlord's consent, to sublet all or any portion of the Premises.
Prior to an Bvent of Default, Tenant shall be entitled to retain
all sublease rents. Bffective upon the occurrence and during the
continuance of an Event of Default, all rents payable under such
subleases are hereby assigned to Landlord. A copy of any
sublease fully executed and acknowledged by Tenant and sublessee
shall be delivered to Landlord at the time of its execution. No
such sublease shall be deemed to relieve Tenant of any liability
for the due and faithful performance of the terms of this Lease
and Tenant shall continue to be directly and primarily liable
hereunder, and not as a guarantor or surety. Tenant shall not
assign, mortgage, pledge, transfer or otherwise encumber of
dispose of this Lease, or any interest therein, or in any manner
assign, mortgage, pledge, tran~fer or otherwise encumber or
dispose of its interest or estate in the Premises, or any portion
thereof, without obtaining Landlord's prior written consent.
Notwithstanding the foregoing, provided Tenant gives
- -32
written notice (hereinafter referred to as "Merger Notice") to Landlord,
Landlord's consent shall not be required for the transfer of all, or
substantially all, of Tenant's rights under the terms of this Lease to (i) an
entity which holds the controlling ownership interest of Tenant; (ii) to an
entity which Tenant holds (and continues to hold during the Term) the
controlling ownership interest; (i-.i! to an entity which is wholly owned by an
entity which holds the controlling ownership interest of Tenant; or (iv) to the
resultant entity of a merger or consolidation with Tenant.
<PAGE> 32
(b) Notwithstanding anything contained in this Lease to the contrary and
notwithstanding any consent by Landlord to any sublease of the Premises, or any
portion thereof, or to any assignment of this Lease or of Tenant's interest or
estate in the Premises, no sublessee shall assign its sublease nor further
sublease the Premises, or any portion thereof, and no assignee shall further
assign its interest in this lease or its interest or estate in the Premises, or
any portion thereof, nor sublease the Premises, or any portion thereof, without
Landlord's prior written consent in each and every instance which consent shall
not be unreasonably withheld. No such assignment or subleasing shall relieve
Tenant from any of Tenant's obligations in this Lease contained.
(c) Tenant's failure to comply with all of the foregoing provisions shall
(whether or not Landlord's consent is required under this Article), at
Landlord's option, render any purported assignment or subletting null and void
and of no force and effect.
25. HAZARDOUS MATERIAL:
A. Tenant (i) shall comply, and cause the Premises to comply, with all
Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required
by Environmental Law and the carrying out of any remediation program specified
by such authority) (ii) shall prohibit the use of the Premises for the
generation, manufacture, refinement, production, or processing of any Hazardous
Material (as hereinafter defined) or for the storage, handling, transfer or
transportation of any Hazardous Material (other than in connection with the
operation, business and maintenance of the Premises and in commercially
reasonable quantities as a consumer thereof and supplier of consumer products
and in compliance with Environmental Laws), (iii) shall not permit to remain,
install or permit the installation on the Premises of any surface impoundments,
underground storage tanks, or friable asbestos-containing
- -33
materials and (iv) shall cause any alterations of the Premises to be done
in a way so as to not expose in an unsafe manner the persons working on or
visiting the Premises to Hazardous Materials and in connection with any such
alterations shall remove any Hazardous Materials present upon the Premises
which are not in compliance with Environmental Laws or which present a danger
to persons working on or visiting the Premises.
B. "Environmental Laws~ means the Resource Conservation and Recovery Act
of 1976, as amended, 42 U.S.C. Section 6901, et seq. (RCRA), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42. U.S.C. Section
9601 et seq. (CERCLA), the Toxic Substance Control Act, as amended, 15 U.S.C.
Section 2601 et seq., the Federal Insecticide, Fungicide, Rodenticide Act, as
amended, 7 U.S. Section 136 et seq., Utah Indoor Clean Air Act, 28381 Utah
Code, et seq., and all applicable federal, state and local environmental laws,
ordinances, rules and regulations, as any of the foregoing may have been or may
be from time to time amended, supplemented or supplanted, and any other
<PAGE> 33
federal, state or local laws, ordinances, rules and regulations, now or
hereafter existing relating to regulations or control of Hazardous Material or
materials. The term "Hazardous Materials" as used in this Lease shall mean
substances defined as "hazardous substances", "hazardous materials", "hazardous
wastes" or "toxic substances" in any applicable federal, state or local
statute, rule, regulation or determination, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 USC Section 9601, et seq.; the Hazardous Materials
Transportation Act, 49 USC, Section 1801, et seq.; the Resource, Conservation
and Recovery Act, 42 USC Section 6901, et seg.; and, asbestos, pcb's,
radioactive substances, methane, volatile hydrocarbons, petroleum or
petroleum-derived substances or wastes, radon, industrial solvents or any other
material as may be specified in applicable law or regulations.
C. Except for liability resulting from or arising out of the negligent or
willful act of Landlord or its Mortgagee or their agents on or about the
Premises or their successors and assigns, Tenant agrees to protect, defend,
indemnify and hold harmless Landlord, its directors, officers, employees and
agents, and any successors to Landlord's interest in the chain of title to the
Premises, their direct or indirect partners, directors, officers, employees,
and agents, from and against any and all liability, including all foreseeable
and all unforeseeable damages including but not limited to attorney's and
consultant's fees, fines, penalties and civil or criminal damages, directly or
indirectly arising out of the use, generation, storage, treatment, release,
threatened release, presence or disposal of
- -34
Hazardous Materials from, on, at, to or under the Premises prior to or
during the Term of this Lease, and including, without limitation, the cost of
any required or necessary repair, response action, remediation, investigation,
cleanup or detoxification and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following
transfer of title to the Premises. This agreement to indemnify and hold
harmless shall be in addition to any other obligations or liabilities Tenant
may have to Landlord at common law under all statutes and ordinances or
otherwise, and shall survive following the date of expiration or earlier
termination of this Lease. Tenant expressly agrees that the representations,
warranties and covenants made and the indemnities stated in this Lease are not
personal to Landlord, and the benefits under this Lease may be assigned to
subsequent parties in interest to the chain of title to the Premises, which
subsequent parties in interest may proceed directly against Tenant to recover
pursuant to this Lease. Tenant, at its expense, may institute appropriate legal
proceedings with respect to environmental matters of the type specified in this
Paragraph C or lien for such environmental matters, not involving Landlord or
its Mortgagee as a defendant (unless Landlord or its Mortgagee is the alleged
cause of the damage), conducted in good faith and with due diligence, provided
that such proceedings shall not in any way impair the interests of Landlord or
its Mortgagee under this Lease or contravene the provisions of any First
Mortgage. Counsel to Tenant in such proceedings shall be reasonably approved by
Landlord if Landlord is a defendant in the same proceeding. Landlord shall have
the right to appoint cocounsel, which co-counsel will cooperate with Tenant's
counsel in such proceedings. The fees and expenses of such co-counsel shall be
paid by Landlord, unless
<PAGE> 34
such co-counsel are appointed because the interests of Landlord and Tenant in
such proceedings, in Landlord's reasonable judgment, are or have become adverse.
D. Tenant, promptly upon the written request of Landlord from time to
time, but not more than once in any calendar year unless an Event of Default
has occurred and is continuing, shall permit such persons as Landlord or any
assignee of Landlord may designate and (unless an Bvent of Default has occurred
and is continuing) approved by Tenant (including their liability insurance
coverage), which approval shall not be unreasonably withheld or delayed ("Site
Reviewers t') to visit the Premises from time to time and perform Environmental
site investigations and assessments ("Site Assessments n ) on the Premises for
the purpose of determining whether there exists on the Premises any
environmental condition which may result in any liability, cost or expense to
Landlord or any other owner or occupier of the Premises relating to Hazardous
Material; provided, however, that
- -35
any such Site Reviewer in performing any Site Assessment shall not
unreasonably interfere with the operations or business of Tenant on the
Premises. Landlord will cause any ~uch Site Reviewer to repair any damage to
the Premises resulting from such Site Reviewer's activities. Such Site
Assessments may include both above and below the ground testing for
environmental damage or the presence of Hazardous Material on the Premises and
such other tests on the Premises as may be necessary to conduct the Site
Assessments in the opinion of the Site Reviewers. Tenant shall supply to the
Site Reviewers such historical and operational information regarding the
Premises as may be reasonably requested by the Site Reviewers to facilitate the
Site Assessments (other than information previously supplied in writing to
Landlord by Tenant) and shall make available for meetings with the Site
Reviewers appropriate personnel having knowledge of'such matters. The cost of
performing and reporting all Site Assessments shall be paid by Landlord unless
an Event of Default has occurred and is continuing or unless the Site Reviewers
discover an environmental condition caused by Tenant causing the Premises to be
in material noncompliance with applicable Environmental Laws, in either of
which events such cost will be paid by Tenant within thirty (30) days after
demand by Landlord with interest to accrue at the Overdue Rate. Landlord,
promptly after written request by Tenant and payment by Tenant as aforesaid,
shall deliver to Tenant copies of reports, summaries or other compilations of
the results of such Site Assessments. Tenant's sole remedy for Landlord's
breach of the preceding sentence shall be a mandatory injunction, and not a
termination of this Lease or a withholding or reduction of rent.
E. Tenant shall notify Landlord in writing, promptly upon Tenant's
learning thereof, of any:
(a) notice or claim to the effect that Tenant is or may be
liable to any person as a result of the release or threatened
release of any Hazardous Material into the environment on or
about the Premises;
<PAGE> 35
(b) notice that Tenant is subject to investigation by any governmental
authority evaluating whether any remedial action is needed to respond to the
release or threatened release of any Hazardous Material into the environment on
or about the Premises;
(c) notice that the Premises is subject to an environmental lien; and
(d) notice of violation to Tenant or awareness by Tenant of a condition
which might reasonably result in a notice of violation of any applicable
Environmental Law that could have a
- -36
material adverse effect upon the Premises.
26. MISCELLANEOUS PROVISIONS:
A. This Lease and all of the covenants and provisions hereof shall inure
to the benefit of, and be binding upon, the parties hereto and the heirs,
personal represent~tives, successors and assigns of the parties.
B. The capitalized and underlined titles appearing in this Lease are for
reference only and shall not be considered a part of this lease or in any way
to modify, amend or affect the provisions thereof.
C. This-Lease contains the complete agreement of the parties
with'reference to the leasing of the Premises.
D. Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
E. Whenever Tenant is required to make payments to Landlord other than
Fixed Rent, such payments shall constitute Additional Rent. Whenever Tenant is
required to make payment for insurance or taxes, Landlord shall have the right
after fifteen (15) days notice to Tenant, to make the payment for Tenant and to
recover such sums from Tenant as Additional Rent plus interest on such sums at
the Overdue Rate.
F. This Lease may be executed in one or more counterparts, each of which
shall be an original, and all of which nhall constitute one and same
instrument.
G. The term "Landlord" as used in this Lease shall mean only the owner or
owner~ at the time in question of the fee title, and in the event of any
transfer of such title or interest, Landlord named in this Lea~e (and in case
of any subsequent transfers then the grantor) shall be relieved from and after
the date of such transfer of all liability as respects Landlord's obligations
thereafter to be performed, provided that any funds in the
<PAGE> 36
hands of Landlord or the then grantor at the time of such transfer, in which
Tenant has an interest, shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Landlord shall, subject as
aforesaid, be binding on Landlord's successors and assigns, only during their
respective periods of ownership.
- -37
H. This Lease shall be governed by and construed and enforced in
accordance with and subject to the laws of the State of Utah.
I. Anything contained herein to the contrary notwithstanding, any claim
based on or in respect of any liability of Landlord under this Lease shall be
enforced only against the Prem,ses and not against any other assets, properties
or funds of (a) Landlord or any director, officer, shareholder, general
partner, limited partner, or direct or indirect partners, employee or agent of
Landlord or its general partners (or any legal representative, heir, estate,
successor or assign of any thereof), (b) any predecessor or successor
partnership or corporation (or other entity) of Landlord or its general
partners, either directly or through Landlord or its predecessor or successor
partnership or corporation (or other entity) of Landlord or its general
partners, and (c) any other person or entity. The foregoing provision is not
intended to deprive Tenant of any injunctive relief to which it may be
entitled.
J. Without the written approval of Landlord and Tenant, no person other
than Landlord (including its direct and indirect partners), Mortgagee, Tenant
and their respective successors and assigns shall have any rights under this
Lease.
K. Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this Lease,
it shall be done in accordance with generally accepted accounting principles at
the time in effect, to the extent applicable, except where such principles are
inconsistent with the express provisions of this Lease.
L. There shall be no merger of this Lease or the leasehold estate created
hereby by reason of the fact that the same Person may acquire, own or hold,
directly or indirectly, in whole or in part, (a) this Lease or the leasehold
estate created hereby or any interest in this Lease or such leasehold estate,
and (b) the fee estate in the Premises.
M. Notwithstanding anything contained herein to the contrary, the
interests of Tenant and Landlord under this Lease are expressly intended by the
parties hereto to be construed as a leasehold estate held by Tenant and a fee
simple estate held by Landlord, and not as an estate for years held by Tenant
or a remainder interest held by Landlord.
- -38
IN WITNESS WHEREOF, the parties have hereunto set their hands under seal
on the day and year first above written.
<PAGE> 37
TRINET BSSENTIAL FACILITIES X, INC. Landlord
By:
President
FIRST HEALTH STRATEGIES, INC.
By:
Name: Barry W. Burt
Title: Vice President
39
IN WITNESS WHEREOF, the parties have hereunto set their hands under seal
on the day and year first above written.
TRINET ESSENTIAL FACILITIES X, INC. Landlord
By:
Presic tent
FIRST HEALTH STRATEGIES, INC.
By:
Name: Barry W. Burt
Title: Vice President
<PAGE> 38
- -39ANNEX I
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Lease and shall be equally applicable to both the singular and plural
,forms of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other
than Fixed Rent which Tenant assumes or agrees to pay under this Lease to
Landlord or others.
t'Closinat' is defined in Paragraph 3B of this Leane.
,"Commencement Date" is defined in Paragraph 3B of this Lease.
"Bvent of Default" is defined in Paragraph 14 of this Lease.
"First Mortqaqe" or "Mortgaqe" shall mean a first mortgage on the Premises
given by Landlord to the Mortgagee to secure a loan financing or refinancing
the acquisition of the Premises.
"First Mortqaqe Note" shall mean a promissory note evidencing a- loan
secured by a First Mortgage. -
"First Renewal Term" is defined in Paragraph 3C of this Lease.
<PAGE> 39
"Fixed Rent" is defined in Paragraph 4 of this Lease.
n Imposition" means the various tax and other charges referred to in
Paragraph 9.
~Initial Term" is defined in Paragraph 3A of this Lease.
"Landlord" is defined in the first paragraph of this Lease.
nLease" is defined in the first sentence of this Lease.
"Lease Expiration Date" is defined in Paragraph 3A of this Lease.
~Lease Year" means each twelve-month period beginning on each December ~
during the Term.
~Mortuagee" shall mean any first mortgagee with respect to the Premises.
- -40
"Overdue Rate" means a rate equal to fifteen percent (15) per annum (or
the maximum rate allowed by law if such rate is less than fifteen percent (15~)
per annum).
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subd~vision thereof.
"Permitted Encumbrances" means:
(a) Any liens for taxes, assessments and other governmental charges and any
liens of mechanics, materialmen and laborers for work or services performed or
materials furnished in connection with the Premises, which are not due and
payable;
(b) The easements, rights-of-way, encroachments, encumbrances, restrictive
covenants or other matters in the title set forth in Schedule B to the policy
of owners title insurance (or commitments therefore) delivered to and accepted
by Landlord with respect to the Premises in connection with the delivery of
this Lease as shown on Exhibit E attached hereto;
(c) The Lease and the rights of Tenant under this Lease;
(d) The lien of the Deed of Trust dated as of , 1994, from Landlord to Bankers
Trust Company, as trustee, and any rights granted thereby; and
<PAGE> 40
"Premises" is defined in Paragraph 1 of this Lease.
"Proceeds Trustee" is defined in Paragraph 1ID.
"Rent" means Pixed Rent and Additional Rent.
"Renewal Term" is defined in Paragraph 3C of this Lease.
"Renewal Term Commencement Date" is defined in Paragraph 3C of this Lease.
"Renewal Term Expiration Date" is defined in Paragraph 3C of this Lease.
"Second Renewal Term" is defined in Paragraph 3C of this Lease.
Site Reviewers n is defined in Paragraph 25E of this Lease.
"Site Assessments" is defined in Paragraph 25E of this Lease. "Term" means
the Initial Term, together with any Renewal Terms. "Third Renewal Term" is
defined in Paragraph 3C of this Lease.
- -42
Exhibit A-1
Description of Land
Those parcels of land located in Salt Lake County, Utah, described as fGllOWS:
PARCEL NO. 1:
BEGINNING at a point South 000310 East 1931.635 feet and South 895950
West 1280.022 feet from the Salt Lake County Monument at the center of Section
22, Township 1 South, Range 1 West, Salt Lake Base and Meridian, said point
being on the West line of a 60 foot right-of-way, and running thence South
895650 West 250.000 feet; thence North 102313 East 315.411 feet; thence
North 000310 West 108.295 feet; thence North 364500 East 204.281 feet;
thence Southeasterly 138.549 feet along a 122.227 foot radius curve with chord
bearing South 323135 East; thence South 000310 East 471.330 feet to the
point of BEGINNING.
EXCEPTING THEREFROM the following:
BEGINNING at a point on the West line of 1935 West Street, said point being
South 000310 East 1744.494 feet and South 895650 West 1280.022 feet from
the Salt Lake County Survey Monument at the center of Section 22, Township 1
South, Range 1 West, Salt Lake Base and Meridian, and running
<PAGE> 41
thence South 000310 East 187.146 feet along said West line of street;
thence South 895650 on West 250.000 feet; thence North 102313 East 190.296
feet; thence North 895650 East 215.518 feet to the point of BEGINNING.
The above described property also known by the street address of: 2602 South
Decker Lake Lane, Salt Lake City, Utah 84119.
PARCEL NO. 2:
BEGINNING at a point on the West line of 1935 West street; said point being
South 000310 East 1744.494 feet and South 895650 West 1280.022 feet from
the Salt Lake County Survey Monument at the center of Section 22, Township 1
South, Range West, Salt Lake Base and Meridian, and running thence South
0003108 East along said West line 290.40 feet; thence South 89565055 West
350.00 feet; thence North 185655n East 307.14 feet; thence North 895650
East 250.00 feet to the point of BEGINNING.
43
The above described property also known by the street address of: 2614 South
Decker Bake Lane, Salt Lake City, Utah 84119.
PARCEL NO. 3:
BEGINNING at a point on the West line of 1935 West Street, said point being
South 00310 East along the Section line 2034.894 feet and South 895650
West 1280.022 feet from the Salt Lake County Survey Monument at the center of
Section 22, Township 1 South, Range 1 West, Salt Lake Base and Meridian, and
running thence South 00310 East along said West line 117.65 feet; thence
South 895650 West 390.51 feet; thence North 185655 East 124.43 feet;
thence North 895650 East 350.00 feet to the point of BEGINNING.
The above described property also known by the street address of: 2650 South
Decker Lake Lane, Salt Lake City, Utah 84119.
PARCEL NO. 4:
BEGINNING at a point on the West line of 1935 West Street, said point being
South 00310 East along the section line 2152.544 feet and South 895650
West 1280.022 feet from the Salt Lake County Survey Monument at the center of
Section 22, Township 1 South, Range 1 West, Salt Lake Base and Meridian, and
running thence South 00310 East along said West line 468.02 feet to a point
on the North line of 2770 South Street; thence South 895730 West along said
North line 140.52 feet to a point of a 460.00 foot radius curve to the right;
thence Northwesterly along the arc of said curve and the Northeasterly line of
Decker Lake Blvd., 403.85 feet, (long chord bears North 645327 West 391.00
<PAGE> 42
feet); thence North 185655 East 319.14 feet; thence North 895650 Bast
390.51 feet to the point of BEGINNING.
The above described property also known by the street address of: 2686 South
Decker Lake Lane, Salt Lake City, Utah 84119.
PARCEL NO. 5:
BEGINNING at a point South 00310 East along the Section line 1880.896 feet
and South 895650" West 990.00 feet from the center of Section 22, Township 1
South, Range 1 West, Salt Lake Base and Meridian, and running thence South
000310 East 100.00 feet; thence South 895650 West 230.00 feet to the East
line of 1935 West Street; thence North 000310 West along said East line
100.00 feet; thence North 895650 East 230.00 feet to the point of BEGINNING.
44
The above described property also known by the street address of 2569
South Decker Lake Lane, Salt Lake City, Utah 84119.
PARCEL NO. 6:
BEGINNING at a point South 00310 Bast along the Section line 1980.896 feet
and South 895650 West 990.0 feet from the center of Section 22, Township 1
South, Range West, Salt Lake Base and Meridian, and running thence South
00310 East 95.0 feet; thence South 895650 West 230.0 feet to the East
line of 1935 West Street; thence North 00310" West along said East line 95.0
feet; thence North 895650 East 230.0 feet to the point of BEGINNING.
The above described property also known by the street address of: 2575 South
Decker Lake Lane, Salt Lake City, Utah 84119.
PARCEL NO. 7:
BEGINNING at a point South 895730 West 968.00 feet and North 000310 West
348.05 feet from the South quarter corner of Section 22, Township 1 South,
Range 1 West, Salt Lake Base and Meridian and running thence North 000310
West 60.00 feet; thence South 895650 West 252.00 feet; thence North
000310 West 159.68 feet; thence North 895650 East 230.00 feet; thence
North 000310 West 9s.00 feet; thence North 895718. Bast 470.00 feet;
thence South 0060310 East 312.87 feet; thence South 895730t West 448.00
feet to the point of BEGINNING.
<PAGE> 43
TOGETHER WITH an easement for ingress and egress created by an Basement
Relocation Agreement dated June 7, 1994 and recorded June 3, 1994 as Bntry No.
5841345 in Book 6955 at page 291 of Official Records, more fully described as:
BEGINNING at a point which lies South 895730 West 781.00 feet and North
00230 West 23.00 feet from the South quarter corner of Section 22, Township
1 South, Range 1 West, Salt Lake Base and Meridian (said point lies on the
North line of 2770 South Street) and running thence North 00230 West 325.05
feet to the South line of property now or formerly of FIRST HEALTH Realty,
Inc.; thence North 89O57930n Bast 15.00 feet along the South line; thence South
00230 Bast 325.05 feet to the North line of 2770 South Street; thence South
895730 West 15.00 feet along said line to the point of BBGINNING.
The above described property also known by the street address of 2601 South
Redwood Road, Salt-Lake City, Utah 84119.
- -45
Exhibit A-2
Description of Personal Property
ITEM
<TABLE>
<CAPTION>
NO. OTY CATALOGDE NO.DESCRIPTIoN
Co9T
<S> <C> <C> <C>
1 16 VPA36404PANEL FABRIC COHM. 36X40 3078.40
2 605 VPA3660RPANEL FAi3RIC COMM. 36X60 139392.00
3 7 OPC40RSSTRAIGHT CONN. (180) KIT 14B.40
4 5 OPC40RCCORNER CONNECTOR (go) KIT 106.00
5 4 OPC4 OREEND CONNECTOR KIT 73.60
6 lS5 OPC60R9STRAIGHT CONN. (lB0) KIT 4218.00
7 72 OPC60RCCORNER CoNNECTOR (90) KIT 1641.60
8 237 OPC60REEND CONNECTOR KIT 4740.00
9 90 OPC60RTTHREE WAY CONNECTOR KIT 2412.00
10 49 OPC60RXFWR WAY CONNECTOR KIT 1313.20
11 4 OPDC8RDUAL PANEL CONN. 40/60 150.40
12 4 PCMF PANEL CONNECTOR CAP 25.60
13 26 OIM60H-6CEIL INFEED MOW E-RIGID 3536.00
14 3 OBI POWER ENTRY ASM 6&8 WIRE 168.00
15 161 OTP-6 TERMINAL BLOCK 6-WIRE 1738.80
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
<S> <C> <C> <C>
16 132 OCC36-6CONDWIT JUMPER 6-WIRE 3273.60
17 100 OR1 DUPLEX RECEPTACLE STD 920.00
18 100 OR2 DUPLEX RECEPTACLE STD 920.00
19 100 OR3 DUPLEX RECEPTACLE 920.00
20 29 NADPIR36CEILING INF. RIGID KIT 2702.80
21 125 NADC36TOP RWAY KIT DATA TRAK 34S0.00
22 50 NADFSSHRODD-TOP RWAY, STRAIoRT 200.00
23 4 NADVS1CSHROUD-DATA TRAK, 8TRAIoHT 17.60
24 74 NADVS2CSHROUD-DATA TRAK, STRAIoRT 325.C0
25 58 NADFERSHRODD-TOP RWAY, END 232.00
26 149 NADVAVERTICAL CABLE MANAGER 2443.60
27 75 vWMeoWIRE MANAGER VERTICAL 450.00
28 296 W324AG236X24 WORK8URF. CANT.MIC. 31376.00
29 2 W624AG272X24 WORKSURF. CANT.MIC. 304.80
30 149 236C24G236X24 CORNER WORKSDRFACE 21456.00
31 1 WM6CCE273X15 COUNTER CAP EXT. (1) 86.00
32 2 WM6CCEE274X15 COUNTER CAP EXT. (2) 176.80
33 298 DPFlBLSUPP.DWR. PEDESTAL 6/6/12 69851.20
34 146 AC836 SHELF 8TANDARD 8117.C0
35 C ACOP3636~ OVERHEAD CABINET W/L 895.20
36 1S2 ATL36 STANDARD TASK LIoRT 9363.20
237 150 BU~rnOG TASK CHAIR S9400.00
</TABLE>
,~/I,Y
- -46
Exhibit A-3
Site Plan
Exhibit B
Rent Payments
--~~!
~_
2. Each installment of Fixed rent payable for the Premises during that
portion of the Initial Term commencing on December 1, 1994 and ending on and
including November 30, 1999 is $103,753.83 and said installments are payable on
December 1, 1994 and thereafter on the first day of each month to and including
November 1, 1999. .
3. Each installment of Fixed Rent payable for the Premises during that
portion of the Initial Term commencing on December 1, 1999 and ending on and
including November 30, 2004 is $108,426.58 and said installments are
<PAGE> 45
payable on December 1, 1999 and thereafter on the first day of each month to
and including November 1, 2004.
4. Bach installment of Fixed rent payable for the Premises during that
portion of the Initial Term commencing on December 1, 2004 and ending on and
including November 30, 2009, is $122,674.75 and said installments are payable
on December 1, 2004 and thereafter on the first day of each month to and
including November 1, 2009.
5. Each installment of Fixed Rent payable for the Premises during the
First Renewal Term is $132,488.75 and said installments are payable on December
1, 2009 and thereafter on the first day of the month to and including November
1, 2014.
6. Each installment of Fixed Rent payable for the Premises during the
Second Renewal Term is $143,087.83 and said installments are payable on
December 1, 2014 and on the first day of each month thereafter to and including
November 1, 2019.
7. Each installment of Fixed Rent payable for the Premises during the
Third Renewal Term is $154,534.92 and said installments are payable on December
1, 2019 and on the first day of each month thereafter to and including November
1, 2024.
- -48
Exhibit C
The applicable amount determined in accordance with Schedule C shall be the
amount set forth opposite the date on which such determination is made, or if
such date is not listed below, then on the next preceding date.
December 1, 1994
January 1, 1995
February 1, 1995
March 1, 1995
April 1, 1995
May 1, 1995
June 1, 1995
July 1, 1995
August 1, i995
September 1, 1995
October 1, 1995
November 1, 1995
December 1, 1995
<PAGE> 46
January 1, 1996
February 1, 1996
March 1, 1996
April 1, 1996
May 1, 1996
June 1, 1996
July 1, 1996
August 1, 1996
September 1, 1996
October 1, 1996
November 1, 1996
December 1, 1996
January 1, 1997
February 1, 1997
March 1, 1997
April 1, 1997
May 1, 1997
June 1, 1997
July 1, 1997
August 1, i997
September 1, 1997
October 1, 1997
November 1, 1997
December 1, 1997
January 1, 1998
February 1, 1998
March 1, 1998
April 1, 1998
May 1, 1998
- -49
$12,900,000 $12,894,413 $12,888,793 $12,883,141 $12,877,455 $12,871,736
$12,865,984 $12,860,199 $12,854,380 $12,848,526 $12,842,639 $12,836,717
$12,830,761 $12,824,770 $12,818,744 $12,812,683 $12,806,586 $12,800,454
$12,794,286 $12,788,082 $12,781,842 $12,775,566 $12,769,253 $12,762,903
$12,756,516 $12,750,092 $12,743,631 $12,737,131 $12,730,594 $12,724,019
$12,717,405 $12,710,753 $12,704,062 $12,697,332 $12,690,562 $12,683,753
$12,676,905 $12,670,016 $12,663,087 $12,656,118 $12,649,108 $12,642,058
June 1, 1998
July 1, 1998
August 1, 1998
September 1, 1998
October 1, 1998
November 1, 1998
<PAGE> 47
December 1, 1998
January 1, 1999
February 1, 1999
March 1, 1999
April 1, 1999
May 1, 1999
June 1, 1999
July 1, 1999
August 1, 1999
September 1, 1999
October 1, 1999
November 1, 1999
December 1, 1999 and thereafter
- -50
$12,634,966
$12,627,833
$12,620,658
$12,613,441
$12,606,183
$12,598,882
$12,591,538
$12,584,151
$12,576,722
$12,569,249
$12,561,732
$12,554,172
$12,546,567
$12,538,919
$12,531,225
$12,523,487
$12,515,703
$12,507,874
$12, 500, 00o
Exhibit D
Estoppel Certificate
The undersigned is the [landlord] [tenant] under the Lease Agreement dated
as of October 1, 1994 between TriNet Essential Facilities X, Inc., a Maryland
corporation (together with its successors as such landlord, called "Landlord")
and FIRST HEALTH Strategies, Inc., a Delaware corporation (together with its
successors as such tenant, called "Tenant") (the Lease), and hereby certifies
that on the date hereof:
<PAGE> 48
1. The Lease has not been amended or modified, and remains in full force
and effect. There has been no partial termination of the Lease pursuant to
paragraph 10 thereof.
2. No Event of Default, as defined in the Lease, has occurred and is
continuing and, to the knowledge of the undersigned, no event which, with
notice or lapse of time or both, would constitute an Event of Default, has
occurred and is continuing.
3. Landlord is not in breach of any provision of the Lease, and Tenant has
no defense to or offset against full performance of its obligations under the
Lease.
4. The Term of the Lease commenced on November
and is scheduled to expire on.
, 1994
5. Exhibit B to the Lease, a copy of which is attached
hereto, accurately states the obligations of Tenant to pay Fixed
Rent. Fixed Rent has been paid through . [Tenant
only: Additional Rent has been paid currently, except:
as of~
In witness whereof, this certificate has been duly executed
By_
- -51
Exhibit E
1. The lien of taxes and assessment not yet due and payable.
2. Reservations contained in that certain Warranty Deed, recorded July 14,
1953 as Entry No. 1337123 in Book 1021 at page 345 of Official Records of
Salt Lake County, Utah.
3. By modification of Deed Restrictions, recorded August 12, 1977 as Entry No.
2982410 in Book 4532 at page 768 of Official Records, the foregoing
restrictions were modified.
<PAGE> 49
4. Conditions and restrictions recorded June 10, 1977 as Entry
No. 2955455 in Book 4501 at page 858 of Official Records of
Salt Lake County, Utah.
5. Conditions and Restrictions recorded November 24, 1980 as
Entry No. 3506515 in Book 5182 at page 528 of Official
Records, Salt Lake County, Utah.
6. An easement for public utilities and incidental purposes as granted to The
Mountain States Telephone and Telegraph Company, a Colorado corporation, by
instrument recorded February 22, 1983 as Entry No. 3761760 in Book 5439 at page
1518 of Official Records of Salt Lake County, Utah.
7. The property lies within the bounds of the Redwood Neighborhood Development
Plan and is subject to the provisions thereof, as disclosed by Notice recorded
December 27, 1984 as Entry No. 4032439 in Book 5617 at page 2824 of Official
Records, Salt Lake County, Utah.
8. Covenants, Conditions and Restrictions created by an Easement Agreement by
and between P.P.M.C., Inc., a Utah corporation, and FIRST HEALTH Realty, Inc.,
a Utah corporation, dated October 5, 1993 and record October 6, 1993 as Entry
No. 5623353 in Book 6771 at page 1056, and amended by Easement Relocation
Agreement recorded June 3, 1994 as Entry No. 5841345 in Book 6955 at page 291
of Official Records of Salt Lake County, Utah.
~811
/wr3/Id4 6/work/Trltht/FF~C/L - ~. . 06
Novenber 28, 1994; 6: 04pm
- -52
<PAGE> 1
EXHIBIT 10.113
OFFICE LEASE
THIS LEASE is made as of February 6, 1989, by and between ROWE
PROPERTIES-DATA LIMITED PARTNERSHIP, a Virginia limited partnership
("Lessor"), and THE COMPUTER COMPANY, a Virginia corporation ("Lessee").
1. Description of Premises. Lessor, in consideration of the rents to be
paid by Lessee and other covenants of Lessee contained herein, does hereby lease
to Lessee the premises described below (the "Premises"):
A parcel of land, located off Cox Road in the Innsbrook Corporate Center,
Henrico County, Virginia, containing approximately five acres, more
particularly shown on the site plan attached hereto as Exhibit A (the
"Land"), together with (i) a three-story building containing approximately
69,311 rentable square feet and 71,800 gross square feet, parking area and
other site improvements to be constructed on the Land by Lessor as
hereinafter provided (the "Building") and (ii) an easement to use all
offsite utility lines now or hereafter serving the Building. Rentable
square feet shall be determined in the manner provided in Paragraph 5 of
the Rider attached hereto as a part hereof (the "Rider").
2. Term. The initial term of this lease shall be for a period of ten
(10) "lease years" (as defined in paragraph 36).
3. Rent. See Paragraphs 6 and 9 of Rider.
4. Acceptance of Premises. See Paragraph 5 of Rider.
5. Delay in Commencement. See Paragraph 1 of Rider.
6. Use and Compliance with Law. The Premises shall be used only for
general office purposes and as a computer center, and for no other purpose
without Lessor's prior written consent. Lessee shall not use the Premises for
any unlawful purpose or so as to constitute a nuisance. Lessee covenants and
agrees to comply with all restrictive covenants and ordinances and regulations
of governmental authorities applicable to Lessee's use of the Premises;
provided, however, that Lessee shall not be required to modify the Premises to
comply with any subsequently enacted governmental requirements unless same are
applicable because of Lessee's particular use of the Premises (other than
general office use and as a computer center).
7. Signs. See Paragraph 14 of Rider.
8. Quiet Enjoyment and Covenant of Title. Lessor covenants that it has
full right and power to execute this lease and to grant the estate demised
herein, and that Lessee, upon payment
<PAGE> 2
of the rents herein reserved and performing the terms, conditions, and
covenants herein contained, shall peacefully and quietly have, hold, and
enjoy the Premises during the full term of this lease, and any extension
hereof.
9. Lessor's Services. [Intentionally Omitted]
10. Utility Stop. [Intentionally Omitted]
11. Alterations by Lessee. Lessee shall not make any structural
alterations to the Premises (including, without limitation, roof penetrations)
without obtaining Lessor's prior written consent, which consent shall not be
unreasonably withheld. Lessee may make nonstructural alterations and
improvements, including interior walls and partitions and other tenant
improvements, without Lessor's consent. Any and all alterations, additions or
other improvements made by Lessee, with or without the consent of Lessor,
regardless of how attached (except movable trade fixtures, including panels,
workstations and full height panels), shall become immediately upon
installation and hereafter remain the property of Lessor, without compensation
therefor to Lessee, unless otherwise agreed in writing by Lessor.
12. Use of the Parking Facilities. Lessee and its employees, business
invitees and customers shall have the exclusive right to park automobiles in
the parking area provided by Lessor. See Paragraphs 11 and 13 of Rider.
13. Subleasing and Assignment. Lessee may assign this lease or
sublease the Premises without Lessor's prior approval, but any such assignment
or sublease shall not release Lessee of any of its obligations under this lease
arising before or after the effective date of the assignment of this lease or
sublease of the Premises. In addition, for so long as this lease continues in
effect and Lessee pays to Lessor the rent due hereunder, should the amount of
rent payable by a sublessee or assignee to Lessee exceed the rent payable by
Lessee hereunder, Lessor shall not be entitled to any of such excess.
14. Care of Premises. Lessee agrees to take good care of the Premises, and
shall not suffer or permit any waste or injury thereto. Upon the expiration or
termination of this lease, Lessee shall surrender the Premises in as good
condition as Lessee obtained same on the Commencement Date, reasonable wear
and tear excepted and subject to any alterations which Lessee is authorized
hereunder to make and any repairs which Lessor is obligated hereunder to make.
15. Damage to Premises. If the Premises shall be damaged by fire, the
elements, unavoidable accident or other casualty, but are not thereby rendered
untenantable in whole or in part, Lessor shall promptly at its expense cause
such damage to be repaired, and rent shall not be abated. If by reason of such
2
<PAGE> 3
occurrence the Premises shall be rendered partially untenantable, Lessor shall
promptly at its own expense cause the damage to be repaired, and rent meanwhile
shall be abated for the period of untenantablility in proportion to the portion
of the Premises rendered untenantable. If by reason of such occurrence all of
the Premises are rendered untenantable, Lessor shall promptly at its expense
cause the damage to be repaired, and rent shall abate until the Premises are
again tenantable, unless within thirty (30) days after said occurrence Lessor
shall give Lessee written notice that the estimated time necessary to
reconstruct the destroyed Premises and Building is in excess of one hundred
twenty (120) days after commencement of reconstruction and Lessee elects to
terminate this Lease by written notice, to Lessor given within fifteen (15)
days after receipt of Lessor's notice. If so terminated, this lease and the
tenancy hereby created shall cease as of the date of casualty and all rent shall
be abated as of such date. Lessor shall not be obligated to reconstruct or
repair the Building or Premises (i) unless Lessee maintained insurance for such
purposes as required by this lease and (ii) except to the extent insurance
proceeds have been received or are to be made available upon completion of the
repairs or reconstruction (other than with respect to repairs costing $100,000
or less). Lessor shall not be required to repair, replace or insure any
property which the Lessee may be entitled to remove from the Premises. No
damages, compensation or claims shall be payable by Lessor for inconvenience,
loss of business or other consequential damages arising from any casualty or
restoration of the Premises or the Building except to the extent caused by
Lessor's negligence or failure to comply with its obligations under this lease.
All rent paid in advance shall be apportioned in accordance with the foregoing
provisions as of the date of damage. If this lease is not terminated on account
of such damage or destruction and Lessee so requests, Lessor shall undertake
reasonable efforts to provide to Lessee office space in one or more other
buildings in Innsbrook Corporate Center managed or controlled by Rowe
Development Company for so long as the Premises remain untenantable (to the
extent such office space is then available), and in such case Lessee shall pay
the then prevailing rental rate for the space it occupies in such other office
buildings.
16. Liability. See Paragraphs 7 and 12 of Rider.
17. Inspection of Premises. Lessor and Lessor's agents shall have
reasonable access during normal business hours to the Premises for the purposes
of inspection, maintenance and repair. Lessor shall also have access to the
Premises without notice in the event of an emergency. Lessor shall have the
right to show the Premises to prospective tenants during the last one hundred
eighty (180) days of the term of this lease.
18. Condemnation. If all or a part of the Premises sufficient to render
same unusable for Lessee's purposes (in Lessee's reasonable judgment) or all
means of access to the Premises shall
3
<PAGE> 4
be condemned for a period in excess of ninety (90) days or sold under threat of
condemnation, this lease shall terminate and Lessee shall have no claim against
Lessor or to any portion of the award in condemnation for the value of any
unexpired term of this lease. Lessee may seek to recover independently
compensation from the condemning authority for moving expenses, the value of any
of Lessee's property taken (other than Lessee's leasehold interest in the
Premises) or other compensable loss or damage. In the event of a temporary
taking of ninety (90) days or less, this lease shall not terminate, but the
term hereof shall be extended by the period of the taking and the rent shall
abate in proportion to the area taken for the period of such taking.
19. Default. See Paragraph 12 of Rider.
(a) If Lessee does not pay any rent or other sum payable by Lessee
pursuant to this lease and such default continues for a period of ten (10) days
after written notice is given to Lessee (provided, however, that no written
notice shall be required if Lessor has previously given written notice of
failure to pay rent on at least two separate occasions during the then current
calendar year), or if Lessee shall fail to perform any other covenant,
agreement, or obligation of Lessee pursuant to this lease and such default
continues for thirty (30) days after written notice thereof is given to Lessee
or if Lessee should become bankrupt or insolvent or any debtor proceedings are
taken by or against Lessee, or if Lessee vacates or attempts to vacate the
Premises, then Lessor shall have the following rights and remedies.
(i) Lessor may terminate this lease by written notice to Lessee, in
which event this lease, all rights of Lessee, and all duties of Lessor
shall immediately cease and terminate, and Lessor may re-enter and take
possession of the Premises, remove all persons and property from the
Premises and store such property in a public warehouse or elsewhere at the
cost of, and for the account of, Lessee and enjoy the Premises free of
Lessee's estate pursuant to this lease, without prejudice, however, to any
and all rights of action against Lessee that Lessor may have for rent
payable before the date of termination, damages, or breach of this lease,
in respect of which Lessee shall remain and continue liable
notwithstanding such termination; or
(ii) Lessor shall have the right to re-enter the Premises and remove
all persons and property from the Premises and store such property in a
public warehouse or elsewhere at the cost of, and for the account of,
Lessee, without terminating this lease. Lessor shall have the right to
take such action without service of notice except as may be expressly
required herein or by applicable law and without resort to legal process
(unless required by law) and without being deemed guilty of trespass or
becoming liable for any loss or damage which may be occasioned thereby.
If
4
<PAGE> 5
Lessor elects to re-enter the Premises as aforesaid, Lessor may, at any
time thereafter, elect to terminate this lease by giving written notice to
Lessee of such election. Whether or not Lessor elects to re-enter the
Premises or takes possession of the Premises pursuant to legal proceedings
or pursuant to any notice required by law, Lessor may, at its option,
re-let the Premises or any portion thereof for the benefit of Lessee for
such term or terms (whether shorter or longer than the term of this lease)
and at such rental and upon such other terms and conditions as Lessor, in
its reasonable discretion, deems advisable, and, at the expense of Lessee,
Lessor shall have the right to make such repairs or alterations to the
Premises as Lessor deems necessary in order to re-let same. Lessor shall
use reasonable efforts to re-let the Premises. Provided this lease has
not been terminated by Lessor, upon each such re-letting, all rentals
actually received by Lessor from such re-letting applicable to the
unexpired term of this lease shall be applied as follows: First, to the
payment of any costs and expenses of such re-letting, including costs
incurred by Lessor for brokerage fees, legal fees and alterations and
repairs to the Premises; Second, to the payment of any indebtedness other
than rent due hereunder from Lessee; Third, to payment of any unpaid
portion of rent then due. On the scheduled expiration date of this lease,
Lessor shall pay the residue, if any, to Lessee. No such re-entry or
taking of possession of the Premises by Lessor shall be construed or shall
operate as an election by Lessor to terminate this lease unless written
notice of termination is given by Lessor to Lessee, or this lease is
terminated by an order or decree of a court of competent jurisdiction.
(b) In addition to all remedies specified in this lease, Lessor
shall have all remedies available pursuant to applicable law. However, Lessor
hereby subordinates any statutory or other lien it may have in Lessee's
property located in the Premises for nonpayment of rent to any and all
equipment leases, liens and security interests entered into or granted from
time to time by Lessee with respect to such property, and Lessor agrees to
execute from time to time upon request instruments confirming such
subordination.
(c) No re-entry, taking possession of, or repair of the Premises by
Lessor, termination of this lease or any other action taken by Lessor as a
result of any default of Lessee shall relieve Lessee of any of its liabilities
or obligations hereunder which arose prior to or by reason of such termination,
whether or not the Premises are re-let.
(d) All remedies of Lessor shall be cumulative. Election by Lessor
to exercise any remedy shall not prevent or be deemed a waiver of Lessor's
right to thereafter exercise any other remedy.
5
<PAGE> 6
(e) Lessee agrees to pay upon demand all reasonable costs, fees and
expenses (including, without limitation, court costs and reasonable attorney's
fees) incurred by Lessor in enforcing this lease. Lessor also agrees to pay
upon demand all reasonable costs, fees and expenses (including, without
limitation, court costs and reasonable attorneys' fees) incurred by Lessee in
enforcing this lease.
20. Holding Over. If Lessee remains in possession of the Premises after
the expiration or termination of the term of this lease without Lessor's
written consent, such possession shall, at Lessor's option, (a) be a tenancy at
sufferance only, during which tenancy at sufferance monthly rent shall be due
and payable at 150% of the monthly rent due for the last month of the term, or
(b) result in an extension of this lease on a month-to-month basis, upon the
terms and conditions applicable to the last lease year of the preceding term
except monthly rent, which shall be at 150% of the rent payable during the last
month of the term.
21. Surrender of Premises. Lessee shall surrender the Premises at the
expiration or sooner termination of the lease term, broom-cleaned, with all
rubbish removed, free of subtenancies, and in good condition and repair (except
for any items which this lease requires Lessor to repair), reasonable wear and
tear excepted. Lessee shall deliver all keys to Lessor or Lessor's agent.
22. Information Concerning Lessee. Lessee shall furnish within 15 days
after request from Lessor such current information concerning the financial
condition of Lessee as Lessor may reasonably require. Such financial
information shall include (but is not necessarily limited to) a financial
statement dated not more than thirteen (13) months prior to Lessor's request.
Such financial statement shall be prepared in accordance with generally
accepted accounting principles and certified by a certified public accountant.
A general partner or officer of Lessee shall furnish a certification to Lessor
to the effect that there either has or has not been any material adverse change
in the financial condition of Lessee since the date of the financial statement
submitted, and if such certification states that there has been a material
adverse change, furnishing such details concerning same as Lessor may
reasonably request. Lessor shall not disclose the financial information to any
party except to a prospective purchaser or mortgagee of the Premises upon
request.
23. Authority of Lessee and Lessor. Each party shall furnish to the
other within fifteen (15) days after request such corporate resolutions,
certificates of incumbency, partnership resolutions, partnership agreements,
legal opinions or other information as the requesting party may reasonably
request in order to confirm that the execution and delivery of this lease has
been duly authorized by the other party and that the person(s) executing this
lease on behalf of such party were duly authorized to do so. All such corporate
or partnership resolu-
6
<PAGE> 7
tions, certificates or agreements shall be certified as being duly adopted
and/or in full force and effect, without amendment, by an appropriate officer
or partner of the other party. If the Premises are sold or if the beneficial
interests in Lessor are transferred, Lessor shall upon request furnish Lessee
with information as to the beneficial owners of Lessor.
24. Security Deposit. [Intentionally Omitted]
25. Rules and Regulations. [Intentionally Omitted]
26. Subordination. See Paragraph 15 of Rider.
27. Estoppel Statement. Within twenty (20) days after request therefor by
Lessor, Lessee agrees to deliver in recordable form a certificate prepared by
Lessor to any proposed mortgagee or purchaser of the Premises certifying (if
such is the case) that this lease is in full force and effect, that to Lessee's
knowledge there are no defenses or offsets thereto, or stating those claimed by
the other party, and such other facts related to this lease or the Premises as
Lessor may reasonably request.
28. Notices. Any notices required pursuant to this lease shall be in
writing. Addresses to which notices shall be sent are as follows:
TO LESSEE: The Computer Company
1905 Westmoreland Street
Richmond, Virginia 23230
Attn: President
TO LESSOR: Rowe Properties-Data
Limited Partnership
c/o Rowe Development Company
P.O. Box 32136
4121 Cox Road, Suite 110
Richmond, Virginia 23294
Attn: President
Either party may at any time designate by written notice to the other a
change of address for notices. All notices, demands and requests which are
addressed as provided above and are (i) deposited in the United States mail,
registered or certified, postage prepaid, return receipt requested, or (ii)
accepted for overnight delivery by Federal Express, Emery, Purolator, Airborne
or Express Mail, delivery charges prepaid or with delivery not conditioned upon
payment of charges, shall be deemed to have been given for all purposes
hereunder at the time such notice, demand or request shall be deposited in the
United States mail or accepted for delivery by the applicable overnight
delivery service.
7
<PAGE> 8
29. Past Due Rents. Lessee recognizes and acknowledges that if rent
payments are not received when due, Lessor will suffer damages and additional
expense thereby and Lessee therefore agrees that a late charge equal to five
percent (5%) of the late rent may be assessed by Lessor as additional rental if
Lessor has not received any monthly installment of annual rent within ten (10)
business days after its due date. If any check given in payment of rent is not
honored when due, Lessor may require that subsequent rent payments be made by
certified or cashier's check.
30. Building Name. See Paragraph 14 of Rider.
31. Right to Relocate. [Intentionally Omitted]
32. Rent Taxes. See Paragraph 7 of Rider.
33. Area of the Premises. See Paragraph 6 of Rider.
34. Taxes Attributable to Lessee's Improvements. See Paragraph 7 of Rider.
35. Tax Stop. [Intentionally Omitted]
36. Definition of Lease Year. The first lease year is the period
beginning on the Commencement Date and ending one (1) year after the last day
of the month in which the Commencement Date occurs. The second lease year shall
begin on the day after the end of the first lease year, and shall end one (1)
year after the end of the first lease year. The third and subsequent lease
years shall begin and end on the appropriate anniversary dates of the beginning
and ending dates of the second lease year.
37. Successor and Assigns. This lease shall bind and inure to the benefit
of the successors, assigns, heirs, executors, administrators and legal
representatives of the parties hereto. This provision shall not give Lessee by
implication any right to assign its rights or interest pursuant to this lease.
The provisions of paragraph 13 above govern Lessee's right to assign and sublet.
38. Relationship of Lessor and Lessee. It is expressly understood and
agreed that Lessor shall not be construed as or held to be a partner, joint
venturer or associate of Lessee, it being expressly understood that the
relationship between the parties hereto is and shall at all times remain that
of landlord and tenant.
39. Limitation of Lessor's Obligation. The obligations of Lessor
hereunder shall be binding only upon its interest in the Project and its other
assets and not upon any partner personally. Lessee agrees to look solely to the
interest of Lessor in the Premises, to Lessor's other assets and to any
separate guaranty of Lessor's obligations, for the satisfaction of any judgment
8
<PAGE> 9
obtained by Lessee as a result of a breach by Lessor of this lease.
40. Performance by Lessor and Lessee. If, after the Premises are
"substantially completed" (as defined in the Rider), either party fails to
perform any of its obligations hereunder after prior written notice from the
other party and reasonable opportunity to remedy the nonperformance, the other
party may, at its option (but shall be under no obligation to do so), perform
the obligation or begin curative action to perform such obligation. Any amounts
advanced in so performing or taking curative action to perform such obligations
shall bear interest at the rate of twelve percent (12%) (or, if lower, the
highest lawful rate) from the date expended until repaid, shall be due and
payable on demand, and failure to pay on demand shall constitute an
independent event of default hereunder. Payment or performance by the other
party of the obligations of the nonperforming party shall not waive or cure any
breach occasioned by the nonperforming party's failure or refusal to pay or
perform same. Lessee may also offset any sum due to it on account of the
foregoing against rent payable hereunder.
41. Waiver. Delay in asserting or prosecuting any right, claim or cause
of action accruing hereunder is not and shall not be deemed to be a waiver of,
and shall not prejudice the same, or any other right, claim or cause of action
accruing hereunder at any time. Waiver of any right, claim or cause of action
at any time shall not prejudice any other right, claim or cause of action which
either party may have or which shall thereafter accrue, and shall not waive
either party's right to assert any other right, claim or cause of action.
Acceptance by Lessor of rent from Lessee during the existence of any default
shall not constitute a waiver of such default, or a waiver of the right of
Lessor to insist upon Lessee's strict compliance with the terms of this lease.
42. Paragraph Headings. The paragraph headings of this lease are used for
convenience only, and are in no way to be construed as a part of this lease or
as a limitation on the scope of the particular provision to which they refer.
43. Invalidity. If any provision of this lease shall be held to be
invalid, whether generally or as to specific facts or circumstances, the same
shall not affect in any respect whatsoever the validity of the remainder of
this lease, which shall continue in full force and effect. Any provision held
invalid as to any particular facts and circumstances shall remain in full force
and effect as to all other facts and circumstances.
44. Governing Law. This lease and the rights of the parties hereunder
shall be interpreted in accordance with the laws of the state in which the
Project is located.
9
<PAGE> 10
45. Entire Agreement. This lease, together with the attached Exhibits and
Rider referred to herein and specified below, contains the entire agreement of
the parties related to this transaction, supersedes all prior negotiations and
agreements and represents their final and complete understanding. This lease
may not be modified orally, through course of performance or in any manner
other than by agreement in writing, signed by the parties hereto.
46. Exhibits and Rider. The Exhibit(s) designated "A", "B", "C" and "D",
which are attached hereto and have been signed or initialed by Lessee and
Lessor are a part of this lease, and are incorporated herein as if set forth in
full.
Exhibit "A" - Site Plan
Exhibit "B" - Outline Specifications
Exhibit "C" - Assumption Agreement
Exhibit "D" - Reconfigured Parking Area
IN WITNESS WHEREOF, this lease has been duly executed by the parties
hereto as of the date and year first above written.
LESSOR: ROWE PROPERTIES-DATA LIMITED
PARTNERSHIP
By: ROWE DEVELOPMENT COMPANY,
General Partner
By: /s/ Dee Heel
-------------------------
Title: V.P.
-----------------------
LESSEE: THE COMPUTER COMPANY
By: /s/
------------------------------
Title: President
---------------------------
10
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EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
First Health Group Corp.:
We consent to the incorporation by reference in the Registration Statements of
First Health Group Corp. (formerly HealthCare COMPARE Corp.) on Form S-8 (file
numbers 33-26639, 33-26640, 33-42902, 33-43806, 33-43807, 33-87986, 33-62747
and 333-31893) of our reports dated February 23, 1998 incorporated by reference
in the Annual Report on Form 10-K/A of First Health Group Corp. for the year
ended December 31, 1997.
DELOITTE & TOUCHE LLP
Chicago, Illinois
June 5, 1998
