Document:

ex10-9

 

Exhibit 10.9

HearUSA, Inc.

2002 FLEXIBLE STOCK PLAN

ARTICLE I — NAME AND PURPOSE

	 	 	 
	1.1	 	
Name. The name of the Plan is the “HearUSA, Inc. 2002 Flexible Stock
Plan.”
	 
	1.2	 	
Purpose. The Company has established the Plan for the following
purposes:

	 	 	 
	(a)	 	
to attract, retain, motivate and reward Employees and other
individuals, to encourage ownership of the Company’s Common Stock by
Employees and other individuals, and to promote and further the best
interests of the Company; and
	 
	(b)	 	
in connection with the Arrangement between Helix Hearing Care
of America Corp. (“Helix”) and the Company pursuant to the Amended
and Restated Merger Agreement, dated November 6, 2001 (the “Merger
Agreement”), to provide a sufficient amount of Options for the
exchange of outstanding Helix Options, in accordance with Section
1.6 of the Merger Agreement.

ARTICLE II — DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION

	 	 	 
	2.1	 	
General Definitions. The following words and phrases, when used in the
Plan, unless otherwise specifically defined or unless the context clearly
otherwise requires, shall have the following respective meanings:

	 	 	 
	(a)	 	
Agreement. The document which evidences the grant of any
Benefit under the Plan and which sets forth the Benefit and the
terms, conditions and provisions of, and restrictions relating to,
such Benefit.
	 
	(b)	 	
Benefit. Any benefit granted to a Participant under the
Plan.
	 
	(c)	 	
Board. The Board of Directors of the Company.
	 
	(d)	 	
Change of Control. The acquisition after the Effective Date,
without the approval of the Board, by any person or entity, other
than the Company or a Related Entity, of more than 20% of the
outstanding Shares through a tender offer, exchange offer or
otherwise; the liquidation or dissolution of the Company following a
sale or other disposition of all or substantially all of its assets;
a merger or consolidation involving the Company which results in the
Company not being the surviving parent corporation; or any time
during any two-year period in which individuals who constituted the
board at the start of such period (or whose election was approved by
at least two-thirds of the then members of the Board who were

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members at the start
of the two-year period) do not constitute at least 50% of the Board
for any reason. A Related Entity is a Subsidiary or any employee
benefit plan (including a trust forming a part of such a plan)
maintained by the Company or a Subsidiary.
	 
	(e)	 	
Code. The Internal Revenue Code of 1986, as amended. Any
reference to the Code includes the regulations promulgated pursuant
to the Code.
	 
	(f)	 	
Company. HearUSA, Inc.
	 
	(g)	 	
Committee. The Committee described in Section 5.1.
	 
	(h)	 	
Common Stock. The Company’s common stock, $.10 par value.
	 
	(i)	 	
Effective Date. The date that the Plan is approved by the
shareholders of the Company, which must occur within one year after
approval by the Board. No grants of Benefits shall be made prior to
the approval of the Plan by the shareholders of the Company.
	 
	(j)	 	
Employee. Any person employed by the Employer.
	 
	(k)	 	
Employer. The Company and all Subsidiaries.
	 
	(l)	 	
Exchange Act. The Securities Exchange Act of 1934, as amended.
	 
	(m)	 	
Fair Market Value. The last reported sale price, regular
way, of the Common Stock on any day or, in case no such reported
sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, in either case on the principal
national securities exchange on which the Common Stock is listed or
if the Common Stock is not listed on a national securities exchange
and is listed on the Nasdaq Stock Market, the sale price determined
in the same fashion or, if the Common Stock is not so listed on any
of the foregoing, the average of the bid and asked prices on such
day as furnished by dealers in the Common Stock in the
over-the-counter market. All calculations of the current market
price shall be made to the nearest cent.
	 
	(n)	 	
Fiscal Year. The taxable year of the Company which ends on
the Saturday closest to December 31 of each year.
	 
	(o)	 	
Helix Options. Options to purchase the common shares of
Helix outstanding on the Effective Date and granted pursuant to a
stock compensation plan for directors, employees and consultants
approved by the Helix Board of Directors.

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	(p)	 	
ISO. An Incentive Stock Option as defined in Section 422 of
the Code.
	 
	(q)	 	
NQSO. A Non-Qualified Stock Option, which is an Option that
does not qualify as an ISO.
	 
	(r)	 	
Option. An option to purchase Shares granted under the Plan.
	 
	(s)	 	
Other Stock Based Award. An award under ARTICLE XVII that is
valued in whole or in part by reference to, or is otherwise based
on, Common Stock.
	 
	(t)	 	
Participant. A person who is granted a Benefit under the
Plan. Benefits may be granted only to Employees, employees and
owners of entities which are not Subsidiaries but which have a
direct or indirect ownership interest in an Employer or in which an
Employer has a direct or indirect ownership interest, persons who,
and employees and owners of entities which, are customers and
suppliers of an Employer, persons who, and employees and owners of
entities which, render services to an Employer, and persons who, and
employees and owners of entities, which have ownership or business
affiliations with any persons or entity previously described, and to
the holders of Helix Options.
	 
	(u)	 	
Performance Share. A Share awarded to a Participant under
ARTICLE XVI of the Plan.
	 
	(v)	 	
Plan. The HearUSA, Inc. 2002 Flexible Stock Plan and all
amendments and supplements to it.
	 
	(w)	 	
Restricted Stock. Shares issued under ARTICLE XV of the
Plan.
	 
	(x)	 	
Rule 16b-3. Rule 16b-3 promulgated by the SEC pursuant to
Section 16(b) of the Exchange Act, as such rule may be amended, or
any successor rule in effect from time to time.
	 
	(y)	 	
SEC. The Securities and Exchange Commission.
	 
	(z)	 	
Share. A share of Common Stock.
	 
	(aa)	 	
SAR. A stock appreciation right, which is the right to
receive an amount equal to the appreciation, if any, in the Fair
Market Value of a Share from the date of the grant of the right to
the date of its payment.

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	(bb)	 	
Subsidiary. Any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of grant of
an Option or other Benefit, each of the
corporations, other than the last corporation in the unbroken
chain, owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain; provided that the Company and such
corporation are consolidated for purposes of preparing financial
statements.

	 	 	 
	2.2	 	
Other Definitions. In addition to the above definitions, certain words
and phrases used in the Plan and any Agreement may be defined in other
portions of the Plan or in such Agreement.
	 
	2.3	 	
Conflicts in Plan. In the case of any conflict in the terms of the Plan
relating to a Benefit, the provisions in the ARTICLE of the Plan which
specifically grants such Benefit shall control those in a different
ARTICLE.

ARTICLE III — COMMON STOCK

	 	 	 
	3.1	 	
Number of Shares. The number of Shares for which Options, SARs,
Restricted Stock or Performance Shares may be granted under the Plan shall
initially be 3,000,000 Shares. Such number of Shares shall increase
annually, effective as of the first day of each Fiscal Year, commencing
with the Fiscal Year beginning in 2003, by the number of shares equal to
10% of the number of Shares subject to the Plan as of the last day of the
prior Fiscal Year, but in no event more than 5,000,000 Shares in the
aggregate. Such shares may be authorized but unissued Shares, Shares held
in the treasury, or both.
	 
	3.2	 	
Reuse. If an Option or SAR expires or is terminated, surrendered, or
canceled without having been fully exercised, if Restricted Shares or
Performance Shares are forfeited, or if any other grant results in any
Shares not being issued, the Shares covered by such Option or SAR, grant
of Restricted Shares, Performance Shares or other grant, as the case may
be, shall again be available for use under the Plan, to the fullest extent
permitted under Rule 16b-3.
	 
	3.3	 	
Adjustments. If there is any change in the Common Stock of the Company
by reason of any stock dividend, stock split, spin-off, split-up,
spin-out, recapitalization, merger, consolidation, reorganization,
combination or exchange of shares, the number of SARs and number and class
of shares available for Options and grants of Restricted Stock,
Performance Shares and Other Stock Based Awards and the number of Shares
subject to outstanding Options, SARs, grants of Restricted Stock and
Performance Shares, and Other Stock Based Awards, and the price thereof,
as applicable, shall be appropriately adjusted by the Committee; provided,
that any such adjustment shall not increase the intrinsic value of any
Option nor decrease the ratio of the purchase price for Shares thereunder
to Fair Market Value.

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ARTICLE IV — ELIGIBILITY

	 	 	 
	4.1	 	
Determined By Committee. The Participants and the Benefits they receive
under the Plan shall be determined solely by the Committee, except in the
case of holders of Helix Options which shall be automatically converted
into Options of the Company under the Plan pursuant to the terms of the
Merger Agreement effective upon the closing of the combination
contemplated by the Merger Agreement. In making its determinations, the
Committee shall consider past, present and expected future contributions
of Participants and potential Participants to the Employer, including,
without limitation, the performance of, or the refraining from the
performance of, services.

ARTICLE V — ADMINISTRATION

	 	 	 
	5.1	 	
Committee. The Plan shall be administered by the Committee. The
Committee shall consist of the full Board of Directors or, if determined
by the full Board, of two or more members of the Board who are
“Non-Employee Directors” as defined in Rule 16b-3. The members of the
Committee shall be appointed by and shall serve at the pleasure of the
Board, which may from time to time appoint members in substitution for
members previously appointed and fill vacancies, however caused, in the
Committee. The Committee may select one of its members as its Chairman
and shall hold its meetings at such times and places as it may determine.
A majority of its members shall constitute a quorum. All determinations
of the Committee shall be made by a majority of its members. Any decision
or determination reduced to writing and signed by a majority of the
members shall be fully as effective as if it had been made by a majority
vote at a meeting duly called and held.
	 
	5.2	 	
Authority. Subject to the terms of the Plan, the Committee shall have
discretionary authority to: (a) determine the individuals to whom
Benefits are granted, the type and amounts of Benefits to be granted and
the time of all such grants; (b) determine the terms, conditions and
provisions of, and restrictions relating to, each Benefit granted; (c)
interpret and construe the Plan and all Agreements; (d) prescribe, amend
and rescind rules and regulations relating to the Plan; (e) determine the
content and form of all Agreements; (f) determine all questions relating
to Benefits under the Plan; (g) maintain accounts, records and ledgers
relating to Benefits; (h) maintain records concerning its decisions and
proceedings; (i) employ agents, attorneys, accountants or other persons
for such purposes as the Committee considers necessary or desirable; and
(j) do and perform all acts which it may deem necessary or appropriate for
the administration of the Plan and carry out the purposes of the Plan.

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	5.3	 	
Delegation. Except as required by Rule 16b-3 with respect to grants of
Options, SARs, Restricted Stock, Performance Shares, Other Stock Based
Awards, or other Benefits to
individuals who are subject to Section 16 of the Exchange Act or as
otherwise required for compliance with Rule 16b-3 or other applicable
law, the Committee may delegate all or any part of its authority under
the Plan to any Employee, Employees or committee.
	 
	5.4	 	
Determination. All determinations of the Committee shall be final.

ARTICLE VI — AMENDMENT

	 	 	 
	6.1	 	
Power of Board. Except as hereinafter provided, the Board shall have the
sole right and power to amend the Plan at any time and from time to time.
	 
	6.2	 	
Limitation. The Board may not amend the Plan, without approval of the
shareholders of the Company in a manner which would violate applicable law
or cause the Company to violate its listing agreement with the American
Stock Exchange.

ARTICLE VII — TERM AND TERMINATION

	 	 	 
	7.1	 	
Term. The Plan shall commence as of the Effective Date and, subject to
the terms of the Plan, including those requiring approval by the
shareholders of the Company and those limiting the period over which ISOs
or any other Benefits may be granted, shall continue in full force and
effect until terminated.
	 
	7.2	 	
Termination. The Plan may be terminated at any time by the Board.

ARTICLE VIII — MODIFICATION OR TERMINATION OF BENEFITS

	 	 	 
	8.1	 	
General. Subject to the provisions of Section 8.2, the amendment or
termination of the Plan shall not adversely affect a Participant’s right
to any Benefit granted prior to such amendment or termination.
	 
	8.2	 	
Committee’s Right. Any Benefit granted may be converted, modified,
forfeited or canceled, in whole or in part, by the Committee if and to the
extent permitted in the Plan or applicable Agreement or with the consent
of the Participant to whom such Benefit was granted.

ARTICLE IX — CHANGE OF CONTROL

	 	 	 
	9.1	 	
Right of Committee. In order to maintain a Participant’s rights in the
event of a Change of Control, the Committee, in its sole discretion, may,
in any Agreement evidencing a Benefit, or at any time prior to, or
simultaneously with or after a Change in Control, provide such

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protection
as it may deem necessary. Without, in any way, limiting the generality of
the foregoing sentence or requiring any specific protection, the Committee
may:

	 	 	 
	(a)	 	
provide for the acceleration of any time periods relating to
the exercise or realization of such Benefit so that such Benefit may
be exercised or realized in full on or before a date fixed by the
Committee;
	 
	(b)	 	
provide for the purchase of such Benefit, upon the
Participant’s request, for an amount of cash equal to the amount
which could have been attained upon the exercise or realization of
such Benefit had such Benefit been currently exercisable or payable;
	 
	(c)	 	
make such adjustment to the Benefits then outstanding as the
Committee deems appropriate to reflect such transaction or change;
and/or
	 
	(d)	 	
cause the Benefits then outstanding to be assumed, or new
Benefits substituted therefor, by the surviving corporation in such
change.

ARTICLE X — AGREEMENTS AND CERTAIN BENEFITS

	 	 	 
	10.1	 	
Grant Evidenced by Agreement. The grant of any Benefit under the Plan
may be evidenced by an Agreement which shall describe the specific Benefit
granted and the terms and conditions of the Benefit. The granting of any
Benefit shall be subject to, and conditioned upon, the recipient’s
execution of any Agreement required by the Committee. Except as otherwise
provided in an Agreement, all capitalized terms used in the Agreement
shall have the same meaning as in the Plan, and the Agreement shall be
subject to all of the terms of the Plan.
	 
	10.2	 	
Provisions of Agreement. Each Agreement shall contain such provisions
that the Committee shall determine to be necessary, desirable and
appropriate for the Benefit granted which may include, but not be limited
to, the following with respect to any Benefit: description of the type of
Benefit; the Benefit’s duration; its transferability; if an Option, the
exercise price, the exercise period and the person or persons who may
exercise the Option; the effect upon such Benefit of the Participant’s
death or termination of employment; the Benefit’s conditions; when, if,
and how any Benefit may be forfeited, converted into another Benefit,
modified, exchanged for another Benefit or replaced; and the restrictions
on any Shares purchased or granted under the Plan.
	 
	10.3	 	
Certain Benefits. Any Benefit granted to an individual who is subject to
Section 16 of the Exchange Act, and any other Benefit unless otherwise
specified in an Agreement or permitted by the Committee, shall be not
transferable other than by will or the laws of

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descent and distribution
and shall be exercisable during his lifetime only by him, his guardian or
his legal representative.

ARTICLE XI — REPLACEMENT AND TANDEM AWARDS

	 	 	 
	11.1	 	
Replacement. The Committee may permit a Participant to elect to
surrender a Benefit in exchange for a new Benefit.
	 
	11.2	 	
Tandem Awards. Awards may be granted by the Committee in tandem.
However, no Benefit may be granted in tandem with an ISO except SARs.

ARTICLE XII — PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING

	 	 	 
	12.1	 	
Payment. Upon the exercise of an Option or in the case of any other
Benefit that requires a payment to the Company, the amount due the Company
is to be paid:

	 	 	 
	(a)	 	
in cash;
	 
	(b)	 	
by the tender to the Company of Shares owned by the optionee
for more than six months and registered in his name having a Fair
Market Value equal to the amount due to the Company; or
	 
	(c)	 	
by any combination of the payment methods specified in (a)
and (b) above.

	 	 	 
		 	
Notwithstanding the foregoing, any method of payment other than (a) may
be used only with the consent of the Committee or if and to the extent so
provided in an Agreement. The proceeds of the sale of Common Stock
purchased pursuant to an Option and any payment to the Company for other
Benefits shall be added to the general funds of the Company or to the
Shares held in treasury, as the case may be, and used for the corporate
purposes of the Company as the Board shall determine.

	 	 	 
	12.2	 	
Dividend Equivalents. Grants of Benefits in Shares or Share equivalents
may include dividend equivalent payments or dividend credit rights.
	 
	12.3	 	
Deferral. The right to receive any Benefit under the Plan may, at the
request of the Participant, be deferred for such period and upon such
terms as the Committee shall determine, which may include crediting of
interest on deferrals of cash and crediting of dividends on deferrals
denominated in Shares.
	 
	12.4	 	
Withholding. The Company, at the time any distribution is made under the
Plan, whether in cash or in Shares, or at the time any Option is
exercised, may withhold from such

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distribution or Shares issuable upon the
exercise of an Option any amount necessary to satisfy federal, state and
local income and other tax withholding requirements with respect to such
distribution or exercise of such Options. Such withholding shall be in
cash or, in the
Committee’s sole discretion, Shares; provided, that the Shares are only
for the minimum withholding required. The Committee or the Company may
require a Participant to tender to the Company cash and/or Shares in the
amount necessary to comply with any such withholding requirements.

ARTICLE XIII — OPTIONS

	 	 	 
	13.1	 	
Types of Options. It is intended that both ISOs and NQSOs may be granted
by the Committee under the Plan.
	 
	13.2	 	
Grant of ISOs and Option Price. Each ISO must be granted to an Employee
and granted within ten years from the earlier of the date of approval of
the Plan by the Board or the Effective Date. The purchase price for
Shares under any ISO shall be no less than the Fair Market Value of the
Shares at the time the Option is granted (or, in the case of an ISO
granted to an Employee who, at the time ISO is granted, owns (actually or
constructively under Section 424(d) of the Code) stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary, 110% of such Fair Market Value.
	 
	13.3	 	
Other Requirements for ISOs. The terms of each Option which is intended
to qualify as an ISO shall meet all requirements of Section 422 of the
Code.
	 
	13.4	 	
NQSOs. The terms of each NQSO shall provide that such Option will not be
treated as an ISO. The purchase price for Shares under any NQSO shall be
the Fair Market Value of the Shares at the time the Option is granted.
	 
	13.5	 	
Determination by Committee. Except as otherwise provided in Section 13.2
through Section 13.5, the terms of all Options shall be determined by the
Committee.

ARTICLE XIV — SARS

	 	 	 
	14.1	 	
Grant and Payment. The Committee may grant SARs. Upon electing to
receive payment of a SAR, a Participant shall receive payment in cash, in
Common Stock, or in any combination of cash and Common Stock, as the
Committee shall determine.
	 
	14.2	 	
Grant of Tandem Award. The Committee may grant SARs in tandem with an
Option, in which case: the exercise of the Option shall cause a
correlative reduction in SARs standing to a Participant’s credit which
were granted in tandem with the Option; and the payment of SARs shall
cause a correlative reduction of the Shares under such Option.

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	14.3	 	
ISO Tandem Award. When SARs are granted in tandem with an ISO, the SARs
shall have such terms and conditions as shall be required for the ISO to
qualify as an ISO.
	 
	14.4	 	
Payment of Award. SARs shall be paid, to the extent payment is elected
by the Participant (and is otherwise due and payable), as soon as
practicable after the date on which such election is made.

ARTICLE XV — RESTRICTED STOCK

	 	 	 
	15.1	 	
Description. The Committee may grant Benefits in Shares available under
ARTICLE III of the Plan as Restricted Stock. Shares of Restricted Stock
shall be issued and delivered at the time of the grant but shall be
subject to forfeiture until provided otherwise in the applicable Agreement
or the Plan. Each certificate representing Shares of Restricted Stock
shall bear a legend referring to the Plan and the risk of forfeiture of
the Shares and stating that such Shares are nontransferable until all
restrictions have been satisfied. The grantee shall be entitled to full
voting and dividend rights with respect to all shares of Restricted Stock
from the date of grant.
	 
	15.2	 	
Cost of Restricted Stock. Grants of Shares of Restricted Stock shall be
made at no cost to the Participant.
	 
	15.3	 	
Non-Transferability. Shares of Restricted Stock shall not be
transferable until after the removal of the legend with respect to such
Shares.

ARTICLE XVI — PERFORMANCE SHARES

	 	 	 
	16.1	 	
Description. Performance Shares are the right of an individual to whom a
grant of such Shares is made to receive Shares or cash equal to the Fair
Market Value of such Shares at a future date in accordance with the terms
of such grant. Generally, such right shall be based upon the attainment
of targeted profit and/or performance objectives.
	 
	16.2	 	
Grant. The Committee may grant an award of Performance Shares. The
number of Performance Shares and the terms and conditions of the grant
shall be set forth in the applicable Agreement.

ARTICLE XVII — OTHER STOCK BASED AWARDS AND OTHER BENEFITS

	 	 	 
	17.1	 	
Other Stock Based Awards. The Committee shall have the right to grant
Other Stock Based Awards which may include, without limitation, the grant
of Shares based on certain conditions, the payment of cash based on the
performance of the Common Stock, and the grant of securities convertible
into Shares.

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	17.2	 	
Other Benefits. The Committee shall have the right to provide types of
Benefits under the Plan in addition to those specifically listed, if the
Committee believes that such Benefits would further the purposes for which
the Plan was established.

ARTICLE XVIII — MISCELLANEOUS PROVISIONS

	 	 	 
	18.1	 	
Underscored References. The underscored references contained in the Plan
are included only for convenience, and they shall not be construed as a
part of the Plan or in any respect affecting or modifying its provisions.
	 
	18.2	 	
Number and Gender. The masculine and neuter, wherever used in the Plan,
shall refer to either the masculine, neuter or feminine; and, unless the
context otherwise requires, the singular shall include the plural and the
plural the singular.
	 
	18.3	 	
Unfunded Status of Plan. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments
or deliveries of Shares not yet made to a Participant by the Company,
nothing contained herein shall give any rights that are greater than those
of a general creditor of the Company. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver Shares or payments hereunder consistent with the
foregoing.
	 
	18.4	 	
Termination of Employment. If the employment of a Participant by the
Company terminates for any reason, except as otherwise provided in an
Agreement, all unexercised, deferred, and unpaid Benefits may be
exercisable or paid only in accordance with rules established by the
Committee. These rules may provide, as the Committee may deem
appropriate, for the expiration, forfeiture, continuation, or acceleration
of the vesting of all or part of the Benefits.

11

 

	 	 	 
	18.5	 	
Designation of Beneficiary. A Participant may file with the Committee a
written designation of a beneficiary or beneficiaries (subject to such
limitations as to the classes and number of beneficiaries and contingent
beneficiaries as the Committee may from time to time prescribe) to
exercise, in the event of the death of the Participant, an Option, or to
receive, in such event, any Benefits. The Committee reserves the right to
review and approve beneficiary designations. A Participant may from time
to time revoke or change any such designation of beneficiary and any
designation of beneficiary under the Plan shall be controlling over any
other disposition, testamentary or otherwise; provided, however, that if
the Committee shall be in doubt as to the right of any such beneficiary to
exercise any Option or to receive any Benefit, the Committee may determine
to recognize only an exercise by the legal representative of the
recipient, in which case the Company, the Committee and the members
thereof shall not be under any further liability to anyone.
	 
	18.6	 	
Governing Law. This Plan shall be construed and administered in
accordance with the laws of the State of Delaware.
	 
	18.7	 	
Purchase for Investment. The Committee may require each person
purchasing Shares pursuant to an Option or other award under the Plan to
represent to and agree with the Company in writing that such person is
acquiring the Shares for investment and without a view to distribution or
resale. The certificates for such Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer. All
certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem
advisable under all applicable laws, rules and regulations, and the
Committee may cause a legend or legends to be put on any such certificates
to make appropriate references to such restrictions.
	 
	18.8	 	
No Employment Contract. The adoption of the Plan shall not confer upon
any Employee any right to continued employment nor shall it interfere in
any way with the right of the Employer to terminate the employment of any
of its Employees at any time.
	 
	18.9	 	
No Effect on Other Benefits. The receipt of Benefits under the Plan
shall have no effect on any benefits to which a Participant may be
entitled from the Employer, under another plan or otherwise, or preclude a
Participant from receiving any such benefits.

12ex10-1

 

BB&T

LOAN AGREEMENT

         956-0086757         

Account Number

This Loan Agreement (the “Agreement”) is made this 9th day of November, 2001 by
and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking
corporation (“Bank”), and:

The Advisory Board Company, a Delaware corporation (“Borrower”), having its
chief executive office at 600 New Hampshire Avenue, N.W., Eighth Floor,
Washington, D.C. 20037.

The Borrower has applied to Bank for and the Bank has agreed to make, subject
to the terms of this Agreement, the following loan (hereinafter referred to as
“Loan”):

Line of Credit (“Line of Credit”) in the maximum principal amount not to exceed
$10,000,000.00 at any one time outstanding for the purpose of providing
short-term working capital which shall be evidenced by the Borrower’s
Promissory Note dated on or after the date hereof which shall mature August 31,
2002, when the entire unpaid principal balance then outstanding plus accrued
interest thereon shall be paid in full. Prior to maturity or the occurrence of
any Event of Default hereunder the Borrower may borrow, repay, and reborrow
under the Line of Credit through maturity. The Line of Credit shall bear
interest at the rate set forth in any such Note evidencing all or any portion
of the Line of Credit, the terms of which are incorporated herein by reference.

Section 1 Conditions Precedent

The Bank shall not be obligated to make any disbursement of Loan proceeds until
all of the following conditions have been satisfied by proper evidence,
execution, and/or delivery to the Bank of the following items in addition to
this Agreement, all in form and substance satisfactory to the Bank and the
Bank’s counsel in their sole discretion:

Note(s): The Note(s) evidencing the Loans(s) duly executed by the Borrower.

Commitment Fee: A commitment fee of $20,000.00 payable to the Bank on the date
of execution of the Loan Documents.

Corporate Resolution: A Corporate Resolution duly adopted by the Board of
Directors of the Borrower authorizing the execution,

      delivery, and
performance of the Loan Documents on or in a form provided by or
acceptable to Bank.

Articles of Incorporation: A copy of the Articles of Incorporation and all
other charter documents of the Borrower, all filed with and

      certified by
the Secretary of State of the State of the Borrower’s incorporation.

By-Laws: A copy of the By-Laws of the Borrower, certified by the Secretary of
the Borrower as to their completeness and accuracy.

Certificate of Incumbency: A certificate of the Secretary of the Borrower
certifying the names and true signatures of the 

      officers of the Borrower
authorized to sign the Loan Documents.

Opinion of Counsel: An opinion of counsel for the Borrower satisfactory to the
Bank and the Bank’s counsel.

Section 2 Representations and Warranties

The Borrower and Guarantor(s) represent and warrant to Bank that:

	 		 	2.01. Financial Statements. The balance sheet of the Borrower and its
subsidiaries, if any, and the related Statements of Income and Retained
Earnings of the Borrower and its subsidiaries, the accompanying footnotes
together with the accountant’s opinion thereon, and all other financial
information previously furnished to the Bank, are true and correct and fairly
reflect the financial condition of the Borrower and its subsidiaries as of
the dates thereof, including all contingent liabilities of every type, and
the financial condition of the Borrower and its subsidiaries as stated
therein has not changed materially and adversely since the date thereof.
	 
	 		 	2.02. Name, Capacity and Standing. The Borrower’s exact legal name is
correctly stated in the initial paragraph of the Agreement. The Borrower
warrants and represents that it is duly organized and validly existing under
the laws of its respective state of incorporation or organization; that it
and/or its subsidiaries, if any, are duly qualified and in good standing in
every other state in which the nature of their business shall require such
qualification, and are each duly authorized by their board of directors,
general partners or member/manager(s), respectively, to enter into and
perform the obligations under the Loan Documents.
	 
	 		 	2.03. No Violation of Other Agreements. The execution of the Loan Documents,
and the performance by the Borrower will not violate any provision, as
applicable, of its articles of incorporation, by-laws, articles of
organization, operating agreement, agreement of partnership, limited
partnership or limited liability partnership, or of any law, other agreement,
indenture, note, or other instrument binding upon the Borrower, or give cause
for the acceleration of any of the respective obligations of the Borrower.
	 
	 		 	2.04. Authority. All authority from and approval by any federal, state,
or local governmental body, commission or agency necessary to the
making, validity, or enforceability of this Agreement and the other Loan
Documents has been obtained.
	 
	 		 	2.05. Asset Ownership. The Borrower has good and marketable title to all of
the properties and assets reflected on the balance sheets and financial
statements furnished to the Bank, and all such properties and assets are free
and clear of mortgages, deeds of trust, pledges, liens, and all other
encumbrances except as otherwise disclosed by such financial statements.
	 
	 		 	2.06. Discharge of Liens and Taxes. The Borrower and its subsidiaries, if
any, have filed, paid, and/or discharged all taxes or other claims which may
become a lien on any of their respective properties or assets, excepting to
the extent that such items are being appropriately contested in good faith
and for which an adequate reserve (in an amount acceptable to Bank) for the
payment thereof is being maintained.
	 
	 		 	2.07. Regulation U. None of the Loan proceeds shall be used directly or
indirectly for the purpose of purchasing or carrying any margin stock in
violation of the provisions of Regulation U of the Board of Governors of the
Federal Reserve System.
	 
	 		 	2.08. ERISA. Each employee benefit plan, as defined by the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), maintained by
the Borrower or by any subsidiary of the Borrower meets, as of the date
hereof, the minimum funding standards of Section 302 of ERISA, all applicable
requirements of ERISA and of the Internal Revenue Code of 1986, as amended,
and no “Reportable Event” nor “Prohibited Transaction” (as defined by ERISA)
has occurred with respect to any such plan.
	 
	 		 	2.09. Litigation. There is no claim, action, suit or proceeding pending,
threatened or reasonably anticipated before any court, commission,
administrative agency, whether State or Federal, or arbitration which will
materially adversely affect the financial condition, operations, properties,
or business of the Borrower or its subsidiaries, if any, or the ability of
the Borrower to perform their obligations under the Loan Documents.
	 
	 		 	2.10. Other Agreements. The representations and warranties made by Borrower
to Bank in the other Loan Documents are true and correct in all respects on
the date hereof.
	 
	 		 	2.11. Binding and Enforceable. The Loan Documents, when executed, shall
constitute valid and binding obligations of the Borrower and Guarantors
respectively, the execution of such Loan Documents has been duly authorized
by the parties thereto, and are enforceable in accordance with their terms,
except as may be limited by bankruptcy, insolvency, moratorium, or similar
laws affecting creditors’ rights generally.
	 
	 		 	2.12. Commercial Purpose. The Loan(s) are not “consumer transactions”, as
defined in the District of Columbia Uniform Commercial Code.

 

 

BB&T

LOAN AGREEMENT

Section 3 Affirmative Covenants

The Borrower covenants and agrees that from the date hereof and until payment
in full of all indebtedness and performance of all obligations owed under the
Loan Documents, Borrower shall:

	 		 	3.01. Maintain Existence and Current Legal Form of Business. (a) Maintain
its existence and good standing in the state of its incorporation or
organization, (b) maintain its current legal form of business indicated
above, and, (c) as applicable, qualify and remain qualified as a foreign
corporation, general partnership, limited partnership, limited liability
partnership or limited liability company in each jurisdiction in which such
qualification is required.
	 
	 		 	3.02. Maintain Records. Keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Borrower.
	 
	 		 	3.03. Maintain Properties. Maintain, keep, and preserve all of its properties
(tangible and intangible) necessary or useful in the conduct of its business
in good working order and condition, ordinary wear and tear excepted.
	 
	 		 	3.04. Conduct of Business. Continue to engage in an efficient, prudent, and
economical manner in a business of the same general type as now conducted.
	 
	 		 	3.05. Maintain Insurance. Maintain insurance with financially sound and
reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in the same or a
similar business, and business interruption insurance if required by Bank,
which insurance may provide for reasonable deductible(s). The Bank shall be
named as loss payee (Long Form) on all policies, and the Borrower shall
deliver certificates of insurance at closing evidencing same. All such
insurance policies shall provide, and the certificates shall state, that no
policy will be terminated without 20 days prior written notice to Bank.
	 
	 		 	3.06. Comply With Laws. Comply in all respects with all applicable laws,
rules, regulations, and orders including, without limitation, paying before
the delinquency of all taxes, assessments, and governmental charges imposed
upon it or upon its property, and all Environmental Laws.
	 
	 		 	3.07. Right of Inspection. Permit the officers and authorized agents of the
Bank, at any reasonable time or times in the Bank’s sole discretion, to
examine and make copies of the records and books of account of, to visit the
properties of the Borrower, and to discuss such matters with any officers,
directors, managers, members or partners, limited or general of the Borrower,
and the Borrower’s independent accountant as the Bank deems necessary and
proper.
	 
	 		 	3.08. Reporting Requirements. Furnish to the Bank:
	 

	 	 	 	Quarterly Financial Statements: As soon as available and not more than
forty-five (45) days after the end of each quarter, balance sheets,
statements of income, cash flow, and retained earnings for the period
ended and a statement of changes in the financial position, all in
reasonable detail, and all prepared in accordance with GAAP consistently
applied and certified as true and correct by an officer, general partner
or manager (or member(s)) of the Borrower, as appropriate.
	 
	 	 	 	Annual Financial Statements: As soon as available and not more than one
hundred and twenty (120) days after the end of each fiscal year, balance
sheets, statements of income, and retained earnings for the period ended
and a statement of changes in the financial position, all in reasonable
detail, and all prepared in accordance with GAAP consistently applied.
The financial statements must be of the following quality or better:
Audited.
	 
	 	 	 	Notice of Litigation: Promptly after the receipt by the Borrower of
notice or complaint of any action, suit, and proceeding before any court
or administrative agency of any type which, if determined adversely,
could have a material adverse effect on the financial condition,
properties, or operations of the Borrower, as appropriate.
	 
	 	 	 	Tax Returns: As soon as available each year, complete copies (including
all schedules) of all state and federal tax returns filed by Borrower.
	 
	 	 	 	Notice of Default: Promptly upon discovery or knowledge thereof, notice
of the existence of any event of default under this Agreement or any
other Loan Documents.
	 
	 	 	 	Other Information: Such other information as the Bank may from time to
time reasonably request.
	 

	 		 	3.09. Affirmative Covenants from other Loan Documents. All affirmative
covenants contained in any Loan Document executed by the Borrower which
are described in paragraph 2 hereof are hereby incorporated by reference
herein.

Section 4 Guarantor(s)

Section 5 Financial Covenants

The Borrower covenants and agrees that from the date hereof until payment in
full of all indebtedness and the performance of all obligations under the Loan
Documents, the Borrower shall at all times maintain the following financial
covenants and ratios all in accordance with GAAP unless otherwise specified:

	 	 	 	Adjusted Current Ratio. A ratio of total current assets to total Adjusted
Current Liabilities of not less than 2.0 to 1 through December 30, 2001, and
an Adjusted Current Ratio of not less than 2.5 to 1 beginning December 31,
2001 and continuing thereafter. Adjusted Current Liabilities is defined as
current liabilities minus deferred revenue)
	 
	 	 	 	Adjusted Tangible Net Worth. A minimum Adjusted Tangible Net Worth of not
less than $7,000,000.00 through. December 30, 2001, a minimum Adjusted
Tangible Net Worth of not less than $10,500,000.00 beginning December 31,
2001 and continuing thereafter. Adjusted Tangible Net Worth is defined as
net worth, minus goodwill, contract rights, and assets representing claims on
stockholders or affiliated entities, plus eighty percent (80%) of deferred
revenue.
	 
	 	 	 	Adjusted Debt to Adjusted Tangible Net Worth. A ratio of Adjusted Debt to
Adjusted Tangible Net Worth of not greater than 2.0 to 1.0 through December
30, 2001, and a ratio of Adjusted Debt to Adjusted Tangible Net Worth of not
greater than 1.5 to 1.0 beginning December 31, 2001 and continuing
thereafter. Adjusted Debt is defined as total liabilities minus eighty
percent (80%) of deferred revenue.

Section 6 Negative Covenants

The Borrower covenants and agrees that from the date hereof and until payment
in full of all indebtedness and performance of all obligations under the Loan
Documents, the Borrower shall not, without the prior written consent of the
Bank:

	 	 	 	6.01.     Liens. Create, incur, assume, or suffer to exist any lien upon or with
respect to any of Borrower’s properties now owned or hereafter acquired,
except:

	 
	 	 	 	(a) Liens and security interests in favor of the Bank;
	 
	 	 	 	(b) Liens for taxes not yet due and payable or otherwise being contested
in good faith and for which appropriate reserves are maintained;
	 
	 	 	 	(c) Other liens imposed by law not yet due and payable, or otherwise being
contested in good faith and for which appropriate reserves are maintained;
	 
	 	 	 	(d) purchase money security interests on any property hereafter
acquired, provided that such lien shall attach only to the property
acquired.
	 

	 	 	 	6.02.      Debt. Create, incur, assume, or suffer to exist any debt, except:
	 

	 	 	 	(a) Debt to the Bank;
	 
	 	 	 	(b) Debt outstanding on the date hereof and shown on the most recent
financial statements submitted to the Bank;
	 
	 	 	 	(c) Accounts payable to trade creditors incurred in the ordinary
course of business;
	 
	 	 	 	(d) Debt secured by purchase money security interests as outlined
above in Section 6.01 (d);
	 
	 	 	 	(e) Additional debt not to exceed $500,000.00 in the aggregate at any
time.

 

 

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LOAN AGREEMENT

	 	 	 	6.03. Change of Legal Form of Business; Purchase of Assets. Change
Borrower’s name or the legal form (other than converting from a subchapter-S
corporation to a subchapter-C corporation) of Borrower’s business as shown
above, whether by merger, consolidation, conversion or otherwise, and
Borrower shall not purchase all or substantially all of the assets or
business of any Person without prior written approval from the Bank.
	 
	 	 	 	6.04. Leases. Create, incur, assume, or suffer to exist any leases, except:
	 

	 	 	 	(a) Leases outstanding on the date hereof and showing on the most
recent financial statement submitted to the Bank;
	 
	 	 	 	(b) Operating Leases for machinery and equipment which do not in the
aggregate require payments in excess of $250,000.00 in any fiscal year
of the Borrower.
	 

	 	 	 	6.05. Guaranties. Assume, guarantee, endorse, or otherwise be or become
directly or contingently liable for obligations of any Person, except
guaranties by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business.
	 
	 	 	 	6.06. Disposition of Assets. Sell, lease, or otherwise dispose of any of its
assets or properties except in the ordinary and usual course of its business.
	 
	 	 	 	6.07. Transfer of Ownership. If Borrower is a corporation, (a) issue,
transfer or sell any new class of stock, or (b) issue, transfer or sell, in
the aggregate, from its treasury stock and/or currently authorized but
unissued shares of any class of stock (other than pursuant to existing stock
plans), more than 10% of the total number of all such issued and outstanding
shares as of the date of this Agreement.
	 
	 	 	 	6.08. Negative Covenants from other Loan Documents. All negative covenants
contained in any Loan Document executed by the Borrower which are described
in paragraph 2 hereof are hereby incorporated by reference herein.

Section 7 Hazardous Materials and Compliance with Environmental Laws

	 		 	7.01. Compliance. Borrower agrees to comply with all applicable
Environmental Laws, including, without limitation, all those relating to
Hazardous Materials. Borrower further agrees to provide Bank, and all
appropriate Federal and State authorities, with immediate notice in writing
of any release of Hazardous Materials on Borrower’s property and to pursue
diligently to completion all appropriate and/or required remedial action in
the event of such release.

Section 8 Events of Default

The following shall be “Events of Default” by Borrower or any Guarantor:

	 		 	8.01. The failure to make prompt payment of any installment of principal or
interest on any of the Note(s) when due or payable.
	 
	 		 	8.02. Should any representation or warranty made in the Loan Documents prove
to be false or misleading in any material respect.
	 
	 		 	8.03. Should any report, certificate, financial statement, or other document
furnished prior to the execution of or pursuant to the terms of this
Agreement prove to be false or misleading in any material respect.
	 
	 		 	8.04. Should the Borrower default on the performance of any other obligation
of indebtedness when due or in the performance of any obligation incurred in
connection with money borrowed.
	 
	 		 	8.05. Should the Borrower breach any covenant, condition, or agreement made
under any of the Loan Documents.
	 
	 		 	8.06. Should a custodian be appointed for or take possession of any or all of
the assets of the Borrower, or should the Borrower either voluntarily or
involuntarily become subject to any insolvency proceeding, including becoming
a debtor under the United States Bankruptcy Code, any proceeding to dissolve
the Borrower, any proceeding to have a receiver appointed, or should the
Borrower make an assignment for the benefit of creditors, or should there be
an attachment, execution, or other judicial seizure of all or any portion of
the Borrower’s assets, including an action or proceeding to seize any funds
on deposit with the Bank, and such seizure is not discharged within 30 days.
	 
	 		 	8.07. Should final judgment for the payment of money be rendered against the
Borrower which is not covered by insurance and shall remain undischarged for
a period of 30 days unless such judgment or execution thereon be effectively
stayed.
	 
	 	.	 	8.08. Upon the death of, or termination of existence of, or dissolution of
the Borrower.
	 
	 		 	8.09. Should the Bank in good faith deem itself, its liens and security
interests, if any, or any debt thereunder unsafe or insecure, or should the
Bank believe in good faith that the prospect of payment of any debt or other
performance by the Borrower is impaired.
	 
	 		 	8.10. Should any lien or security interest granted to Bank to secure payment
of the Note(s) terminate, fail for any reason to have the priority agreed to
by Bank on the date granted, or become unperfected or invalid for any reason.

Section 9 Remedies Upon Default

Upon the occurrence of any of the above listed Events of Default, the Bank may
at any time thereafter, at its option, take any or all of the following
actions, at the same or at different times:

	 		 	9.01. Declare the balance(s) of the Note(s) to be immediately due and
payable, both as to principal and interest, without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived by
Borrower and such balance(s) shall accrue interest at the Default Rate as
provided herein until paid in full;
	 
	 		 	9.02. Require the Borrower to pledge collateral to the Bank from the
Borrower’s assets and properties, the acceptability and sufficiency of such
collateral to be determined in the Bank’s sole discretion;
	 
	 		 	9.03. Take immediate possession of and foreclose upon any or all collateral
which may be granted to the Bank as security for the indebtedness and
obligations of Borrower under the Loan Documents;
	 
	 		 	9.04. Exercise any and all other rights and remedies available to the Bank
under the terms of the Loan Documents and applicable law, including the
District of Columbia Uniform Commercial Code;
	 
	 		 	9.05. Any obligation of the Bank to advance funds to the Borrower or any
other Person under the terms of under the Note(s) and all other obligations,
if any, of the Bank under the Loan Documents shall immediately cease and
terminate unless and until Bank shall reinstate such obligation in writing.

Section 10 Miscellaneous Provisions

	 		 	10.01. Definitions.

     “Default Rate” shall mean a rate of interest equal to Bank’s Prime Rate
plus five percent (5%) per annum (not to exceed the legal maximum rate) from
and after the date of an Event of Default hereunder which shall apply, in the
Bank’s sole discretion, to all sums owing, including principal and interest,
on such date.

     “Environmental Laws” shall mean all federal and state laws and
regulations which affect or may affect the Borrower’s property, including
without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Sections 9601 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the Clean Air
Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.).

     “Loan Documents” shall mean this Agreement including any schedule
attached hereto, the Note and all other documents, certificates, and
instruments executed in connection therewith, and all renewals, extensions,
modifications, substitutions, and replacements thereto and therefore.

     “Person” shall mean an individual, partnership, corporation, trust,
unincorporated organization, limited liability company, limited liability
partnership, association, joint venture, or a government agency or political
subdivision thereof.

     “GAAP” shall mean generally accepted accounting principles as
established by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants, as amended and supplemented from
time to time.

 

 

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LOAN AGREEMENT

	 		 	10.02. Non-impairment. If any one or more provisions contained in the Loan
Documents shall be held invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions
contained therein shall not in any way be affected or impaired thereby and
shall otherwise remain in full force and effect.
	 
	 		 	10.03. Applicable Law. The Loan Documents shall be construed in accordance
with and governed by the laws of the District of Columbia.
	 
	 		 	10.04. Waiver. Neither the failure or any delay on the part of the Bank in
exercising any right, power or privilege granted in the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise of any other right, power, or
privilege which may be provided by law.
	 
	 		 	10.05. Modification. No modification, amendment, or waiver of any provision
of any of the Loan Documents shall be effective unless in writing and signed
by the Borrower and Bank.
	 
	 		 	10.06. Stamps and Fees. The Borrower shall pay all federal or state stamps,
taxes, or other fees or charges, if any are payable or are determined to be
payable by reason of the execution, delivery, or issuance of the Loan
Documents or any security granted to the Bank; and the Borrower and Guarantor
agree to indemnify and hold harmless the Bank against any and all liability
in respect thereof.
	 
	 		 	10.07. Attorneys’ Fees. In the event the Borrower shall default in any of
its obligations hereunder and the Bank believes it necessary to employ an
attorney to assist in the enforcement or collection of the indebtedness of
the Borrower to the Bank, to enforce the terms and provisions of the Loan
Documents, to modify the Loan Documents, or in the event the Bank voluntarily
or otherwise should become a party to any suit or legal proceeding (including
a proceeding conducted under the Bankruptcy Code), the Borrower agrees to pay
the reasonable attorneys’ fees of the Bank and all related costs of
collection or enforcement that may be incurred by the Bank. The Borrower
shall be liable for such attorneys’ fees and costs whether or not any suit or
proceeding is actually commenced.
	 
	 		 	10.08. Bank Making Required Payments. In the event Borrower shall fail to
maintain insurance, pay taxes or assessments, costs and expenses which
Borrower is, under any of the terms hereof or of any Loan Documents, required
to pay, or fail to keep any of the properties and assets constituting
collateral free from new security interests, liens, or encumbrances, except
as permitted herein, Bank may at its election make expenditures for any or
all such purposes and the amounts expended together with interest thereon at
the Default Rate, shall become immediately due and payable to Bank, and shall
have benefit of and be secured by the collateral; provided, however, the Bank
shall be under no duty or obligation to make any such payments or
expenditures.
	 
	 		 	10.09. Right of Offset. Any indebtedness owing from Bank to Borrower may be
set off and applied by Bank on any indebtedness or liability of Borrower to
Bank, at any time and from time to time after maturity, whether by
acceleration or otherwise, and without demand or notice to Borrower. Bank
may sell participations in or make assignments of any Loan made under this
Agreement, and Borrower agrees that any such participant or assignee shall
have the same right of setoff as is granted to the Bank herein.
	 
	 		 	10.10. Modification and Renewal Fees. Bank may, at its option, charge any
fees for modification, renewal, extension, or amendment of any terms of the
Note permitted by law.
	 
	 		 	10.11. Conflicting Provisions. If provisions of this Agreement shall
conflict with any terms or provisions of the Note, the provisions of such
Note, as appropriate, shall take priority over any provisions in this
Agreement.
	 
	 		 	10.12. Notices. Any notice permitted or required by the provisions of this
Agreement shall be deemed to have been given when delivered in writing to the
City Executive or any Vice President of the Bank at its offices in
Washington, D.C. and to the Chief Financial Officer of the Borrower at its
offices in Washington, D.C. when sent by certified mail and return receipt
requested.
	 
	 		 	10.13. Consent to Jurisdiction. Borrower hereby irrevocably agrees that any
legal action or proceeding arising out of or relating to this Agreement may
be instituted in the Superior Court in the District of Columbia, or the
United States District Court for the District of District of Columbia, or in
such other appropriate court and venue as Bank may choose in its sole
discretion. Borrower consents to the jurisdiction of such courts and waives
any objection relating to the basis for personal or in rem jurisdiction or to
venue which Borrower may now or hereafter have in any such legal action or
proceedings.
	 
	 		 	10.14. Counterparts. This Agreement may be executed by one or more parties
on any number of separate counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
	 
	 		 	10.15. Entire Agreement. The Loan Documents embody the entire agreement
between Borrower and Bank with respect to the Loans, and there are no oral or
parol agreements existing between Bank and Borrower with respect to the Loans
which are not expressly set forth in the Loan Documents.

[SIGNATURES ON FOLLOWING PAGE]

 

 

BB&T

LOAN AGREEMENT

Signature Page

IN WITNESS WHEREOF, the Bank and Borrower have caused this Agreement to be duly
executed under seal all as of the date first above written.

Borrower is a Corporation:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Advisory Board Company
	 	 	 	 	 	 	
	Attest:	 	 	 	By:	 	/s/ Frank J. Williams
		 	
	 		 	

		 	 	 		 	Frank Williams
	Title:	 	 	 	Title:	 	Chief Executive Officer
		 	
	 		 	

	 
	 	 	(Corporate Seal)	 	By:	 	/s/ David L. Felsenthal
		 		 		 	

	 	 		 		 	David L. Felsenthal
	 	 		 	Title:	 	Chief Financial Officer
		 		 		 	

	 
	 	 	 	 	 	 	BRANCH BANKING AND TRUST COMPANY
	 
	Attest:	 		 	By:	 	/s/ James R. Sherrick
		 	
	 		 	

		 		 		 	James Sherrick
		 	(Corporate Seal)	 	Title:	 	Vice President

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