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EXHIBIT 10.4
$15,000,000.00
AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT
originally dated as of September 11, 2000
by and among
THE TRIZETTO GROUP, INC.
CREATIVE BUSINESS SOLUTIONS, INC.
FINSERV HEALTH CARE SYSTEMS, INC.
HEALTHCARE MEDIA ENTERPRISES, INC.
HEALTHWEB, INC.
XXXXXXXX HEALTH ENTERPRISES, INC.
XXXXXXX CORPORATION
TRIZETTO APPLICATION SERVICES, INC.
HEALTHCARE MEDIA PRIVATE LIMITED
DIGITAL INSURANCE SYSTEMS CORPORATION
HEALTH NETWORKS OF AMERICA, INC.
XXXXXXX DEVELOPMENT CORPORATION
XXXXXXX DEVELOPMENT & LICENSING CORPORATION
XXXXXXX SERVICES CORPORATION
ERISCO, INC.
and
XXXXXX HEALTHCARE FINANCE, INC.
Amended as of October 17, 2000
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AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made as of this 17th day of October, 2000, by and THE TRIZETTO GROUP, INC., a
Delaware corporation ("TriZetto"), CREATIVE BUSINESS SOLUTIONS, INC., a Texas
corporation ("CBS"); FINSERV HEALTH CARE SYSTEMS, INC., a New York corporation
("Finserv"); HEALTHCARE MEDIA ENTERPRISES, INC., a Delaware corporation ("HME");
HEALTHWEB, INC., a Delaware corporation ("HealthWeb"); XXXXXXXX HEALTH
ENTERPRISES, INC., a California corporation ("Xxxxxxxx"); XXXXXXX CORPORATION, a
Delaware corporation ("Xxxxxxx"); TRIZETTO APPLICATION SERVICES, INC., a
Colorado corporation ("TriZetto Application"); HEALTHCARE MEDIA PRIVATE LIMITED,
an India company and subsidiary of HME ("HMP"); DIGITAL INSURANCE SYSTEMS
CORPORATION, an Ohio corporation ("Digital"); HEALTH NETWORKS OF AMERICA, INC.,
a Maryland corporation ("Health Networks"); XXXXXXX DEVELOPMENT CORPORATION, a
Delaware corporation ("Xxxxxxx Development"); XXXXXXX DEVELOPMENT & LICENSING
CORPORATION, an Indiana corporation ("Xxxxxxx Licensing"); XXXXXXX SERVICES
CORPORATION, a Delaware corporation ("Xxxxxxx Services" and collectively with
TriZetto, CBS, Finserv, HME, HealthWeb, Margolis, Novalis, TriZetto Application,
HMP, Digital, Health Networks, Xxxxxxx Development, and Xxxxxxx Licensing, the
"Original Borrower") and ERISCO, INC., a New York corporation, ("New Borrower",
and collectively with Original Borrower, "Borrower"), and XXXXXX HEALTHCARE
FINANCE, INC., a Delaware corporation ("Lender").
RECITALS
A. Pursuant to that certain Loan and Security Agreement dated
September 11, 2000, by and between Original Borrower, Elbejay
Acquisition Corp., a Delaware corporation ("LBJ") and Lender (as
amended, modified and restated from time to time, collectively, the
"Loan Agreement"), Lender agreed to make available to Original
Borrower a revolving credit loan (the "Loan").
B. On October 3, 2000, LBJ merged with and into New Borrower, the
separate corporate existence of LBJ ceased, and New Borrower
survived the merger as a wholly-owned subsidiary of TriZetto.
C. The Lender and Borrower hereto believe it is in their best
interests that, among other things, New Borrower be added as a
Borrower under the Loan Agreement pursuant to Section 2 herein and
further that the Loan Agreement is modified in connection with the
terms hereof.
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NOW, THEREFORE, in consideration of the foregoing, the terms and
conditions set forth in this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender and Borrower hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined in this Amendment, all
capitalized terms shall have the meanings assigned to such terms in the Loan
Agreement.
SECTION 2. ADDITION OF NEW BORROWER. Original Borrower, New Borrower
and Lender agree that, upon satisfaction of the conditions set forth in this
Amendment, New Borrower shall constitute a "Borrower" for purposes of and as
defined in the Loan Agreement and all other Loan Documents. Accordingly, New
Borrower hereby agrees to be bound by all of the conditions, covenants,
representations, warranties, and other agreements set forth in the Loan
Agreement, and hereby agrees to promptly execute all further documentation
required by Lender to be executed by New Borrower, consistent with the terms of
the Loan Agreement.
SECTION 3. CONFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
Borrower, including New Borrower, hereby (a) confirms that all of the
representations and warranties set forth in Article IV of the Loan Agreement are
true and correct with respect to such Borrower, and (b) specifically represents
and warrants to Lender that it has good and marketable title to all of its
respective Collateral, free and clear of any lien or security interest in favor
of any other person or entity other than Permitted Liens.
SECTION 4. GRANT BY NEW BORROWER OF SECURITY INTEREST. Consistent with
the intent of the parties, the New Borrower hereby grants to Lender a continuing
first priority lien on and security interest in, upon, and to the Collateral,
pursuant to and in accordance with the terms of Article III of the Loan
Agreement, as follows:
As security for the payment of all liabilities of Borrower
(including without limitation the New Borrower) to Lender, including without
limitation: (i) indebtedness evidenced under the Note (as amended and/or
restated from time to time), repayment of Revolving Credit Loans, advances and
other extensions of credit, all fees and charges owing by Borrower, and all
other liabilities and obligations of every kind or nature whatsoever of Borrower
to Lender, whether now existing or hereafter incurred, joint or several, matured
or unmatured, direct or indirect, primary or secondary, related or unrelated,
due or to become due, including but not limited to any extensions,
modifications, substitutions, increases and renewals thereof, (ii) the payment
of all amounts advanced by Lender to preserve, protect, defend, and enforce its
rights under this Agreement and in the following property in accordance with the
terms of this Agreement, and (iii) the payment of all expenses incurred by
Lender in connection therewith (collectively, the "Obligations"). Borrower
hereby assigns and grants to Lender a continuing first priority lien on and
security interest in, upon, and to the following property (the "Collateral"):
(a) All of Borrower's now-owned and hereafter acquired or arising
Accounts, accounts receivable and rights to payment of every kind and
description, and all of Borrower's contract rights, chattel paper, documents and
instruments with respect thereto, and all of Borrower's rights, remedies,
security and liens, in, to and in respect of the Accounts, including, without
limitation, rights of stoppage in transit, replevin, repossession and
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party, guaranties or other contracts of suretyship with respect to the Accounts,
deposits or other security for the obligation of any Account Debtor, and credit
and other insurance;
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(b) All moneys, securities and other property and the proceeds
thereof, now or hereafter held or received by, in transit to, in possession of,
or under the control of Lender or a bailee or Affiliate of Lender, from or for
Borrower, whether for safekeeping, pledge, custody, transmission, collection or
otherwise, and all of Borrower's deposits (general or special), balances, sums
and credits with Lender at any time existing;
(c) All of Borrower's right, title and interest in, to and in
respect of all goods relating to, or which by sale have resulted in, Accounts,
including, without limitation, all goods described in invoices or other
documents or instruments with respect to, or otherwise representing or
evidencing, any Account, and all returned, reclaimed or repossessed goods;
(d) All of Borrower's now owned or hereafter acquired deposit
accounts into which Accounts are deposited, including the Lockbox Account;
(e) All of Borrower's now owned and hereafter acquired or arising
general intangibles and other property of every kind and description with
respect to, evidencing or relating to its Accounts, accounts receivable and
other rights to payment, including, but not limited to, all existing and future
customer lists, choses in action, claims, books, records, ledger cards,
contracts, licenses, formulae, tax and other types of refunds, returned and
unearned insurance premiums, rights and claims under insurance policies, and
computer programs, information, software, records, and data, as the same relates
to the Accounts;
(f) The proceeds (including, without limitation, insurance
proceeds) of all of the foregoing.
SECTION 5. AMENDMENT TO LOAN AGREEMENT.
(a) Section 2.1(d) of the Loan Agreement is hereby amended by adding
the following phrase to the end of the first sentence of such section:
"provided, however, that the Qualified Accounts of ERISCO, Inc.
will not be included in the Borrowing Base."
(b) Section 2.4(a) of the Loan Agreement is hereby amended by replacing
"Fifty Thousand Dollars ($50,000)" in the second line with "Thirty Thousand and
No/100 Dollars ($30,000)".
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(c) Section 6.23 of the Loan Agreement is hereby amended to replace the
first sentence of such section with the following provision:
"Borrower will not at any time allow its "tangible net worth" to
fall below $25,000,000. For purposes of this section 6.23, "tangible net worth"
shall be defined as Borrower's net worth minus all intangibles, including
without limitation goodwill, all calculated in accordance with GAAP."
SECTION 6. ENFORCEABILITY. This Amendment constitutes the legal, valid
and binding obligation of New Borrower, and is enforceable against New Borrower
in accordance with its terms.
SECTION 7. NO NOVATION. Lender's agreement to add New Borrower shall
not constitute a novation of the debt evidenced by the Revolving Credit Note (as
amended and restated hereby), nor shall it constitute a waiver of the Lender's
right of consent in connection with any future addition of new borrowers.
SECTION 8. EFFECTIVE DATE. This Amendment shall be effective upon (and
Lender's requirement to fund under the Loan Agreement shall be conditioned upon)
(a) execution and delivery to Lender of this Amendment by each Borrower; (b)
execution and delivery to Lender of the Amended and Restated Revolving Credit
Note attached hereto by each Borrower; (c) Lender's receipt and approval of
financing statement, tax lien and pending litigation search results with respect
to New Borrower; (d) execution and delivery by New Borrower to Lender of UCC-1
Financing Statements covering the Collateral; (e) execution and delivery by New
Borrower of an officer's certificate and secretary's certificate and delivery of
a legal opinion in respect of New Borrower in the form of such documents
delivered by (or in respect of) the Original Borrower; (f) review and approval
by Lender of an updated Borrowing Base Certificate; and (g) satisfaction of the
condition set forth in Section 5.1(l) (landlord estoppels) of the Loan
Agreement.
SECTION 9. COSTS. Borrower shall be responsible for the payment of all
costs of Lender incurred in connection with the preparation of this Amendment,
the Amended and Restated Note, the UCC-1 Financing Statements, the searches
described above, all filing fees, and all reasonable document preparation fees
of Lender's in-house counsel.
SECTION 10. REFERENCE TO THE EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
similar import shall mean and be a reference to the Loan Agreement as amended by
this Amendment.
(b) Except as specifically amended above, the Loan Agreement, and all
other Loan Documents, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided in this Amendment, operate as a waiver of any
right, power or remedy of Lender, nor constitute a waiver of any provision of
the Loan Agreement, or any other documents, instruments and agreements executed
or delivered in connection with the Loan Agreement.
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SECTION 11. ACKNOWLEDGMENT. Borrower and Lender agree and acknowledge
that in accordance with Section 5.1(n) of the Loan Agreement, Lender's credit
committee approved the Loan Agreement upon the terms and conditions of the Loan
Agreement as amended hereby, as of October 16, 2000.
SECTION 12 . GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Maryland (without
reference to conflicts of laws principles).
SECTION 13. HEADINGS. Section headings in this Amendment are included
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 14. COUNTERPARTS. This Amendment may be executed in
counterparts, and both counterparts taken together shall be deemed to constitute
one and the same instrument.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed as of the date first written above.
LENDER:
XXXXXX HEALTHCARE FINANCE, INC.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
ORIGINAL BORROWER:
THE TRIZETTO GROUP, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
CREATIVE BUSINESS SOLUTIONS, INC.
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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FINSERV HEALTH CARE SYSTEMS, INC.
a New York corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
HEALTHCARE MEDIA ENTERPRISES, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
HEALTHWEB, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
XXXXXXXX HEALTH ENTERPRISES, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
XXXXXXX CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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TRIZETTO APPLICATION SERVICES, INC.
a Colorado corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
HEALTHCARE MEDIA PRIVATE LIMITED
an India company and subsidiary of HME
By:
-----------------------------------
Name:
Title:
DIGITAL INSURANCE SYSTEMS CORPORATION
an Ohio corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
HEALTH NETWORKS OF AMERICA, INC.
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
XXXXXXX DEVELOPMENT CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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XXXXXXX DEVELOPMENT & LICENSING
CORPORATION an Indiana corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
XXXXXXX SERVICES CORPORATION
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
NEW BORROWER:
ERISCO, INC.
a New York corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer/
Secretary
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