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AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this "Amendment"), dated as of ____________, 1998, by and among MEDICAL
TECHNOLOGY SYSTEMS, INC., a Delaware corporation ("MTS"), the following
subsidiaries of MTS: CLEARWATER MEDICAL SERVICES, INC., a Florida corporation
("Clearwater Medical"), MEDICAL TECHNOLOGY LABORATORIES, INC., a Florida
corporation ("MTS Labs"), MTS PACKAGING SYSTEMS, INC., a Florida corporation
("MTS Packaging"), PERFORMANCE PHARMACY SYSTEMS, INC., a Florida corporation
("Performance Pharmacy"), VANGARD LABS, INC., a Kentucky corporation ("Vangard
Labs"), and VANGARD PHARMACEUTICAL PACKAGING, INC., a Florida corporation
("Vangard Pharmaceutical"), CART-XXXX, INC., a Florida corporation
("Cart-Xxxx"), MEDICATION MANAGEMENT SYSTEMS, INC., a Florida corporation
("MMS"), MEDICATION MANAGEMENT TECHNOLOGIES, INC., a Florida corporation and a
debtor and debtor-in-possession in proceedings pending under Chapter 11 of the
United States Bankruptcy Code ("MMT"), MTS SALES & MARKETING, INC., a Florida
corporation ("MTS Sales"), SYSTEMS PROFESSIONALS, INC., a Florida corporation
("Systems Professionals"), and LIFESERV TECHNOLOGIES, INC., a Florida
corporation ("LifeServ") (collectively referred to herein as the "MTS
Subsidiaries" and, together with MTS, as the "Borrowers"), XXXX X. XXXXXX
("Xxxxxx" or the "Guarantor"), and SOUTHTRUST BANK, NATIONAL ASSOCIATION,
formerly ASouthTrust Bank of Alabama, National Association, "a national banking
association (the "Lender" or "SouthTrust"):
R E C I T A L S:
WHEREAS, the parties hereto, other than LifeServ, have heretofore executed
and delivered that certain Second Amended and Restated Loan and Security
Agreement, dated as of September 5, 1996 (the "Loan Agreement"), and the various
security documents and instruments described therein (together with the Plan
Notes, as defined in the Loan Agreement, the "Loan Documents"); and
WHEREAS, certain defaults have occurred under the Loan Agreement and the
Borrowers and Xxxxxx have requested that SouthTrust (i) waive the occurrence of
these defaults and, (ii) consent to certain transactions to be entered into by
certain of the Borrowers which are not permitted by the express terms of the
Loan Agreement; and
WHEREAS, MTS has formed LifeServ as a wholly-owned subsidiary of MTS, and
LifeServ has agreed to assume joint and several liability for all of the
Obligations (as defined in the Loan Agreement), on the terms and subject to the
conditions set forth herein; and
WHEREAS, in order to accommodate the Borrowers= various requests and to
evidence LifeServ=s assumption of liability for the Obligations, the parties
hereto have determined that it is necessary to amend the Loan Agreement on the
terms and conditions set forth herein;
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. Definitions. (a) Except as otherwise defined herein, capitalized terms
used in this Amendment shall have the meanings ascribed to such terms in the
Loan Agreement.
(b) The Loan Agreement is hereby amended by adding the following
definitions to Section 1.1 thereof:
""Amendment" means the Amendment to Second Amended and Restated Loan
and Security Agreement, dated as of __________, 1998, among each of the
Borrowers, Xxxxxx and SouthTrust."
""Consolidated Excess Cash Flow" means, for each fiscal quarter of the
Borrowers, net income of all Borrowers other than the LifeServ Companies,
on a consolidated basis, after taxes, minus principal, determined under
GAAP, payments and capital expenditures which are expressly permitted under
Section 6.2(L) of the Loan Agreement, plus, to the extent deducted in
determining such net income, (i) amortization of intangible assets and (ii)
depreciation and depletion, all as shown by the income statements of the
Borrowers for the relevant time period, calculated in accordance with
GAAP."
""LifeServ Bridge Loan" means the loan described in Section 3 of the
Amendment."
""LifeServ Companies" means LifeServ Technologies, Inc., a Florida
corporation, Performance Pharmacy, Cart-Xxxx, MMS, MMT and Systems
Professionals."
""LifeServ Companies Collateral" means all Collateral owned by the
LifeServ Companies (or in which they, or any of them, have any interest),
and all Pledged Notes of the LifeServ Companies."
""LifeServ Private Placement" means the proposed private placement of
securities by LifeServ described in Section 5 of the Amendment."
(c) Section 1.1 of the Loan Agreement is hereby amended further, by
amending the following definitions contained therein to read, in their
entirety, as follows:
""Capital Transaction" means (A) any sale, transfer or disposition of
all or substantially all the assets or business of any of the Borrowers,
whether by merger, sale, transfer, exchange or other disposition of capital
stock or assets, consolidation, or otherwise, (B) any refinance of the
indebtedness evidenced by the Plan Notes, (C) any offering, issuance or
sale of any capital stock or other securities of any of the Borrowers
through a private placement or public offering, and (D) any sale or other
disposition by MTS or any Affiliate thereof, of any shares of capital stock
or other securities of LifeServ or any of the other LifeServ Companies."
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""Fixed Charge Coverage" means the quotient which is obtained by
dividing (i) the sum of the Consolidated net income of the Borrowers (after
provision for federal and state income taxes) for the 12-month period
preceding the applicable date plus the interest, lease and rental expenses
of the Borrowers for the same period plus the sum of non-cash expenses or
allowances for such period (including, without limitation, amortization or
write-down of intangible assets, depreciation, depletion and deferred taxes
and expenses) by (ii) the sum of (a) the current portion of the Long-Term
Liabilities of the Borrowers as of the applicable date, and (b) interest
expense, lease and rental expenses of the Borrowers for the 12-month period
immediately following the applicable date; provided, that there shall not
be included in the foregoing calculation any amount attributable to
interest accruing on the LifeServ Bridge Loan, unless and until the
LifeServ Bridge Loan has matured."
""Net Proceeds" means,
(A) with respect to any Capital Transaction (other than the LifeServ
Private Placement and any Capital Transaction involving any one or more of
the LifeServ Companies which occurs after the consummation of the LifeServ
Private Placement), the gross proceeds received or derived from such
Capital Transaction, whether in cash, stock or other property, less (i) all
expenses (not including any payments or consideration of any kind paid to
any Affiliate of any Borrower) which are directly and actually incurred by
Borrowers in connection with such Capital Transaction, and which are
approved in writing by the Lender, and (ii) if such Capital Transaction
constitutes a sale of all of the capital stock, or all or substantially all
of the assets, of MTS Labs or any of the LifeServ Companies, and if prior
to such Capital Transaction, all or any portion of the Amortization
Principal Amount has been refinanced in compliance with all applicable
provisions of this Agreement (including Section 6.2(H)), the amount
required to repay such refinanced Indebtedness; provided, that the amount
deducted pursuant to this clause shall not exceed $2,000,000.00 in the case
of a Capital Transaction with respect to MTS Labs or $1,000,000.00 in the
case of a Capital Transaction with respect to one or more of the LifeServ
Companies; and
(B) with respect to any Capital Transaction involving any one or more
of the LifeServ Companies which occurs after the consummation of the
LifeServ Private Placement, the gross proceeds derived from such Capital
Transaction to the extent received by, or payable to, MTS or any Affiliate
of MTS then owning capital stock or other securities of any one or more of
the LifeServ Companies, whether in cash, stock or other property; and
(C) with respect to any Causes of Action, "Net Proceeds" means the
gross proceeds derived from any such Cause of Action, whether pursuant to
jury verdict, judgment or settlement, less all reasonable legal fees,
expenses and court costs actually incurred by the Borrowers which are
directly related to the prosecution of such Causes of Action."
2. Formation of LifeServ; Assumption of Liability by LifeServ.
(a) SouthTrust hereby consents to the formation by MTS of LifeServ
and, subject to the terms and conditions contained in this Amendment, to
the transfer by Performance Pharmacy, Cart-Xxxx, MMS, MMT and Systems
Professionals, of all or substantially all of their respective assets and
liabilities to LifeServ. The parties hereby agree that, upon such transfer,
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all of the assets and properties so transferred shall be and remain subject
in all respects to the security interest and lien in favor of SouthTrust as
described in the Loan Agreement. The Borrowers and the Guarantor hereby
agree to notify SouthTrust in writing upon the occurrence of such transfer
and, promptly upon request by SouthTrust, to execute and deliver to
SouthTrust all documents, instruments and things, including, without
limitation, UCC financing statements and amendment statements, reflecting
that the transfer described herein is subject to the prior security
interest in favor of SouthTrust under the Loan Agreement.
(b) LifeServ hereby assumes direct liability, jointly and severally as
a co-obligor with each other Borrower under the Loan Agreement, for all
Obligations under or in connection with the Loan Agreement, including,
without limitation, all Obligations arising under Plan Note I, subject only
to the provisions contained in Sections 6 and 7 hereof, and hereby
acknowledges and agrees that all of LifeServ=s assets are subject to valid
and enforceable security interests in favor of SouthTrust, as Collateral
securing the Obligations. In furtherance of the foregoing, and as further
security for the prompt satisfaction of all Obligations, in addition to any
other or further security provided under any of the Security Documents,
LifeServ hereby assigns and transfers to the Lender all of its right, title
and interest in and to, and grants the Lender a lien upon and security
interest in, all of the following property and rights of LifeServ, wherever
located, whether now owned or hereafter acquired, together with all
replacements therefor and proceeds (including, but without limitation,
insurance proceeds) and products thereof (all of which shall constitute
original Collateral under the Loan Agreement, as amended hereby): (i)
Accounts and accounts receivable; (ii) Chattel Paper; (iii) Contracts; (iv)
Contract rights; (v) Documents; (vi) Equipment, including all trucks,
automobiles, motor vehicles and machinery of all classes; (vii) Fixtures;
(viii) General Intangibles; (ix) Instruments; (x) Inventory, including all
goods held for sale or lease or to be furnished under contracts of service,
raw materials, work in process and materials to be used or consumed in
LifeServ=s business; (xi) Furniture; (xii) Patents, trademarks, copyrights
and other intellectual property (including software) and all rights under
licenses with respect to intellectual property of other Persons; (xiii)
Leasehold improvements; (xiv) Interests in partnerships and joint ventures;
(xv) Rights as seller of Goods and rights to returned or repossessed Goods;
and (xvi) All Records pertaining to any of the Collateral. As further
security for the prompt satisfaction of all Obligations, LifeServ hereby
assigns, transfers and sets over to the Lender all of its right, title and
interest in and to, and grants the Lender a lien on and a security interest
in, all amounts that may be owing from time to time by the Lender to
LifeServ in any capacity, including, but without limitation, any balance or
share belonging to LifeServ of or with respect to any deposit or other
account with the Lender, which lien and security interest shall be
independent of any right of set-off which the Lender may have.
(c) In furtherance of the foregoing, LifeServ hereby agrees to execute
and deliver to SouthTrust the allonge to Plan Note I, in substantially the
form set forth in Exhibit 2(c) attached hereto, and to execute and deliver
all such other documents, instruments and things as SouthTrust may
reasonably request in order to evidence (i) LifeServ=s joint and several
liability under the Loan Agreement and Plan Note I, and (ii) the security
interests in all of LifeServ=s assets in favor of SouthTrust, as collateral
for all Obligations.
(d) Each of the Borrowers hereby acknowledges that all of the
outstanding capital stock in each of the Borrowers (other than MTS) has
been pledged to SouthTrust as Collateral for the Obligations. MTS hereby
agrees to execute and deliver to SouthTrust (i) a stock pledge agreement,
in substantially the form set forth as Exhibit 2(d) hereto (the "LifeServ
Stock Pledge Agreement") evidencing the first priority pledge of all
outstanding capital stock of LifeServ in favor of SouthTrust, as Collateral
for the Obligations, together with (ii) the original stock certificates
evidencing all such capital stock and (iii) stock powers covering such
capital stock, executed in favor of SouthTrust or in blank.
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3. LifeServ Bridge Loan.
(a) The Borrowers have requested that SouthTrust consent to the
LifeServ Companies= incurring certain short term indebtedness, in principal
amount not to exceed $500,000.00, and which would be secured by
substantially all of their respective assets, and having the other terms
and conditions set forth on Exhibit 3(a) attached hereto (as so described,
the "LifeServ Bridge Loan"
(b) SouthTrust hereby consents to the incurrence of the LifeServ
Bridge Loan, and to the grant by the LifeServ Companies of security
interests in the assets described on Exhibit 3(a) attached hereto; provided
(i) that none of the Borrowers other than the LifeServ Companies shall be
liable in any way, whether as a borrower, guarantor or otherwise, for any
amounts owed under the LifeServ Bridge Loan, and (ii) all of the capital
stock of each of the LifeServ Companies, including, without limitation, any
capital stock issued to the LifeServ Bridge Loan lender pursuant to
warrants or otherwise, shall be and remain subject to a first priority
pledge in favor of SouthTrust as collateral security for all Obligations.
(c) In furtherance of the foregoing, on and as of the date on which
the LifeServ Bridge Loan is consummated, SouthTrust shall enter into a
subordination agreement with the Bridge Loan lender, in substantially the
form set forth in Exhibit 3(c)(i) attached hereto, pursuant to which (i)
SouthTrust shall subordinate its security interests in the assets of the
LifeServ Companies to the security interests, securing not more than
$500,000.00, plus accrued and unpaid interest thereon, in favor of the
LifeServ Bridge Loan lender, (ii) the LifeServ Bridge Loan lender will
agree to deliver to SouthTrust any original stock certificates which may be
issued to it by any of the LifeServ Companies pursuant to exercise of the
warrants described on Exhibit 3(a) attached hereto (the "Bridge Loan
Warrants"), together with a fully executed stock pledge agreement in
substantially the form set forth in Exhibit 3(c)(ii) hereto and fully
executed (in favor of SouthTrust or in blank) stock powers with respect to
such stock, and (iii) the LifeServ Bridge Loan lender will agree to provide
SouthTrust with notice of the occurrence of any default under the LifeServ
Bridge Loan, and its taking of any enforcement or collection action
thereunder.
(d) Notwithstanding any provision contained in the Loan Agreement to
the contrary, SouthTrust hereby consents to (i) the use of the proceeds
from the LifeServ Bridge Loan for general working capital purposes, and
(ii) the issuance by MTS to the Bridge Loan lender of warrants to purchase
shares of common stock in MTS in amounts and on the terms and conditions
set forth on Exhibit 3(a) attached hereto.
(e) Each of the Borrowers and the Guarantor hereby agree that the
occurrence of a default or event of default under the LifeServ Bridge Loan
and the commencement, by the LifeServ Bridge Loan lender, of any
enforcement or collection action (including, without limitation, any
self-help remedy) as a result thereof, shall constitute a Major Default
under the Loan Agreement, as amended hereby.
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4. Connecticut Valley Hospital Contract and Related Financing.
(a) The Borrowers have requested that SouthTrust consent to the
execution and delivery by the LifeServ Companies of certain agreements with
the State of Connecticut or agencies of the Connecticut State government,
covering the provision of certain equipment and services to the Connecticut
Valley Hospital. The Borrowers have also requested that SouthTrust consent
to the incurrence of certain indebtedness by the LifeServ Companies to
finance certain costs associated with the contract or agreement described
above.
(b) If and to the extent SouthTrust=s consent is required by the terms
of the Loan Agreement, SouthTrust hereby consents to the execution and
delivery, by LifeServ and any one or more of the other LifeServ Companies,
of the contracts and agreements which are listed or otherwise fully
described on Exhibit 4(b) attached hereto, true and correct copies of which
have been provided to SouthTrust (collectively, the "Connecticut Valley
Contract").
(c) SouthTrust hereby consents to the incurrence, by LifeServ and the
other LifeServ Companies, of indebtedness in principal amount not to exceed
$700,000.00, and which would be secured by a collateral assignment of the
Connecticut Valley Contract and by purchase money security interests in the
property described on Exhibit 4(c)(i) attached hereto (the "Connecticut
Valley Equipment"), and which has the other terms and conditions set forth
on Exhibit 4(c)(ii) attached hereto (as so described, the "Connecticut
Valley Debt"), and to the grant by the LifeServ Companies of security
interests in the assets described on Exhibit 4(c)(i) attached hereto;
provided, that none of the Borrowers other than the LifeServ Companies
shall be liable in any way, whether as a borrower, guarantor or otherwise,
for any amounts owed under the Connecticut Valley Debt, except that, if
required by the lender providing the Connecticut Valley Debt, MTS may
guarantee the repayment thereof on substantially the terms set forth in
Exhibit 4(c)(iii) attached hereto, so long as such guaranty obligation is
and remains unsecured.
(d) In furtherance of the foregoing, on and as of the date on which
the documentation governing the Connecticut Valley Debt is executed and
delivered (or as soon thereafter as is practicable), SouthTrust shall, if
requested by the lender thereunder, enter into a subordination agreement,
in substantially the form set forth in Exhibit 4(d) attached hereto,
pursuant to which (i) SouthTrust shall subordinate its security interests
in the Connecticut Valley Contract and the Connecticut Valley Equipment to
the security interests, securing not more than $700,000.00, plus accrued
and unpaid interest thereon, in favor of the lender under the Connecticut
Valley Debt, and (ii) the lender thereunder will agree to provide
SouthTrust with notice of the occurrence of any default under the
Connecticut Valley Debt, and its taking of any enforcement or collection
action thereunder.
(e) Notwithstanding any provision contained in the Loan Agreement to
the contrary, SouthTrust hereby consents to the use of the proceeds from
the Connecticut Valley Debt for the purposes specified in Exhibit 4(c)(ii)
attached hereto.
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(f) Each of the Borrowers and the Guarantor hereby agree that the
occurrence of a default or event of default under the Connecticut Valley
Debt shall constitute a Major Default under the Loan Agreement, as amended
hereby.
5. LifeServ Private Placement.
(a) The Borrowers have requested that SouthTrust consent to a private
placement of securities of LifeServ, which the Borrowers have represented
to SouthTrust (i) will generate net proceeds to LifeServ of at least
$3,000,000.00, (ii) will constitute an issuance and sale by LifeServ of not
more than 40% of the outstanding capital stock of LifeServ (including, for
purposes of this calculation, any shares which are issuable pursuant to
warrants, options or similar rights, including the Bridge Loan Warrants) at
the time of consummation thereof, and (iii) will permit MTS to retain
ownership of at least 60% of the outstanding capital stock of LifeServ (as
described above, the "LifeServ Private Placement"). The Borrowers have also
requested that, in connection with the LifeServ Private Placement,
SouthTrust consent to the LifeServ Companies engagement of Xxxxxx & Xxxxxx
Capital Markets, Inc. ("Xxxxxx & Xxxxxx") to serve as financial advisors
and investment bankers to the LifeServ Companies.
(b) SouthTrust hereby consents to the LifeServ Companies retaining
Xxxxxx & Xxxxxx, on the terms and conditions set forth in the engagement
letter dated December 12, 1997, a copy of which has been provided to
SouthTrust; provided, that Borrowers shall deliver to SouthTrust, within
ten (10) days after the execution and delivery of this Amendment, the
written agreement of Xxxxxx & Xxxxxx that none of the Borrowers, other than
the LifeServ Companies, will incur any obligation to Xxxxxx & Xxxxxx under
or in connection with such engagement for the payment of any fees or
expenses of Xxxxxx & Xxxxxx or otherwise.
(c) SouthTrust hereby consents to LifeServ completing the LifeServ
Private Placement; provided, that (i) MTS shall retain at all times
following the consummation of the LifeServ Private Placement voting capital
stock which constitutes at least 60% of the then outstanding capital stock
of LifeServ (including, for purposes of this calculation, any shares which
are issuable pursuant to warrants, options or similar rights, including the
Bridge Loan Warrants), and (ii) all capital stock of LifeServ and the other
LifeServ Companies which is owned by MTS or any Affiliate of MTS following
the consummation of the LifeServ Private Placement shall be and remain
subject to the first priority pledge in favor of SouthTrust, as Collateral
security for all Obligations.
(d) The parties hereby acknowledge that the LifeServ Private Placement
constitutes a Capital Transaction under the Loan Agreement. Nevertheless,
SouthTrust hereby agrees that, provided that no Default or Event of Default
occurs and is then continuing as of the date on which the LifeServ Private
Placement is consummated, the Borrowers shall not be obligated to make the
payments to SouthTrust that would otherwise be due and payable, under
Sections 2.4(B) and 2.4(E) of the Loan Agreement, on account of the
occurrence of the LifeServ Private Placement.
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(e) Section 6.1(A) of the Loan Agreement is hereby amended by
adding a new subsection (10) at the end thereof, to read in its
entirety as follows:
"(10)Upon the consummation of the LifeServ Private
Placement, MTS shall deliver to SouthTrust a certificate signed
by the President of MTS, certifying (i) the fact that the
LifeServ Private Placement has been consummated, (ii) that shares
of capital stock constituting not more than 40% of the then
outstanding capital stock of LifeServ have been issued in the
LifeServ Private Placement, (iii) that the LifeServ Private
Placement has generated net proceeds of at least $3,000,000.00 to
LifeServ, and (iv) that MTS continues to hold, beneficially and
of record, shares of LifeServ constituting at least 60% of the
outstanding capital stock of LifeServ (including, for purposes of
this calculation, any shares which are issuable pursuant to
warrants, options or similar rights, including the Bridge Loan
Warrants)."
6. Effect of LifeServ Private Placement. The Borrowers have requested that
SouthTrust agree that, upon the consummation of the LifeServ Private Placement,
LifeServ and the other LifeServ Companies (if and to the extent that the other
LifeServ Companies continue to exist) be released from their obligations under
the Loan Agreement, and that they no longer constitute "Borrowers" as that term
is defined in the Loan Agreement. In addition to the foregoing, the Borrowers
have requested that, upon such consummation, SouthTrust agree to release its
pledge of capital stock in LifeServ (if any) which has theretofore been issued
pursuant to the Bridge Loan Warrants. In order to accomplish the foregoing, the
parties hereto agree as follows:
(a) Upon the consummation of the LifeServ Private Placement and
SouthTrust's receipt of the certificate described in Section 5(e) hereof,
SouthTrust shall release from the pledge in favor of SouthTrust that is
described in Section 3(c) hereof, any and all capital stock of LifeServ
which has been issued pursuant to the Bridge Loan Warrants and pledged to
SouthTrust as required by Section 3(c) hereof. In furtherance of the
foregoing, as soon as practicable after the consummation of the Private
Placement, SouthTrust shall return to the Bridge Loan lender (i) any
certificates then in the possession of SouthTrust and evidencing capital
stock pledged to SouthTrust by the Bridge Loan lender, (ii) the original
stock powers described in Section 3(c) hereof, and (iii) the original
signed copy of the stock pledge agreement described in Section 3(c) hereof.
(b) Section 4.8(B) of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(B) The LifeServ Companies. Provided that no Major Default
shall have occurred and be continuing hereunder, under the Plan
Notes, or under the Security Documents, on and as of the earlier
of (i) the date on which the requirements set forth in Section
4.8(D) have been satisfied, (ii) the date on which seventy-five
percent (75%) of all principal payments theretofore paid by the
Borrowers to the Lender with respect to the Amortization
Principal Amount, plus all additional amounts (if any) paid to
the Lender pursuant to the provisions of Section 2.4(B)(i),
equals, in the aggregate, $1,000,000.00, or (iii) the date on
which the LifeServ Private Placement shall have been consummated
and SouthTrust shall have received the certificate required to be
delivered pursuant to Section 6.1(A)(10) hereof, the liens,
security interests and pledges arising hereunder or under the
Security Documents in favor of the Lender with respect to the
LifeServ Companies Collateral shall be released. Upon the
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occurrence of such event, the Lender will execute any and all
UCC-3 release statements necessary to evidence such release which
are presented to the Lender by Borrowers (provided that such
release statements are in form and substance reasonably
acceptable to the Lender), and will return the same, together
with the Pledged Notes issued by the LifeServ Companies, to MTS
within thirty (30) days after the Lender's receipt of such
release statements. The Borrowers shall be entitled, at their
sole expense, to record or file the same in the applicable filing
offices."
(c) Section 4.8(E) of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(E) Release of Collateral Not a Waiver or Release of the
Obligations. Except as expressly provided in Section 4.8(F)
below, in no event shall the Lender's release of its interest in
any Collateral, under this Section 4.8 or otherwise, constitute
or be deemed to constitute a waiver, release or modification of
the Obligations of the Borrowers hereunder or under the Plan
Notes or of the obligations of the Guarantor under the Guaranty
Agreement, nor shall any such release of Collateral impair or
have any effect upon the Lender's rights hereunder or under the
Guaranty Agreement, or its interests in any other Collateral not
expressly released by the Lender. In furtherance of the
foregoing, the Guarantor and each of the Borrowers hereby agree,
jointly and severally, that (i) all Obligations then remaining
hereunder or under the Plan Notes shall remain in full force and
effect after any such release of Collateral, (ii) except as
otherwise expressly provided in the Guaranty, the Guaranty
Agreement shall remain in full force and effect after any such
release of Collateral and will not be, and will not be deemed to
be, impaired by any such release of Collateral, and (iii) the
Three-Party Agreement, the Collateral Patent Assignment and the
Subordination Agreement shall remain in full force and effect
after any such release of Collateral."
(d) Section 4.8 of the Loan Agreement is hereby amended further by
adding, at the end thereof, a new subsection (F), to read in its entirety
as follows:
"(F) Release of LifeServ Companies and LifeServ Companies
Collateral Upon Consummation of the LifeServ Private Placement.
Notwithstanding any provision to the contrary contained herein,
provided that no Major Default shall have occurred and be
continuing hereunder, under the Plan Notes or under the Security
Documents, then upon the consummation of the LifeServ Private
Placement and SouthTrust's receipt of the certificate described
in Section 6.1(A)(10) hereof, the LifeServ Companies shall be
released from all further liability hereunder for the Obligations
(except for their obligations contained in Sections 6.2(H)(8) and
6.2(W) hereof), and from and after the date of such release, all
references contained herein or in the Plan Notes to the
"Borrowers" shall be deemed to exclude from that reference each
of the LifeServ Companies. Each of the Borrowers and the
Guarantor hereby agrees that any release of the LifeServ
Companies from the Obligations pursuant to this Section 4.8(F)
shall not constitute or be deemed to constitute a waiver, release
or modification of the Obligations of the remaining Borrowers
hereunder or under the Plan Notes or of the obligations of the
Guarantor under the Guaranty Agreement, nor shall any such
release impair or have any effect upon the Lender's rights
hereunder against or with respect to any of the remaining
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Borrowers, or under the Guaranty Agreement, or its interests in
any other Collateral not expressly released by the Lender. In
furtherance of the foregoing, the Guarantor and each of the
Borrowers hereby agree, jointly and severally, that (i) all
Obligations then remaining hereunder or under the Plan Notes
shall remain in full force and effect after any such release of
the LifeServ Companies, (ii) the Guaranty Agreement shall remain
in full force and effect after any such release and will not be,
and will not be deemed to be, impaired by any such release of the
LifeServ Companies from the Obligations, and (iii) the
Three-Party Agreement, the Collateral Patent Assignment and the
Subordination Agreement shall remain in full force and effect
after any such release."
7. Amendments With Respect to Plan Note I.
(a) Section 2.4(B) of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(B) Mandatory Partial Prepayments Applied Against
Amortization Principal Amount. In addition to the monthly
installments referred to above, the Borrowers shall make
mandatory partial prepayments of the Amortization Principal
Amount as follows:
(i) If, at any time prior to the earlier of (a) the
Maturity Date or (b) the date on which the LifeServ Private
Placement is consummated, any Capital Transaction occurs
which involves, directly or indirectly, any one or more of
the LifeServ Companies (other than the LifeServ Private
Placement), then the Borrowers shall pay to the Lender an
amount equal to $1,000,000.00; provided, that there shall be
credited against such amount, an amount equal to
seventy-five percent (75%) of the aggregate amount of
principal payments theretofore made by Borrowers with
respect to the Amortization Principal Amount, up to a
maximum credit amount of $1,000,000.00 (the amount payable
under this Section 2.4(B)(i) is referred to as the "Software
Companies Release Payment");
(ii) Upon the occurrence of any Capital Transaction
which involves, directly or indirectly, any one or more of
the LifeServ Companies and which occurs after the
consummation of the LifeServ Private Placement, then MTS and
any other Borrower or Affiliate thereof then owning any
capital stock or other securities of the relevant LifeServ
Company(ies) shall pay the following amounts to SouthTrust
on the date on which each such Capital transaction is
consummated:
(1) If the Capital Transaction occurs on or prior to
September 5, 1998, an amount equal to 40% of the Net
Proceeds from such Capital Transaction;
(2) If the Capital Transaction occurs after September 5,
1998, but on or prior to September 5, 1999, an amount
equal to 30% of the Net Proceeds from such Capital
Transaction;
(3) If the Capital Transaction occurs after September 5,
1999, but on or prior to the Maturity Date, an amount
equal to 20% of the Net Proceeds from such Capital
Transaction;
(iii) If, at any time prior to the Maturity Date, any
Capital Transaction occurs which involves, directly or
indirectly, MTS Labs (or any Subsidiary thereof), then the
Borrowers shall pay to the Lender an amount equal to
$2,000,000.00; provided, that there shall be credited
against such amount, an amount equal to seventy-five percent
(75%) of the aggregate amount of principal payments
theretofore made by Borrowers with respect to the
Amortization Principal Amount in excess of $1,000,000.00, up
to a maximum credit amount of $2,000,000.00 (the amount
payable under this Section 2.4(B)(ii) is referred to as the
"MTS Labs Release Payment");
(iv) In addition to the foregoing, commencing on
November 1, 1998, and thereafter on the first day of
February, May, August and November in each year until (a)
all Obligations have been paid in full or (b) payments made
pursuant to this Section 2.4(B)(iv) have aggregated
$1,000,000.00, whichever first occurs, the Borrowers (other
than the LifeServ Companies) shall pay to SouthTrust an
amount equal to 25% of Consolidated Excess Cash Flow for the
fiscal quarter immediately preceding the relevant payment
date;
All Mandatory prepayments made under this Section 2.4(B) shall be
applied in the manner set forth in Section 2.4(C) hereof. Mandatory
prepayments made by Borrowers under Sections 2.4(B)(i) and 2.4(B)(iii)
shall be due and payable on the date on which the relevant Capital
Transaction is consummated, and shall have the effect set forth in
Sections 4.8(B) and (C) hereof. The Software Companies Release Payment
and the MTS Labs Release Payment, respectively, shall each be payable
only once, upon the consummation of the first Capital Transaction
including any of the LifeServ Companies or MTS Labs, as the case may
be. Mandatory prepayments made by Borrowers under Section 2.4(B)(ii)
shall be due and payable on the date on which each Capital Transaction
described therein is consummated. Mandatory prepayments made by
Borrowers under Section 2.4(B)(iv) shall be due and payable on the
dates specified in such Section."
11
(b) The first sentence of Section 2.4(C) of the Loan Agreement is hereby
amended to read as follows:
"All prepayments under Plan Note I with respect to the Amortization
Principal Amount (whether mandatory partial prepayments under Section
2.4(B), optional prepayments under Section 2.4(D), or mandatory
prepayments with respect to the Pending Vangard Litigation under
Section 2.4(E)(iii)) shall be applied, first to accrued interest on
the then outstanding Amortization Principal Amount, and then to
installments of principal in inverse order of their maturity."
(c) Section 2.4(D) of the Loan Agreement is hereby amended by adding at the
end thereof the following:
"Except as expressly provided in the next succeeding sentence, no
prepayment under this Section 2.4(D) shall have the effect of releasing
the Borrowers from their other Obligations hereunder. If, on or prior
to June 30, 1998, the Borrowers prepay in full a sum equal to 85% of
the then outstanding Amortization Principal Amount under Plan Note I
plus accrued and unpaid interest on such sum, then SouthTrust agrees to
accept such sum, in full satisfaction of all Obligations under this
Loan Agreement."
(d) The first sentence of Section 2.4(E)(ii)(a) of the Loan Agreement is
hereby amended to read as follows:
"Upon the occurrence of any Capital Transaction (other than the
LifeServ Private Placement and any Capital Transaction which occurs
after the consummation of the LifeServ Private Placement) which
involves, directly or indirectly, any one or more of the LifeServ
Companies, then, in addition to any amounts payable under Section
2.4(B)(i) hereof, the Borrowers shall pay the following amounts to the
Lender on the date on which each such Capital Transaction is
consummated:"
(e) Section 2.4(E)(iii) of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(iii) Mandatory Prepayment With Respect to Certain Causes
of Action. If the Borrowers (or any one or more of them) commence
the litigation or other prosecution of any Causes of Action at
any time or times prior to the Maturity Date of Plan Note I, the
Borrowers shall pay to the Lender an amount equal to (1) 50% of
the Net Proceeds derived from each such Cause of Action asserted
or held by any of the Borrowers other than Vangard Labs, and (2)
90% of the Net Proceeds derived from each such Cause of Action
asserted by, held by, or relating to Vangard Labs (including,
without limitation, any Cause of Action relating to Glasgow
Pharmaceutical Corporation), and in each case the amount to which
the Lender is entitled shall be paid within five (5) days after
receipt thereof by any Borrower. For purposes of this Section
2.4(E)(iii), the lawsuit or proceeding styled, _______________,
Case No. ______________ is referred to as the "Pending Vangard
Litigation." Except as expressly provided in Section 2.4(D)
hereof, if litigation or other prosecution of any such Cause of
Action is commenced prior to the Maturity Date of Plan Note I,
but as of such Maturity Date the Borrowers have not received any
recovery therefrom, the Borrowers' Obligation under this Section
2.4(E)(iii) to pay the applicable portion of the Net Proceeds
from such Cause of Action to the Lender shall survive such
Maturity Date and the termination of this Agreement.
12
All amounts paid to the Lender under this Section 2.4(E),
other than payments with respect to the Pending Vangard
Litigation, shall be applied to reduce the Stated Principal
Amount and the Remaining MTS Debt, but shall not reduce or
otherwise affect the Amortization Principal Amount. All amounts
paid to the Lender under this Section 2.4(E) with respect to the
Pending Vangard Litigation shall be applied in the manner set
forth in Section 2.4(C) hereof, notwithstanding any other
provision contained herein to the contrary."
8. Amendments to the Borrowers= Covenants.
(a) Section 6.2(H)(8) of the Loan Agreement is hereby amended to read
in its entirety as follows:
"(8) Indebtedness of one Borrower to one or more other Borrowers if
(i) such Indebtedness is incurred in the ordinary course of
business and (ii) such Indebtedness is expressly subordinate
to the Indebtedness evidenced by the Plan Notes pursuant to
agreements containing terms substantially similar to those
contained in the Subordination Agreement; provided, that none
of the LifeServ Companies shall be permitted to incur any
Indebtedness of any kind to any other Borrower."
(b) Section 6.2(K) of the Loan Agreement is hereby amended, by
deleting the last clause thereof, and inserting the following in lieu
thereof:
"nor pay salary to those officers of the Borrowers who constitute
their respective chief executive officers, chief financial officers
and chief operating officers in amounts aggregating more than
$400,000.00 per year, on a consolidated basis."
(c) Section 6.2(L) of the Loan Agreement is hereby amended by adding,
at the end thereof, the following:
"Notwithstanding the foregoing, to the extent that purchases of
equipment by LifeServ and the other LifeServ Companies in connection
with the Connecticut Valley Contract, which are provided for under the
Connecticut Valley Debt, constitute the purchase or lease of Fixed
Assets, such purchases shall be permitted hereunder."
(d) Section 6.2(M) of the Loan Agreement is hereby amended by deleting
the figure, A$505,000.00" appearing therein and inserting the figure,
A$700,000.00" in lieu thereof.
13
(e) Section 6.2(O) of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(O) Except for (i) the issuance of the Bridge Loan Warrants by
LifeServ and the issuance of capital stock pursuant thereto, and (ii)
the issuance of capital stock in the LifeServ Private Placement, none
of the Borrowers will (1) issue, redeem, purchase or retire any of its
capital stock or grant or issue any warrant, right or option
pertaining thereto or other security convertible into any of the
foregoing, including, without limitation, any issuance, redemption,
re-purchase or retirement of the "debentures" described in Article VII
of the Joint Plan, or (2) permit any transfer, sale, redemption,
retirement, or other change in the ownership of the outstanding
capital stock of any of the MTS Subsidiaries."
(f) Section 6.2 of the Loan Agreement is hereby amended further by
adding a new subsection (W) at the end thereof, to read in its entirety as
follows:
"(W) In addition to the foregoing, (1) none of the Borrowers
(other than the LifeServ Companies) shall provide any cash, credit or
other financial accommodation of any kind (including, without
limitation, the provision of services of any kind except on terms
under which such services are fully paid or reimbursed by the LifeServ
Companies within the calendar month during which such services are
provided) to any of the LifeServ Companies, and (2) each of the
LifeServ Companies is and shall be prohibited from accepting any such
financial accommodation. Notwithstanding any provision contained
herein to the contrary, this covenant shall survive any release of the
LifeServ Companies from their other Obligations hereunder which may
occur under Section 4.8(F) hereof. Notwithstanding the foregoing, in
the event that a Capital Transaction involving MTS Labs is permitted
to occur under the terms of this Loan Agreement and, as a result of
such Capital Transaction the Borrowers are entitled to retain a
portion of the Net Proceeds thereof, the Borrowers may, in their sole
discretion, provide funding or other financial accommodation to the
LifeServ Companies solely from such Net Proceeds."
(g) Section 6.3(A) of the Loan Agreement is hereby amended by (i)
deleting the words, "and thereafter" from the last line thereof, and (ii)
by adding a new line at the end thereof to read, "During Fiscal 2001 and
thereafter ...................................$4,000,000."
(h) Section 6.3(B) of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(B) Negative Net Worth not to exceed the following:
From January 31, 1998 through
March 31, 1998.............................$6,500,000
During Fiscal 1999......................... $6,500,000
During Fiscal 2000......................... $6,000,000
During Fiscal 2001 and thereafter.......... $5,500,000"
14
(i) Section 6.3(D) of the Loan Agreement is hereby amended
to read in its entirety as follows:
"(D) Fixed Charge Coverage of not less than 1.5 to 1.0."
9. Amendment of Events of Default.
(a) Section 7.1(A)(3) of the Loan Agreement is hereby amended to read
in its entirety as follows:
"(3) The Borrowers (or any of them) shall fail to observe or
perform the covenants contained in Sections 6.2(A), (B), (C), (D),
(F), (G), (H), (I), (J), (K), (L), (M), (O), (Q), or (W);"
(b) Section 7.1(A)(15) of the Loan Agreement is hereby amended to read
in its entirety as follows:
"(15) Any financial statement or any representation or warranty
contained in this Agreement or in any of the other Plan Documents, or
otherwise made or delivered by any of the Borrowers or the Guarantor
to SouthTrust pursuant to this Agreement or any amendment thereto, in
order to induce SouthTrust to enter into the transactions contemplated
in this Agreement or in any such amendment, shall be false, incorrect
or incomplete, in any material respect, when made."
(c) Section 7.1(A) of the Loan Agreement is hereby amended further by
adding, at the end thereof, the following:
"(16) The occurrence of any default or event of default under the
Bridge Loan and the commencement, by the Bridge Loan lender, of any
enforcement or collection action (including, without limitation, any
self-help remedy) as a result thereof; or
(17) The occurrence of any default or event of default under the
Connecticut Valley Debt, or under any guaranty thereof executed and
delivered by MTS."
10. Waiver of Certain Events of Default. Subject to the prior satisfaction
of all conditions precedent contained in Section 13 hereof, SouthTrust hereby
waives the occurrence of the Events of Default which are expressly described in
the letter from Xxxxxxx X. Xxxxxxx to the Borrowers dated December 5, 1997, a
copy of which is attached hereto as Exhibit 10. Nothing contained in this
Amendment shall, however, constitute or be deemed to constitute a waiver by
SouthTrust of the occurrence of any other Event of Default which may have
occurred under the Loan Agreement or any of the other Loan Documents.
15
11. Representations and Warranties of Borrowers and Guarantor. In order to
induce SouthTrust to enter into the transactions contemplated by this Amendment,
each of the Borrowers and the Guarantor hereby, jointly and severally,
represents and warrants to SouthTrust as follows:
(a) That (i) none of the Borrowers, other than the LifeServ Companies,
has or will incur any liability of any kind under the Bridge Loan, (ii)
none of the Borrowers, other than the LifeServ Companies, has or will incur
any obligation or liability of any kind under the Connecticut Valley
Contract or, except as expressly set forth in Section 4(c) hereof, under
the Connecticut Valley Debt, and (iii) none of the Borrowers, other than
the LifeServ Companies, has or will incur any liability of any kind to
Xxxxxx & Xxxxxx for fees and charges, or otherwise, except for the initial
payment provided for in the engagement letter referred to in Section 5(b)
hereof (which has either been fully reimbursed by one or more of the
LifeServ Companies or is included within the funding referred to in Section
11(b) hereof);
(b) That since November 30, 1997, none of the Borrowers has provided
any funding or financial accommodation of any kind to any of the LifeServ
Companies, except for funding aggregating not more than $200,000.00;
(c) That, as of the date hereof, other than the Events of Default
referred to in Exhibit 10 attached hereto, no Event of Default exists under
the Loan Agreement or the other Loan Documents;
(d) That the representations and warranties of Borrowers and Guarantor
contained in the Loan Agreement and the other Loan Documents were true,
correct and complete in all respects when made and continue to be true and
correct in all respects on the date hereof;
(e) That the execution, delivery and performance by Borrowers and
Guarantor of this Amendment and the consummation of the transactions
contemplated hereby are within the corporate power of each of the
Borrowers, and have been duly authorized by all necessary corporate action
on the part of each of the Borrowers, do not require any approval or
consent, or filing with, any governmental agency or authority, do not
violate any provisions of any law, rule or regulation or any provision of
any order, writ, judgment, injunction, decree, determination or award
presently in effect in which any Borrower or Guarantor is named or any
provision of the organizational documents of any of the Borrowers, and do
not result in a breach of or constitute a default under any agreement or
instrument to which any Borrower or any Guarantor is a party or by which it
or any of its or their properties are bound;
(f) That this Amendment constitutes the legal, valid and binding
obligation of Borrowers and Guarantor, enforceable against each of them in
accordance with its terms; and
(g) That the Borrowers and the Guarantor are entering into this
Amendment freely and voluntarily with the advice of legal counsel of their
own choosing.
16
12. Filing of Motions, Hearings, Etc. The Borrowers have heretofore filed,
or caused to be filed, in the Bankruptcy Court (a) the Emergency Motion of MTS
Packaging, MTS Labs, Vangard Labs, and MMT to Approve Modification of Loan
Agreement and Confirmation Order (the "Amendment Motion"), and (b) the Emergency
Motion of MMT Under Section 364(c) of the Bankruptcy Code to Authorize Pledge of
Collateral, Execution of Bridge Loan Documents and Incurrence of $500,000 of
Secured Indebtedness (the "Bridge Loan Motion"). The Bankruptcy Court has
scheduled hearings on the Amendment Motion and the Bridge Loan Motion for March
30, 1998. The Borrowers and the Guarantor hereby agree to use their respective
best efforts to obtain the Bankruptcy Court=s approval of both of the foregoing
motions as promptly as possible.
13. Conditions Precedent. Notwithstanding any provision contained herein to
the contrary, this Amendment shall not become effective unless and until the
hearings described in Section 12 hereof have occurred and the Bankruptcy Court
shall have (a) granted the Amendment Motion and the Bridge Loan Motion, and (b)
entered on order or orders in each of the Bankruptcy Cases, and in the pending
Chapter 11 Case of MMT (the "MMT Case"), in form and substance acceptable in all
respects to SouthTrust, approving this Amendment and providing that, upon the
occurrence of a Major Default under the Loan Agreement, as amended hereby, (i)
SouthTrust shall be entitled to immediately exercise all of its rights and
remedies arising under the Loan Agreement, as amended hereby and the other Loan
Documents, or otherwise against any one or more of the Borrowers and the
Guarantor, without further notice to, or order of, the Bankruptcy Court, and
(ii) SouthTrust shall automatically be entitled to relief from the automatic
stay (if then in effect) in the MMT Case.
14. Certain Acknowledgments by Borrowers and Guarantor. Each Borrower and
the Guarantor hereby acknowledges, stipulates and agrees that: (a) all of the
obligations of Borrowers under the Loan Agreement are absolutely due and owing
by Borrowers to SouthTrust without any defense, deduction, offset or
counterclaim (and, to the extent Borrowers or Guarantor had any defense,
deduction, offset or counterclaim on the date hereof, the same is hereby
waived); (b) the Loan Agreement and all other documents and instruments executed
in connection therewith or in connection with any predecessor agreement are
legal, valid and binding obligations of Borrowers and Guarantor, enforceable
against Borrowers and Guarantor in accordance with their respective terms; (c)
each of Borrowers and the Guarantor has consented to, and hereby ratifies any
and all prior consents given by them (or any of them) with respect to the Loan
Documents, including, without limitation, this Amendment, all transactions
contemplated thereby and all documents and instruments executed in connection
herewith and therewith; and (d) prior to executing this Amendment, Borrowers and
Guarantor consulted with and had the benefit of advice of legal counsel of their
own selection and each has relied upon the advice of such counsel, and in no
part upon any representation of SouthTrust concerning the legal effects of this
Amendment, any of the Loan Documents, or any provision hereof or thereof.
17
15. Ratification and Reaffirmation of Releases and Waivers.
(a) Each of the Borrowers and the Guarantor hereby ratifies, confirms
and re-affirms each of the releases, waivers and undertakings set forth in
the Loan Agreement and the Loan Documents, each of which is hereby
incorporated herein by this reference, including, without limitation, those
contained in the following Sections of the Loan Agreement: Section 7.5
"Waiver of Right To Stay Foreclosure Upon Occurrence of Major Default,"
Section 7.6 "Relief from Automatic Stay," Section 8.3 "Indemnity," Section
8.7 "Waiver by the Borrowers," Section 8.10 "Submission to Jurisdiction;
Waivers," and Section 8.11 "Release."
(b) In addition to the foregoing, each of the Borrowers and the
Guarantor hereby agree that, in addition to SouthTrust=s other rights and
remedies under the Loan Agreement, upon the occurrence of a Major Default
under the Loan Agreement, as amended hereby, (i) SouthTrust shall be
entitled to immediately exercise all of its rights and remedies arising
under the Loan Agreement, as amended hereby, and the other Loan Documents,
or otherwise against any one or more of the Borrowers and the Guarantor,
without further notice to, or order of, the Bankruptcy Court, and (ii)
SouthTrust shall automatically be entitled to relief from the automatic
stay (if then in effect) in the MMT Case.
(c) Borrowers and Guarantor hereby acknowledge that the provisions
contained in this Section 15, and in the Sections of the Loan Agreement
referred to in subsection (a) hereof, were bargained for by the Lender, and
are being relied upon by the Lender in connection with its agreement to
enter into the transactions contemplated by the Loan Agreement and this
Amendment.
16. Ratification of Loan Agreement and Other Loan Documents. Borrowers and
the Guarantor hereby ratify and reaffirm the Loan Agreement, each of the other
Loan Documents and all of its or their obligations and liabilities thereunder.
Guarantor hereby ratifies and reaffirms the validity, legality and
enforceability of the Guaranty Agreement and agrees that the Guaranty Agreement
is and shall remain in full force and in effect until all the Obligations of
Borrowers under the Loan Agreement, as amended by this Amendment, and as the
same may hereafter be amended or modified, and all other Guaranteed Obligations
(as defined in the Guaranty Agreement) have been indefeasibly paid and satisfied
in full.
17. Debtor-Creditor Relationship. Nothing in this Amendment shall be
construed to alter the existing debtor-creditor relationship between Borrowers
and Lender, nor is this Amendment or any Loan Document intended to change or
affect in any way the relationship between Lender and the Guarantor to one other
than a debtor-creditor relationship. This Amendment, together with the other
Loan Documents, is not intended, nor shall any of them be construed to create, a
partnership or joint venture relationship between or among any of the parties
hereto. No person other than a party hereto is intended to be a beneficiary
hereof and no person other than a party hereto shall be authorized to rely upon
the contents of this Amendment.
18. Entire Agreement. This Amendment, the Loan Agreement as amended hereby
and the other Loan Documents constitute the entire understanding of the parties
with respect to the subject matter hereof and thereof. The Loan Agreement, as
amended hereby, may not be modified, altered or amended except by an agreement
in writing signed by all the parties hereto.
18
19. No Waiver. No delay or failure on the part of Lender in the exercise of
any right, power or privilege granted under the Loan Agreement, as amended by
this Amendment, or any of the other Loan Documents, or available at law or in
equity, shall impair any such right, power or privilege or be construed as a
waiver of any Event of Default thereunder or any acquiescence therein. No single
or partial exercise of any such right, power or privilege shall preclude the
further exercise of such right, power or privilege. No waiver shall be valid
against Lender unless made in writing and signed by Lender, and then only to the
extent expressly specified therein.
20. No Novation, Etc.. This Amendment is not intended to be, nor shall it
be construed to create, a novation or accord and satisfaction, and, except as
otherwise expressly modified herein, the Loan Agreement and the other Loan
Documents shall remain in full force and effect.
21. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto, each of which when so executed
shall constitute an original, but all of which taken together shall be one and
the same instrument. In proving this Amendment or any of the Loan Documents, it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought. Any signature delivered
by a party telecopy or facsimile transmission shall be deemed an original
signature hereto. Notice of Lender=s acceptance hereof is hereby waived.
22. Release. To induce the Lender to enter into this Amendment, each of the
Borrowers and the Guarantor, for themselves and their respective legal
representatives, successors, predecessors, heirs and assigns, and their
respective officers, directors, stockholders, agents, servants and employees,
hereby release, acquit and forever discharge the Lender and its Participants,
officers, directors, stockholders, agents, servants, employees, legal
representatives, successors and assigns, of and from any and all claims,
demands, debts, actions and causes of action of any kind, whether absolute or
contingent, due or to become due, disputed or undisputed, liquidated or
unliquidated, at law or in equity, or known or unknown, which they or any of
them now have or might hereafter have against the Lender or any of its
Participants, officers, directors, stockholders, agents, servants, employees,
legal representatives, successors or assigns, by reason of any act, matter,
contract, agreement or thing whatsoever up to the date of this Amendment,
including, without limitation, any claim, counterclaim, demand, debt, action or
cause of action of any kind, and whether arising, directly or indirectly, under
or in connection with the Loan Agreement, the Loan Documents, the Original
SouthTrust Loan Documents or the Original SouthTrust Indebtedness.
23. Governing Law. This Amendment is being delivered to the Lender, and is
performable, in Jefferson County, Alabama, and the substantive Laws of the
United States and the State of Alabama, without giving effect to its principles
of conflict of laws, shall govern the construction of this Amendment and the
documents executed and delivered pursuant hereto, and the rights and remedies of
the parties hereto and thereto, except to the extent that the location of any
Collateral in a state or jurisdiction other than Alabama requires that the
perfection of the Lender's security interest hereunder, and the enforcement of
certain of the Lender's remedies with respect to the Collateral, be governed by
the laws of such other state or jurisdiction.
19
24. Survival. All representations and warranties contained in this
Amendment, the Loan Agreement or made or furnished on behalf of any Borrower or
Guarantor in connection herewith or therewith shall survive the execution and
delivery of this Amendment, and shall survive until the Obligations are
indefeasibly paid in full, and thereafter as and to the extent provided in the
Loan Agreement.
IN WITNESS WHEREOF, each of the undersigned parties has executed this
Amendment, or has caused the same to be executed on its behalf by its duly
authorized officer and agent, on and as of the date first above written.
MEDICAL TECHNOLOGY SYSTEMS, INC.
By:
-------------------------------
Its:
-------------------------------
CLEARWATER MEDICAL SERVICES, INC.
By:
-------------------------------
Its:
-------------------------------
MEDICAL TECHNOLOGY LABORATORIES, INC.
By:
-------------------------------
Its:
-------------------------------
MTS PACKAGING SYSTEMS, INC.
By:
-------------------------------
Its:
-------------------------------
20
VANGARD LABS, INC.
By:
-------------------------------
Its:
-------------------------------
VANGARD PHARMACEUTICAL PACKAGING, INC.
By:
-------------------------------
Its:
-------------------------------
PERFORMANCE PHARMACY SYSTEMS,
By:
-------------------------------
Its:
-------------------------------
CART-XXXX, INC.
By:
-------------------------------
Its:
-------------------------------
MEDICATION MANAGEMENT SYSTEMS, INC.
By:
-------------------------------
Its:
-------------------------------
21
MEDICATION MANAGEMENT TECHNOLOGIES, INC.
By:
-------------------------------
Its:
-------------------------------
MTS SALES & MARKETING, INC.
By:
-------------------------------
Its:
-------------------------------
SYSTEMS PROFESSIONALS, INC.
By:
-------------------------------
Its:
-------------------------------
LIFESERV TECHNOLOGIES, INC.
By:
-------------------------------
Its:
-------------------------------
-------------------------------
Xxxx X. Xxxxxx
WITNESS:
-------------------------------
22
SOUTHTRUST BANK, NATIONAL ASSOCIATION
By:
-------------------------------
Its:
-------------------------------
