FORBEARANCE AND AMENDMENT AGREEMENT
AMONG
PHYSICIAN COMPUTER NETWORK, INC.,
THE SUBSIDIARIES PARTY HERETO,
FLEET BANK, N.A., AS ADMINISTRATIVE AGENT,
AND
THE LENDERS PARTY HERETO
DATED AS OF APRIL 22, 1998
FORBEARANCE AND AMENDMENT AGREEMENT
FORBEARANCE AND AMENDMENT AGREEMENT, dated as of April 22, 1998, among
PHYSICIAN COMPUTER NETWORK, INC., a New Jersey corporation (the "Borrower"), the
several subsidiaries of the Borrower which are parties hereto (the
"Subsidiaries"), the several banks and other financial institutions or entities
which are parties hereto (the "Required Lenders"), and FLEET BANK, N.A., as
Administrative Agent (in such capacity, the "Administrative Agent").
R E C I T A L S:
I. The Administrative Agent, Xxxxxx Brothers Commercial Paper, Inc., as
arranger and as a Lender, the several banks and other financial institutions
parties thereto (the "Lenders"), and the Borrower entered into a Credit
Agreement, dated as of September 10, 1997 (the "Credit Agreement").
II. The Administrative Agent, the Lenders, the Borrower and certain
Subsidiaries of the Borrower (the "Guarantors") also entered into a Guarantee
and Collateral Agreement, dated as of September 10, 1997 (the "Guarantee and
Collateral Agreement").
III. On March 3, 1998, the Borrower issued a Securities and Exchange
Commission Form 8-K and a press release pursuant to which the Borrower disclosed
the existence of certain accounting matters.
IV. On April 2, 1998, the Borrower issued another press release
disclosing, among other things, additional accounting matters and announcing
that the Borrower's auditors had withdrawn their opinion with respect to the
Borrower's 1996 financial statements. A description of the nature of the
disclosures, facts and events described in Recitals III and IV is set forth in
Exhibit A annexed hereto and the disclosures, facts and events described in
Exhibit A are collectively referred to herein as the "Accounting Matters."
V. The Accounting Matters have resulted in one or more Events of
Default under the Credit Agreement (the "Specified Events of Default").
VI. As a result of the occurrence of the Specified Events of Default,
the Borrower and the Guarantors have requested that the Administrative Agent and
the other Lenders agree to forbear from pursuing their remedies under, and to
amend certain SECTIONS of, the Credit Agreement.
VII. The Administrative Agent and the Required Lenders have advised the
Borrower that they are willing to agree to the Borrower's and the Guarantors'
request on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION I. DEFINITIONS AND REFERENCES.
A. OTHER DEFINITIONS:
Any capitalized terms used herein that are not defined herein shall
have the meanings ascribed to them in the Credit Agreement.
B. SPECIFIC DEFINITIONS:
As used herein and in the Credit Agreement, the following terms shall
have the following meanings:
"ACCEPTABLE AUDITED 1997 FINANCIAL STATEMENTS shall mean financial
statements of the Borrower and its Subsidiaries for the fiscal year ending
December 31, 1997, certified by the Auditors, without a "going concern"
qualification.
"ADDITIONAL LOAN DOCUMENTS" means all of the documents executed and
delivered to the Administrative Agent pursuant to SECTION 4 hereof.
"AGENT'S FEE" means the fee payable to the Administrative Agent under
SECTION 4(d) hereof.
"AMI" means Xxxxxxx & Marsal, Inc.
"AMI INDEMNIFICATION AGREEMENT" means the agreement between the
Borrower and AMI and Xxxxx pursuant to which, inter alia, the Borrower agrees to
indemnify and hold AMI and Xxxxx harmless from certain losses, claims and causes
of action.
"AMI INTERCREDITOR AGREEMENT" means the Intercreditor Agreement among
AMI, Xxxxx and the Administrative Agent, in form and substance satisfactory to
the Administrative Agent and the Required Lenders, which, among other things,
(a) will provide that the security interests granted to AMI are unconditionally,
completely and irrevocably subordinate, in all respects, to the security
interests granted to the Lenders (b) will prohibit AMI and Xxxxx from enforcing
any obligations of the Borrower and the Subsidiaries under the AMI
Indemnification Agreement against any and all Property of the Borrower and the
Subsidiaries which is Collateral subject to the Liens and security interests
held by the Administrative Agent and the Lenders and which will prohibit AMI and
Xxxxx from enforcing their subordinate security interests, until the obligations
of the Borrower to the Lenders have been paid in full, (c) will allow the
Lenders to pursue their remedies upon the occurrence of a Termination Event,
without the vote, consent or approval of AMI and Xxxxx and AMI and Xxxxx will
agree not to object to the Lenders' pursuing such remedies, (d) will confirm
that the Administrative Agent shall have no duty to protect the Collateral or
otherwise have any responsibility to AMI and Xxxxx and AMI and Xxxxx shall hold
the Administrative Agent and the Lenders harmless from and against any liability
in connection with the Collateral, (e) will require AMI to release collateral as
necessary for the sale of the Disposition Assets or any other Property without
consideration to AMI or Xxxxx therefor and (f) will require AMI to acknowledge
the sharing of the proceeds of the Disposition Assets between the Borrower and
the Lenders.
"APPROVED CASH FLOW PROJECTIONS" means (i) the cash flow projections
for the Borrower and its Subsidiaries, on a consolidated basis, for the period
from April 1, 1998 through March 31, 1999, a copy of which is annexed hereto as
Exhibit B and (ii) any supplemental cash flow projections submitted by the
Borrower, which, in accordance with SECTION 2.3(b)(vii) of the Credit Agreement,
must be approved by an executive officer of the Borrower and by AMI (or, if
applicable, a replacement crisis manager) and must be reasonably satisfactory to
the Administrative Agent, the Required Lenders and their professionals.
"AUDITORS" means KPMG Peat Marwick or another firm of certified public
accountants reasonably acceptable to the Administrative Agent and the Lenders.
"BUSINESS COMBINATION" has the meaning set forth in
SECTION 2.3(g)(ii) of the Credit Agreement.
"CUMULATIVE PREFERRED STOCK" means the cumulative preferred stock
issued by the Borrower to the Third Party Contributor pursuant to the Stock
Purchase Agreement.
"DISPOSITION ASSETS" means (i) the "Commercial Business" as defined in
the Credit Agreement, (ii) the assets or stock of Integrated Health Systems,
Inc., a Subsidiary of the Borrower engaged in the business of providing
information systems and software products to hospitals, clinics or the like and
(iii) the real property located in Xxxx, Washington which is owned by the
Borrower's Subsidiary, Xxxxxx Xxxxxx Corp., subject, in each instance, to an
agreement between the Administrative Agent, the Required Lenders and the
Borrower with respect to the specific assets which comprise the "Disposition
Assets," as required under SECTION 7.5(g)(ii) of the Credit Agreement.
"XXXXX" means Xxxxxx Xxxxx.
"EXTENSION FEES" means the fees payable to the Lenders by the Borrower
under SECTIONS 2.3(b)(iv) and 2.3(c) of the Credit Agreement.
"FINANCIAL STATEMENT ISSUANCE DATE" means the date on which Acceptable
Audited Financial Statements are issued by the Auditors.
"FORBEARANCE EFFECTIVE DATE" means the date on which this Agreement is
executed and all of the payments and documents listed in SECTION 4 hereof have
been received by the Administrative Agent.
"FORBEARANCE PERIOD" means the period from the date hereof to the
Maturity Date, as the Maturity Date may be extended pursuant to SECTIONS 2.3(b)
and 2.3(f) of the Credit Agreement.
"MATURITY DATE" means September 30, 1998, as such date may be extended
pursuant to SECTIONS 2.3(b) and 2.3(f) of the Credit Agreement.
"PICOWER" means Xxxxxx X. Picower.
"PICOWER AGREEMENT" means the agreement among Picower, individually and
on behalf of all Related Parties, the Third Party Contributor and the
Administrative Agent, in form and
substance satisfactory to the Administrative Agent and the Required Lenders,
pursuant to which Picower, the Related Parties and the Third Party Contributor
will, among other things, (a) agree not to join in any Chapter 7 or 11 petition
against the Borrower or any of its Subsidiaries, (b) agree not to provide a
debtor-in-possession loan facility or any loan facility that will seek priority
on a basis other than subordinate to the security interests or claims of the
Lenders, (c) agree to allow the Lenders to pursue their remedies upon the
occurrence of a Termination Event, without the vote, consent or approval of
Picower, the Third Party Contributor and all other Related Parties and Picower,
the Third Party Contributor and all other Related Parties will agree not to
object to the Lenders pursuing such remedies and (d) confirm that the
Administrative Agent shall have no duty to Picower, the Third Party Contributor
and all other Related Parties and VIS-A-VIS the Collateral and (e) Picower, the
Third Party Contributor and all other Related Parties shall hold the
Administrative Agent and the Lenders harmless from and against any liability in
connection with the Collateral.
"PICOWER GUARANTEE" means the unconditional guarantee of payment to be
issued by Picower (in form and substance satisfactory to the Lenders) limited to
$2,000,000, which shall provide, among other things, that (a) the Lenders may
not realize on the guarantee until the earlier of the Maturity Date, the
acceleration of the Loans or a Business Combination and (b) the guarantee shall
not be reduced on account of any payments or reductions of the Loans.
"RESTRUCTURE FEE" has the meaning set forth in SECTION
4(c) hereof.
"REVISED MATERIAL ADVERSE EFFECT" means an event, circumstance or both
shall exist or shall have occurred which, after the date hereof, has or will
have a material adverse effect on the continuing operations and business of the
Borrower and its Subsidiaries (taken as a whole) as such operations and business
are reflected in the Approved Cash Flow Projections, in each such case, after
taking into account each event or circumstance which is currently known by the
Lenders to have arisen on or before the date hereof, provided that (a) the
subsequent identification of events, circumstances or both which arise on or
before the date hereof, but which are not currently known to the Lenders, shall
not, in and of itself, be deemed to constitute a Revised Material Adverse Effect
unless such events, circumstances or both have or will have a Revised Material
Adverse Effect from and after the date hereof, and (b) the failure to sell the
Disposition Assets by any particular date shall not, in and of itself, be a
Revised Material Adverse Effect; provided, however, such failure, when combined
with other event(s) and circumstance(s) may nonetheless be deemed to constitute
a Revised Material Adverse Effect.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated
April 1, 1998, between the Borrower and the Third Party Contributor.
"THIRD PARTY CONTRIBUTION" means the equity investment in the amount of
$11,000,000 made by JA Special Limited Partnership, a Related Party of Picower,
pursuant to the Stock Purchase Agreement and, pursuant to which Stock Purchaser
Agreement, the Borrower has issued to the Third Party Contributor non-redeemable
cumulative preferred stock (a) having a liquidation preference of $11,000,000
and (b) accruing cumulative dividends at a rate increasing from 15% to 18% over
the next four years.
"THIRD PARTY CONTRIBUTOR" means JA Special Limited Partnership, the
Related Party of Picower, which purchased the Cumulative Preferred Stock.
"VAR" means a value added reseller that is a party to an Independent
Reseller Agreement with the Borrower or one of its Subsidiaries.
C. REFERENCES TO CREDIT AGREEMENT AND CERTAIN DEFINED
TERMS.
From and after the Forbearance Effective Date (a) all references herein
and in any other Loan Document to the "Credit Agreement" shall be deemed to be a
reference to the Credit Agreement as amended pursuant to this Agreement, (b) all
references in the Credit Agreement, the Loan Documents or the Additional Loan
Documents to the term "Revolving Credit Termination Date" shall be deemed to be
a reference to the term "Maturity Date", and (c) all references to the term
"Notes" in this Agreement, the Credit Agreement, the Loan Documents and the
Additional Loan Documents shall be deemed to be a reference to the amended and
restated notes delivered to the Lenders pursuant to this Agreement.
SECTION II. ACKNOWLEDGMENTS.
A. ACKNOWLEDGMENT OF DEBT.
(a) The Borrower hereby acknowledges, confirms and declares that, as of
the date hereof and after giving effect to the principal payment required under
SECTION 4(b) hereof, the outstanding principal balance of the Loans is
$16,500,000 and such principal amount and all other amounts due to the Lenders
under the Credit Agreement are unconditionally owed to the Lenders without any
setoff, deduction, counterclaim, or defense of any kind or nature to the payment
thereof.
(b) Each of the Guarantors hereby acknowledges, confirms and declares
that the amounts owed by the Borrower to the Lenders and described in SECTION
2.1(a) hereof are owed by each of the Guarantors to the Lenders in accordance
with the terms of the Guarantee and Collateral Agreement without any setoff,
deduction, counterclaim or defense of any kind or nature to the payment thereof.
B. ACKNOWLEDGMENT OF RECITALS AND DEFAULTS.
(a) The Borrower and each of the Guarantors acknowledges that the
Recitals are true and correct in all material respects.
(b) The Borrower and each of the Guarantors acknowledges the disclosure
of the Accounting Matters and agrees that the disclosure of the Accounting
Matters and the results and the effects thereof constitute and, notwithstanding
the execution of this Agreement, will continue to constitute one or more Events
of Default under the Credit Agreement.
C. ACKNOWLEDGMENT OF TERMINATION OF COMMITMENTS.
(a) The Borrower acknowledges and agrees that, as a result of and as of
the occurrence of the Specified Events of Default, the Revolving Credit
Commitments contained in SECTION 2.1 of the Credit Agreement and the L/C
Commitment contained in SECTION 3.1 of the Credit Agreement were and remain
irrevocably terminated.
(b) The Borrower acknowledges and agrees that (i) upon the Lenders'
receipt of any payment of principal from and after
the date hereof, the Revolving Credit Commitments shall be further reduced and
irrevocably terminated by the amount of principal repaid and (ii) the Borrower
shall not have any right to borrow and the Lenders shall not have any obligation
to re-lend any amount repaid.
D. ACKNOWLEDGMENT OF RESERVATION OF RIGHTS.
The Borrower and the Guarantors acknowledge and agree that nothing
contained in this Agreement is or shall be deemed to be (a) a waiver by the
Administrative Agent or any of the Lenders of any of the Specified Events of
Default or (b) a release or waiver by the Administrative Agent or any of the
Lenders of any claim, right, or cause of action arising out of, relating to or
in connection with the Accounting Matters or the Specified Events of Default,
all of which are hereby reserved by the Administrative Agent and the Lenders.
E. ACKNOWLEDGMENT OF ADVICE OF COUNSEL AND OTHER
MATTERS.
The Borrower and the Guarantors hereby acknowledge that:
(a) they have been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Additional Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower or the Guarantors arising out of or in
connection with this Agreement or any of the Additional Loan Documents, and the
relationship between the Administrative Agent and Lenders, on one hand, and the
Borrower and its Subsidiaries, on the other hand, in connection herewith or
therewith is solely that of creditor and debtor; and
(c) no joint venture is created by this Agreement or by the Additional
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and its Subsidiaries and the
Lenders.
SECTION III. REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Required Lenders to enter
into this Agreement, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
A. CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
B. CORPORATE POWER; AUTHORIZATION: ENFORCEABLE
OBLIGATIONS.
Each Loan Party has the corporate power and authority, and the legal
right, to make, deliver and perform this Agreement and the Additional Loan
Documents. Each Loan Party has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and the Additional
Loan Documents. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and the Additional Loan Documents. This
Agreement and the Additional Loan Documents have been duly executed and
delivered on behalf of each Loan Party thereto. This Agreement and the
Additional Loan Documents constitute, and each other Additional Loan Document
upon execution will constitute, a legal, valid and binding obligation of each
Loan Party thereto, enforceable against each such Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
C. NO LEGAL BAR.
The execution, delivery and performance of this Agreement and the
Additional Loan Documents, will not violate any Requirement of Law or any
Contractual Obligation of the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
D. NO MATERIAL LITIGATION.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries with respect to
this Agreement or any of the transactions contemplated hereby.
E. USE OF PROCEEDS.
The Borrower will use $6,000,000 of the proceeds of the Third Party
Contribution to reduce the principal balance of the Loans by $6,000,000 and will
use the balance thereof exclusively for working capital and general corporate
purposes of the Borrower and the Subsidiaries.
F. ACCURACY OF INFORMATION, ETC.
(a) No statement or information contained in this Agreement or other
document, certificate or statement furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection
with the transactions contemplated by this Agreement, contained as of the date
any such statement, information, document or certificate was so furnished any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
(b) The Approved Cash Flow Projections are based upon good faith
estimates and assumptions believed by the senior management of the Borrower to
be reasonable at the time made.
G. SUBSIDIARIES.
The Subsidiaries of the Borrower listed in Exhibit C annexed hereto are
all of the active Subsidiaries of the Borrower in existence as of the date of
this Agreement and the Subsidiaries of the Borrower listed in Exhibit D are
inactive and do not own any Property.
H. DISCLOSURE.
(a) The Borrower has disclosed to the Administrative Agent and to the
Lenders the nature of all of the material events known to it which were or are
reported, accounted for or disclosed in a manner inconsistent with GAAP.
(b) The Borrower has no knowledge of any Events of Default under (i)
SECTIONS 8(a) of the Credit Agreement, (ii)
SECTION 8(c) of the Credit Agreement (in respect of SECTIONS 6.4(a), SECTIONS
7.2 THROUGH 7.15 of the Credit Agreement and SECTION 5 of the Guarantee and
Collateral Agreement) and (iii) SECTIONS 8(e) THROUGH (l) of the Credit
Agreement, except (1) the Specified Events of Default (2) with respect to
SECTION 7.3 of the Credit Agreement, Liens which are permitted under SECTION
7.3, as amended by the Forbearance Agreement and (3) with respect to SECTION
7.4, changes made in the method of conducting business to address the Accounting
Matters.
I. CREDIT AGREEMENT REPRESENTATIONS.
The representations and warranties contained in SECTIONS 4.8, 4.9,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.19, 4.20 and 4.21 of the Credit
Agreement and in SECTION 4 of the Guarantee and Collateral Agreement are true
and correct in all material respects as of the date of this Agreement, except
that with respect to the representations and warranties in SECTION 4.15 of the
Credit Agreement, Solion Corp. is also, as of the date hereof, a Subsidiary of
the Borrower.
SECTION IV. CLOSING DOCUMENTS
This Agreement shall become effective and binding upon the Lenders upon
the Administrative Agent's receipt of the following (which, in the case of
documents, agreements, certificates and opinions, must be satisfactory in form
and substance to the Administrative Agent and its counsel):
(a) THIRD PARTY CONTRIBUTION. Confirmation that (i) the Third Party
Contribution has closed on the terms as set forth in the definition thereof,
(ii) the proceeds of the Third Party Contribution have been received by the
Borrower and (iii) $6,000,000 of the proceeds thereof are being used by the
Borrower to make the principal payment required under SECTION 4(b) hereof and
(iv) (1) an amendment (subject to adoption by the Board of Directors of the
Borrower) of SECTION 7 of Article Third of the Company's Restated Certificate of
Incorporation which provides that such SECTION 7 is subject to the restrictions
and prohibitions set forth in the Credit Agreement, INTER ALIA, against the
payment of dividends on and redemption of the Cumulative Preferred Stock and (2)
the Borrower and the Third Party Contributor have entered into an agreement
pursuant to which the Third Party Contributor for itself and its successors
and assigns acknowledges that such SECTION 7 is subject to the restrictions and
prohibitions set forth in the Credit Agreement, INTER ALIA, against the payment
of dividends on and redemption of the Cumulative Preferred Stock and agrees not
to sell the Cumulative Preferred Stock until such amendment has been approved.
(b) PRINCIPAL PAYMENT. $6,000,000, by wire transfer of
immediately available funds, which shall be applied by the
Lenders as a payment in reduction of the principal balance of
each Lender's Loan.
(c) Restructure Fee. $330,000, by wire transfer of
immediately available funds, which shall be paid to the Lenders
as a fee for entering into this Agreement (the "Restructure
Fee").
(d) AGENT'S FEE. $50,000, by wire transfer of
immediately available funds, which shall be retained by the
Administrative Agent as a fee for its services as Administrative
Agent (the "Agent's Fee").
(e) COMMITMENT FEES. $59,696.18, by wire transfer of
immediately available funds, representing accrued and unpaid
Commitment Fees due under the Credit Agreement for the period to
March 15, 1998.
(f) NOTES. The Administrative Agent shall have received amended and
restated notes in the form of Exhibit E annexed hereto, one each payable to the
order of each of the Lenders in an amount equal to the outstanding principal
balance of each Lender's Loans.
(g) PICOWER GUARANTEE. The Picower Guarantee, duly
executed by Picower.
(h) PICOWER AGREEMENT. The Picower Agreement, duly
executed by Picower.
(i) PICOWER FINANCIAL INFORMATION. Financial information of Picower
reasonably satisfactory to the Administrative Agent.
(j) LEGAL OPINIONS. Legal opinions of
(i) Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov and Xxxx,
counsel to the Borrower and its Subsidiaries.
(ii) local counsel in New Jersey and of such other special and
local counsel as may be required by the Administrative Agent.
(iii)Gordon, Altman, Butowsky, Weitzen, Shalov and
Xxxx, counsel to Picower.
(iv) Gordon, Altman, Butowsky, Weitzen, Shalov and
Xxxx, counsel to the Third Party Contributor.
(k) Intentionally deleted.
(l) LOCK BOX AGREEMENT. A Lock-Box Agreement between the
Borrower and its Subsidiaries and the Administrative Agent, duly
executed by the Borrower and its Subsidiaries.
(m) Secretary's Certificate. A certificate of the Secretary of the
Borrower and its Subsidiaries certifying (i) that attached thereto are true and
complete copies of the resolutions, adopted by the Board of Directors of the
Borrower and its Subsidiaries and all other necessary corporate action
evidencing approval of the transactions contemplated by this Agreement and (ii)
as to the incumbency and specimen signature of each officer of the Borrower and
its Subsidiaries executing the Agreement.
(n) HEALTHPOINT AGREEMENT AND CONFIRMATION. (1) a copy of the
HealthPoint Agreement certified by an officer of the Company to be true and
complete and (2) confirmation from Glaxo Wellcome, Inc. or Intelligent Medical
Systems, Inc. or from the Borrower's outside counsel that the obligations of PCN
HP Venture to make the capital contribution of $550,000 due under the
HealthPoint Agreement for the current year has been extended and may be made in
monthly installments of $150,000.00.
(o) CORPORATE AND PARTNERSHIP DOCUMENTS OF THE THIRD
PARTY CONTRIBUTOR.
(1) A certificate of the general partner of the Third Party
Contributor (the "General Partner") certifying that attached thereto is a true
and complete copy of the agreement of limited partnership of the Third Party
Contributor.
(2) A certificate of the secretary of the General
Partner certifying (i) that attached thereto are true and complete copies of the
resolution of the Board of Directors of the General Partner and all other
necessary corporate action evidencing approval of the transactions contemplated
by the Third Party Contributor Agreement and (ii) as to the incumbency and
specimen signature of each officer of the General Partner executing the Third
Party Contributor Agreement.
(p) Intentionally deleted.
(q) LITIGATION. A schedule of any legal actions commenced against the
Borrower and any of its Subsidiaries since March 1, 1998, a copy of the
complaints in such actions and a copy of the answers or responses, if any, filed
by the Borrower and its Subsidiaries in response to such complaints.
(r) GUARANTEES. A schedule of any guarantee obligations of the Borrower
and any of the Subsidiaries outstanding as of April 15, 1998, other than the
guarantee obligations in favor of the Administrative Agent and the Lenders.
(s) PROFESSIONAL FEES. Payment of the fees and expenses of Xxxxx,
Xxxxxx & Xxxxxx, LLP and Ernst & Young, LLP, the fees and expenses of counsel to
each of the Lenders and the fees and expenses of in-house counsel of the
Administrative Agent and the Lenders.
SECTION V. AMENDMENTS OF THE CREDIT AGREEMENT
A. AMENDMENTS - EXISTING SECTIONS
1. AMENDMENT OF SECTION 2.3.
SECTION 2.3 of the Credit Agreement is amended by deleting the text
thereof in its entirety and substituting therefor the following:
"2.3 REPAYMENT OF LOANS; MATURITY DATE; EXTENSION OPTIONS
AND EXTENSION FEES.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the appropriate Lender the then unpaid
principal amount of the Loan of such Lender on September 30, 1998 (the "Maturity
Date") (or such earlier date on which the Loans become due and payable under
SECTION 7 hereof). The Borrower further agrees to pay interest on the unpaid
principal balance of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in SECTION 2.9.
(b) The Borrower may elect to extend the Maturity Date from September
30, 1998 to December 31, 1998 provided, on or before 11:00 A.M. Eastern Time on
September 30, 1998;
(i) the Administrative Agent shall have received written
notice from the Borrower of its election to extend the Maturity Date,
(ii) no Termination Event shall have occurred,
(iii)the outstanding principal balance of the Loans shall have been
reduced by at least $11,250,000 (inclusive of the payment of $6,000,000
required under SECTION 4(b) of the Forbearance Agreement),
(iv) the Administrative Agent shall have received for
the account of the Lenders an extension fee of $1,000,000,
(c) If the Borrower has extended the Maturity Date from September 30,
1998 to December 31, 1998, in accordance with SECTION 2.3(b) hereof, then the
Lenders shall earn, and the Borrower shall pay, the following additional
extension fees on the following dates:
Amount Dates Fees Dates Earned
of Fees Are Earned Fees are Payable
------- ---------- ----------------
$500,000 October 1, 1998: October 30, 1998
$500,000 November 1, 1998 November 30, 1998
$500,000 December 1, 1998 Xxxxxxxx 00, 0000
(x) In the event the Borrower pays the Loans in full
after any of the Extension Fees are earned but prior to the date on which the
Extension Fees set forth in SECTION 2.3(c) are payable, the Borrower shall pay
to the Lenders, at the time the Loans are repaid, the entire amount of the
Extension Fees which have been earned by the day on which the Loans are repaid.
(e) All Extension Fees paid by the Borrower pursuant to SECTIONS 2.3(b)
and 2.3(c) shall be retained by the Lenders as fees and not as payments of
interest, principal or expenses on the Loans.
(f) If the Borrower has extended the Maturity Date from September 30,
1998 to December 31, 1998 in accordance with SECTION 2.3(b) hereof, the Borrower
thereafter may elect further to extend the Maturity Date of the Loans from
December 31, 1998 to the earlier of (1) May 31, 1999 or (2) one year and one day
after the Financial Statements Issuance Date, provided on or before 11:00 A.M.
Eastern Time on September 30, 1998 (in the case of SUBSECTION (i) and (iii); on
or before the earlier of 30 days from the delivery of the document described in
SUB-SECTION (i) or October 31, 1998 (in the case of SUB-SECTION (ii)); and on or
before 11:00 A.M. Eastern Time on December 30, 1998 (in the case of SUBSECTIONS
(iv), (v) and (vi)):
(i) the Administrative Agent shall have received from the
Auditors written confirmation that they will issue Acceptable Audited
1997 Financial Statements if the Lenders extend the Maturity Date to
the date specified in
SECTION 2.3(f),
(ii) the Borrower shall have received and delivered to the
Administrative Agent the Acceptable Audited 1997 Financial Statements,
and
(iii)the Administrative Agent shall have received supplemental cash
flow projections through the period ending May 31, 1999, which
supplemental projections shall have been approved by an executive
officer of the Borrower and by AMI (or a replacement crisis manager, if
applicable) and such supplemental cash flow projections are reasonably
satisfactory to the Administrative Agent, the Lenders and their
professionals.
(iv) all of the conditions to the extension of the Maturity
Date under SECTION 2.3(b) shall have been satisfied in the time
required by such SECTION,
(v) the Administrative Agent shall have received written
notice from the Borrower of its election to extend the Maturity Date,
(vi) no Termination Event shall have occurred.
(g) (i) If the Borrower shall have extended the Maturity Date of the
Loans to the earlier of May 31, 1999 or a year and a day after the Financial
Statement Issuance Date pursuant to SECTION 2.3(f) hereof then, in addition to
any other payments which the Borrower is required to make to the Lenders, the
Borrower shall make the following principal payments on the following dates:
Amount Date
------ ----
$500,000 January 1, 1999
$500,000 February 1, 1999
$500,000 March 1, 1999
$500,000 April 1, 1999
$500,000 May 1, 1999
(ii) Upon a sale of all or substantially all of the assets of
the Borrower, the sale of all or substantially all of the shares of Common Stock
of the Borrower, or a merger, consolidation or other similar transaction
involving the Borrower (a "Business Combination") the entire principal balance
of the Loans and all other amounts due under the Credit Agreement (including
without limitation, any Extension Fees that have been earned) shall be
immediately due and payable.
(h) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(i) The Administrative Agent shall maintain the Register
pursuant to SECTION 10.6(e), and a subaccount therein for each Lender, in which
shall be recorded (1) the amount of each Loan made hereunder and any Note
evidencing such Loan, (2) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (3) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(j) The entries made in the Register and the accounts of each Lender
maintained pursuant to SECTION 2.3(h) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(k) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Revolving Credit Loans of such
Lender, substantially in the form of Exhibit E to the Forbearance Agreement,
with appropriate insertions as to date and principal amount."
2. AMENDMENT OF SECTION 2.9
SECTION 2.9 of the Credit Agreement is amended by deleting the text
thereof in its entirety and substituting therefor the following:
"2.9 Interest Rates and Payment Dates. (a) On the
Forbearance Effective Date, all outstanding Loans shall be deemed
to be Base Rate Loans.
(b) All Base Rate Loans shall bear interest at the following rates for
the following periods:
For the period from the Forbearance
Effective Date to and including The Reference Lender's
September 30, 1998: Base Rate plus 2% per annum.
If the Maturity Date has been extended
from September 30, 1998 to December 31,
1998 in accordance with SECTION 2.3(b), The Reference Lender's
for the period from October 1, 1998 to Base Rate plus 5% per
and including December 31, 1998: annum.
If the Maturity Date has been extended
from December 31, 1998 to the earlier of
May 31, 1999 or one year and one day after
the Financial Statement Issuance Date,
in accordance with SECTION 2.3(f), for
the period from January 1, 1999 to the The Reference Lender's
earlier of such dates (and thereafter Base Rate plus 7.5%
until the Loans are paid in full): per annum.
(c) If all or a portion of the principal amount of any Loan shall not
be paid when due (whether at the stated maturity, by acceleration or otherwise),
all outstanding Loans (whether or not overdue) shall bear interest at a rate per
annum which is equal to the rate that would otherwise be applicable thereto
(whether or not the Maturity Date has been extended) pursuant to the foregoing
provisions of this SECTION 2.9 PLUS 2%, from the date of such non-payment until
such amount is paid in full (both before and after as the entry of any
judgment).
(d) Interest on all of the Base Rate Loans shall be payable in arrears
on the first day of each month."
3. AMENDMENT OF SECTION 2.10.
SECTION 2.10 of the Credit Agreement is amended by deleting the text
thereof and substituting therefor the following:
"2.10 COMPUTATION OF INTEREST AND FEES.
(a) Interest shall be calculated on the basis of a 360 day year for the
actual number of days elapsed, except that with respect to Base Rate Loans the
rate of interest on which is calculated at the Prime Rate, the interest rate
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. Any change in the interest rate on a Loan
resulting from a change in the Base Rate shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall, as soon as practicable,
notify the Borrower and the relevant Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to SECTION 2.10(a)."
4. AMENDMENT OF SECTION 2.12.
SECTION 2.12 of the Credit Agreement is amended by deleting the text
thereof and substituting therefor the following:
"2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Each payment by the Borrower on account of the Restructuring Fee
and the Extension Fees shall be made to the Administrative Agent and shall be
distributed by the Administrative Agent to the Lenders pro rata according to the
respective outstanding principal balances of the Loans then held by the Lenders.
(b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Loans and payments received from the
proceeds of sale of any Disposition Asset shall be made to the Administrative
Agent and shall be distributed by the Administrative Agent to the Lenders pro
rata according to the respective outstanding principal balances of the Loans
then held by the Lenders.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be
extended to the next succeeding Business Day."
5. AMENDMENTS OF SECTIONS 7.2 THROUGH 7.9 AND SECTIONS
7.14 AND 7.15 OF THE CREDIT AGREEMENT.
SECTIONS 7.2 through 7.9 and SECTIONS 7.14 and 7.15 of the Credit
Agreement are amended by deleting the text thereof in their entirety and
substituting therefor the following:
"7.2 LIMITATION ON INDEBTEDNESS. Create, incur,
assume or suffer to exist (in each case, to "Incur") any
Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document or any Additional Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary
existing as of September 10, 1997;
(c) Indebtedness outstanding on September 10, 1997 and listed on
Schedule 7.2(e) hereof and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof);
(d) Guarantees in existence as of April 1, 1998 and made in the
ordinary course of business by the Borrower or any of its Subsidiaries
of obligations of any Wholly Owned Subsidiary Guarantor;
(e) Intentionally deleted.
(f) Unsecured Indebtedness fully subordinated to the Lenders' Loans on
terms satisfactory to the Lenders and subject to an intercreditor
agreement that (i) will confirm the subordination of such indebtedness
on terms satisfactory to the Lenders, (ii) will prohibit the holder of
such Indebtedness from declaring a default under such Indebtedness,
accelerating such Indebtedness, receiving any payments on account of
such Indebtedness or initiating any action to recover such
Indebtedness, until all the obligations of the Borrower to the Lenders
have been paid in full, including without limitation, fees, interest,
principal and expenses and (iii) otherwise has terms no
more favorable to such lender than the Picower Agreement and the Third
Party Contribution.
(g) Unsecured Indebtedness to vendors for the purchase of inventory
incurred by the Borrower and any Subsidiary in the ordinary course of
business on customary terms."
"7.3 LIMITATION ON LIENS. Create, incur, assume or suffer
to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', material-men's, repairmen's
or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Intentionally deleted.
(g) Intentionally deleted.
(h) Intentionally deleted.
(i) Intentionally deleted.
(j) Liens created pursuant to the Security Documents.
(k) Intentionally deleted.
(l) Liens in existence as of September 10, 1997 and listed in Schedule
7.3(f) to the Credit Agreement, securing Indebtedness permitted by
SECTION 7.2(e) of the Credit Agreement as of September 10, 1997;
(m) Liens securing the indemnification obligations of the Borrower to
AMI under the AMI Indemnification Agreement, PROVIDED AMI shall have
executed the AMI Intercreditor Agreement substantially in the form
annexed to the Forbearance Agreement as Exhibit F;
(n) Liens securing Indebtedness of the Borrower to International
Business Machines Corporation ("IBM") PROVIDED (i) such Liens are
purchase money security interests which secure and only secure the
purchase price of the property sold by IBM to the Borrower or a
Subsidiary for re-sale in the ordinary course of business of the
Borrower or Subsidiary (and IBM takes all actions required by law to
perfect such Liens as purchase money security interests), (ii) such
Liens do not at any time encumber any Property other than the Property
sold to the Borrower or a Subsidiary and the identifiable proceeds
thereof, (iii) neither the Borrower nor any Subsidiary has paid or will
make any payment in respect of the purchase price of the Property
secured by such purchase money lien prior to the delivery thereof to
the Borrower or Subsidiary, (iv) the total amount of Indebtedness
secured by such Lien does not exceed $500,000 at any one time, (v) IBM
shall have confirmed in a writing addressed to the Lenders (in form and
substance satisfactory to the Administrative Agent) that the purchase
money Lien shall not secure indebtedness owing to IBM in excess of
$500,000 and shall be limited to specific IBM Property and the
identifiable proceeds thereof and (vi) the Borrower shall have agreed
and hereby does agree that all payments due to IBM shall all be made
within the earlier of (1) 60 days of invoice date or (2) such shorter
period as may be required by IBM, notice of which shorter period having
been given to the Administrative Agent by IBM;
"7.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or substantially all
of its Property or business, or make any material change in its present method
of conducting business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation);
and
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Wholly Owned Subsidiary Guarantor."
"7.5 LIMITATION ON SALE OF ASSETS. Dispose of any of its Property or
businesses (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out Property
in the ordinary course of business;
(b) the sale of inventory in the ordinary course of
business;
(c) Dispositions permitted by SECTION 7.4(b) hereof;
(d) the sale or issuance of any Subsidiary's Capital
Stock to the Borrower or any Wholly Owned Subsidiary
Guarantor,
(e) Intentionally deleted,
(f) Intentionally deleted,
(g) the sale of the Disposition Assets, PROVIDED that:
(i) no Termination Event has occurred,
(ii) the Administrative Agent and the Required Lenders and
the Borrower shall have agreed, using their
respective reasonable judgment, on the specific
assets comprising the Disposition Asset being sold,
(iii)each sale of a Disposition Asset is pursuant to an arms length
transaction, including without limitation, the term of and
interest rate on any Asset Note (hereinafter defined),
(iv) the purchase price for each sale of a
Disposition Asset is paid at least half in cash
at the closing of the sale and not more than
half of the purchase price is paid pursuant to a
purchase money note (the "Asset Note") from a
credit worthy entity or secured by appropriate
collateral, that is supported by appropriate
financial information and/or evidence
establishing adequate collateral coverage, as
the case may be, which evidence is delivered to
the Administrative Agent not less than ten (10)
days prior to the closing of the sale of the
applicable Disposition Asset,
(v) if the purchase price for the sale of a
Disposition Asset is paid entirely in cash,
regardless of when the Disposition Asset is sold
(unless at the time of any sale of a Disposition
Asset all of the Borrower Obligations have been
paid in full), 50% of the Net Proceeds received
by the Borrower (or other Loan Party which is
the seller of the Disposition Asset) is paid to
the Administrative Agent at the closing of the
sale or thereafter when received; or
(vi) if the purchase price for the Disposition Asset is
paid part in cash and part pursuant to an Asset Note,
regardless of when the Disposition Asset is sold,
(unless at the time of any sale of a Disposition
Asset all of the Borrower Obligations have been paid
in full)
(1) 50% of the Net Proceeds received in cash by
the Borrower (or other Loan Party which is
the Seller of the Disposition Assets) is
paid to the Administrative Agent at the
closing of the sale or thereafter when
received, and
(2) the Asset Note is delivered and endorsed to
the Administrative Agent to hold, for itself
and the other Lenders, as secured parties,
in accordance with the Guarantee and
Collateral Agreement as additional
collateral for the obligations of the
Borrower and the Guarantors to the Lenders,
together with a letter directing the maker
thereof to remit all payments due and to
become due thereunder directly to the
Administrative Agent until written notice to
the contrary is given by the Administrative
Agent,
(3) all payments paid to the Administrative
Agent under any Asset Note shall be retained
by the Administrative Agent and the Lenders
until the Lenders shall have received 50% of
the purchase price of the Disposition Asset
and interest thereon as provided in the
Asset Note, after which, the Administrative
Agent shall continue to hold the Asset Note
but, provided no Termination Event has
occurred, the Administrative Agent shall
remit to the Borrower any subsequent
payments received under the Asset Note.
(vii) the proceeds of sale of the Disposition Assets allocated to
the Borrower shall be deposited in the Borrower's accounts at
the offices of the Administrative Agent and shall be available
to the Borrower for general working capital requirements of
the Borrower and the Subsidiaries.
(viii) all payments received by the Administrative Agent from the
sale of the Disposition Assets shall be applied to such
obligations of the Borrower to the Lenders as the Lenders deem
appropriate in their sole discretion.
"7.6 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
Subsidiary or any warrants or options to purchase any such Capital Stock,
including, without limitation, on the Cumulative Preferred Stock issued to the
Third Party Contributor whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (collectively,
"Restricted Payments"), except that any Subsidiary may make Restricted Payments
to the Borrower or any Wholly Owned Subsidiary Guarantor."
"7.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit
to make (by way of the acquisition of securities of a Person or
otherwise) any Capital Expenditure, except Capital Expenditures
of the Borrower and its Subsidiaries contemplated by the Approved
Cash Flow Projections."
"7.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary
course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by SECTION 7.2
of the Credit Agreement;
(d) Intentionally deleted;
(e) investments by the Borrower or any of its Subsidiaries in
the Borrower or any person that, prior to such investment, is a Wholly
Owned Subsidiary Guarantor,
as contemplated by the Approved Cash Flow Projections;
(f) Intentionally deleted;
(g) Intentionally deleted;
(h) so long as (i) no Termination Event has occurred and (ii)
a Wholly Owned Subsidiary Guarantor remains a general partner of
HealthPoint with at least a 50% economic interest therein before and
after giving effect thereto, investment in or capital contribution to
HealthPoint, pursuant to the HealthPoint Agreement.
(i) Asset Notes."
"7.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS, AND ON REDEMPTIONS OF PREFERRED STOCK ETC. (a) Make or offer to
make any payment, prepayment, repurchase or redemption of or otherwise defease
or segregate funds with respect to any Subordinated Debt, if any or Cumulative
Preferred Stock (other than scheduled interest payments required to be made in
cash), or (b) amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of any
Subordinated Debt, if any (other than any such amendment, modification, waiver
or other change which (i) would extend the maturity or reduce the amount of any
payment of principal thereof or which would reduce the rate or extend the date
for payment of interest thereon and (ii) does not involve the payment of a
consent fee).
(b) Intentionally deleted.
"7.14 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the Borrower or
any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary."
"7.15 LIMITATION ON LINES OF BUSINESS. Enter into any
business, either directly or through any Subsidiary, except for
those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement."
6. AMENDMENTS OF SECTIONS 10.6(c), (d) AND (e)
SECTIONS 10.6(c), (d) and (e) of the Credit Agreement are
amended by deleting the text thereof in their entirety and substituting therefor
the following:
"(c) All Lenders and any Lender (an "Assignor") may, in
accordance with applicable law, at any time and from time to time assign without
the consent of the Borrower or any of the Agents to any bank or financial
institution or to any other person or entity (whether or not a bank or financial
institution) (an "ASSIGNEE") all or any part of its rights and obligations under
this Agreement, in its Note, if any, in the Forbearance Agreement, in any other
Additional Loan Documents or other Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit [D], executed by such Assignee,
and such Assignor, and delivered to the Administrative Agent for its acceptance
and recording in the Register. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with Loans as set forth therein, and (y)
the Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such assigning Lender shall cease to be a
party hereto).
(d) The Administrative Agent shall maintain at its address referred to
in SECTION 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Lenders and of the principal amount of the Loans owing to each Lender from time
to time and any Notes evidencing such Loans. The entries in the Register shall
be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loan and any
Note evidencing such Loan recorded therein for all purposes of this Agreement.
Any assignment of any Loan whether or not evidenced by a Note shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "cancelled". The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof or a Person under common management with
such Lender, by the Borrower, the Administrative Agent, and the Issuing Lender)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (except that no such registration and processing fee
shall be payable (y) in connection with an assignment by Xxxxxx Commercial Paper
Inc. or (z) in the case of an Assignee which is already a Lender or is an
affiliate of a Lender or a Person under common management with a Lender), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower. On or prior to such effective
date, the Borrower, at its own expense, upon request, shall execute and deliver
to the Administrative Agent (in exchange for the Revolving Credit Note of the
assigning Lender) a new Revolving Credit Note to the order of such Assignee in
an amount equal to the then outstanding principal balance of the Revolving
Credit Note assumed or acquired by it pursuant to such Assignment and
Acceptance."
B. ADDITIONAL COVENANTS.
1. The Credit Agreement is amended by adding the following additional
covenants as SECTIONS 6.10 through 6.17:
"6.10 ADDITIONAL REPORTING REQUIREMENTS. Deliver
to the Administrative Agent and each of the Lenders:
(a) Each week, an itemized aging and summary of accounts
receivable (segregated by VAR receivables, direct
sale receivables and maintenance and service contract
receivables).
(b) Each week, an itemized report on accounts receivable
collections.
(c) Each week, an itemized aging of accounts payable.
(d) Each week, a rolling cash flow projection
(substantially in the format of the Approved
Cash Flow Projections) for the period remaining
to the Maturity Date presented weekly for the
remainder of the period to the Maturity Date,
together with a written report on and written
explanation for any variances between (1) actual
results and the Approved Cash Flow Projections
and (2) the Approved Cash Flow Projections and
the revised cash flow projections.
(e) Each week, a certification of the cash position of
the Borrower and its Subsidiaries, which may be
included in the weekly cash flow report.
(f) Each month, a report of sales and renewals and
cancellation of maintenance contracts.
(g) Each month, a cash flow report for the preceding
month showing the actual results for the preceding
month, comparing the actual results to the Approved
Cash Flow Projections and containing a report on and
explanation of the variances, if any, between the
actual results and the Approved Cash Flow
Projections.
(h) Each month, internally prepared accrual basis income
statement and balance sheet for the Borrower and its
Subsidiary.
(i) Each month, a sales forecast and a pipeline report.
(j) Each month, summary information with respect to the
total number of sites for the Borrower's and its
Subsidiaries' systems (including legacy systems).
6.11 DELIVERY DATES. (a) Deliver (i) all weekly reports
required under SECTION 6.10 on Wednesday for the preceding week, (ii) all
monthly reports required under SECTION 6.10 on the 10th day of the month for the
preceding month, other than the monthly financial statements required under
sub-SECTION (h) and the summary information required under sub-SECTION (i),
(iii) deliver the financial statements required under sub-SECTION (h) on or
before the 20th day of the month and (iv) deliver the summary information
required under sub-SECTION (i) as soon as it is available but in no event later
than the 20th day of the month, and (b) deliver with all reports a certificate
of an authorized officer of the Borrower certifying the accuracy of the
historical information contained therein.
6.12 RETENTION OF INVESTMENT BANKER. Retain on or before April
30, 1998 and maintain and continue the retention of an investment banking firm
of national and industry standing for the purpose of marketing the Borrower and
the Subsidiaries or the assets of the Borrower and Subsidiaries (other than the
Disposition Assets) for sale.
6.13 RETENTION OF CRISIS MANAGER. Maintain and continue the
retention of AMI, or another firm reasonably acceptable to the Lenders, as
crisis manager with supervisory authority over executive decision matters.
6.14 MAINTENANCE OF A SENIOR EXECUTIVE OFFICER. Either (a)
maintain and continue the appointment of a representative of AMI (or another
firm reasonably acceptable to Lenders) or (b) another individual, as a senior
executive officer of the Borrower, reasonably acceptable to the Lenders, who, in
accordance with resolutions of the Board of Directors, (i) reports directly to
the Board of Directors and (ii) has final and ultimate executive authority to
make corporate decisions and deliver written confirmation to the Lenders that
such person has accepted such appointment.
6.15 INSPECTIONS AND ACCESS. At any time and from
time to time, upon reasonable notice, at the Borrower's expense,
(a) permit the Administrative Agent to conduct, by itself or through its agents,
examinations of the Borrower's and/or its Subsidiaries' books and records and
(b) continue to permit the Administrative Agent's professionals to have access
to the Borrower and its Subsidiaries to perform such functions as the
Administrative Agent shall reasonably request.
6.16 ADDITIONAL INFORMATION. Deliver to the Administrative
Agent and the Lenders such additional information as they may reasonably request
including, without limitation, (i) any report prepared by the Special Committee
of the Board of Directors or special counsel to the Borrower regarding the
Accounting Matters which is made available to the public and (ii) any factual
report prepared by the Special Committee of the Board of Directors or special
counsel, excluding or redacting any privileged matters or communications;
PROVIDED HOWEVER, when determining whether the Administrative Agent and/or the
Lenders are acting reasonably, reasonableness shall be broadly interpreted to
recognize that the transactions involve a complex restructuring/forbearance
arrangement with a financially distressed borrower.
6.17 BANK ACCOUNTS. Establish and cause all the Subsidiaries
to establish within ten days of the execution of the Forbearance Agreement, and
thereafter maintain and cause all of the Subsidiaries to maintain, all of
Borrower's and the Subsidiaries' bank accounts with the Administrative Agent
except for payroll accounts, medical insurance accounts and freight accounts,
which shall not at any time have a balance in excess of $100,000 in aggregate
plus the actual amounts necessary to pay payroll when due.
2. The Credit Agreement is amended by adding the following additional
covenants as SECTION 7.16 and 7.17:
7.16 CREATION OF SUBSIDIARIES. Create, form or (except as
permitted by SECTION 7.8) invest in any corporation, partnership, joint venture,
limited liability company or other entity except to the extent that the creation
of a new subsidiary is reasonably necessary to effect a sale of any of the
Disposition Assets and then, only if, at the time of the creation of any such
subsidiary, the subsidiary shall become a guarantor and debtor under the
Security Documents and Administrative Agent shall receive for the ratable
benefit of the Lenders a perfected
security interest in all of the ownership interests in such
Subsidiary and in all of the assets of such subsidiary.
7.17 SOFTWARE SUPPORT REVENUES. Permit for each fiscal quarter
indicated below (provided, that, quarters ending after September 30, 1998 shall
only be applicable if the Maturity Date is extending past September 30, 1998),
on a GAAP basis, the Borrower's total revenues related to (i) PCN Health Network
software care and PCN Health Network direct software support and (ii) Mends
software support, CTI Mends software support and DFT Mends software support, to
be less than the amount designated below opposite such quarter:
Quarter Ending Amount
-------------- ------
June 30, 1998 $2,141,000
September 30, 1998 $2,069,000
December 31, 1998 $1,996,000
March 31, 1999 $1,973,000"
SECTION VI. FORBEARANCE
The Administrative Agent and the Required Lenders hereby agree, from
and after the date hereof to and including the earlier of the Maturity Date or
the occurrence of a Termination Event, that the Required Lenders shall forbear
from directing the Administrative Agent to
(a) declare the Loans to be due and payable as a result of the
occurrence of (i) the Specified Events of Default or (ii) any existing or future
violations of the covenants contained in SECTION 7.1 of the Credit Agreement,
(b) institute any judicial or non-judicial action or proceeding to
enforce or obtain payment of the Loans or to enforce the Lenders' security
interests as a result of (i) the Specified Events of Default or (ii) any
existing or future violation of the covenants contained in SECTION 7.1 of the
Credit Agreement.
SECTION VII. TERMINATION EVENTS
Each of the following shall constitute a "Termination Event" under this
Agreement:
(a) the Borrower shall fail to pay any principal of any Loan,
any Extension Fee, or the Lenders' share of the Net Proceeds of sale of
any Disposition Asset when due in accordance with the terms hereof and
the Credit Agreement (time being of the essence with respect to any and
all of such payments); or the Borrower shall fail to pay any interest
on any Loan, expenses or any other amount payable hereunder, under the
Credit Agreement, under any other Loan Document, or under any
Additional Loan Document within five days after any such interest or
other amount becomes due in accordance with the terms hereof (time
being of the essence with respect to any and all of such payments).
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any Additional Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement
or any such Additional Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed
made.
(c) any Loan Party shall default in the observance or
performance of the covenants contained in clause (i) or (ii) of SECTION
6.4(a) (with respect to the Borrower only), SECTIONS 6.7(a), 6.10,
6.11. 6.12, 6.16, and SECTION 7 of the Credit Agreement or SECTION 5 of
the Guarantee and Collateral Agreement.
(d) any Loan Party shall default in the observance or
performance of any agreement contained in this Agreement, the
Additional Loan Documents, the Credit Agreement or the Security
Documents (other than as provided in subSECTIONS (a) through (c) of
this SECTION) and such default shall continue unremedied for a period
of 5 days after notice to the Borrower from the Administrative Agent.
(e) the occurrence of any event or circumstance which has a
Revised Material Adverse Effect.
(f) the Picower Guarantee or the Picower Agreement shall
cease, for any reason, to be in full force or effect
or any party (other than the Lenders) shall so assert.
(g) the occurrence of any transaction or accounting matter
occurring after the Forbearance Effective Date which is fraudulent or
which is reported, accounted for or disclosed in a manner inconsistent
with GAAP.
(h) commencement of any action or proceeding or the issuance
of any restraining order, injunction or other pre-judgment remedy which
is not dismissed within 10 days and which, in the judgment of the
Lenders, would prevent or delay the sale of the Borrower, or the sale
of any of the Disposition Assets, or delay Borrower from repaying the
Loans.
(i) the termination of the HealthPoint Agreement for
cause by Glaxo Wellcome, Inc. or Intelligent Medical
Systems, Inc. or its successor.
(j) the resignation or termination of KPMG Peat Marwick as the
auditors of the Borrower and its Subsidiaries, unless promptly replaced
by other outside accountants satisfactory to the Administrative Agent
and the Lenders.
(k) if at any time the book balances in the Borrower's cash
accounts at the Administrative Agent (plus up to $100,000 in the
aggregate in freight accounts, medical insurance accounts and payroll
accounts whether or not such accounts are maintained at an office of
the Administrative Agent) are less than $500,000 but more than zero,
unless within three (3) days the after the occurrence of any such
deficiency, the book balances are restored to an amount in excess of
$500,000.
(l) if at any time the book balances in the Borrower's cash
accounts at the Administrative Agent (plus up to $100,000 in the
aggregate in freight accounts, medical insurance accounts and payroll
accounts whether or not such accounts are maintained at an office of
the Administrative Agent) are less or equal to zero.
(m) commencement of any action or proceeding against the
Administrative Agent or the Lenders by the Borrower, any Subsidiary,
the Third Party Contributor, Picower, any of their respective
affiliates or any entity controlled by or under common control with any
such parties.
(n) a degradation in the Borrower's and its Subsidiaries',
taken as a whole, installed base of Health Network and Mends users
which is material and adverse.
(o) the occurrence of an Event of Default specified in
SECTIONS 8(e) through (l) of the Credit Agreement.
SECTION VIII. REMEDIES; CONSENT TO RELIEF FROM STAY AND
OTHER REMEDIES.
A. REMEDIES.
Upon one (1) business day's written notice of the occurrence of a
Termination Event of the kind described in SECTION 7(e) (which notice shall
describe in reasonable detail the events and circumstances resulting in a
Revised Material Adverse Effect) and immediately upon the occurrence of any
other Termination Event, with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall:
(a) terminate the forbearance agreements contained in
SECTION 6 hereof.
(b) declare all amounts due under the Credit Agreement, this Agreement,
under the other Loan Documents and under the Additional Loan Documents, under
the Guarantee and Collateral Agreement, and under the Picower Guarantee to be
due and payable forthwith, whereupon the same shall be immediately due and
payable.
(c) take any action which the Administrative Agent and the Required
Lenders deem necessary or appropriate to collect the Loans and to enforce the
rights and remedies under this Agreement, the Credit Agreement, the Guarantee
and the Collateral Agreement, the Picower Guarantee, the other Loan Documents,
the Additional Loan Documents and under applicable law.
B. CONSENT TO RELIEF FROM STAY AND OTHER REMEDIES
(a) AS MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS
AGREEMENT BY THE ADMINISTRATIVE AGENT AND THE REQUIRED LENDERS
AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, (WITHOUT SUCH MATERIAL
CONSIDERATION THE ADMINISTRATIVE AGENT AND THE LENDERS WOULD NOT HAVE ENTERED
INTO THIS AGREEMENT), THE BORROWER AND ITS SUBSIDIARIES HEREBY AGREE THAT IN THE
EVENT THAT THE BORROWER AND/OR ITS SUBSIDIARIES SHALL (i) FILE WITH ANY
BANKRUPTCY COURT OR BE THE SUBJECT OF ANY PETITION UNDER TITLE 11 OF THE U.S.
CODE, AS IT MAY BE AMENDED FROM TIME TO TIME ("CODE"), (ii) BE THE SUBJECT OF
ANY ORDER FOR RELIEF ISSUED UNDER SUCH TITLE 11 OF THE CODE, AS IT MAY BE
AMENDED FROM TIME TO TIME, (iii) FILE OR BE THE SUBJECT OF ANY PETITION SEEKING
ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION,
DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT
OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR DEBTORS, (iv)
HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY TRUSTEE,
RECEIVER, CONSERVATOR, OR LIQUIDATOR, (v) BE THE SUBJECT OF ANY ORDER, JUDGMENT,
OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION APPROVING A PETITION
FILED AGAINST SUCH PARTY FOR ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR
FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR RELIEF
FOR DEBTORS, WHETHER VOLUNTARY OR INVOLUNTARY, THE ADMINISTRATIVE AGENT AND THE
LENDERS SHALL THEREUPON BE ENTITLED TO IMMEDIATE RELIEF FROM ANY AUTOMATIC STAY
IMPOSED BY SECTION 362 OF TITLE 11 OF THE CODE, AS MAY BE AMENDED FROM TIME TO
TIME, OR IMPOSED BY ANY SUCH OTHER PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW
RELATING TO BANKRUPTCY, INSOLVENCY, OR RELIEF FOR DEBTORS, ON OR AGAINST THE
EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO ADMINISTRATIVE AGENT
AND THE LENDERS AS PROVIDED IN THE CREDIT AGREEMENT, THIS AGREEMENT, THE
SECURITY DOCUMENTS OR AS OTHERWISE PROVIDED BY LAW.
(b) THE BORROWERS AND EACH OF THE SUBSIDIARIES FURTHER AGREE THAT UPON
THE OCCURRENCE OF ANY TERMINATION EVENT AND WHETHER OR NOT ANY OF THE EVENTS SET
FORTH ABOVE IN SECTION 8.2(A) HAVE OCCURRED, THE BORROWER AND SUBSIDIARIES SHALL
TAKE, OR CAUSE TO BE TAKEN, ANY AND ALL ACTIONS NECESSARY: (I) TO PERMIT THE
ADMINISTRATIVE AGENT AND THE LENDERS TO PROCEED WITH ANY AND ALL ENFORCEMENT
ACTIONS UNDER THIS AGREEMENT, THE CREDIT AGREEMENT, SECURITY DOCUMENTS AND THE
ADDITIONAL LOAN DOCUMENTS; AND (II) TO PERMIT THE ADMINISTRATIVE AGENT AND THE
LENDERS TO INITIATE AND/OR PROCEED WITH ANY AND ALL FORECLOSURES ON (WHETHER
JUDICIAL OR NON-JUDICIAL), AND REALIZATION OF, ANY AND ALL PROPERTY HELD AS
SECURITY FOR THE LOANS.
SECTION IX. RELEASES
AS MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS AGREEMENT BY THE
ADMINISTRATIVE AGENT AND THE REQUIRED LENDERS AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED,
(WITHOUT SUCH MATERIAL CONSIDERATION ADMINISTRATIVE AGENT WOULD NOT HAVE ENTERED
INTO THIS AGREEMENT), BORROWER AND EACH SUBSIDIARY, AND ON BEHALF OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS
AND ASSIGNS (COLLECTIVELY, THE "RELEASORS") HEREBY FOREVER WAIVES, RELEASES,
REMISES, ACQUITS AND DISCHARGES THE ADMINISTRATIVE AGENT AND EACH LENDER, AND
ANY OF ADMINISTRATIVE AGENT'S OR LENDER'S RESPECTIVE PARENTS, AFFILIATES,
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, SHAREHOLDERS,
SUBSIDIARIES AND AFFILIATE CORPORATIONS, CONSTITUENT PARTNERS, ATTORNEYS,
ACCOUNTANTS, CONSULTANTS, ADVISORS, SUCCESSORS, HEIRS, ASSIGNS AND
BENEFICIARIES, AND EACH OF THEM (COLLECTIVELY, THE "RELEASEES"), OF AND FROM ANY
AND ALL CONTROVERSIES, PROMISES, DAMAGES, COSTS, LOSSES, EXPENSES, OBLIGATIONS,
INDEBTEDNESS, DEBTS, SUMS OF MONEY, ACCOUNTS, COMPENSATIONS, CONTRACTS,
LIABILITIES, BREACHES OF CONTRACTS, BREACHES OF DUTY OF ANY RELATIONSHIP, ACTS,
OMISSIONS, MISFEASANCE, MALFEASANCE, RIGHTS, CAUSES OF ACTION, SUITS, JUDGMENTS,
CLAIMS, COUNTERCLAIMS OR DEMANDS, OF EVERY TYPE, KIND, NATURE, DESCRIPTION OR
CHARACTER, AND IRRESPECTIVE OF HOW, WHY, OR BY REASON OF WHAT FACTS, WHETHER NOW
EXISTING OR THAT COULD, MIGHT, OR MAY BE CLAIMED TO EXIST, OF WHATEVER KIND OR
NAME, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, LIQUIDATED OR
UNLIQUIDATED, FIXED OR CONTINGENT, FORESEEABLE OR UNFORESEEABLE, EACH AS THOUGH
FULLY SET FORTH HEREIN AT LENGTH, IN LAW, ADMIRALTY OR EQUITY (ANY OF THE
FOREGOING, A "CLAIM"), WHICH ANY OF THE RELEASORS PREVIOUSLY HAD FROM THE
BEGINNING OF THE WORLD OR NOW HAVE AGAINST ANY OF THE RELEASEES THROUGH THE DATE
HEREOF, RELATED TO OR CONNECTED WITH (A) THIS AGREEMENT, THE ADDITIONAL LOAN
DOCUMENTS, THE CREDIT AGREEMENT, THE LOANS OR ANY OF THEM OR THE TRANSACTIONS
CONTEMPLATED BY ANY OF THE FOREGOING, OR (B) ANY DISCUSSIONS OR ALLEGED ORAL
AGREEMENTS AMONG THE RELEASEES AND THE RELEASORS, OR ANY OF THEM, RELATING TO
THE LOANS OR ANY OTHER MATTER, WHICH DISCUSSIONS OR ORAL AGREEMENTS ARE NOT
EMBODIED IN A WRITTEN AGREEMENT EXECUTED BY A PARTIES INTENDED TO BE BOUND BY
SUCH AGREEMENT AND EXPRESSLY STATED TO BE AN AGREEMENT AMONG ALL OF SUCH
PARTIES. THE BORROWER, THE SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE
REQUIRED LENDERS INTEND THAT THIS WAIVER, RELEASE AND DISCHARGE APPLIES TO ALL
SUCH CLAIMS THAT ARE BASED ON FACTS OR CIRCUMSTANCES THAT EXISTED PRIOR TO, OR
CAME INTO EXISTENCE CONCURRENTLY WITH, OR THAT COME
INTO EXISTENCE PRIOR, THE EXECUTION AND DELIVERY OF THIS AGREEMENT BUT WHICH DO
NOT RIPEN INTO A RIGHT, CAUSE OF ACTION, CLAIM OR DEMAND UNTIL AFTER THE
EXECUTION AND DELIVERY OF THIS AGREEMENT. BORROWER AND EACH OF THE SUBSIDIARIES
HEREBY AGREES AND ACKNOWLEDGES THAT FACTS OR CIRCUMSTANCES NOW UNKNOWN TO THE
BORROWER AND THE SUBSIDIARIES, AS THE CASE MAY BE, THAT EXISTED PRIOR TO, OR
CAME INTO EXISTENCE CONCURRENTLY WITH, THE EXECUTION AND DELIVERY OF THIS
AGREEMENT MAY HAVE GIVEN RISE TO CLAIMS THAT ARE PRESENTLY UNKNOWN,
UNANTICIPATED AND UNSUSPECTED, AND THE BORROWER AND EACH SUBSIDIARY FURTHER
AGREES THAT THIS SECTION 9 HAS BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT
ACKNOWLEDGMENT AND THAT THE BORROWER AND EACH SUBSIDIARY, AS THE CASE MAY BE,
NEVERTHELESS HEREBY INTENDS IRREVOCABLY TO WAIVE, RELEASE, REMISE, ACQUIT AND
DISCHARGE THE RELEASEES OF AND FROM ANY SUCH UNKNOWN CLAIMS AS AFORESAID,
RELATED TO ANY OF THE TRANSACTIONS OR CIRCUMSTANCES DESCRIBED IN THIS SECTION.
SECTION X. MISCELLANEOUS
A. AMENDMENTS AND WAIVERS.
None of the terms as provisions of this Agreement may be waived,
amended, supplemented or otherwise modified, except in accordance with SECTION
10.1 of the Credit Agreement.
B. AGREEMENTS AND ACKNOWLEDGMENTS OF THE ADMINISTRATIVE
AGENT AND REQUIRED LENDERS.
The Administrative Agent and the Required Lenders:
(a) agree, provided no Termination Event has occurred, and subject to
the satisfaction of the conditions contained in SECTION 7.5(g) of the Credit
Agreement, (i) to release, in the case of an asset sale of any of the
Disposition Assets, the Lenders' Liens and security interests in the Disposition
Assets which are being sold, (ii) to release, in the case of a stock sale of any
Subsidiary owning only Disposition Assets, the Lenders' Liens and security
interests in the stock of the Subsidiary which is being sold and to release the
Subsidiary from the obligations under its guarantee of the Borrower Obligations,
so long as, in each instance, the Administrative Agent has confirmed that the
Subsidiary being sold owns no Property other than Disposition Assets.
(b) agree that from and after the date hereof, no Commitment Fees shall
be due to any Lender under SECTION 2.4 of the Credit Agreement.
(c)(i) acknowledge that the Borrower has not delivered the financial
statements required under SECTION 6.1(a) (for the fiscal year ending December
31, 1997) and under SECTION 6.1(b) (for the first quarter of the fiscal year
ending December 31, 1998) of the Credit Agreement and (ii) agree that the
Borrower's failure to deliver such financial statements does not and will not
constitute a Termination Event, provided the Borrower delivers such financial
statements to the Administrative Agent and the other Lenders no later than five
(5) days after such financial statements are available (in draft or final form)
or are issued.
(d) (i) acknowledge that certain of the reports required under SECTIONS
6.2(c) and (d) of the Credit Agreement may be included in the reports required
under SECTION 6.10 of the Credit Agreement and (ii) agree that the Borrower
shall not be obligated to provide duplicative reports to the Administrative
Agent, provided however, in the event of any conflicts or inconsistencies
between the requirements of SECTION 6.2 and SECTION 6.10, the requirements of
SECTION 6.10 shall control.
(e) agree to execute the AMI Intercreditor Agreement substantially in
the form annexed hereto as Exhibit F, if and when, pursuant to SECTION 7.3(m) of
the Credit Agreement the Borrower and the Subsidiaries should grant a
subordinate security interest to secure their obligations under the AMI
Indemnification Agreement.
C. FURTHER ASSURANCES.
At any time and from time to time, promptly after any request by the
Administrative Agent, the Borrower and the Subsidiaries will make, execute and
deliver, or cause to be made, executed and delivered, and, where appropriate,
cause to be recorded and/or filed and from time to time thereafter to be
re-recorded and/or refiled at such time and in such offices and places as the
Administrative Agent shall deem necessary any and all such other and further
financing statements, continuation statements, certificates, documents,
instruments, documents to correct any technical or inadvertent errors or
omissions in legal descriptions, and other items as the Administrative Agent,
may deem necessary or desirable in order to effectuate, complete or perfect, or
to continue and preserve the Liens and security interests granted or intended to
be granted under this Agreement,
the Credit Agreement, the Security Documents and the Additional
Loan Documents.
D. NOTICES.
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed as
follows in the case of the Borrower and the Administrative Agent, and as set
forth in an administrative questionnaire delivered to the Administrative Agent
in the case of the Lenders, or to such other address as may be hereafter,
designated by the respective parties hereto:
The Borrower: Physician Computer Network, Inc.
0000 Xxx Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxxxx
Vice President and
General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Arranger
and the
Syndication
Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The
Administrative
Agent: Fleet Bank, N.A.
000 Xxxx Xxxxxx - XXXXX00X
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
PROVIDED that any notice, request or demand to or upon the either the
Administrative Agent or the Lenders shall not be effective until received.
E. NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of
either the Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement.
G. PAYMENT OF EXPENSES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, this Agreement
and any amendment, supplement or modification to, this Agreement and the other
Additional Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
fees and disbursements of counsel and other advisors to the Administrative
Agent, and to each of the Lenders (including the allocated fees and expenses of
in-house counsel) (b) to pay or reimburse each Lender and the Administrative
Agent for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender
and of counsel to the Administrative Agent, (c) to pay, indemnify, and hold the
Administrative Agent and each Lender harmless from, any and all recording and
filing fees or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Agreement, the Additional Loan Documents
and any such other documents, and (d) to pay, indemnify, and hold the
Administrative Agent and each Lender and their respective officers, directors,
employees, affiliates, agents and controlling persons (each, an "indemnitee")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the Additional
Loan Documents and any such other documents, including, without limitation, any
of the foregoing relating to the use of proceeds of the Loans and the Third
Party Contribution or the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of the Borrower any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided, that the Borrower shall
have no obligation hereunder to any indemnitee with respect to indemnified
liabilities to the extent such indemnified liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such indemnitee. The
agreements in this SECTION 10.6 shall survive repayment of the Loans and all
other amounts payable hereunder.
H. INTEGRATION.
This Agreement and the other Additional Loan Documents represent the
entire agreement of the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in the
Additional Loan Documents.
I. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OR CONFLICTS
OF LAW.
J. SUBMISSION TO JURISDICTION: WAIVERS.
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR
THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 10.2 OR AT
SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION; AND
(E) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING
REFERRED TO IN THIS SECTION 10.9 ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.
K. WAIVERS OF JURY TRIAL.
THE BORROWER, THE SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE OTHER
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER ADDITIONAL DOCUMENT
AND FOR ANY COUNTERCLAIM OR THIRD PARTY CLAIM THEREIN.
L. CREDIT AGREEMENT.
Except as amended or modified by this Agreement, the Credit Agreement
shall remain in full force and effect in accordance with its original terms,
provided, however, in the event that there is any inconsistency between this
Agreement and any of the Additional Loan Documents and the Credit Agreement, the
provisions of this Agreement and the Additional Loan Documents shall control.
M. COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
N. ENFORCEABILITY; USURY.
In no event shall any provision of this Agreement, the Credit
Agreement, the Notes, or any other instrument evidencing or securing the
indebtedness of the Borrower hereunder ever obligate the Borrower to pay or
allow any Lender to collect interest on the Notes or any other indebtedness of
the Borrower hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower to pay any taxes, assessments, charges, insurance
premiums or other amounts to the extent that such payments, when added to the
interest payable on the Notes, would be held to constitute the payment by the
Borrower of interest at a rate greater than the Highest Lawful Rate; and this
provision shall control over any provision to the contrary.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower hereunder shall be accelerated for any reason, then such principal
amount so accelerated shall be credited with any interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration. If,
pursuant to the terms of this Agreement, the Credit Agreement or the Notes, any
funds are applied to the payment of any part of the principal amount of the
indebtedness of the Borrower hereunder prior to the maturity thereof, then (a)
any interest
which would otherwise thereafter accrue on the principal amount so paid by such
application shall be canceled, and (b) the indebtedness of the Borrower
hereunder remaining unpaid after such application shall be credited with the
amount of all interest, if any, theretofore collected on the principal amount so
paid by such application and remaining unearned at the date of said application;
and if the funds so applied shall be sufficient to pay in full all the
indebtedness of the Borrower hereunder, then the Lenders shall refund to the
Borrower all interest theretofore paid thereon in advance and remaining unearned
at the time of such acceleration. Regardless of any other provision in this
Agreement, the Credit Agreement or in any of the written evidences of the
indebtedness of the Borrower hereunder, the Borrower shall never be required to
pay any unearned interest on such indebtedness or any portion thereof, and shall
never be required to pay interest thereon at a rate in excess of the Highest
Lawful Rate construed by courts having competent jurisdiction thereof.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT
BLANK.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date and year first above written.
PHYSICIAN COMPUTER NETWORK, INC.
By:-----------------------------
Name:------------------------
Title:-----------------------
VERSYSS INCORPORATED
By:-----------------------------
Name:------------------------
Title:-----------------------
SOLION CORPORATION
By:-----------------------------
Name:------------------------
Title:-----------------------
XXXXXX-XXXXXX, INC.
By:-----------------------------
Name:------------------------
Title:-----------------------
INTEGRATED HEALTH SYSTEMS, INC.
By:-----------------------------
Name:------------------------
Title:-----------------------
PCN HP VENTURE CORP.
By:-----------------------------
Name:------------------------
Title:-----------------------
PCN SERVICES CORP.
By:-----------------------------
Name:------------------------
Title:-----------------------
V HOLDING CORP.
By:-----------------------------
Name:------------------------
Title:-----------------------
FLEET BANK, N.A., as Administrative
Agent and as a Lender
By:-----------------------------
Name:------------------------
Title:-----------------------
XXXXXX COMMERCIAL PAPER, INC.,
By:-----------------------------
Name:------------------------
Title:-----------------------
BANK OF MONTREAL
By:-----------------------------
Name:------------------------
Title:-----------------------
SKANDINAVISKA ENSKILDA XXXXXX XX
(PUBLIC) NEW YORK BRANCH
By:-----------------------------
Name:------------------------
Title:-----------------------
By:-----------------------------
Name:------------------------
Title:-----------------------
FIRST UNION NATIONAL BANK
By:-----------------------------
Name:------------------------
Title:-----------------------
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By:-----------------------------
Name:------------------------
Title:-----------------------
SOCIETE GENERALE
By:-----------------------------
Name:------------------------
Title:-----------------------
SUMMIT BANK
By:-----------------------------
Name:------------------------
Title:-----------------------
