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EXHIBIT 10-B
SEVENTH AMENDMENT TO AMENDED AND
RESTATED LOAN AGREEMENT AND WAIVER
THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND WAIVER
(this "Seventh Amendment") is dated as of September 30, 1995, among (i)
FOXMEYER CORPORATION, a Delaware corporation ("Borrower"), (ii) FOXMEYER DRUG
COMPANY, a Kansas corporation, MERCHANDISE COORDINATOR SERVICES CORPORATION, a
Delaware corporation, and XXXXXX WHOLESALE COMPANY, a Delaware corporation (the
"Operating Subsidiaries"), (iii) the LENDERS and ISSUER referred to therein,
and (iv) CITICORP USA, INC., a Delaware corporation, as Administrative Agent
("Administrative Agent"), and NATIONSBANK OF TEXAS, N.A., a bank organized
under the laws of the United States, as Documentation Agent ("Documentation
Agent").
WITNESSETH:
WHEREAS, FoxMeyer Corporation ("Old FoxMeyer"), Operating Subsidiaries,
Lenders and Issuer, and Administrative Agent and NationsBank of Texas, N.A. and
Banque Paribas, as Co-Agents, entered into an Amended and Restated Loan
Agreement dated as of April 29, 1993, as amended as of October 18, 1993, June
20, 1994 and August 26, 1994 (the "Amended and Restated Loan Agreement"); on
October 12, 1994, Old FoxMeyer was merged into Borrower and Borrower succeeded
to and assumed all of Old FoxMeyer's rights and obligations under the Amended
and Restated Loan Agreement; and Borrower, Operating Subsidiaries, Lenders and
Issuer, and Administrative Agent and Documentation Agent entered into
additional amendments dated as of November 22, 1994, April 26, 1995 and August
17, 1995 (the Amended and Restated Loan Agreement, as so amended, being herein
referred to as the "Loan Agreement");
WHEREAS, Borrower has requested that the Lenders (a) agree to the
amendment of certain provisions of the Loan Agreement, among other things, to
revise certain financial covenants and to permit an overline credit facility
that may be provided by certain Lenders in the aggregate principal amount of up
to $60,000,000 and (b)(i) waive certain provisions of the Loan Agreement to
permit the distribution and sale by Borrower to its parent, FoxMeyer Health
Corporation ("Fox Health"), of certain of its subsidiaries engaged in its
CareStream operations (and certain assets related thereto) and (ii) release
such subsidiaries from their Guaranties of Borrower's obligations under the
Loan Agreement;
WHEREAS, the Lenders executing this Seventh Amendment, Issuer,
Administrative Agent and Documentation Agent are willing to agree to such
amendments and (provided all Lenders
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so agree) provide such waiver and agree to such release, all upon the terms and
conditions set forth below;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, terms are
used herein as defined in the Loan Agreement.
SECTION 2. AMENDMENT OF LOAN AGREEMENT. Subject to Section 4 of this
Seventh Amendment:
(a) Section 1.2 of the Loan Agreement is hereby amended by deleting
the definitions of "Applicable Coverage Ratio", "Development Cost Debt Service
Coverage Ratio Adjustment Amount", "Development Cost Interest Coverage Ratio
Adjustment Amount", "Funded Debt", "Funded Debt Service", "Healthcare Connect
Subsidiaries" and "Permitted Indebtedness" and adding the following definitions
(in appropriate alphabetical order):
Applicable Coverage Ratio. Means, as of any date, the ratio of
(a)(i) EBIT, plus (ii) amortization and depreciation expense, plus (iii)
the Development Cost Interest Coverage Ratio Adjustment Amount, plus
(iv) the Phar-Mor Interest Coverage Ratio Adjustment Amount, plus (v)
the CareStream EBT Adjustment Amount, less (vi) the CareStream D&A
Adjustment Amount, of Borrower and the Consolidated Subsidiaries for the
12 month period ended on such date, to (b)(i) Interest Expense, less
(ii) the CareStream Interest Expense Adjustment Amount, plus (iii)
interest income then being currently received (to the extent such income
is netted against interest charges in the definition of "Interest
Expense"), for such 12 month period.
CareStream D&A Adjustment Amount. Means, for each date of
determination after the CareStream Operations shall have been first
accounted for as a discontinued operation of Borrower and the
Consolidated Subsidiaries in accordance with GAAP, the amounts in
respect of depreciation and amortization allocated to the CareStream
Operations in accordance with GAAP for the 12 month period ending on
such date of determination.
CareStream Debt Service Adjustment Amount. Means, for each date
of determination after the CareStream Operations shall first have been
accounted for as a discontinued operation of Borrower and the
Consolidated Subsidiaries in accordance with GAAP, the principal and
interest payments allocated to or or paid directly by the CareStream
Operations in accordance with
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GAAP for the 12 month period ending on such date of determination.
CareStream EBT Adjustment Amount. Means, for each date of
determination after the CareStream Operations shall have been first
accounted for as a discontinued operation of Borrower and the
Consolidated Subsidiaries in accordance with GAAP, an amount equal to
the loss of Borrower and the Consolidated Subsidiaries before provision
for income taxes allocated to the CareStream Operations in accordance
with GAAP for the 12 month period ending on such date of determination.
CareStream Holdings. Means the wholly owned Consolidated
Subsidiary to be formed for the purpose of acquiring all of the capital
stock of the Subsidiaries of Borrower (and related assets) engaged in
the CareStream Operations, which Subsidiary shall execute a Guaranty
Agreement pursuant to Section 3.3 not later than the date it acquires
such capital stock (and related assets).
CareStream Indemnity. Means the assumption and indemnity
agreement from NII to CareStream Holdings and Borrower, (a) assuming and
providing CareStream Holdings, and Borrower and its other Subsidiaries,
indemnification against all obligations and liabilities, and related
expenses, in respect of the CareStream Transactions (as defined in the
Seventh Amendment hereto) and the CareStream Operations, including
without limitation (i) all taxes payable on account of the dividend and
sale of appreciated assets included in the CareStream Transactions, any
future deconsolidation of the CareStream Operations from the affiliated
group (as defined in Section 1504 of the Code) that includes NII, (ii)
all deferred purchase price, earnout and other obligations under the
agreements under which the CareStream Operations were acquired and (iii)
all contingent obligations for financing provided for the CareStream
Operations, and (b) providing Borrower and its Subsidiaries with a right
of setoff in respect of such indemnification for amounts payable under
the Tax Sharing Agreement, all on terms contemplated by the Seventh
Amendment hereto and satisfactory to Administrative Agent (as amended,
supplemented or otherwise modified from time to time in accordance with
Section 6.2(w)).
CareStream Interest Expense Adjustment Amount. Means, for each
date of determination after the CareStream Operations shall have been
first accounted for as a discontinued operation of Borrower and the
Consolidated Subsidiaries in accordance with GAAP, the Interest Expense
allocated to or paid directly by the CareStream Operations in accordance
with GAAP for the 12 month period ending on such date of determination.
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CareStream Net Income Adjustment Amount. Means, for each date of
determination after the CareStream Operations shall have been first
accounted for as a discontinued operation of Borrower and the
Consolidated Subsidiaries in accordance with GAAP, the loss (after
income taxes) of Borrower and the Consolidated Subsidiaries allocated to
the CareStream Operations in accordance with GAAP for the 12 month
period ending on such date of determination.
CareStream Note. Means the secured promissory note, in the
principal amount contemplated by the Seventh Amendment hereto, made by
NII payable to the order of CareStream Holdings evidencing the purchase
price for the CareStream Operations, on terms contemplated by the
Seventh Amendment hereto and satisfactory to Administrative Agent (as
amended, restated, replaced, substituted, supplemented or otherwise
modified from time to time in accordance with Section 6.2(w)).
CareStream Operations. Means the operations conducted by
Healthcare Connect, Inc. and its Subsidiaries, principally providing
healthcare administration and management services, together with (a) the
assets of Healthcare Connect, Inc. and its Subsidiaries, (b) the assets
purchased by Borrower and/or FoxMeyer Drug Company from the chapter 11
estate of Synercom Healthcare Systems, Inc. on or about February 8,
1995, and (c) the assets (consisting principally of hardward and
software) used as of the Waiver Effective Date (as defined in the
Seventh Amendment hereto) in the operation of the DataNet division of
Borrower and/or FoxMeyer Drug Company, but excluding all shares of
capital stock of FoxMeyer Canada.
CareStream Pledge Agreement. Means the pledge agreement from NII
to CareStream Holdings, pledging all of the capital stock and assets
included in the CareStream Operations distributed or sold to NII as
contemplated by the Seventh Amendment hereto, as security for the
CareStream Note and the CareStream Indemnity (which collateral shall be
released upon the payment in full of the CareStream Note), on the terms
contemplated by the Seventh Amendment hereto and satisfactory to
Administrative Agent (as amended, supplemented or otherwise modified
from time to time in accordance with Section 6.2(w)).
Development Cost Debt Service Coverage Ratio Adjustment Amount.
Means, as of any date of determination, the aggregate amount of any
reduction of Operating Cash Flow attributable to any write-off of
previously capitalized computer software development costs or any
write-off of the costs of, or loss on the
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disposition of, replaced computer software and related hardware, but
excluding any such reduction in respect of the CareStream Operations;
provided that the aggregate amount of the Development Cost Debt Service
Coverage Ratio Adjustment Amount utilized during any period of 12 months
shall not exceed $5,000,000 (prior to any adjustment for income taxes).
Development Cost Interest Coverage Ratio Adjustment Amount.
Means, as of any date of determination, the aggregate amount of any
reduction of EBIT attributable to any write-off of previously
capitalized computer software development costs or any write-off of the
costs of, or loss on the disposition of, replaced computer software and
related hardware, but excluding any such reduction in respect of the
CareStream Operations; provided that the aggregate amount of the
Development Cost Interest Coverage Ratio Adjustment Amount utilized
during any period of 12 months shall not exceed $5,000,000 (prior to any
adjustment for income taxes).
Funded Debt. Means, as of the date of any determination, the sum
of the following (without duplication): (a) all Indebtedness evidenced
by the Notes or the B Borrowing Account as of such date, (b) all
Indebtedness evidenced by the 7.09% Notes as of such date, (c) all
Indebtedness consisting of Subordinated Debt as of such date, (d) all
Indebtedness which would be classified as "funded debt" or "long-term
debt", including the current portions thereof, on a consolidated balance
sheet of Borrower and the Consolidated Subsidiaries prepared as of such
date in accordance with GAAP, (e) all Indebtedness of Borrower or any
Consolidated Subsidiary having a final maturity (or which is renewable
or extendible at the option of the obligor for a period ending) more
than one year after the date of creation thereof, notwithstanding that
payments in respect thereof are required to be made by the obligor less
than one year after the date of the creation thereof or that any amount
thereof is at the time included also in Current Liabilities of such
obligor, (f) all Indebtedness of Borrower or any Consolidated Subsidiary
outstanding under a revolving credit or similar agreement providing for
borrowings (and renewals and extensions thereof) over a period of more
than one year, notwithstanding that any such Indebtedness is created
within one year of the expiration of such agreement, (g) the present
value (discounted at the implicit rate, if known, or ten percent (10%)
per annum otherwise) of all obligations in respect of Capital Leases of
Borrower or any Consolidated Subsidiary and (h) Redeemable Capital Stock
of Borrower valued at the greater of its voluntary or involuntary
maximum fixed repurchase or redemption
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price plus accrued and unpaid dividends. For purposes hereof, the
"maximum fixed repurchase or redemption price" of any Redeemable Capital
Stock which does not have a fixed repurchase or redemption price shall
be calculated in accordance with the terms of such Redeemable Capital
Stock as if such Redeemable Capital Stock were purchased or redeemed on
any date on which Funded Debt shall be required to be determined, and if
such price is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value to be determined in
good faith by the Board of Directors of the issuer of such Redeemable
Capital Stock. Notwithstanding the foregoing, Funded Debt shall be
deemed not to include Indebtedness under the Overline Facility, which is
due and payable not later than March 31, 1996.
Funded Debt Service. Means, with respect to Borrower and the
Consolidated Subsidiaries, for any period, the sum of (a) the aggregate
of all principal and interest payments and repurchase or redemption
payments required or scheduled to be made during such period with
respect to Funded Debt, (b) interest payments required to be made during
such period with respect to Indebtedness under the Overline Facility and
(c) Preferred Dividends accruing or payable during such period.
Healthcare Connect Subsidiaries. Means Healthcare Connect, Inc.,
a Delaware corporation, and its wholly owned Subsidiaries, OmNex Health,
Inc. (formerly HCPP Holdings, Inc.), Health Care Pharmacy Providers,
Inc., NexCare, Inc., US HealthData Interchange, Inc. and Scrip Card
Enterprises, Inc., and any future wholly owned Subsidiaries of
Healthcare Connect, Inc., for such periods as such Persons are wholly
owned Subsidiaries of Borrower.
New CareStream. Means the wholly-owned Subsidiary of NII formed
for the purpose of holding the CareStream Operations acquired from
Borrower and CareStream Holdings.
Overline Facility. Means any agreement to be entered into among
Borrower, Operating Subsidiaries, the lenders named therein and Citicorp
USA, Inc., as Administrative Agent, providing a working capital facility
in the aggregate principal amount of up to $60,000,000, and all
Guaranties and other documents related thereto, as such agreement,
Guaranties and other documents may be amended, replaced, supplemented or
otherwise modified from time to time.
Permitted Indebtedness. Means (a) the Obligations, (b) the
existing Indebtedness, other than
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the 7.09% Notes and the 7.09% Note Guaranties, expressly identified on
Schedule 2 hereto (including renewals or extensions thereof, but
excluding increases thereof except as may otherwise be permitted), (c)
Guaranties of Indebtedness of customers of Borrower or an Operating
Subsidiary by Borrower or such Operating Subsidiary, provided such
Guaranties constitute Permitted Customer Advances, (d) agreements
entered into in the ordinary course of business by Borrower or an
Operating Subsidiary to repurchase at a discounted price Inventory sold
to customers of Borrower or such Operating Subsidiary, (e) obligations
evidenced by the Intercompany Notes, (f) accounts payable and other
accruals incurred by Borrower or any Consolidated Subsidiary and payable
or owing to another Person who is Borrower or any Consolidated
Subsidiary as a result of the cash management system of Borrower and its
Consolidated Subsidiaries, (g) obligations evidenced by any Interest
Rate Protection Agreement in respect of the Obligations or the 7.09%
Notes, (h) any Indebtedness which is expressly permitted pursuant to
clause (iv) of Section 6.2(l), (i) Indebtedness consisting of the 7.09%
Notes and the 7.09% Note Guaranties, (j) Indebtedness consisting of
Redeemable Capital Stock, provided such stock is Preferred Stock which
does not provide for mandatory repurchase or redemption prior to the
fifth (5th) anniversary of the date of issuance thereof, (k)
Subordinated Debt incurred in the aggregate principal amount not to
exceed $200,000,000, provided that at the time of any incurrence of such
Indebtedness and after giving effect thereto and considering facts and
circumstances then existing, no Potential Default or Event of Default
exists or will occur or may reasonably be expected to occur, (l) up to
$10,000,000 of Indebtedness consisting of (i) Capital Leases or (ii)
purchase money Indebtedness secured by Liens permitted by clause (h) of
the definition of "Permitted Liens" and (m) Indebtedness from time to
time outstanding under the Overline Facility.
(b) Section 2.8 of the Loan Agreement is hereby amended by
adding the following new subsection (i) thereto:
(i) Seventh Amendment Fee. Borrower shall pay to
Administrative Agent for the account of each Lender which
executes the Seventh Amendment hereto an amendment fee equal to
one tenth of one percent (0.10%) of such Lender's Commitment.
Such fee shall be paid (i) on the date the amendments provided in
the Seventh Amendment hereto become effective as to all Lenders
which have executed the Seventh Amendment as of such date and
(ii) on the earlier of the effective date of the waiver provided
in the Seventh Amendment hereto or five days after their
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respective executions thereof as to all Lenders which execute the
Seventh Amendment hereto after such amendments become effective.
(c) Section 3.3 of the Loan Agreement is hereby amended by
deleting the phrase "upon request by Administrative Agent" and inserting in
place thereof the word "thereafter".
(d) Section 6.1(f) of the Loan Agreement is hereby amended by
adding the following new sentence at the end thereof:
In furtherance of the foregoing, but not by way of limitation
thereof, Borrower and the Operating Subsidiaries shall permit Administrative
Agent to conduct during normal business hours after reasonable notice to
Borrower, from time to time at Borrower's expense, a review and examination of
the Inventory and Receivables, and related systems, of Borrower and the
Consolidated Subsidiaries, which review and examination may include a
verification of the amounts of Inventory and Receivables in the financial
statements of Borrower and the Consolidated Subsidiaries; provided, however,
that if the Administrative Agent shall conduct more than one such review and
examination in any calendar year, the Borrower shall only be required to
reimburse Administrative Agent for the expenses related to the first of such
reviews and Administrative Agent and Lenders shall be responsible for the
expenses relating to each subsequent review in such calendar year.
(e) Section 6.1(m) of the Loan Agreement is hereby amended by
inserting after the phrase "7.09% Note Guaranties" the phrase "and the
Indebtedness under the Overline Facility".
(f) Section 6.2(d) of the Loan Agreement is hereby amended by
deleting the proviso at the end of such section in its entirety.
(g) Section 6.2(f) of the Loan Agreement is hereby amended (i)
by inserting at the end of clause (i) thereof the phrase ", plus (E) the
CareStream EBT Adjustment Amount", (ii) by inserting after the phrase "the
Service Fee Adjustment Amount," in clause (ii) thereof the phrase "less the
CareStream Interest Expense Adjustment Amount," and (iii) by deleting the last
four ratios set forth in the table therein and inserting in place thereof the
following new ratios:
Last Day of
Applicable Period Ratio
------------------------- ------------
9/30/95 2.50 to 1.00
12/31/95 2.00 to 1.00
3/31/96 2.50 to 1.00
6/30/96 and thereafter 3.40 to 1.00
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(h) Section 6.2(g) of the Loan Agreement is hereby amended (i)
by inserting at the end of clause (i) thereof the phrase ", plus (D) the
CareStream Net Income Adjustment Amount, less (E) the CareStream D&A Adjustment
Amount, less (F) the CareStream Interest Expense Adjustment Amount" and (ii) by
deleting the phrase "Funded Debt Service" in clause (ii) thereof and inserting
in place thereof the phrase "(A) Funded Debt Service, less (B) the CareStream
Debt Service Adjustment Amount".
(i) Section 6.2(i) of the Loan Agreement is hereby amended by:
(i) inserting after the phrase "Permitted Indebtedness
referred to in clause (d) of the definition thereof" each place
it appears the phrase "or, for the fiscal quarter ending December
31, 1995, Permitted Indebtedness referred to in clause (m) of the
definition thereof"; and
(ii) deleting the phrase "0.60 to 1.00" and inserting in
place thereof the following: "(i) 0.60 to 1.00 for all fiscal
quarters of Borrower other than the fiscal quarter ending
December 31, 1995 and (ii) 0.63 to 1.00 for the fiscal quarter
ending December 31, 1995."
(j) Section 6.2(n) of the Loan Agreement is hereby amended by
inserting after the phrase "Revolving Receivables Purchase Program," in the
second sentence thereof the phrase "and except as set forth in the Overline
Facility,".
(k) Section 6.2(w) of the Loan Agreement is hereby amended by
deleting the section heading in its entirety and inserting in place thereof the
new heading "NII Loan Documents; Other Documents" and adding at the end of such
section the following:
Borrower shall not allow to occur any of the following without
the prior written consent of Administrative Agent and Majority
Lenders: (A) modify the terms of payment of principal (whether
at maturity, on mandatory prepayment or otherwise) or interest in
respect of the CareStream Note, (B) release any collateral
securing the CareStream Note and the CareStream Indemnity, except
as permitted by the CareStream Pledge Agreement, or (C) modify or
release any assumption or indemnification obligations benefiting
Borrower and the Consolidated Subsidiaries under the CareStream
Indemnity.
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(l) Section 6.3(a) is hereby amended by deleting clause (ii)
thereof and inserting in place thereof the following:
(ii) the calculation of the Applicable Leverage Ratio for each
day of the preceding month and a borrowing base certificate as of the last day
of such preceding month substantially in the form of Exhibit N hereto, all in
reasonable detail and certified as to accuracy by a Financial Officer of
Borrower and the Operating Subsidiaries.
(m) Section 6.3(h) of the Loan Agreement is hereby amended by
inserting after the phrase "7.09% Note Purchase Agreements" the phrase ", the
Overline Facility".
(n) Section 6.3(o) of the Loan Agreement is hereby amended by:
(i) substituting a comma for the word "or" before the
"(iv)" and inserting after the phrase "any Subordinated Debt," in
the first clause thereof the phrase "(v) the Overline Facility or
(vi) the CareStream Note, the CareStream Pledge Agreement or the
CareStream Indemnity,"; and
(ii) inserting after the words "any of the NII Loan
Documents" the phrase ", the Revolving Receivables Purchase
Program, the Overline Facility, the CareStream Note, the
CareStream Pledge Agreement, the CareStream Indemnity".
(o) Section 7.1(d) of the Loan Agreement is hereby amended by
(i) inserting after the word "Notes" in the title thereto the phrase ",
Overline Facility" and (ii) inserting after the first semi-colon in such
Section the following phrase:
or any Event of Default (as defined in the Overline Facility)
shall occur; or any one or more Events of Default (as defined in
the CareStream Note, the CareStream Pledge Agreement or the
CareStream Indemnity) shall occur;
(p) Exhibit M to the Loan Agreement is hereby amended by
substituting in place thereof a new Exhibit M, to read as provided in Exhibit 1
to the Seventh Amendment hereto.
(q) Exhibit N is hereby added to the Loan Agreement to read as
provided in Exhibit 2 to the Seventh Amendment hereto.
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SECTION 3. REQUESTED CONSENT AND RELEASE.
(a) Borrower hereby requests that Lenders waive the provisions
of Sections 6.1(i), 6.1(l), 6.2(b), 6.2(j), 6.2(k), 6.2(l), 6.2(n) and 6.2(q)
of the Loan Agreement to permit the following transactions (the "CareStream
Transactions"):
(i) a dividend to Fox Health of $5,000,000 in value of
the capital stock of Health Care Pharmacy Providers, Inc.
("HCPP") and the contribution by Fox Health of such capital stock
to its wholly-owned Subsidiary formed for the purpose of holding
the CareStream Operations (as hereinafter defined) ("New
CareStream");
(ii) the creation of a wholly owned Subsidiary of
Borrower ("CareStream Holdings") to hold all of the capital stock
of HealthCare Connect, Inc. and its Subsidiaries, OmNex Health,
Inc., NexCare, Inc., Scrip Card Enterprises, Inc. and US
HealthData Interchange, Inc., including the balance of the
capital stock of HCPP but excluding all shares of capital stock
of FoxMeyer Canada, the assets purchased by Borrower and/or
Foxmeyer Drug Company from the chapter 11 estate of Synercom
Healthcare Systems, Inc. on or about February 8, 1995, and the
assets used as of the Waiver Effective Date (as defined below) in
the operation of the DataNet division of Borrower and/or FoxMeyer
Drug Company (collectively, the "CareStream Operations") and the
contribution of such capital stock and assets to CareStream
Holdings; and
(iii) the sale by CareStream Holdings of the CareStream
Operations to Fox Health for a consideration equal to (A) the
amount of Borrower's consolidated investment in the CareStream
Operations from March 31, 1993 to the date of such sale (which
investment aggregated $19,983,000 from March 31, 1993 through
March 31, 1995) less $5,000,000 (representing the amount of the
dividend described in paragraph (i) above), which amount shall be
evidenced by a promissory note (the "CareStream Note") of Fox
Health payable on the earlier of (1) the date of consummation of
any public or private offering of shares of capital stock of New
CareStream or any other transaction (whether sale of stock or
assets, merger or other business combination) in which funds are
received by Fox Health or any of its Subsidiaries (including
without limitation New CareStream) in respect of the sale or
other disposition of the CareStream Operations (or any interest
therein) or (2) one year from the date of the CareStream Note,
which note will be secured
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by a first priority pledge and security interest in the capital
stock and assets distributed or sold to Fox Health as part of the
CareStream Transactions and (B) the assumption and
indemnification (the "CareStream Indemnity") by Fox Health for
all obligations and liabilities, and related expenses, in respect
of the CareStream Transactions, including without limitation
obligations for Taxes (as defined in, and notwithstanding, the
Tax Sharing Agreement, including estimated Taxes), deferred or
contingent purchase price obligations and contingent obligations
for financing, and providing a right of setoff for amounts
payable under the Tax Sharing Agreement.
(b) In order to induce Lenders to provide such waiver,
Borrower hereby represents, warrants and covenants as follows:
(i) The CareStream Transactions are correctly described
in paragraph (a) above and the memoranda dated October 3, 1995
and October 13, 1995 (collectively, the "Transaction
Description"), from Borrower to Lenders. The Transaction
Description does not omit any statement of a material fact
necessary to make the statements contained therein or herein not
misleading.
(ii) The principal amount of the CareStream Note will be
not less than the actual amount of all loans, advances, capital
contributions and other investments made by Borrower and its
Consolidated Subsidiaries in the CareStream Operations after
March 31, 1993, less $5,000,000. After giving effect to the
CareStream Transactions, (A) the maximum aggregate amount of (1)
obligations of Borrower and the Consolidated Subsidiaries to pay
the deferred or contingent purchase prices for the CareStream
Operations and (2) all Guaranties and other contingent
obligations of Borrower and the Consolidated Subsidiaries for
financing of the CareStream Operations shall not exceed
$5,000,000, and shall be fully assumed and indemnified against by
Fox Health pursuant to the CareStream Indemnity, and (B) neither
Borrower or any Consolidated Subsidiary will have any other
liabilities or obligations to, or any agreement to provide
financial support for, the CareStream Operations.
(iii) The consummation of the CareStream Transactions
will not, and Borrower hereby agrees that the consummation of the
CareStream Transactions shall not, violate the terms of, or give
rise to a default under, the 7.09% Notes, the 7.09% Note
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Guaranties or the 7.09% Note Purchase Agreements, the agreements
and instruments evidencing the Revolving Receivables Purchase
Program or any other material agreement, any law, rule or
regulation, or any order, writ, judgment, injunction, decree,
determination or award, to which Borrower or any Consolidated
Subsidiary is a party or by which it or any of its material
Assets are bound or affected. None of the CareStream
Transactions will have a Material Adverse Effect.
(iv) After giving effect to the CareStream Transactions,
Borrower and each of the Operating Subsidiaries will be Solvent,
both as a separate corporate entity and on a consolidated basis
with its Subsidiaries.
(c) On the basis of the representations and warranties in this
Section 3 and in Section 5 of this Seventh Amendment, and subject to Section 4
of this Seventh Amendment, Lenders executing this Seventh Amendment hereby (i)
waive, in this specific instance, the provisions of the Loan Agreement set
forth in paragraph (a) above insofar as may be required to effect the
CareStream Transactions and (ii) agree to release and terminate on the Waiver
Effective Date (as hereinafter defined) the Guaranty Agreements of the
following Guarantors: Healthcare Connect, Inc., OmNex Health, Inc. (formerly
HCPP Holdings, Inc.), HCPP, NexCare, Inc., Scrip Card Enterprises, Inc. and US
HealthData Interchange, Inc.; provided that the waiver and release contemplated
by this Section 3 shall not become effective if a Potential Default or an Event
of Default shall have occurred and be continuing.
(d) Borrower acknowledges and agrees that the foregoing waiver
shall extend only to the requirements of the Loan Agreement to the limited
extent expressly provided herein and shall not extend to any other or
additional state of facts or circumstances or any other covenant, obligation,
representation or warranty of any party to the Loan Agreement or the other Loan
Papers.
SECTION 4. EFFECTIVENESS.
(a) This Seventh Amendment shall become binding on the parties
hereto when executed by the Required Lenders, Issuer, Administrative Agent,
Borrower and Operating Subsidiaries; provided it is so executed not later than
October 24, 1995. However, the amendments provided in Section 2 of this
Seventh Amendment shall not become effective until all of the applicable
conditions therefor provided in this Section 4 shall have been satisfied, and
the waiver and agreement to release provided in Section 3 of this Seventh
Amendment shall not become effective until all of the applicable conditions
therefor provided in this Section 4
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shall have been satisfied and all Lenders shall have executed this Seventh
Amendment. The amendments provided in Section 2 of this Seventh Amendment may
become and shall remain effective even if the waiver and agreement to release
provided in Section 3 of this Seventh Amendment does not become effective.
(b) The amendments provided in Section 2 of this Seventh
Amendment shall become effective upon satisfaction of the following, in a
manner acceptable to Administrative Agent, on or before October 24, 1995 (the
date of such effectiveness herein called the "Amendment Effective Date"):
(i) All of the Guarantors shall have executed and
delivered the Consent and Agreement attached to this Seventh
Amendment (the "Guarantor Consent and Agreement").
(ii) Borrower and each Guarantor shall have delivered to
Administrative Agent certificates providing the certifications
contemplated by Section 4.1(c) of the Loan Agreement as of the
Amendment Effective Date, including resolutions authorizing the
execution, delivery and performance of this Seventh Amendment and
the Guarantor Consent and Agreement.
(iii) Administrative Agent shall have received an opinion
of Weil, Gotshal & Xxxxxx, counsel to Borrower and the Operating
Subsidiaries, in form and substance satisfactory to
Administrative Agent, that this Seventh Amendment and the
Guarantor Consent and Agreement have been duly authorized,
executed and delivered by Borrower, the Operating Subsidiaries,
and the other Consolidated Subsidiaries, and that the Credit
Agreement, as amended by this Seventh Amendment, and the Guaranty
Agreements, as confirmed by the Guarantor Consent and Agreement,
constitute the legal, valid, and binding obligations of Borrower,
Operating Subsidiaries and the other Consolidated Subsidiaries,
enforceable in accordance with their respective terms (subject as
to enforcement of remedies to any applicable bankruptcy,
reorganization, moratorium, or similar laws or principles of
equity affecting enforcement of creditors' rights generally), and
as to such other matters as Administrative Agent deems
appropriate.
(iv) Before and after giving effect to this Seventh
Amendment, the representations and warranties provided in Article
V of the Loan Agreement, as supplemented by the addition of
NexCare, Inc. to Schedule 2 thereto as set forth on
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Exhibit 3 to this Seventh Amendment, shall be true and correct on
the Amendment Effective Date as if made on such date (except to
the extent that such representations and warranties are expressly
by their terms made only as of a date other than the Restatement
Date or the date of this Seventh Amendment), and no Potential
Default or Event of Default shall have occurred or be continuing
on the Amendment Effective Date.
(v) Borrower shall have paid all fees and expenses
payable by Borrower under the Loan Papers on or before the
Amendment Effective Date.
(vi) Administrative Agent shall have received such other
documents, instruments, certificates and opinions as it shall
deem necessary or appropriate in connection with the amendments
contemplated by Section 2 of this Seventh Amendment and the
transactions contemplated thereby.
(vii) Administrative Agent shall have received a
certificate from a Financial Officer of Borrower certifying the
satisfaction of the conditions precedent set forth in this
paragraph (b).
(c) The waiver provided in Section 3 of this Seventh Amendment
shall be effective, and Administrative Agent shall be authorized to release and
terminate the Guaranty Agreements of the Consolidated Subsidiaries named in
Section 3(c) of this Seventh Amendment, upon satisfaction of the following, in
a manner acceptable to Administrative Agent, on or before May 31, 1996 (the
date of effectiveness herein called the "Waiver Effective Date"):
(i) The Amendment Effective Date shall occur.
(ii) Borrower shall provide Administrative Agent with at
least five Business Days' notice of the proposed consummation of
the CareStream Transactions, which notice shall include copies of
the proposed CareStream Note, CareStream Pledge Agreement and
CareStream Indemnity (collectively, the "CareStream Transaction
Documents"), and the CareStream Transaction Documents shall be in
form and substance satisfactory to Administrative Agent. The
CareStream Transactions shall be consummated as contemplated by
this Seventh Amendment, and all proceedings taken in connection
with the CareStream Transactions shall be satisfactory to
Administrative Agent and its counsel.
(iii) Borrower and CareStream Holdings shall have
received the CareStream Note, the CareStream
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Pledge Agreement and the CareStream Indemnity, duly executed by
Fox Health, together with certificates representing all of the
capital stock required to be pledged pursuant thereto and related
stock powers duly endorsed in blank.
(iv) Administrative Agent shall have received evidence
that all Intercompany Notes of HCPP and the other Subsidiaries of
CareStream Holdings shall be repaid in full or contributed to
capital and included in the principal amount of the CareStream
Note.
(v) Administrative Agent shall have received an opinion
of Weil, Gotshal & Xxxxxx, counsel to Borrower and the Operating
Subsidiaries, in form and substance satisfactory to
Administrative Agent, (A) confirming the opinion provided under
paragraph (b)(iii) above as of the Waiver Effective Date, (B)
that the CareStream Transaction Documents have been duly
authorized, executed and delivered by Fox Health and New
CareStream and constitute the legal, valid and binding
obligations of Fox Health and New CareStream, enforceable in
accordance with their respective terms (subject as to enforcement
of remedies to any applicable bankruptcy, reorganization,
moratorium, or similar laws or principles of equity affecting
enforcement of creditors' rights generally), (C) that the
execution, delivery and performance of the CareStream Transaction
Documents do not violate the terms of, or give rise to a default
under, the 7.09% Notes, the 7.09% Note Guaranties or the 7.09%
Note Purchase Agreements, the agreements and instruments
evidencing the Revolving Receivables Purchase Program, any law,
rule or regulation, or any order, writ, judgment, injunction,
decree or determination or award, to which Borrower or any
Consolidated Subsidiary is a party or by which it or any of its
material Assets are bound or affected, (D) that the CareStream
Pledge Agreement creates a valid and enforceable pledge of and
security interest in the capital stock and assets intended to be
subject thereto, and (E) as to such other matters as
Administrative Agent deems appropriate.
(vi) Before and after giving effect to the CareStream
Transactions, the representations and warranties provided in
Article V of the Loan Agreement, as supplemented by the addition
of NexCare, Inc. to Schedule 2 thereto as set forth on Exhibit 3
to this Seventh Amendment, and in Section 2 of this Seventh
Amendment shall be true and correct on the Waiver Effective Date
as if made
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on such date (except to the extent that such representations and
warranties are expressly by their terms made only as of a date
other than the Restatement Date or the date of this Seventh
Amendment), and no Potential Default or Event of Default shall
have occurred or be continuing on the Waiver Effective Date.
(vii) Borrower shall have paid all fees and expenses
payable by Borrower under the Loan Papers on or before the Waiver
Effective Date.
(viii) Administrative Agent shall have received such other
documents, instruments, certificates and opinions as it shall
deem necessary or appropriate in connection with the waiver
contemplated by Section 3 of this Seventh Amendment and the
transactions contemplated thereby.
(ix) Administrative Agent shall have received a
certificate from a Financial Officer of Borrower certifying the
satisfaction of the conditions precedent set forth in this
paragraph (c).
SECTION 5. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants, and each Operating Subsidiary as to matters relating to such
Operating Subsidiary represents and warrants, that this Seventh Amendment and
the Guarantor Consent and Agreement have been duly authorized, executed and
delivered by Borrower, Operating Subsidiaries and the other Consolidated
Subsidiaries and constitute the legal, valid, and binding obligations of
Borrower, Operating Subsidiaries and the other Consolidated Subsidiaries,
enforceable in accordance with their respective terms (subject as to
enforcement of remedies to any applicable bankruptcy, reorganization,
moratorium, or similar laws or principles of equity affecting the enforcement
of creditors' rights generally). Borrower further represents and warrants
that, before and after giving effect to this Seventh Amendment, (a) there
exists no Potential Default or Event of Default on the date of this Seventh
Amendment, (b) the representations and warranties set forth in Article V of the
Loan Agreement, as supplemented by the addition of NexCare, Inc. to Schedule 2
thereto as set forth on Exhibit 3 to this Seventh Amendment, are true and
correct on the date of this Seventh Amendment (including the representations or
warranties that are otherwise expressly made as of the Restatement Date), and
(c) Borrower and Operating Subsidiaries have complied with all agreements and
conditions to be complied with by it under the Loan Agreement and other Loan
Papers by the date of this Seventh Amendment.
SECTION 6. ENTIRE AGREEMENT; RATIFICATION. This Seventh Amendment
embodies the entire agreement of the parties and supersedes any prior
agreements or understandings with respect
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to the subject matter hereof. Except as amended or waived hereby, the Loan
Agreement and all other Loan Papers shall continue in full force and effect.
SECTION 7. GOVERNING LAW. THIS SEVENTH AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE
U.S. FEDERAL LAWS.
SECTION 8. COUNTERPARTS. This Seventh Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument. In making proof hereof, it shall not be necessary to
produce or account for any counterpart other than one signed by the party
against which enforcement is sought.
SECTION 9. NO ORAL AGREEMENTS. THIS SEVENTH AMENDMENT, TOGETHER WITH
THE LOAN AGREEMENT AND THE OTHER LOAN PAPERS, CONSTITUTES A "LOAN AGREEMENT"
FOR THE PURPOSES OF SECTION 26.02(A) OF THE TEXAS BUSINESS AND COMMERCE CODE,
AND REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES HERETO AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (A)
BORROWER OR ANY OPERATING SUBSIDIARY AND (B) ADMINISTRATIVE AGENT,
DOCUMENTATION AGENT, ANY LENDER OR ISSUER.
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IN WITNESS WHEREOF, this Seventh Amendment to Amended and Restated Loan
Agreement is executed as of the date first set forth above.
FOXMEYER CORPORATION
By
-----------------------------------
Title:
FOXMEYER DRUG COMPANY
By
-----------------------------------
Title:
MERCHANDISE COORDINATOR SERVICES
CORPORATION
By
-----------------------------------
Title:
XXXXXX WHOLESALE COMPANY
By
-----------------------------------
Title:
CITICORP USA, INC., individually and
as Administrative Agent
By
-----------------------------------
Title:
20
NATIONSBANK OF TEXAS, N.A.,
individually and as Co-Agent and
Documentation Agent
By
-----------------------------------
Title:
BANQUE PARIBAS, individually and as
Co-Agent
By
-----------------------------------
Title:
By
-----------------------------------
Title:
CITIBANK, N.A., as Issuer (and not a
Lender)
By
-----------------------------------
Title:
FIRST BANK NATIONAL ASSOCIATION
By
-----------------------------------
Title:
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By
-----------------------------------
Title:
00
XXXX XX XXXXXXX XXXXXXXX
By
-----------------------------------
Title:
FIRST INTERSTATE BANK OF TEXAS, N.A.
By
-----------------------------------
Title:
CREDIT SUISSE
By
-----------------------------------
Title:
By
-----------------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By
-----------------------------------
Title:
THE FUJI BANK, LTD.
By
-----------------------------------
Title:
THE BANK OF TOKYO, LTD., DALLAS AGENCY
By
-----------------------------------
Title:
00
XXX XXXX XX XXXX XXXXXX
By
-----------------------------------
Title:
23
CONSENT AND AGREEMENT
The undersigned, being all of the Guarantors (as defined in the Loan
Agreement), hereby consent and agree to the foregoing Seventh Amendment,
including the amendments contemplated thereby, the release of certain
Guarantors contemplated thereby and the distribution and sales of Assets
permitted thereby, and hereby confirm their respective obligations under their
respective Guaranty Agreements (as defined in the Loan Agreement), which shall
remain in full force and effect.
FOXMEYER DRUG COMPANY, a Kansas
corporation
DRXCARE, INC.
HEALTH CARE PHARMACY PROVIDERS, INC.
HEALTH MART, INC.
FOXMEYER DRUG COMPANY, a Delaware
corporation
IV PARTNERS, INC.
FOXMEYER REALTY COMPANY
FOXMEYER SOFTWARE, INC.
HEALTHCARE TRANSPORTATION SYSTEM, INC.
MERCHANDISE COORDINATOR SERVICES
CORPORATION
XXXXX STREAM HOLDINGS, INC.
XXXXXX WHOLESALE COMPANY
HEALTHCARE CONNECT, INC.
OMNEX HEALTH, INC. (formerly HCPP
HOLDINGS, INC.)
US HEALTHDATA INTERCHANGE, INC.
SCRIP CARD ENTERPRISES, INC.
HEALTH SYSTEMS, INC.
NEXCARE, INC.
By
-----------------------------------
Title:
