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EXHIBIT 10.1
October 24, 1997
Medaphis Corporation
0000 Xx. Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx XxXxxxxx
Chief Executive Officer
RE: Second Amended and Restated Credit Agreement, dated as
of February 4, 1997 (the "CREDIT AGREEMENT"), among
Medaphis Corporation (the "BORROWER"), the lenders
signatory thereto (collectively, the "LENDERS"), and
SunTrust Bank, Atlanta, as agent for the Lenders (the
"AGENT")
Gentlemen:
All capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Credit Agreement.
We refer to the September 18, 1997 letter under which the Lenders,
among other things, waived Borrower's compliance with certain of the financial
covenants in the Credit Agreement (the "WAIVER LETTER"). The Borrower has
requested that the Required Lenders waive the deadline in paragraph (ii) of the
Waiver Letter for the termination of the Revolving Loan Commitments and the
payment of the Obligations (subject to certain exceptions as stated therein).
The Borrower also has requested that the Required Lenders waive any
breach of the Borrower's representations and warranties in Section 6.02 and the
last unnumbered paragraph of Section 5.02 of the Credit Agreement and any
breaches of Borrower's covenants in Section 7.01(a), 7.01(b), 7.01(c) and 7.03
of the Credit Agreement (and any resultant failure on Borrower's part to
satisfy the conditions specified in Section 5.02 of the Credit Agreement) solely
to the extent any such representation, warranty and covenant breaches (and
resultant failure) result from any downward restatement by up to $40,000,000 in
total of Borrower's consolidated revenues for its fiscal years ended December
31, 1995 and December 31, 1996 and its two fiscal quarters ending June 30,
1997 (of which no more than $5,000,000 of any such restatement may relate to
downward adjustments of results for the two-quarter period ending June 30,
1997), which restatement, in turn, is the result of a change in the Borrower's
recognition of income on certain contracts of Health Data Sciences Corporation.
The Borrower also has requested that the Required Lenders confirm that any such
restatement and the commencement of any investigation, action or proceeding
before or by
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any court or governmental or regulatory authority as a result thereof will not
result in a Material Adverse Effect.
The Borrower also has requested that the Required Lenders extend the
deadline under Section 7.01(b) of the Credit Agreement for the delivery of
Borrower's financial statements for its fiscal quarter ending September 30,
1997 from November 15, 1997 to November 30, 1997 and waive solely to the extent
of such restatement the requirement that the monthly financial statements
required to be delivered by Borrower for the months of September, 1997 and
October, 1997 be prepared in accordance with GAAP.
Subject to the terms and conditions of this letter, the Required
Lenders hereby (i) extend the aforesaid Waiver Letter termination and payment
deadline from November 30, 1997 to January 31, 1998; (ii) waive any breaches
(and resultant failure) described in the first sentence of the third full
paragraph of this letter and any Defaults or Events of Default resulting from
such breaches; (iii) confirm that any such aforesaid restatement and the
commencement of any of the aforesaid investigation, actions or proceedings as a
result thereof will not result in a Material Adverse Effect; (iv) extend the
deadline for the delivery of the aforesaid quarterly financial statements from
November 15, 1997 to November 30, 1997; and (v) waive the aforesaid monthly
financial statement preparation requirement; provided, however, that (1) in
consideration of such extensions, waivers and confirmation, Borrower shall pay
to the Agent, on the effective date of this letter as provided below, a fee
(which fee shall be fully earned upon the effectiveness of this letter) in an
amount equal to one-quarter of one percent (0.25%) of the aggregate Revolving
Loan Commitments of all Lenders, and such fee shall be distributed by the Agent
to all Lenders in accordance with their respective Pro Rata Shares therof; (2)
the aforesaid extensions relate solely to the above-described deadlines and
nothing in this letter is intended, or shall be construed, to extend, waive or
otherwise modify any of the other terms and conditions of the Waiver Letter
(including without limitation the provisions therof regarding any extension of
such deadline beyond June 30, 1998, which provisions shall remain in full force
and effect); (3) the aforesaid waivers relate solely to the specific
provisions, restatement and time periods described above and nothing in this
letter is intended, or shall be construed, to constitute a waiver of or a
consent to a departure from any other provisions of the Credit Agreement; and
(4) the aforesaid confirmation relates solely to the specific restatement
described above and the commencement of the aforesaid investigations, actions
or procedings and nothing in this letter is intended, or shall be construed, to
constitute the confirmation or agreement by any Lender or the Agent that any
other event which is or may be direct or indirect result of such restatement or
that any subsequent development in any such investigation, action or proceeding
(including without limitation any adverse outcome therein) will not result in a
Material Adverse Effect.
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Please note that this letter (and the extensions, waivers and confirmation
provided herein) shall not become effective unless and until (a) the aforesaid
fee has been paid and (b) this letter has been signed by the Required Lenders
and this letter has been accepted and agreed to by the Borrower, in each case by
such person's signing a copy of this letter in the appropriate space indicated
below and returning the same to the Agent's counsel (which may be done by
telecopy and in counterparts).
SUNTRUST BANK, ATLANTA, as Agent
and as a Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: S.V.P.
------------------------
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------
Title: S.V.P.
-------------------------
THE CHASE MANHATTAN BANK, as a
Lender
By:
-----------------------------
Name:
--------------------------
Title:
-------------------------
CREDITANSTALT-BANKVEREIN, as a
Lender
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: EVP
-------------------------
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Senior Associate
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NATIONSBANK, N.A., as a Lender
By: /s/ XxXxxx X. Xxxx, III
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Name: Xxxxxx X. Xxxx, III
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Title: Senior Vice President
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PNC BANK, N.A., as a Lender
By:
---------------------------------
Name:
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Title:
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WACHOVIA BANK, N.A., as a Lender
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
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Title: Assistant Vice President
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ACCEPTED AND AGREED TO
this 24th day of October, 1997:
MEDAPHIS CORPORATION
By: /s/ Xxxxxxxx X. X. Xxxxx
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Name: Xxxxxxxx X. X. Xxxxx
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Title: Executive Vice President
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cc: Each Guarantor
