Exhibit 10.13
FIRST AMENDMENT TO LOAN INSTRUMENTS
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This FIRST AMENDMENT TO LOAN INSTRUMENTS (this "First Amendment"), dated as of
October 23, 1998, is among INFOCURE CORPORATION, a Delaware corporation
("InfoCure"), THOROUGHBRED ACQUISITION, INC., a Georgia corporation
("Thoroughbred Acquisition, Inc."), MEDICAL SOFTWARE INTEGRATORS, INC., a
Georgia corporation ("MSI"), PROFESSIONAL ON-LINE COMPUTER, INC., a Michigan
corporation ("Polci"), ORTHODONTIC PRACTICE MANAGEMENT SYSTEM, INC., a Georgia
corporation ("OPMS"), PACE FINANCIAL CORPORATION, an Ohio corporation ("Pace"),
MD ACQUISITION, INC., a Connecticut corporation ("MD Acquisition, Inc."), ROVAK,
INC., a Minnesota corporation ("Rovak"), KCOMP MANAGEMENT SYSTEMS, INC., a
California corporation ("KComp"), SOFTEASY SOFTWARE, INC., a Pennsylvania
corporation ("SoftEasy"), CCI ACQUISITION, INC., a Florida corporation ("CCI
Acquisition, Inc."), HEALTH CARE DIVISION, INC., a Georgia corporation ("HCD"),
DR SOFTWARE, INC., a Georgia corporation ("DR Software"), XXXXXXX-XXXXX, INC., a
Georgia corporation ("Xxxxxxx-Xxxxx"), INTERNATIONAL COMPUTER SOLUTIONS, INC., a
Georgia corporation ("ICS") (Infocure, Thoroughbred Acquisition, Inc., MSI,
Polci, OPMS, Pace, MD Acquisition, Inc., Rovak, KComp, SoftEasy, CCI
Acquisition, Inc., HCD, DR SoftWare, Xxxxxxx-Xxxxx and ICS, and such other
entities that from time to time have or may become a "Borrower" in accordance
with and under the terms of the Loan Agreement (as defined below), hereinafter
sometimes are referred to individually as a "Borrower" and collectively as
"Borrowers"), and FINOVA Capital Corporation, a Delaware corporation ("FINOVA").
All capitalized terms used but not elsewhere defined herein shall have the
respective meanings ascribed to such terms in Section 1 below.
R E C I T A L S
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A. Borrowers and FINOVA entered into that certain Second Amended and Restated
Loan Agreement dated as of February 24, 1998 (as amended through the date
hereof, the "Existing Loan Agreement"), pursuant to which FINOVA, among other
things, made certain loans and other financial accommodations to Borrowers
subject to the terms and conditions therein set forth.
B. Borrowers and FINOVA desire to amend the Existing Loan Agreement and other
Loan Instruments in certain respects, subject to the terms and conditions herein
set forth, including, without limitation, to provide for an addition term loan
to Borrowers in an amount not to exceed $40,000,000, the proceeds of which shall
be used solely to (i) consummate the Thoroughbred Acquisition and (ii) pay
related transaction costs.
NOW, THEREFORE, in consideration of the foregoing and other mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, and subject to the terms and
conditions hereof, Borrowers and FINOVA agree as follows:
1. Definitions. All capitalized terms used but not elsewhere defined herein
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shall have the respective meanings ascribed to such terms in the Existing Loan
Agreement, as amended by this First Amendment.
2. Amendments to the Existing Loan Agreement. The Existing Loan Agreement is
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amended as set forth below:
(i) Section 1.1 - Substituted Definition. Section 1.1 of the Existing
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Loan Agreement hereby is amended by (a) deleting the definitions of
Contingent Obligation Payment, COP Base Amount, COP Calculation Date, COP
Default Event, COP Market Value, COP Maturity Payment Date, Market Event,
Market Refinancing Event and Multiplier and (b) substituting the following
definitions in lieu of the current version of such definitions:
Acquisition Loan: the loan in the aggregate amount of $19,997,113.43,
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the proceeds of which are to be used solely for Permitted Acquisitions
and to pay related transaction costs and, with respect only to the
Acquisition Loan Working Capital Advance, for working capital purposes.
Borrowers: collectively, InfoCure, Rovak, CCI Acquisition, Inc.,
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Polci, HCD, KComp, SoftEasy, DR Software, Xxxxxxx-Xxxxx, ICS, OPMS,
Pace, MD Acquisition, Inc., MSI, Thoroughbred Acquisition, Inc., each
Acquisition Subsidiary and any Target Acquired by InfoCure pursuant
to an Equity Acquisition.
Default Rate: (i) with respect to the Term Loan and the Convertible
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Bridge Loan, a rate equal to fourteen and one-half percent (14.5%)
per annum, (ii) with respect to the Acquisition Loan, a rate equal
to the Base Rate, plus the Applicable Margin then in effect, plus
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five percent (5.0%) per annum and (iii) with respect to any other
amounts which may be owing by Borrowers to FINOVA pursuant to this
Loan Agreement, the other Loan Instruments or otherwise, a rate equal
to the greater of (i) and (ii) of this definition.
Existing Acquisition Instruments: collectively, (i) the Micro-
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Software Acquisition Instruments, (ii) the SoftEasy Acquisition
Instruments, (iii) the Commercial Acquisition Instruments, (iv) the
OPMS Acquisition Instruments, (v) the Pace Acquisition Instruments
and (vi) the Polci Acquisition Instruments.
Fiscal Year: shall mean the fiscal year of Borrowers for financial
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accounting purposes, which fiscal year ends on December 31.
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Instruments: collectively, (i) the Loan Instruments, (ii) the
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Acquisition Instruments, (iii) the Existing Acquisition Instruments,
(iv) the KComp Notes, (v) the Commercial Subordinated Note, (vi) the
Polci Subordinated Note, (vii) the Thoroughbred Acquisition
Instruments, (viii) the FINOVA Warrants and (ix) each subordination
agreement executed and delivered in connection with the transactions
contemplated by the Loan Instruments.
Loan Agreement: this Second Amended and Restated Loan Agreement, as
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amended by the First Amendment, and any amendments, modifications or
supplements thereto or hereto.
Loan Instruments: collectively, (i) the Initial Loan Instruments,
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(ii) the Existing Loan Instruments and (iii) the Acquisition Loan
Instruments, including, without limitation, the Acquisition Loan
Instruments executed and delivered in connection with the Micro-
Software Acquisition and the Thoroughbred Acquisition.
Loans: collectively, the Term Loan, the Convertible Bridge Loan and
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the Acquisition Loan.
Notes: collectively, the Term Note, the Convertible Bridge Loan
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Note and the Acquisition Loan Note.
Polci: Professional On-Line Computer, Inc., a Michigan corporation.
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Prepayment Premium: as defined in subsection 2.6.1(b)(i).
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(ii) Section 1.1 - Additional Definitions. Section 1.1 of the Existing
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Loan Agreement hereby is amended by adding the following definitions
thereto in the appropriate alphabetical order:
Acquisition Loan Working Capital Advance: a one-time Advance of the
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Acquisition Loan in an amount equal to $1,000,000 to be made by FINOVA
to Borrowers on the First Amendment Closing Date.
Commitment Letter: that certain commitment letter dated as of
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September 27, 1998 among FINOVA and Borrowers.
Conversion Prepayment: as defined in subsection 2.6.2(c).
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Convertible Bridge Loan: the term loan in the aggregate amount of
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$40,000,000 to be made by FINOVA to Borrowers pursuant to subsection
2.1.3 of this Loan Agreement.
Convertible Bridge Loan Note: a promissory note in the principal
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amount of $40,000,000 executed and delivered by Borrowers to FINOVA to
evidence the Convertible Bridge Loan, and any notes issued in substitution
thereof pursuant to the terms of this Loan Agreement, in each case in form
and substance satisfactory to FINOVA.
Facility: as defined in subsection 2.6.1(b)(iii).
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FINOVA Warrants: collectively, (i) that certain Warrant dated as of
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the First Amendment Closing Date issued by InfoCure for the benefit of
FINOVA to acquire 225,000 shares of common stock of InfoCure and (ii) that
certain Warrant dated as of the Initial CBL Maturity Date issued by
InfoCure for the benefit of FINOVA to acquire 25,000 shares of common stock
of InfoCure, provided, however, that the Warrant described in clause (ii)
of this definition shall only be issued by InfoCure in the event the entire
Principal Balance of the Convertible Bridge Loan and interest thereon shall
not have been repaid in full on or before the Initial CBL Maturity Date.
First Amendment: that certain First Amendment to Loan Instruments
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dated as of the First Amendment Closing Date among Borrowers and FINOVA.
First Amendment Closing Date: October 23, 1998.
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First Amendment Capital Fee: as defined in Section 2.8.
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Initial CBL Maturity Date: January 21, 1999.
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MSI: Medical Software Integrators, Inc., a Georgia corporation.
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Offering: the first underwritten public offering of InfoCure common
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stock pursuant to an effective registration statement under the Securities
Act consummated after the First Amendment Closing Date.
Permitted Acquisitions: an Acquisition funded in whole or in part
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with the proceeds of an Advance of the Acquisition Loan and, for the
purposes of the definition of "Acquisition Loan Instruments," the
Thoroughbred Acquisition.
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Xxxxxxxx Company: The Xxxxxxxx and Xxxxxxxx Company, Inc., an Ohio
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corporation.
Xxxxxxxx Holdings: Xxxxxxxx and Xxxxxxxx Holdings, Inc., an Ohio
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corporation.
Success Fee: as defined in Section 2.11.
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Third Party Loan: as defined in subsection 2.6.1(b)(iii).
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Third Party Refinancing: as defined in subsection 2.6.1(b)(iii).
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Thoroughbred Acquisition: the acquisition by Thoroughbred Acquisition,
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Inc. of the Property to be sold to Thoroughbred Acquisition, Inc.
pursuant to the Thoroughbred Acquisition Instruments.
Thoroughbred Acquisition, Inc.: Thoroughbred Acquisition, Inc., a
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Georgia corporation.
Thoroughbred Acquisition Instruments: collectively, the Thoroughbred
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Company Asset Purchase Agreement, the Thoroughbred Holdings Asset
Purchase Agreement, all agreements, documents and instruments executed
pursuant thereto and any other agreements, documents and instruments
executed by or delivered in connection with the Thoroughbred Acquisition.
Thoroughbred Company Asset Purchase Agreement: that certain Asset
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Purchase Agreement dated as of October 23, 1998 among Thoroughbred
Acquisition, Inc., InfoCure and Xxxxxxxx Company, together with all
schedules, exhibits and other attachments thereto.
Thoroughbred Holdings Asset Purchase Agreement: that certain Asset
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Purchase Agreement dated as of September 28, 1998 among Thoroughbred
Acquisition, Inc., InfoCure and Xxxxxxxx Holdings, together with all
schedules, exhibits and other attachments thereto.
Thoroughbred Assignment of Acquisition Instruments: that certain
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assignment of the Thoroughbred Acquisition Instruments from
Thoroughbred Acquisition, Inc. to FINOVA, in form and substance
satisfactory to FINOVA.
Thoroughbred Pay-Off Letters: a pay-off letter from each holder of
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existing indebtedness secured by a Lien on the Property to be sold to
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Thoroughbred Acquisition, Inc. pursuant to the Thoroughbred
Acquisition Instruments, in form and substance satisfactory to FINOVA.
Thoroughbred Sellers: collectively, Xxxxxxxx Company and Xxxxxxxx
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Holdings.
Thoroughbred Subordinated Note: that certain Convertible Promissory
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Note dated as of the First Amendment Closing Date in the original principal
amount of $10,000,000 made by InfoCure payable to the order of
Xxxxxxxx Holdings.
Thoroughbred Subordination Agreement: that certain Subordination
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Agreement dated as of the First Amendment Closing Date between Xxxxxxxx
Holdings and FINOVA.
(iii) Section 2.1. Section 2.1 of the Existing Loan Agreement is amended
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by adding the following subsection 2.1.3 thereto in
the appropriate numerical order:
"2.1.3 Convertible Bridge Loan. The Convertible Bridge
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Loan shall consist of a term loan from FINOVA to Borrowers in the
aggregate amount of $40,000,000. FINOVA shall disburse the proceeds
of the Convertible Bridge Loan to or as directed by Borrowers when
all of the terms and conditions set forth in Paragraph 3 of the
First Amendment have been satisfied."
(iv) Subsection 2.1.1. Subsection 2.1.1 of the Existing Loan Agreement
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is amended by adding the following sentence to the end of such subsection:
"Borrowers agree and acknowledge that on the First Amendment Closing
Date,the Principal Balance of the Term Loan shall be equal to $8,433,271.11."
(v) Subsection 2.1.2. Subsection 2.1.2 of the Existing Loan Agreement
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is deleted in its entirety and the following is substituted in lieu thereof:
"2.1.2 Advances of the Acquisition Loan. Borrowers agree and
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acknowledge that on the First Amendment Closing Date, after giving effect
to the making of the Acquisition Loan Working Capital Advance, the
Acquisition Loan shall be deemed to have been fully disbursed and, on such
date, the Principal Balance of the Acquisition Loan shall be equal to
$19,997,113.43, such amount constituting (i) the outstanding Principal
Balance of the Acquisition Loan as of the First Amendment Closing Date
without giving effect to the making of the Acquisition Loan Working Capital
Advance ($18,997,113.43), plus (ii) the
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Acquisition Loan Working Capital Advance to be disbursed on the First
Amendment Closing Date in an amount equal to $1,000,000. FINOVA shall have
no obligation to make Advances of the Acquisition Loan on or after the
First Amendment Closing Date (except for the Acquisition Loan Working
Capital Advance to be made on the First Amendment Closing Date, the
proceeds of which shall be disbursed by FINOVA to or as directed by
Borrowers when all of the terms and conditions set forth in Paragraph 3 of
the First Amendment have been satisfied)."
(vi) Section 2.2. Section 2.2 of the Existing Loan Agreement is deleted
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in its entirety and the following is substituted in lieu thereof:
"2.2 Use of Proceeds, Notes and Reborrowing.
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2.2.1 Use of Proceeds. The proceeds of the Term Loan and the
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Acquisition Loan shall be used solely for Permitted Acquisitions and
to pay related transaction costs; provided that the proceeds of the
Acquisition Loan Working Capital Advance shall be used solely for
working capital purposes. The proceeds of the Convertible Bridge
Loan shall be used solely for the Thoroughbred Acquisition and to
pay related transaction costs.
2.2.2 Notes. The Term Loan, the Convertible Bridge Loan and
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the Acquisition Loan shall be evidenced by the Term Note, the
Convertible Bridge Loan Note and the Acquisition Loan Note,
respectively.
2.2.3 Reborrowing. Borrowers may not reborrow all or any
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portion of the Loans which is repaid or prepaid."
(vii) Subsection 2.3.1. Clause (i) contained in the first sentence of
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Section 2.3.1 of the Existing Loan Agreement is amended by adding the phrase
"and the Convertible Bridge Loan" after the phrase "Term Loan" therein
contained. Subsection 2.3.1 of the Existing Loan Agreement further is amended
by deleting the last sentence of such subsection and substituting the
following in lieu thereof:
"Interest shall be payable monthly in arrears on the first Business
Day of each month commencing with the first month following the month in
which the Original Closing Date occurs; provided, however, that after the
First Amendment Closing Date, interest shall be payable quarterly in
arrears on the first Business Day of each quarter commencing with the first
quarter following the quarter in which the First Amendment Closing Date
occurs."
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(viii) Subsection 2.3.2. Subsection 2.3.2 of the Existing Loan Agreement
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is deleted in its entirety and the following is substituted in lieu thereof:
"2.3.2 Default Rate. During a Default Rate Period, Borrowers'
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Obligations shall bear interest at the applicable Default Rate."
(ix) Subsection 2.4.1. Subsection 2.4.1 of the Existing Loan Agreement
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is deleted in its entirety and the following is substituted in lieu thereof:
"2.4.1 Term Loan. The Principal Balance of the Term Loan after
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the First Amendment Closing Date shall be payable by Borrowers, jointly and
severally, in sixteen (16) consecutive quarterly installments on the first
Business Day of each quarter commencing with the first Business Day of
January, 1999. Each of the first fifteen (15) installments shall be in the
amount of $527,079.44, and the last installment shall be in the amount of
the then remaining Principal Balance of the Term Loan."
(x) Subsection 2.4.2. Subsection 2.4.2 of the Existing Loan Agreement
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is deleted in its entirety and the following is substituted in lieu thereof:
"2.4.2 Acquisition Loan. The Principal Balance of the Acquisition
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Loan after the First Amendment Closing Date shall be payable by Borrowers,
jointly and severally, in sixteen (16) consecutive quarterly installments
on the first Business Day of each quarter commencing with the first
Business Day of January, 1999. Each of the first fifteen (15) installments
shall be in the amount of $1,249,819.58, and the last installment shall be
in the amount of the then remaining Principal Balance of the Acquisition
Loan."
(xi) Subsection 2.4.3. Subsection 2.4.3 of the Existing Loan Agreement is
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deleted in its entirety and the following is substituted in lieu thereof:
"2.4.3 Convertible Bridge Loan. The Principal Balance of the
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Convertible Bridge Loan shall be due and payable on the Initial CBL
Maturity Date; provided, however, in the event InfoCure shall not have
consummated an Offering on or before the Initial CBL Maturity Date the net
proceeds of which shall have been sufficient to repay in full the Principal
Balance of the Convertible Bridge Loan on the Initial CBL Maturity Date in
accordance with subsection 2.6.2(b), then the Principal Balance of the
Convertible Bridge Loan (after giving effect to any repayments thereof
required to be made under subsection 2.6.2(b) and subsection 2.6.2(c))
shall be payable in fifteen (15) consecutive quarterly installments on the
first Business Day of each quarter commencing with the first Business Day
of the quarter immediately succeeding the quarter in which the
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Initial CBL Maturity Date occurs. Each such installment shall be in an
amount equal to the applicable percentage of the Principal Balance of the
Convertible Bridge Loan on the Initial CBL Maturity Date (after giving
effect to any repayments thereof required to be made under subsection
2.6.2(b) and subsection 2.6.2(c)) as set forth below:
Installment Percentage
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1 through 4 2.5%
5 through 12 5.0%
13 through 14 10.0%
15 Then Remaining
Principal Balance"
(xii) Section 2.4. Section 2.4 of the Existing Loan Agreement is amended
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by adding the following subsection 2.4.4 to such Section 2.4 in the
appropriate numerical order:
"2.4.4 Final Payments. Notwithstanding anything contained in
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Section 2.4 to the contrary, the then remaining Principal Balance of the
Loans, if any, and any other sums which then are due and payable pursuant
to the terms of the Loan Instruments, shall be due and payable on October
28, 2002."
(xiii) Subsection 2.6.1(b). Subsection 2.6.1(b) of the Existing Loan
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Agreement is deleted in its entirety and the following is substituted in
lieu thereof:
"(b) Prepayment Premium.
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(i) Subject to clause (ii) and (iii) of this subsection
2.6.1(b), any prepayment of the Principal Balance (other than a
prepayment made pursuant to subsection 2.6.2(a) and subsection
2.6.2(c)) shall be accompanied by a payment (a "Prepayment Premium")
of (i) three percent (3%) of the amount so prepaid if prepaid during
the first Loan Year, (ii) two percent (2%) of the amount so prepaid
if prepaid during the second Loan Year; and (iii) one percent (1%)
of the amount so prepaid if prepaid during the third, fourth or
fifth Loan Year.
(ii) In the event any portion or portions of the Principal
Balance of the Convertible Bridge Loan shall have been repaid or
prepaid (a) at any time or from time to time on or before the one
hundred eightieth (180th) day after the Initial CBL Maturity Date
with the proceeds of an Offering or any other equity offering by
InfoCure of its capital stock or (b) pursuant
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to subsection 2.6.2(c), the amount so prepaid shall not be subject
to a Prepayment Premium or Make Whole Premium.
(iii) In the event the Principal Balance of the Convertible
Bridge Loan and interest thereon shall have been repaid or prepaid
in full with the proceeds of an Offering or any other equity
offering by InfoCure of its capital stock and the then outstanding
Borrowers' Obligations subsequently are prepaid and performed in
full during any of the first three Loan Years with the proceeds of
any refinancing made by any financial institution other than FINOVA
(a "Third Party Refinancing"), then the Prepayment Premium
applicable thereto shall be equal to (i) one and three-quarters
percent (1.75%) of the amount so prepaid if prepaid during the first
Loan Year, (ii) one and one-quarter percent (1.25%) of the amount so
prepaid if prepaid during the second Loan Year; and (iii) one
percent (1.00%) of the amount so prepaid if prepaid during the third
Loan Year, provided that each of the following conditions shall have
been satisfied in connection with such Third Party Refinancing:
(A) the Acquisition Loan shall have been fully
disbursed;
(B) Borrowers shall have requested in writing from
FINOVA a total credit facility in the aggregate amount of
$75,000,000 (the "Facility"), a portion of the proceeds of
which would be used to pay and perform in full Borrowers'
Obligations, and Borrowers and FINOVA shall have been unable
to agree on the other material terms and conditions of such
Facility;
(C) Borrowers and a financial institution other than
FINOVA shall have agreed on the material terms and conditions
of a loan or credit facility the aggregate amount of which
shall be equal to $75,000,000 (the "Third Party Loan"), and
Borrowers shall have notified FINOVA in writing of such terms
and conditions;
(D) FINOVA shall have failed to notify Borrowers
within twenty (20) Business Days after the date of such
notification that FINOVA has elected to make the Facility
available to Borrowers on terms and conditions substantially
similar to those so presented with respect to the Third Party
Loan; and
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(E) within sixty (60) days after the expiration of the
twenty (20) Business Day period referred to in (D) of this
clause (iii), the Loans and all other Borrowers' Obligations
(including, without limitation, the Contingent Obligation
Payment pursuant to Section 2.11, if applicable) shall have
been paid in full with the proceeds (or a portion thereof) of
such Third Party Loan provided by such other financial
institution, and such Third Party Loan shall have been on the
same terms and conditions (or more favorable terms and
conditions to Borrowers) presented to FINOVA pursuant to (C)
of this clause (iii)."
(xiv) Subsection 2.6.1(e). Subsection 2.6.1(e) of the Existing Loan
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Agreement is deleted in its entirety and the following is substituted in lieu
thereof:
"(e) Make Whole Premium. In addition to the premiums calculated
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pursuant to (b) above, and subject to subsection 2.6.1(b)(ii), any
prepayment of the Term Loan or the Convertible Bridge Loan (including,
without limitation, any prepayment made pursuant to subsection 2.6.2(a))
shall be accompanied by a payment equal to the Make Whole Premium
applicable thereto. The following definitions shall apply in calculating
the Make Whole Premium:
(i) "Make Whole Premium" means the positive difference,
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if any, between (A) the Discounted Value immediately prior to any
prepayment of that portion of the Principal Balance of the
applicable Loan which is being prepaid and (B) the Principal Balance
of the applicable Loan, or portion thereof, being prepaid as of the
date of any such prepayment.
(ii) "Discounted Value" means the amount determined by
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discounting the Remaining Scheduled Payment Amounts from their
respective due dates to the date of the prepayment of the applicable
Loan at a discount factor equal to the Reinvestment Yield.
(iii) "Remaining Scheduled Payment Amount" means the
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amount of each scheduled payment of the Principal Balance of and
interest on the applicable Loan that would be due on or after the
date of a prepayment of the applicable Loan if no prepayment of the
applicable Loan were made prior to its scheduled due date.
(iv) "Reinvestment Yield" means the sum of (A) the rates
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shown under the column heading "Ask YLD" for "Govt. Bonds & Notes"
in the "Treasury Bonds, Notes & Bills" section of The Wall Street
Journal,
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Western Edition, published on the Business Day prior to the date of
any proposed prepayment of the applicable Loan for the government
bond or note with a maturity date having the closest matching
maturity to the applicable Weighted Average Life to Maturity, or, if
there is more than one government bond or note with a maturity date
having the closest matching maturity to the applicable Weighted
Average Life to Maturity, the highest of the rates shown in the "Ask
YLD" column for any such bond or note, plus (B) two percent (2%).
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(v) "Weighted Average Life to Maturity" means the number
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of years (calculated to the nearest one-twelfth year) obtained by
dividing (A) the sum of the products obtained by multiplying each
remaining scheduled payment of principal under the applicable Loan
by the number of years (calculated to the nearest one-twelfth) which
will elapse between the date of a prepayment of the applicable Loan
and the scheduled due date of such remaining scheduled principal
payments, by (B) the outstanding Principal Balance of the applicable
Loan on such prepayment date prior to giving effect to any such
prepayment."
(xv) Subsection 2.6.2. Subsection 2.6.2 of the Existing Loan Agreement
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is deleted in its entirety and the following is substituted in lieu thereof:
"2.6.2 Mandatory Prepayment.
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(a) Excess Cash Flow Payments. Until Borrowers' Obligations
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are paid and performed in full, for each Fiscal Year of Borrowers
commencing with the Fiscal Year of Borrowers ending January 31, 1999,
Borrowers shall pay to FINOVA an amount equal to twenty-five percent
(25%) of the Excess Cash Flow for such Fiscal Year. Each such payment
shall be made within thirty (30) days after the date that Borrowers
are required to deliver to FINOVA the financial statements for such
Fiscal Year pursuant to subsection 6.3.3. Each Borrower agrees that
it will not take any actions primarily intended to decrease the amount
payable under this subsection 2.6.2(a) in anticipation of the
calculation referred to herein.
(b) If InfoCure shall consummate an Offering at any time and
from time to time, then, to the extent the Principal Balance of the
Convertible Bridge Loan and interest thereon shall not have been paid
and otherwise performed in full, Borrowers shall pay to FINOVA an
amount equal to the lesser of (i) the aggregate net proceeds of such
Offering and (ii) an amount necessary to repay in full the then
Principal Balance of the Convertible Bridge Loan and any accrued and
unpaid interest thereon after giving effect to the provisions of the
immediately
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succeeding sentence. Any prepayments made pursuant to this subsection
2.6.2(b) shall be applied in the following order of priority to the
payment of: (i) any and all sums which are due and payable pursuant to
the terms of the Loan Instruments, except the Principal Balance and
accrued and unpaid interest thereon but specifically including the
Success Fee and the First Amendment Closing Fee, as applicable, (ii)
accrued and unpaid interest on the portion of the Principal Balance
being prepaid, (iii) any other accrued and unpaid interest which is
unpaid and (iv) the Principal Balance of the Convertible Bridge Loan.
(c) In the event the Convertible Bridge Loan shall not have
been paid and performed in full on the Initial CBL Maturity Day
pursuant to subsection 2.6.2(b), then, upon the request of FINOVA at
any time after the Initial CBL Maturity Date (but in no event later
than the one hundred twentieth (120th) day after the Initial CBL
Maturity Date), Borrowers shall pay to FINOVA on demand an amount
equal to $10,000,000 (the "Conversion Prepayment") with cash on hand
and/or the proceeds of an equity line provided to InfoCure by Crescent
International Limited or any other substitute equity funding source
and the terms of any such equity line and the contributions made to
InfoCure pursuant thereto shall not violate any of the terms of this
Loan Agreement. Any prepayments made pursuant to this subsection
2.6.2(c) shall be applied in the following order of priority to the
payment of (i) the Principal Balance of the Convertible Bridge Loan
and (ii) to the payment of Borrowers' Obligations in such manner as
FINOVA shall determine in its sole and absolute discretion.
(d) Concurrently with any payment of the Principal Balance
received by FINOVA resulting from the exercise by FINOVA of any remedy
available to FINOVA subsequent to the occurrence of an Event of
Default and the acceleration of Borrowers' Obligations, Borrowers
jointly and severally shall pay to FINOVA a prepayment premium in an
amount equal to the prepayment premium which would be payable if such
payment was made pursuant to subsection 2.6.1.
(e) Prepayments received by FINOVA pursuant to this subsection
2.6.2 (except subsection 2.6.2(b) and subsection 2.6.2(c)) shall be
applied in the following order of priority to the payment of: (i) any
and all sums which are due and payable pursuant to the terms of the
Loan Instruments, except the Principal Balance and accrued and unpaid
interest thereon but specifically including the Contingent Obligation
Payment and the First Amendment Closing Fee, as applicable, (ii)
accrued and unpaid interest on the portion of the Principal Balance
being prepaid, (iii) any other accrued and unpaid interest which is
unpaid and (iv) the installments of the Principal Balance in
accordance with subsection 2.6.1(d)."
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(xvi) Section 2.8. Section 2.8 of the Existing Loan Agreement is
-----------
deleted in its entirety and the following is substituted in lieu thereof:
"2.8 First Amendment Capital Fee. Borrowers shall pay to FINOVA
---------------------------
a capital fee of $500,000 (the "First Amendment Capital Fee") on the
earlier to occur of (i) the date on which an Offering shall have been
consummated and (ii) December 15, 1998. The First Amendment Capital Fee
shall be (i) deemed fully earned as of the date of the Commitment Letter,
(ii) made in Good Funds via Federal wire transfer to the account designated
by FINOVA in Section 2.12 (or such other account as designated by FINOVA in
writing) and (iii) in addition to any loan or similar fee paid to FINOVA by
Borrowers pursuant to the Existing Amended and Restated Loan Agreement or
otherwise, including, without limitation, the Success Fee."
(xvii) Section 2.9. Section 2.9 of the Existing Loan Agreement is deleted
-----------
in its entirety.
(xviii) Section 2.11. Section 2.11 of the Existing Loan Agreement is
------------
deleted in its entirety and the following is substituted in lieu thereof:
"2.11 Success Fee. Borrowers shall pay to FINOVA a success fee
-----------
of $2,000,000 (the "Success Fee") on the earlier to occur of (i) the date
on which an Offering shall have been consummated and (ii) December 15,
1998. The Success Fee shall be (i) deemed fully earned as of the date of
the Commitment Letter, (ii) made in Good Funds via Federal wire transfer to
the account designated by FINOVA in Section 2.12 (or such other account as
designated by FINOVA in writing) and (iii) in addition to any loan or
similar fee paid to FINOVA by Borrowers pursuant to the Existing Amended
and Restated Loan Agreement or otherwise, including, without limitation,
the First Amendment Closing Fee."
(xix) Section 5.3. Section 5.3 of the Existing Loan Agreement is amended
-----------
by adding the following subsection 5.3.3 to such Section 5.3 in the
appropriate numerical order:
"5.3.3 FINOVA Warrants.
---------------
(a) Authority. InfoCure has full corporate power and
---------
authority to execute and deliver each FINOVA Warrant and to
perform all of its obligations thereunder, and the execution,
delivery and performance thereof have been duly authorized by all
necessary corporation action on its part. Each FINOVA Warrant
has been duly executed on behalf of
14
InfoCure and constitutes the legal, valid and binding obligation
of InfoCure, enforceable in accordance with its terms.
(b) No Legal Bar. The execution, delivery and performance
------------
of each FINOVA Warrant will not (a) conflict with or result in a
violation of the articles or certificate of incorporation or
bylaws of InfoCure, (b) conflict with or result in a violation of
any law, statute, regulation, order or decree applicable to
InfoCure or any Affiliate of InfoCure, (c) require any consent or
authorization or filing with, or other act by or in respect of,
any governmental authority or body or (d) result in a reach of,
constitute a default under or constitute an event creating rights
of acceleration, termination or cancellation under any mortgage,
lease, contract, franchise, instrument or other agreement to
which InfoCure is a party or by which it is or its assets are
bound. Each FINOVA Warrant has been issued in compliance with
all applicable federal and state laws, rules and regulations,
including, without limitation, all so-called "Blue-Sky" laws.
(c) Validity of Shares. When issued upon the exercise of
------------------
the FINOVA Warrants as contemplated therein, shares of common
stock of InfoCure will have been validly issued and will be fully
paid and nonassessable and shall have been issued and sold in
compliance with all applicable federal and state laws, rules and
regulations, including, without limitation, all so-called "Blue-
Sky" laws."
(xx) Section 5.22. Section 5.22 of the Existing Loan Agreement is
------------
deleted in its entirety and the following is substituted in lieu thereof:
"5.22 Subsidiaries. As of the First Amendment Closing Date, (i)
------------
InfoCure has no subsidiaries other than Rovak, CCI Acquisition, Inc.,
Polci, HCD, KComp, SoftEasy, DR Software, Xxxxxxx-Xxxxx, ICS, OPMS, Pace,
MD Acquisition, Inc., MSI and Thoroughbred Acquisition, Inc. and (ii) no
Borrower (other than InfoCure) has any subsidiaries."
(xxi) Section 5.23. Section 5.23 of the Existing Loan Agreement is
------------
deleted in its entirety and the following is substituted in lieu thereof:
"5.23 Representations as to Acquisition Instruments. To the
---------------------------------------------
best knowledge of Borrowers, the representations and warranties made by the
Polci Seller, the SoftEasy Seller, the Commercial Seller, the Micro-
Software Seller, the Thoroughbred Sellers, the sellers under the Pace
Acquisition Instruments and the OPMS Acquisition Instruments and the
sellers under any other Acquisition Instruments to which any Borrower is a
party pursuant to the Polci Acquisition
15
Instruments, the SoftEasy Acquisition Instruments, the Commercial
Acquisition Instruments, the Micro-Software Acquisition Instruments, the
Thoroughbred Acquisition Instruments, the Pace Acquisition Instruments, the
OPMS Acquisition Instruments and such other Acquisition Instruments, as
applicable, are true and correct and no default exists thereunder."
(xxii) Article VI. Article VI of the Existing Loan Agreement is amended
----------
amended by adding the following Section 6.15 to such Article VI in the
appropriate numerical order:
"6.15 Syndication. If the Principal Balance of the Convertible
-----------
Bridge Loan and interest thereon shall not have been paid and otherwise
satisfied in full on or before the Initial CBL Maturity Date, (i) FINOVA
shall have the right at any time to sell, assign, transfer any portion of
its loan position to one or more lenders or otherwise syndicate the
transaction, (ii) in connection with any such sale, assignment, transfer or
syndication, FINOVA shall have the right to disclose to such prospective
lender(s) any and all information regarding or relating to Borrowers, the
transactions contemplated by this Loan Agreement and the other Instruments
which has now or may hereafter be provided to or obtained by FINOVA and
(iii) until successful completion of the initial syndication of the Loans,
in the event such initial syndication of the Loans by FINOVA shall prove to
be impracticable, Borrowers agree to restructure the credit facilities
evidenced by this Loan Agreement and the other Loan Instruments, which
restructuring may include a restructuring of the interest rates and other
lender compensation for Borrowers' Obligations, so as to make syndication
of the Loans reasonably practicable. In connection with any such sale,
assignment, transfer or syndication contemplated by this Section 6.15,
Borrowers agree and acknowledge that (i) FINOVA and Borrowers will be
required to re-document the transactions contemplated by this Loan
Agreement and the other Loan Instruments, which re-documentation shall
contain such terms, agreements, provisions, covenants, representations and
warranties customarily contained in FINOVA syndicated transactions, and
(ii) the costs, fees (including attorneys' fees and expenses),
disbursements and expenses for any such re-documentation shall be borne
solely by Borrowers."
(xxiii) Section 7.1. Section 7.1 of the Existing Loan Agreement is
-----------
deleted in its entirety and the following is substituted in lieu thereof:
"7.1 Borrowing. Create, incur, assume or suffer to exist any
---------
liability for Indebtedness for Borrowed Money except (i) Borrowers'
Obligations, (ii) Permitted Senior Indebtedness, (iii) Indebtedness
for Borrowed Money evidenced by the KComp Notes, (iv) Indebtedness
for Borrowed Money evidenced by the
16
Commercial Subordinated Note, (v) Indebtedness for Borrowed Money
evidenced by the Polci Subordinated Note, (vi) Indebtedness for
Borrowed Money evidenced by the Thoroughbred Subordinated Note and
(vii) unsecured inter-company loans by any Borrower to any other
Borrower, provided that the obligations of each obligor of such
Indebtedness shall: (A) be evidenced by promissory notes which shall
have been pledged to FINOVA as security for Borrowers' Obligations,
(B) if required by FINOVA, be subordinated in right of payment to
Borrowers' Obligations on terms and conditions acceptable to FINOVA
and (C) have such other terms and provisions as FINOVA reasonably may
require."
(xxiv) Section 7.3. Section 7.3 of the Existing Loan Agreement is
-----------
amended by (a) inserting a comma after the word "Acquisitions" contained in
clause (i) thereof, (b) deleting the symbol "(ii)" in the third line of such
section and substituting the symbol "(iii)" in lieu thereof and (c) adding the
following clause (ii) thereto in the appropriate numerical order:
"(ii) the Thoroughbred Acquisition and"
(xxv) Section 7.6. Section 7.6 of the Existing Loan Agreement is
-----------
deleted in its entirety and the following is substituted in lieu thereof:
"7.6 Capital Expenditures. Make or incur any Capital
--------------------
Expenditures (other than Permitted Acquisitions, the Thoroughbred
Acquisition and payments made by any Borrower in connection with the
development of computer software in connection with the business of such
Borrower) in any year if the aggregate amount of Capital Expenditures for
all Borrowers for such year would exceed $2,500,000."
(xxvi) Section 7.7. Section 7.7 of the Existing Loan Agreement is deleted
-----------
in its entirety and the following is substituted in lieu thereof:
"7.7 Payments of Indebtedness for Borrowed Money. Make any
-------------------------------------------
payment or prepayment, whether voluntary, mandatory or optional, of any
Indebtedness for Borrowed Money other than (i) Borrowers' Obligations, (ii)
regularly scheduled payments of Permitted Senior Indebtedness, (iii) KComp
may make regularly scheduled payments of interest and principal of the
Indebtedness for Borrowed Money evidenced by the KComp Notes, provided that
no Event of Default or Incipient Default exists or would be created by the
making
17
of any such payment, (iv) without duplication, InfoCure and CCI
Acquisition, Inc. may make regularly scheduled payments or interest and
principal of the Indebtedness for Borrowed Money evidenced by the
Commercial Subordinated Note, provided that no Event of Default or
Incipient Default exists or would be created by the making of any such
payment, (v) without duplication, InfoCure and Polci may make regularly
scheduled payments of interest and principal of the Indebtedness for
Borrowed Money evidenced by the Polci Subordinated Note, provided that no
Event of Default or Incipient Default exists or would be created by the
making of any such payment, and (vi) InfoCure may make regularly scheduled
payments of interest and principal of the Indebtedness for Borrowed Money
evidenced by the Thoroughbred Subordinated Note to the extent permitted
under, and in accordance with, the terms of the Thoroughbred Subordination
Agreement."
(xxvii) Section 7.12. Section 7.12 of the Existing Loan Agreement
------------
is deleted in its entirety and the following is substituted in lieu thereof:
"7.12 Amendment of Documents. Amend or modify (i) its articles
----------------------
of incorporation except (A) if required by law or (B) InfoCure may amend
its articles of incorporation in connection with the issuance of additional
capital stock permitted under Section 7.14, (ii) any of the KComp Notes,
(iii) the Commercial Subordinated Note, (iv) the Polci Note, (v) any of the
Existing Acquisition Instruments, (vi) any of the Thoroughbred Acquisition
Instruments, (vii) the Thoroughbred Subordinated Note, (viii) the FINOVA
Warrants (except as permitted under the terms thereof) or (ix) any
Acquisition Instruments."
(xxviii) Section 7.14. Section 7.14 of the Existing Loan Agreement is
------------
deleted in its entirety and the following is substituted in lieu thereof:
"7.14 Issuance of Capital Stock or other Similar Interests.
----------------------------------------------------
Issue or sell, permit to be issued or sold, or otherwise consent to the
transfer of, any additional capital stock or equity interests or any
interests convertible into or exercisable for any such capital stock or
additional equity interests, except (i) the FINOVA Warrants and issuances
of shares of capital stock of InfoCure pursuant to the terms thereof, (ii)
the issuance of capital stock of InfoCure, provided that InfoCure shall not
be required to pay dividends, redeem such capital stock or make other
distributions with respect thereto except as permitted under Section 7.5
and (iii) the convertible rights granted pursuant to the Commercial Long-
Term Subordinated Note."
(xxix) Subsection 8.1.4. Subsection 8.1.4 of the Existing Loan
----------------
Agreement is amended by deleting clause (iii) of such subsection 8.1.4 and
substituting the following in lieu thereof:
"(iii) any Borrower at any time shall be in default under any of
the KComp Notes, the Commercial Subordinated Note, the Polci Note or the
Thoroughbred Subordinated Note."
18
(xxx) Exhibits. The Existing Loan Agreement is amended by substituting
--------
Exhibits 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 attached hereto for
Exhibits 5.3.1, 5.5.1, 5.5.2, 5.5.3, 5.5.4, 5.5.5, 5.5.8, 5.7.1, 5.7.2, 5.8,
5.12, 5.19.1 and 5.20.1 to the Existing Loan Agreement, respectively.
3. Conditions to Effectiveness. The effectiveness of this First Amendment
---------------------------
shall be subject to the satisfaction of all of the following conditions in a
manner, form and substance satisfactory to FINOVA:
(a) Representations and Warranties. On the First Amendment Closing
------------------------------
Date, all of the representations and warranties of Borrowers set forth in
the Loan Instruments, as amended hereby, shall be true and correct in all
material respects.
(b) Thoroughbred Acquisition. FINOVA shall have received evidence
------------------------
that (i) immediately upon Borrowers' receipt, or such other Person's receipt
as designated by Borrowers, of the proceeds of the Convertible Bridge Loan,
the Thoroughbred Acquisition shall be consummated in accordance with the terms
of the Thoroughbred Acquisition Instruments and as a result thereof
Thoroughbred Acquisition, Inc. shall have acquired good and marketable title
to all Property to be acquired by such Person under the Thoroughbred
Acquisition Instruments, free and clear of all Liens other than Permitted
Liens, and (ii) none of the parties to the Thoroughbred Acquisition
Instruments shall have failed to perform any obligation or covenant required
by any of the Thoroughbred Acquisition Instruments to be performed or complied
with by such Person on or before the First Amendment Closing Date.
(c) Subordination Agreements. FINOVA shall have received subordination
------------------------
agreements or reaffirmations of subordination agreement, as applicable, each
in form and substance previously approved by FINOVA, with respect to any and
all loans, management fees, dividends, distributions and other payments
payable by any Borrower to any other Person (other than holders of Permitted
Liens), including, without limitation, the Indebtedness for Borrowed Money
evidenced by (i) the KComp Notes, (ii) the Commercial Subordinated Note,
(iii) the Polci Note and (iv) the Thoroughbred Subordinated Note.
(d) Delivery of Documents. The following shall have been delivered to
---------------------
FINOVA, each duly authorized and executed and in form and substance
satisfactory to FINOVA:
(1) this First Amendment;
(2) the applicable Acquisition Loan Instruments;
19
(3) Convertible Bridge Loan Note;
(4) the Thoroughbred Subordination Agreement;
(5) the Thoroughbred Assignment of Acquisition Instruments and a
consent to the Thoroughbred Assignment of Acquisition Instruments
executed by the Thoroughbred Sellers;
(6) certified copies of the (i) Thoroughbred Acquisition Instruments
and all agreements, documents and instruments executed pursuant thereto
and in connection therewith and (ii) Licenses, License Agreements and
material Operating Agreements to be acquired by or otherwise assigned to
Thoroughbred Acquisition, Inc. pursuant to the Thoroughbred Acquisition;
(7) a Mortgage encumbering each parcel of Real Estate to be
acquired by any Borrower pursuant to the Thoroughbred Acquisition
Instruments and title policies and other related documents and
instruments required by FINOVA;
(8) a Landlord's Consent executed by the landlord under each
Lease assumed by any Borrower pursuant to the Thoroughbred Acquisition
Instruments and a certified copy of each such Lease;
(9) a notice of borrowing/disbursement request with respect to
the disbursement of the proceeds of the Convertible Bridge Loan;
(10) such evidence of Borrowers' authority to execute, deliver
and perform the obligations under this First Amendment, the Thoroughbred
Acquisition Instruments and the other agreements, documents and instruments
to be executed and delivered by Borrowers pursuant to the terms of this
First Amendment, as FINOVA reasonably may require, including but not
limited to certified copies of resolutions duly adopted by the board of
directors of each Borrower authorizing the execution and delivery of, and
performance of its obligations under, such agreements, documents and
instruments by such Borrower;
(11) Thoroughbred Pay-Off Letters;
(12) original certificates representing one hundred percent
(100%) of the issued and outstanding capital stock of Thoroughbred
Acquisition, Inc. and executed stock powers in form reasonably acceptable
to FINOVA;
20
(13) an opinion dated as of the First Amendment Closing Date from
(a) Xxxxxx, Xxxxxxx & Xxxxxx, counsel to the Borrowers, and (b) Xxxxxxx
X. Xxxxxxx, general counsel to Thoroughbred Sellers, in each case
addressed to FINOVA, in such form and covering such matters as FINOVA
reasonably shall require; and
(14) such other instruments, documents, agreements, certificates,
consents, waivers and opinions as FINOVA reasonably may request.
(e) Approvals. The approval and/or consent shall have been obtained
---------
from all Persons whose approval or consent is necessary or required to
enable Borrowers to enter into this First Amendment, the Thoroughbred
Acquisition Instruments and the agreements, documents and instruments
delivered in connection herewith and therewith and to perform their
obligations hereunder and thereunder;
(f) Security Interests. All filings of Uniform Commercial Code
------------------
financing statements and all other filings and actions necessary to perfect
and maintain the Liens granted by Borrowers under the Loan Instruments, as
amended, as first, valid and perfected Liens in the Property covered
thereby shall have been filed or taken and FINOVA shall have received such
UCC, state and federal tax Lien, pending suit, judgment and other Lien
searches as it deems necessary to confirm the foregoing and to confirm that
such Property is not subject to any other Liens except Permitted Liens.
(g) Material Adverse Change. No event shall have occurred since the
-----------------------
date on which financial statements shall have been most recently delivered
to FINOVA under the terms of the Existing Loan Agreement which has had or
reasonably could be expected to have a Material Adverse Effect.
(h) Performance; No Default. Borrowers shall have performed and
-----------------------
complied with all agreements, covenants and conditions contained in the
Loan Instruments to be performed by or complied with by Borrowers prior to
the date hereof, and no Event of Default or Incipient Default shall exist
on the First Amendment Closing Date or be created by the disbursement of
the proceeds of the Convertible Bridge Loan.
(i) Proceedings and Documents. All corporate and other proceedings in
-------------------------
connection with the execution and delivery of this First Amendment by
Borrowers shall be satisfactory to FINOVA, and FINOVA shall have received
all such counterpart originals or certified or other copies of evidence of
such as FINOVA may request.
(j) Use of Assets. FINOVA shall be satisfied that Borrowers at all
-------------
times shall be entitled to the use and quiet enjoyment of all Property
necessary for the continued ownership and operation of Borrowers' business,
including, without limitation, the use of
21
equipment, fixtures, licenses, offices and means of ingress and egress
thereto, and any easements or rights-of-way necessary to reach any
equipment or other items necessary of the operation of Borrowers' business.
(k) Insurance. At least three (3) Business Days prior to the First
---------
Amendment Closing Date Borrowers shall have delivered to FINOVA evidence
reasonably satisfactory to FINOVA that all insurance coverage required by
FINOVA is in full force and effect and all premiums then due thereon have
been paid in full.
(l) Payment of Fees and Expenses. Borrowers shall have paid all fees
----------------------------
and expenses of FINOVA incurred in connection with this First Amendment,
including, without limitation, attorneys' fees and expenses.
(m) Litigation. FINOVA shall have received from Borrowers a
----------
comprehensive disclosure of the nature, procedural status and projected
outcome of each suit, action or other proceeding or investigation that is
pending or threatened by or against any Borrower (after giving effect to
the Thoroughbred Acquisition) or against any of their respective assets as
of the First Amendment Closing Date, and such disclosure shall not set
forth any suits, proceedings or investigations which, individually or in
the aggregate, are likely to have a Material Adverse Effect.
(n) Environmental Matters. FINOVA shall have received such reports
---------------------
concerning the environmental condition of Borrowers' facilities (after
giving effect to the Thoroughbred Acquisition), the delivery and
sufficiency of which shall be in accordance with past courses of dealings
among Borrowers and FINOVA.
(o) Background and Reference Checks. FINOVA shall not have determined
-------------------------------
from any background checks which FINOVA shall have conducted that any
individual serving as an executive officer of any of the Borrowers (after
giving effect to the Thoroughbred Acquisition) shall have been convicted of
a felony based upon the commission of fraud.
(p) Financials. FINOVA shall have received copies of the audited
----------
financial statements covering the Property to be acquired by Thoroughbred
Acquisition, Inc. pursuant to the Thoroughbred Acquisition Instruments for
the fiscal years 1996 and 1997.
(q) Year 2000 Audit and Review. FINOVA shall have received (i) the
--------------------------
results of a review and assessment conducted by Borrowers of all micro-chip
computer-based applications and programs and software and other processing
capabilities owned, licensed or used by any Borrower in its business (prior
to the First Amendment Closing Date) and (ii) evidence of a plan to be
implemented by Borrowers to address any (a) potential and actual
inabilities of any such micro-chip and computer-based applications or
22
programs, software or other processing capabilities to properly perform
data-sensitive or other functions after, or in respect of dates occurring
after, December 31, 1999, including, without limitation, the uninterrupted
ability to interpret, store, transmit, receive and manipulate date on and
in relation to dates in and after the year 2000 or (b) other so called
potential or actual "Year 2000" non-compliances.
4. References.
----------
(a) From and after the First Amendment Closing Date, all references in
the Existing Loan Agreement and the other Loan Instruments to (i) the "Loan
Agreement" or such Loan Instrument shall be deemed to refer to the Existing
Loan Agreement or such Loan Instrument as amended hereby and (ii) a term
defined in the Existing Loan Agreement shall be deemed to refer to such
defined term as amended by this First Amendment.
(b) All references in the Existing Loan Agreement and the other Loan
Instruments, in each case as the same may be amended, modified, supplemented
or restated from time to time, to "Polci" or "Polci Acquisition, Inc." shall
be deemed to refer to "Professional On-Line Computer, Inc.", and all Loan
Instruments hereby are amended to reflect the name change of Polci
Acquisition, Inc. to Professional On-Line Computer, Inc.
5. Representations and Warranties. Each Borrower hereby confirms to
------------------------------
FINOVA that the representations and warranties set forth in Article V of the
Existing Loan Agreement, as amended by this First Amendment, are true and
correct in all respects as of the date hereof, and shall be deemed to be
remade as of the date hereof. Each Borrower represents and warrants to FINOVA
that (i) such Borrower has full power and authority to execute and deliver
this First Amendment and to perform such Borrower's obligations hereunder,
(ii) upon the execution and delivery hereof, this First Amendment shall be
valid, binding and enforceable upon such Borrower in accordance with its
terms, (iii) the execution and delivery of this First Amendment does not and
will not contravene, conflict with, violate or constitute a default under (A)
the articles or certificate or incorporation or bylaws of such Borrower, (B)
any of the KComp Notes, the Commercial Subordinated Note, the Polci Note, the
Thoroughbred Subordinated Note or any subordination agreement executed in
connection therewith or (C) any applicable law, rule, regulation, judgment,
decree or order or any agreement, indenture or instrument to which such
Borrower is a party or is bound or which is binding upon or applicable to all
or any portion of such Borrower's Property, (iv) no Incipient Default or Event
of Default exists or will be created by the disbursement of the proceeds of
the Convertible Bridge Loan, (v) such Borrower's Property is free and clear of
all Liens other than Permitted Liens, (vi) no Borrower has Indebtedness for
Borrowed Money except (A) Borrowers' Obligations, (B) Permitted Senior
Indebtedness and (C) Indebtedness for Borrowed Money evidenced by the KComp
Notes, the Commercial Subordinated Note, the Polci Note and the Thoroughbred
Subordinated Note and
23
(vii) as of the date hereof, after giving effect to the transactions
contemplated hereby, the Principal Balance of the (a) Term Loan is $8,433,271.11
and (b) Acquisition Loan is $19,997,113.43.
6. Costs and Expenses. Each Borrower jointly and severally agrees to
------------------
reimburse FINOVA for all fees and expenses incurred in the preparation,
negotiation and execution of this First Amendment and the consummation of the
transactions contemplated hereby, including, without limitation, the fees and
expenses of counsel for FINOVA.
7. No Further Amendments; Ratification of Liability. Except as amended
------------------------------------------------
hereby, the Existing Loan Agreement and each of the other Loan Instruments shall
remain in full force and effect in accordance with their respective terms. Each
Borrower hereby ratifies and confirms its liabilities, obligations and
agreements under the Existing Loan Agreement and the other Loan Instruments, all
as amended by this First Amendment, and the Liens created thereby, and
acknowledges that (i) it has no defenses, claims or set-offs to the enforcement
by FINOVA of such liabilities, obligations and agreements, (ii) FINOVA has fully
performed all obligations to Borrowers which it may have had or has on and as of
the date hereof and (iii) other than as specifically set forth herein, FINOVA
does not waive, diminish or limit any term, condition or covenant contained in
the Existing Loan Agreement or any of the other Loan Instruments. FINOVA's
agreement to the terms of this First Amendment shall not be deemed to establish
or create a custom or course of dealing among FINOVA and Borrowers.
8. Counterparts. This First Amendment may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.
9. Further Assurances. Each Borrower covenants and agrees that it will
------------------
at any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as reasonably may be required by FINOVA in order to
effectuate fully the intent of this First Amendment.
10. Severability. If any term or provision of this First Amendment or the
------------
application thereof to any party or circumstance shall be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
the validity, legality and enforceability of the remaining terms and provisions
of this First Amendment shall not in any way be affected or impaired thereby,
and the affected term or provision shall be modified to the minimum extent
permitted by law so as most fully to achieve the intention of this First
Amendment.
11. Captions. The captions in this First Amendment are inserted for
--------
convenience of reference only and in no way define, describe or limit the scope
or intent of this First Amendment or any of the provisions hereof.
24
IN WITNESS WHEREOF, this First Amendment has been executed and delivered by
each of the parties hereto by a duly authorized officer of each such party on
the date first set forth above.
INFOCURE CORPORATION, a Delaware corporation,
THOROUGHBRED ACQUISITION, INC., a Georgia corporation,
MEDICAL SOFTWARE INTEGRATORS, INC., a Georgia
corporation, MD ACQUISITION, INC., a Connecticut
corporation, PACE FINANCIAL CORPORATION, an Ohio
corporation, ORTHODONTIC PRACTICE MANAGEMENT SYSTEM,
INC., a Georgia corporation, PROFESSIONAL ON-LINE
COMPUTER, INC., a Michigan corporation, ROVAK, INC., a
Minnesota corporation, CCI ACQUISITION, INC., a Florida
corporation, KCOMP MANAGEMENT SYSTEMS, INC., a
California corporation, SOFTEASY SOFTWARE, INC., a
Pennsylvania corporation, HEALTH CARE DIVISION, INC., a
Georgia corporation, XXXXXXX-XXXXX, INC., a Georgia
corporation, DR SOFTWARE, INC., a Georgia corporation,
and INTERNATIONAL COMPUTER SOLUTIONS, INC., a Georgia
corporation
By: /s/ XXXXXXX X. XXXXXXX
---------------------------------------------------
Xxxxxxx X. Xxxxxxx
A duly authorized officer of each Borrower
FINOVA CAPITAL CORPORATION, a Delaware corporation
By: /s/ XXXXXXX XXXXXX
---------------------------------------------------
Vice President
25
