SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 15, 1999
CERNER CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-15386 43-1196944
----------------------- --------------------- -------------------
(State or other jurisdiction Commission File Number (I.R.S. Employer
of incorporation or Identification Number)
organization)
2800 Rockcreek Parkway, Kansas City, Missouri 64117
- -------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (816) 221-1024
--------------
<PAGE>
Item 5. Other Events
On April 15, 1999 Cerner Corporation (the "Company")
completed a $100 million private placement of debt pursuant to a
Note Agreement dated as of April 1, 1999 among the Company,
Principal Life Insurance Company, Principal Life Insurance
Company, on behalf of one or more separate accounts, Commercial
Union Life Insurance Company of America, Nippon Life Insurance
Company of America, John Hancock Mutual Life Insurance Company,
John Hancock Variable Life Insurance Company, and Investors
Partner Life Insurance Company. The proceeds will be used to
retire the Company's existing $30 million of debt, fund proposed
capital improvements and strengthen the Company's cash position.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
4(e). Cerner Corporation Note Agreement dated as of
April 1, 1999 among Cerner Corporation, Principal
Life Insurance Company, Principal Life Insurance
Company, on behalf of one or more separate
accounts, Commercial Union Life Insurance Company
of America, Nippon Life Insurance Company of
America, John Hancock Mutual Life Insurance
Company, John Hancock Variable Life Insurance
Company, and Investors Partner Life Insurance
Company
99.1 Press release dated April 21, 1999
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CERNER CORPORATION
By: /s/ Marc G. Naughton
_______________________________________________
Marc G. Naughton, Chief Financial Officer
Dated: April 22, 1999
EXHIBIT 4(e)
------------
CONFORMED COPY
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
CERNER CORPORATION
NOTE AGREEMENT
Dated as of April 1, 1999
$60,000,000 Principal Amount
7.14% Series A Senior Notes
Due April 15, 2006
$40,000,000 Principal Amount
7.66% Series B Senior Notes
Due April 15, 2009
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Series A PPN: 15678# AB 1
Series B PPN: 15678# AC 9
<PAGE>
TABLE OF CONTENTS
1. DESCRIPTION OF NOTES AND COMMITMENT....................................1
1.1. Description of Notes.............................................1
1.2. Commitment; Closing Date.........................................1
2. PREPAYMENT OF NOTES....................................................2
2.1. Required Prepayments.............................................2
2.2. Optional Prepayments.............................................3
2.3. Notice of Prepayments............................................3
2.4. Surrender of Notes on Prepayment or Exchange.....................4
2.5. Direct Payment and Deemed Date of Receipt........................4
2.6. Allocation of Payments...........................................5
2.7. Payments Due on Saturdays, Sundays and Holidays..................5
3. REPRESENTATIONS........................................................5
3.1. Representations of the Company...................................5
3.2. Representations of the Purchasers................................11
4. CLOSING CONDITIONS.....................................................13
4.1. Representations and Warranties...................................13
4.2. Legal Opinions...................................................13
4.3. Events of Default................................................13
4.4. Subsidiary Guaranty..............................................13
4.5. Payment of Fees and Expenses.....................................13
4.6. Sale of Notes to Other Purchasers................................14
4.7. Legality of Investment...........................................14
4.8. Private Placement Numbers........................................14
4.9. Proceedings and Documents........................................14
5. INTERPRETATION OF AGREEMENT............................................14
5.1. Certain Terms Defined............................................14
5.2. Accounting Principles............................................23
5.3. Valuation Principles.............................................23
5.4. Direct or Indirect Actions.......................................24
6. AFFIRMATIVE COVENANTS.................................................24
<PAGE> i
6.1. Corporate Existence..............................................24
6.2. Insurance........................................................24
6.3. Taxes, Claims for Labor and Materials............................24
6.4. Maintenance of Properties........................................24
6.5. Maintenance of Records...........................................24
6.6. Financial Information and Reports................................25
6.7. Inspection of Properties and Records.............................27
6.8. ERISA............................................................27
6.9. Compliance with Laws.............................................28
6.10. Acquisition of Notes.............................................28
6.11. Private Placement Number; NAIC...................................28
6.12. Proposed Change of Control.......................................29
6.13. Nature of Business...............................................29
6.14. Prepayment of 8.30% Senior Notes.................................29
7. NEGATIVE COVENANTS......................................................29
7.1. Tangible Net Worth...............................................29
7.2. Fixed Charge Ratio...............................................29
7.3. Indebtedness Ratios..............................................29
7.4. Liens............................................................29
7.5. Restricted Payments..............................................31
7.6. Merger or Consolidation..........................................32
7.7. Sale of Assets...................................................32
7.8. Disposition of Stock of Restricted Subsidiaries..................33
7.9. Designation of Unrestricted Subsidiaries.........................33
7.10. Transactions with Affiliates.....................................34
7.11. Guaranties.......................................................34
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR................................34
8.1. Nature of Events.................................................34
8.2. Remedies on Default..............................................36
8.3. Annulment of Acceleration of Notes...............................36
8.4. Other Remedies...................................................36
8.5. Conduct No Waiver; Collection Expenses...........................37
8.6. Remedies Cumulative..............................................37
8.7. Notice of Default................................................37
9. AMENDMENTS, WAIVERS AND CONSENTS.......................................37
9.1. Matters Subject to Modification..................................37
9.2. Solicitation of Holders of Notes.................................38
9.3. Binding Effect...................................................38
<PAGE> ii
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT........39
10.1. Form of Notes....................................................39
10.2. Note Register....................................................39
10.3. Issuance of New Notes upon Exchange or Transfer..................39
10.4. Replacement of Notes.............................................39
11. MISCELLANEOUS..........................................................40
11.1. Expenses.........................................................40
11.2. Notices..........................................................40
11.3. Reproduction of Documents........................................40
11.4. Successors and Assigns...........................................41
11.5. Law Governing....................................................41
11.6. Headings.........................................................41
11.7. Counterparts.....................................................41
11.8. Reliance on and Survival of Provisions...........................41
11.9. Integration and Severability.....................................41
11.10.Confidential Information.........................................41
SCHEDULE I
ANNEXES
I. Subsidiaries
II. Indebtedness
III. Liens
IV. Capitalized Leases
EXHIBITS
A-1 - Form of 7.14% Senior Note due April 15, 2006
A-2 - Form of 7.66% Senior Note due April 15, 2009
B - Legal Opinion of Purchaser's Counsel
C - Legal Opinion of Company's Counsel
D - Compliance Certificate
E - Form of Subsidiary Guaranty
<PAGE> iii
CERNER CORPORATION
NOTE AGREEMENT
Dated as of April 1, 1999
To Each of the Purchasers
Named in Attached Schedule I
Ladies and Gentlemen:
CERNER CORPORATION, a Delaware corporation (the "Company"),
agrees with you as follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1. Description of Notes.
--------------------- The Company has authorized the
issuance and sale of $100,000,000 aggregate principal amount of
its Senior Notes (the "Notes"), to be dated the date of issuance,
to bear interest from such date (computed on the basis of a 360-
day year comprised of twelve 30-day months), payable semi-
annually on April 15 and October 15 of each year, commencing
October 15, 1999, and at maturity, of which: (i) $60,000,000
principal amount shall be designated as Series A (the "Series A
Notes"), shall bear interest at the rate of 7.14% per annum prior
to maturity and shall be expressed to mature on April 15, 2006
and (ii) $40,000,000 principal amount shall be designated as
Series B (the "Series B Notes"), shall bear interest at the rate
of 7.66% per annum prior to maturity and shall be expressed to
mature on April 15, 2009. The Notes shall bear interest on any
overdue principal (including any overdue prepayment), on any
overdue Make-Whole Amount and (to the extent legally enforceable)
on any overdue installment of interest at the rate per annum from
time to time equal to the greater of: (x) 9.14% with respect to
the Series A Notes and 9.66% with respect to the Series B Notes
or (y) 2.0% over the rate of interest publicly announced by The
First National Bank of Chicago from time to time in Chicago as
its "base" or "prime" rate (or the equivalent), and shall be
substantially in the forms attached as Exhibits A-1 and A-2, as
the case may be. The term "Notes" as used herein shall include
each Note delivered pursuant to this Note Agreement (the
"Agreement") and each Note delivered in substitution or exchange
therefor and, where applicable, shall include the singular number
as well as the plural. Any reference to you in this Agreement
shall in all instances be deemed to include any nominee of yours
or any separate account or other person on whose behalf you are
purchasing Notes. You and the other purchasers are sometimes
referred to herein individually as a "Purchaser" and collectively
as the "Purchasers."
1.2. Commitment; Closing Date.
------------------------- Subject to the terms and
conditions hereof and on the basis of the representations and
warranties hereinafter set forth, the Company agrees to issue and
sell to you, and you agree to purchase from the Company, Notes in
the aggregate principal
<PAGE>
amount and series set forth opposite your
name in the attached Schedule I at a price of 100% of the
principal amount thereof.
Delivery of and payment for the Notes shall be made at the
offices of Gardner, Carton & Douglas, 321 North Clark Street,
Quaker Tower, Chicago, Illinois 60610, at 9:00 a.m., Chicago
time, on April 15, 1999 or on such other date not later than
April 30, 1999 as you and the Company may mutually agree (the
"Closing Date"). The Notes shall be delivered to you in the form
of one or more Notes in fully registered form, issued in your
name or in the name of your nominee. Delivery of the Notes to
you on the Closing Date shall be against payment of the purchase
price thereof in Federal funds or other funds in U.S. dollars as
follows: (i) $40,000,000 immediately available at Bank of New
York, New York, ABA #021-000-018 for deposit in Paine Webber
Account #890-011-4096, F/C Cerner Corporation #CP-29440-G2 and
(ii) $60,000,000 immediately available at Mercantile Bank of St.
Louis, ABA #081-000-210 for account of Mercantile Bank, Kansas
City; Cerner Corporation #5290000743. If on the Closing Date the
Company shall fail to tender the Notes to you, you shall be
relieved of all remaining obligations under this Agreement.
Nothing in the preceding sentence shall relieve the Company of
any liability occasioned by such failure to deliver the Notes.
The funding and other obligations of the Purchasers under this
Agreement shall be several and not joint.
1.3. Guaranty.
--------- The Notes will be guaranteed by the
Guarantors pursuant to the Subsidiary Guaranty. No later than
five (5) Business Days after any Person becomes a Subsidiary of
the Company after the date of this Agreement, the Company shall,
in each such instance, forthwith cause such Subsidiary to become
a party to the Subsidiary Guaranty, provided that if any such
Subsidiary is a Foreign Subsidiary such Foreign Subsidiary need
not become a party to the Subsidiary Guaranty. The Company
shall, and shall cause such Subsidiary to, furnish such
certificates and other documentation as any Noteholder may
require, including, without limitation, favorable opinions of
counsel to such Person (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the
documentation necessary to cause such Subsidiary to become a
party to the Subsidiary Guaranty).
2. PREPAYMENT OF NOTES
2.1. Required Prepayments.
--------------------- In addition to payment of all
outstanding principal of the Notes at maturity and regardless of
the amount of Notes which may be outstanding from time to time,
the Company shall prepay and there shall become due and payable
on April 15 in each year (i) $12,000,000 of the principal amount
of the Series A Notes or such lesser amount as would constitute
payment in full on the Series A Notes, commencing April 15, 2002
and ending April 15, 2005, inclusive, with the remaining
principal payable on April 15, 2006 and (ii) $6,666,667 of the
principal amount of the Series B Notes or such lesser amount as
would constitute payment in full on the Series B Notes,
commencing April 15, 2004 and ending April 15, 2008, inclusive,
with the remaining principal payable on April 15, 2009. Each
such prepayment and payment at maturity shall be at a price of
100% of the principal amount prepaid, together with interest
accrued thereon to the date of prepayment, without a Make-Whole
Amount.
2.2. Optional Prepayments.
--------------------- (a) Subject to Sections 2.2(c)
and 2.6, upon notice as provided in Section 2.3(a), the Company
may prepay the Notes, in whole or in part, at any time,
<PAGE> 2
in an
amount not less than $1,000,000 or an integral multiple of
$100,000 in excess thereof, or such lesser amount as shall
constitute payment in full of the Notes. Each such prepayment
shall be at a price of 100% of the principal amount to be
prepaid, plus interest accrued thereon to the date of prepayment,
plus the Make-Whole Amount.
(b) Promptly following the day on which a Change of Control
occurs, the Company, pursuant to the notice provided in
Section 2.3(b) and (c), shall offer to prepay the entire
principal amount of the Notes at a price of 100% of the principal
amount thereof, plus interest accrued thereon to the date of
prepayment, plus either (i) 1.0% of the principal amount thereof
if no Default or Event of Default exists immediately prior to or
after such Change of Control or (ii) the Make-Whole Amount if a
Default or Event of Default exists.
(c) Any optional prepayment of less than all of the Notes
outstanding pursuant to Sections 2.2(a), 2.2(b) or 7.7. shall be
applied in accordance with Section 2.6 to reduce, pro rata, the
payments at maturity and the payments required by Section 2.1.
(d) Except as provided in Section 2.1 and this Section 2.2,
the Notes shall not be prepayable in whole or in part.
2.3. Notice of Prepayments.
----------------------- (a) The Company shall give
notice of any optional prepayment of the Notes pursuant to
Section 2.2(a) to each holder of the Notes not less than 30 days
nor more than 60 days before the date fixed for prepayment,
specifying (i) such date, (ii) the principal amount of the
holder's Notes to be prepaid on such date, (iii) the
Determination Date for calculating the Make-Whole Amount, (iv) a
calculation of the estimated amount of the Make-Whole Amount
showing in detail the method of calculation and (v) the accrued
interest applicable to the prepayment. Notice of prepayment
having been so given, the aggregate principal amount of the Notes
specified in such notice, together with the Make-Whole Amount, if
any, and accrued interest thereon shall become due and payable on
the prepayment date.
(b) The Company shall give notice of any offer to prepay
the Notes pursuant to Section 2.2(b) to each holder of the Notes
immediately and in any event not later than the date of a Change
of Control. Such notice shall be certified by an authorized
officer of the Company and shall specify (i) the nature of the
Change of Control and the date on which it is estimated to occur
or did occur, (ii) the date fixed for prepayment which, to the
extent practicable, shall be not less than 30 or more than 45
calendar days after the date of such notice but in any event
shall be not later than 12 calendar days following the date on
which a proposed Change of Control is expected to occur,
(iii) the Determination Date, (iv) whether a Default or Event of
Default exists or would exist, (v) a calculation of the estimated
amount of the Make-Whole Amount or the 1% premium, as
appropriate, (vi) the accrued interest applicable to the
prepayment and (vi) the date by which any holder of a Note that
wishes to accept such offer must deliver notice thereof to the
Company which date shall not be later than 10 calendar days prior
to the date fixed for prepayment. Not earlier than 7 calendar
days prior to the date fixed for prepayment, the Company shall
give notice, by telecopy, telegram, telex or other same-day
written communication, to all holders of Notes identifying each
holder (and the principal amount of Notes held by each) who has
given notice of acceptance of the Company's offer, and thereafter
any holder may change its response to the Company's offer by
notice to such effect delivered to
<PAGE> 3
the Company not less than 3
calendar days prior to the date fixed for prepayment. The
aggregate principal amount of Notes held by holders who have
accepted the Company's offer and not revoked such acceptance
shall become due and payable on the prepayment date.
(c) The Company also shall give to each holder of the Notes
to be prepaid pursuant to Section 2.2(a) or (b) notice by
telecopy, telegram, telex or other same-day written
communication, confirmed by notice delivered by overnight
courier, as soon as practicable but in any event no less than 2
Business Days prior to the prepayment date, of the Make-Whole
Amount, if any, applicable to such prepayment and the details of
the calculations used to determine the amount of such Make-Whole
Amount.
2.4. Surrender of Notes on Prepayment or Exchange.
--------------------------------------------- Subject
to Section 2.5, upon any partial prepayment of a Note pursuant to
this Section 2 or partial exchange of a Note pursuant to Section
10.3, such Note may, at the option of the holder thereof, (i) be
surrendered to the Company pursuant to Section 10.3 in exchange
for a new Note or Notes equal to the principal amount remaining
unpaid on the surrendered Note, or (ii) be made available to the
Company, at the Company's principal office, for notation thereon
of the portion of the principal so prepaid or exchanged. In case
the entire principal amount of any Note is prepaid, such Note,
upon the request of the Company, shall thereafter be surrendered
to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of such Note. No Note shall be
issued in lieu of a Note the entire principal amount of which has
been prepaid.
2.5. Direct Payment and Deemed Date of Receipt.
--------------------------------------------------
Notwithstanding any other provision contained in the Notes or
this Agreement, the Company will pay all sums becoming due on
each Note held by you or any subsequent Institutional Holder by
wire transfer of immediately available funds to such account as
you or such subsequent Institutional Holder have designated in
Schedule I, or as you or such subsequent Institutional Holder may
otherwise designate by notice to the Company, in each case
without presentment and without notations being made thereon,
except that any such Note so paid or prepaid in full shall, upon
request of the Company, be surrendered thereafter to the Company
for cancellation. Any wire transfer shall identify such payment
in the manner set forth in Schedule I and shall identify the
payment as principal, Make-Whole Amount, if any, premium, if any,
and/or interest. You and any subsequent Institutional Holder of
a Note to which this Section 2.5 applies agree that, upon request
of the Company, before selling or otherwise transferring any such
Note, you or it will make a notation thereon of the aggregate
amount of all payments of principal theretofore made and of the
date to which interest has been paid and, upon written request of
the Company, will provide a copy of such notations to the
Company. Any payment made pursuant to this Section 2.5 shall be
deemed received on the payment date only if received before
12:00 p.m., New York City time. Payments received after
12:00 p.m., New York City time, shall be deemed received on the
next succeeding business day.
2.6. Allocation of Payments.
------------------------- (a) In the case of a
prepayment pursuant to Section 2.1 or 2.2(a), if less than the
entire principal amount of the Notes outstanding is to be paid,
the Company will prorate the aggregate principal amount to be
paid among the outstanding Notes in proportion to the unpaid
principal amounts thereof.
<PAGE> 4
(b) Any repurchase by the Company, any Restricted
Subsidiary or any Affiliate thereof of less than all of the Notes
outstanding shall be applied to reduce pro rata the principal
amount of each of the remaining prepayments required by Section
2.1 and the payment due at maturity. It is the intent of the
parties to this Agreement that each Note shall not be adversely
affected in terms of yield or Weighted Average Life to Maturity
by any repurchase, pursuant to Section 6.10 or otherwise, except
as consented to by the holder of such Note.
2.7. Payments Due on Saturdays, Sundays and Holidays.
------------------------------------------------ In
any case where the date of any required prepayment of the Notes
or any interest payment date on the Notes or the date fixed for
any other payment of any Note or exchange of any Note is a day
other than a Business Day, then such payment, prepayment or
exchange need not be made on such date but may be made on the
next succeeding Business Day, with interest payable to the actual
date of payment.
3. REPRESENTATIONS
3.1. Representations of the Company.
------------------------------- As an inducement to,
and as part of the consideration for, your purchase of the Notes
pursuant to this Agreement, the Company represents and warrants
to you as follows:
(a) Corporate Organization and Authority.
------------------------------------- The Company is a
solvent corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, has all
requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as
presently proposed to be conducted, to enter into and perform
this Agreement and to issue and sell the Notes as contemplated in
this Agreement. Each of the Guarantors has the corporate power
and authority to execute and deliver and to perform its
obligations under the Subsidiary Guaranty, and has taken all
necessary corporate action to authorize its execution, delivery
and performance of the Subsidiary Guaranty.
(b) Qualification to Do Business.
------------------------------ The Company is duly
licensed or qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction where
the nature of the business transacted by it or the character of
its properties owned or leased makes such qualification or
licensing necessary, except for jurisdictions, individually or in
the aggregate, where the failure to be so licensed or qualified
could not be reasonably expected to have a Material Adverse
Effect.
(c) Subsidiaries.
------------- The Company has no Subsidiaries except
those listed in the attached Annex I, which correctly sets forth
the jurisdiction of incorporation and the percentage of the
outstanding Voting Stock or equivalent interest of each
Subsidiary which is owned, of record or beneficially, by the
Company and/or one or more Subsidiaries. Each Subsidiary which
is a Restricted Subsidiary is so designated in Annex I. Each
Subsidiary has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation
or organization and is duly licensed or qualified and in good
standing as a foreign corporation in each other jurisdiction
where the nature of the business transacted by it or the
character of its properties owned or leased makes such
qualification or licensing necessary, except for jurisdictions,
individually or in the aggregate, where the failure to be so
licensed or qualified could not be reasonably expected to have a
Material Adverse Effect. Each Subsidiary has full
<PAGE> 5
corporate
power and authority to own and operate its properties and to
carry on its business as now conducted and as presently proposed
to be conducted, except for instances, individually or in the
aggregate, where the failure to have such power and authority
could not be reasonably expected to have a Material Adverse
Effect. The Company and each Subsidiary have good and marketable
title to all of the shares they purport to own of the capital
stock of each Subsidiary, free and clear in each case of any
Lien, except as otherwise disclosed in the attached Annex III,
and all such shares have been duly issued and are fully paid and
nonassessable.
(d) Financial Statements.
--------------------- The consolidated balance sheets
of the Company and its Subsidiaries as of December 31, 1994,
December 30, 1995, December 28, 1996, January 3, 1998 and January
2, 1999, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the years in the
six-year period ended January 2, 1999, accompanied by the report
and unqualified opinion of KPMG LLP, independent public
accountants, copies of which have heretofore been delivered to
you, were prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved and present fairly the consolidated financial position
of the Company and its Subsidiaries as of such dates and their
consolidated results of operations and cash flows for the years
then ended. The outstanding Indebtedness of the Company and its
Subsidiaries on the date hereof is set forth on Annex II.
(e) No Contingent Liabilities or Adverse Changes.
--------------------------------------------- Neither
the Company nor any Subsidiary has any contingent liabilities
which, individually or in the aggregate, are material to the
Company and its Subsidiaries taken as a whole and, since January
2, 1999, there have been no changes in the condition, financial
or otherwise, of the Company and its Subsidiaries except changes
occurring in the ordinary course of business, none of which,
individually or in the aggregate, have had a Material Adverse
Effect.
(f) No Pending Litigation or Proceedings.
-------------------------------------- There are no
actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any
Subsidiary, at law or in equity or before or by any Federal,
state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
which might reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.
(g) Compliance with Law.
-------------------- (i) Neither the Company nor any
Subsidiary is: (x) in default with respect to any order, writ,
injunction or decree of any court to which it is a named party;
or (y) in default under any law, rule, regulation, ordinance or
order relating to its or their respective businesses, the
sanctions and penalties resulting from which defaults described
in clauses (x) and (y) might reasonably be expected to have a
Material Adverse Effect.
(ii) Neither the Company nor any Subsidiary nor any
Affiliate of the Company is an entity defined as a "designated
national" within the meaning of the Foreign Assets Control
Regulations, 31 C.F.R. Chapter V, or is in violation of, any
Federal statute or Presidential Executive Order, or any rules or
regulations of any department, agency or administrative body
promulgated under any such statute or Order, concerning trade or
other relations with any foreign country or any citizen or
national thereof or the ownership or operation of any property
and no
<PAGE> 6
restriction or prohibition under any such statute, Order,
rule or regulation has a Material Adverse Effect.
(h) ERISA.
------ (i) The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as
have not resulted in and could not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse
Effect. Neither the Company nor any ERISA Affiliate has incurred
any liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA) which has had or could
reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect; and no event, transaction or condition
has occurred or exists that could reasonably be expected to
result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or
to such penalty or excise tax provisions or to Section 401(a)(29)
or 412 of the Code, other than such liabilities or Liens as could
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(i) The present value of the aggregate benefit
liabilities under all Plans (other than multiemployer plans),
determined as of the end of such Plans' most recently ended plan
year on the basis of the actuarial assumptions specified for
funding purposes in such Plans' most recent actuarial valuation
report, did not exceed the aggregate current value of the assets
of such Plans allocable to such benefit liabilities by more than
$100,000 in the aggregate for all Plans. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA
and the terms "current value" and "present value" have the
meaning specified in section 3 of ERISA.
(ii) The Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of
ERISA in respect of multiemployer plans that individually or in
the aggregate could reasonably be expected to have a Material
Adverse Effect.
(iii) To the extent an expected post-retirement
benefit obligation of the Company exists, such expected post-
retirement benefit obligation (determined as of the last day of
the Company's most recently ended fiscal year in accordance with
FASB 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) is
reflected in the most recent audited financial statements
referred to in Section 3.1(d).
(iv) The execution and delivery of this Agreement and
the issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant
to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this clause (v) is made in
reliance upon and subject to the accuracy of your representation
in Section 3.2(b) as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by you.
<PAGE> 7
(i) Title to Properties.
-------------------- The Company and its Subsidiaries
have good and marketable title to all of the property and assets
reflected in the most recent audited consolidated balance sheet
described in the foregoing paragraph (d) of this Section 3.1 or
subsequently acquired by the Company or any Subsidiary (except as
sold or otherwise disposed of in the ordinary course of
business), free from all Liens or defects in title except those
permitted by Section 7.4.
(j) Leases.
------- The Company and its Subsidiaries enjoy
peaceful and undisturbed possession under all leases under which
they are a lessee or are operating, except for leases the
termination of which, individually or in the aggregate, will not
have a Material Adverse Effect.
(k) Franchises, Patents, Trademarks and Other Rights.
------------------------------------------------- The
Company and its Subsidiaries have all franchises, permits,
licenses and other authority necessary to carry on their
businesses as now being conducted and are not in default
thereunder, except for such franchises, permits, licenses or
other authority and defaults which, individually and in the
aggregate, do not and will not have a Material Adverse Effect.
The Company and its Subsidiaries own or possess all patents,
trademarks, service marks, trade names, copyrights, licenses and
rights with respect to the foregoing necessary for the present
conduct of their businesses, without any known conflict with the
rights of others which might have, individually or in the
aggregate, a Material Adverse Effect.
(l) Authorization.
-------------- This Agreement and the Notes have been
duly authorized on the part of the Company and the Agreement
does, and the Notes when issued will, constitute the legal, valid
and binding obligations of the Company, enforceable in accordance
with their terms, except to the extent that enforcement of the
Notes may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether
enforcement is sought in equity or at law. The Subsidiary
Guaranty has been duly authorized on the part of each of the
Guarantors and when executed and delivered will constitute a
legal, valid and binding obligation of each of the Guarantors,
enforceable in accordance with its terms, except to the extent
that enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the
rights of creditors or by equitable principles, regardless of
whether enforcement is sought in equity or at law. The sale of
the Notes and compliance by the Company and the Guarantors with
all of the provisions of this Agreement, the Notes and the
Subsidiary Guaranty (i) are within their respective corporate
powers, (ii) have been duly authorized by proper corporate
action, (iii) are legal and will not violate any provisions of
any law or regulation or order of any court, governmental
authority or agency and (iv) will not result in any breach of any
of the provisions of, or constitute a default under, or result in
the creation of any Lien on any property of the Company or any
Subsidiary under the provisions of, any charter document, by-law,
loan agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or
their property may be bound.
(m) No Defaults.
------------- No Default or Event of Default has
occurred and is continuing. Neither the Company nor any
Subsidiary is in default under any charter document, by-law or
loan agreement to which it is a party or other agreement to which
it is a party or by which it or its
<PAGE> 8
property may be bound, except
for defaults which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(n) Governmental Consent.
---------------------- Neither the nature of the
Company or any Subsidiary, their respective businesses or
properties, nor any relationship between the Company or any
Subsidiary and any other Person, nor any circumstances in
connection with the offer, issue, sale or delivery of the Notes
is such as to require a consent, approval or authorization of, or
withholding of objection on the part of, or filing, registration
or qualification with, any governmental authority on the part of
the Company or any Subsidiary in connection with the execution
and delivery of this Agreement or the Subsidiary Guaranty or the
offer, issue, sale or delivery of the Notes.
(o) Taxes.
------ All income tax returns and all other material
tax returns required to be filed by the Company or any Subsidiary
in any jurisdiction have been filed, and all taxes, assessments,
fees and other governmental charges upon the Company or any
Subsidiary, or upon any of their respective properties, income or
franchises, which are due and payable, have been paid timely or
within appropriate extension periods or contested in good faith
by appropriate proceedings, the collection thereof has been
stayed by the applicable governmental authority during the period
of the contest and with respect to which adequate reserves have
been established, except for such filings and nonpayments which,
individually and in the aggregate, do not and will not have a
Material Adverse Effect. The Company does not know of any
proposed additional tax assessment against it or any Subsidiary
for which adequate provision has not been made on its books. The
statute of limitations with respect to Federal income tax
liability of the Company and its Subsidiaries has expired for all
taxable years up to and including the taxable year ended
December 31, 1994 (except with respect to utilization of tax loss
carryforwards) and no material controversy in respect of
additional taxes due since such date is pending or, to the
Company's knowledge, threatened. The provisions for taxes on the
books of the Company and each Subsidiary are adequate for all
open years and for the current fiscal period.
(p) Status under Certain Statutes.
------------------------------ Neither the Company nor
any Subsidiary is: (i) a "public utility company" or a "holding
company," or an "affiliate" or a "subsidiary company" of a
"holding company," or an "affiliate" of such a "subsidiary
company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) a "public utility" as
defined in the Federal Power Act, as amended, or (iii) an
"investment company" or an "affiliated person" thereof, as such
terms are defined in the Investment Company Act of 1940, as
amended.
(q) Private Offering.
------------------ Neither the Company nor Lehman
Brothers Inc. (the only Person authorized or employed by the
Company as agent, broker, dealer or otherwise in connection with
the offering of the Notes or any similar security of the Company)
has offered any of the Notes or any similar security of the
Company for sale to, or solicited offers to buy any thereof from,
or otherwise approached or negotiated with respect thereto with,
any prospective purchaser, other than 10 institutional investors,
each of whom was offered all or a portion of the Notes at private
sale for investment. Neither the Company nor anyone acting on
its authorization will offer the Notes or any part thereof or any
similar securities for issue or sale to, or solicit any offer to
acquire any of the same from, anyone so as to bring the issuance
and sale of the Notes within the provisions of Section 5 of the
Securities Act.
<PAGE> 9
(r) Effect of Other Instruments.
---------------------------- Neither the Company nor
any Subsidiary is bound by any agreement or instrument or subject
to any charter or other corporate restriction which has, or could
reasonably be expected to have, a Material Adverse Effect.
(s) Use of Proceeds.
------------------ The Company will apply the net
proceeds from the sale of the Notes to repay $30,000,000
principal amount of its 8.30% Senior Notes due August 1, 2004,
for construction of new facilities and additions or renovations
to existing facilities, and for general corporate purposes. None
of the transactions contemplated in this Agreement (including,
without limitation thereof, the use of the proceeds from the sale
of the Notes) will violate or result in a violation of Section 7
of the Exchange Act, or any regulations issued pursuant thereto,
including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System (12 C.F.R.,
Chapter II). "Margin stock" within the meaning of Regulation U
does not constitute more than 5.0% of the value of the
consolidated assets of the Company and its Subsidiaries and the
Company does not have any present intention that margin stock
will constitute more than 5.0% of the value of such assets. None
of the proceeds from the sale of the Notes will be used to
purchase or carry or refinance any borrowing the proceeds of
which were used to purchase or carry any "margin stock" or
"margin security" in violation of Regulations T, U or X.
(t) Condition of Property.
---------------------- All of the facilities of the
Company and its Subsidiaries are in sound operating condition and
repair except for facilities being repaired in the ordinary
course of business or facilities which individually or in the
aggregate are not material to the Company and its Subsidiaries,
taken as a whole.
(u) Books and Records.
-------------------- The Company and each of its
Subsidiaries (i) maintain books, records and accounts in
reasonable detail which accurately and fairly reflect their
respective transactions and business affairs, and (ii) maintain a
system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in
accordance with management's general or specific authorization
and to permit preparation of financial statements in accordance
with generally accepted accounting principles.
(v) Environmental Compliance.
-------------------------- The operations of the
Company and each Subsidiary (including, without limitation, all
operations and conditions at or in the Facilities) comply in all
material respects with all Environmental Laws; the Company and
each Subsidiary have obtained all permits under Environmental
Laws necessary to their respective operations, and all such
permits are in full force and effect, and the Company and each
Subsidiary are in compliance with all material terms and
conditions of such permits, except, in each of the foregoing
cases, for permits the lack or loss of which, or the failure to
comply with which, could not reasonably be expected to have a
Material Adverse Effect; and neither the Company nor any
Subsidiary has any liability (contingent or otherwise) in
connection with any Release of any Hazardous Materials by the
Company or any of its Subsidiaries or the existence of any
Hazardous Material on, under or about any Facility that could
give rise to an Environmental Claim that could reasonably be
expected to have a Material Adverse Effect.
(w) Full Disclosure.
----------------- Neither the Confidential Private
Placement Memorandum dated March 1999 (including the attachments
and enclosures), the financial statements referred to in
<PAGE> 10
paragraph (d) of this Section 3.1, nor this Agreement, nor any
other statement or document furnished by the Company to you in
connection with the negotiation of the sale of the Notes, taken
together, contain any untrue statement of a material fact or omit
a material fact necessary to make the statements contained
therein or herein not misleading in light of the circumstances
under which they were made. There is no fact (exclusive of
general economic, political or social conditions or trends)
particular to the Company or any Subsidiary and known by the
Company or any Subsidiary which the Company has not disclosed to
you in writing and which has or, so far as the Company can now
foresee, will have, a Material Adverse Effect.
(x) Solvency of Company and Guarantors.
-------------------------------------- After giving
effect to the transactions contemplated herein, (i) the present
fair salable value of the assets of each of the Guarantors and of
the Company is in excess of the amount that will be required by
each to pay its respective probable liability on its existing
debts as said debts become absolute and matured, (ii) the Company
has received reasonably equivalent value in exchange for
executing and delivering the Notes and each of the Guarantors has
received reasonably equivalent value in exchange for executing
and delivering the Subsidiary Guaranty, (iii) the property
remaining in the hands of each is not unreasonably small capital,
and (iv) each is able to pay its debts as they mature.
(y) Year 2000.
----------- The Company and its Subsidiaries have
conducted a review and assessment of their computer applications
and inquired of their material suppliers, vendors and customers
regarding the "Year 2000 Problem" (i.e., the risk that computer
applications may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date
after December 31, 1999). Based upon such review, assessment and
inquiry, the Company believes that the Year 2000 Problem will not
have a Material Adverse Effect.
3.2. Representations of the Purchasers.
------------------------------------- (a) You
represent, and in entering into this Agreement the Company
understands, that you are acquiring the Notes for your own
account and not with a view to any distribution thereof, provided
that the disposition of your property shall at all times be and
remain within your control; subject, however, to compliance with
applicable securities laws. You acknowledge that the Notes have
not been registered under the Securities Act and you understand
and agree that the Notes must be held indefinitely unless they
are subsequently registered under the Securities Act or an
exemption from such registration is available. You have been
advised that the Company does not contemplate registering, and is
not legally required to register, the Notes under the Securities
Act.
(a) You further represent that, as of the date of this
Agreement, at least one of the following statements is an
accurate representation as to each source of funds (a "Source")
to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(i) if you are an insurance company, the Source does
not include assets allocated to any separate account maintained
by you in which any employee benefit plan (or its related trust)
has any interest, other than a separate account that is
maintained solely in connection with your fixed contractual
obligations under which the amounts payable, or credited, to such
plan and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the
investment performance of the separate account;
<PAGE> 11
(ii) the Source is either (A) an insurance company
pooled separate account, within the meaning of Prohibited
Transaction Class Exemption ("PTE") 90-1 (issued January 29,
1990), or (B) a bank collective investment fund, within the
meaning of the PTE 91-38 (issued July 12, 1991) and, except as
you have disclosed to the Company in writing pursuant to this
paragraph (ii), no employee benefit plan or group of plans
maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund;
(iii) the Source constitutes assets of an
"investment fund" (within the meaning of Part V of the QPAM
Exemption) managed by a "qualified professional asset manager" or
"QPAM" (within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part
I(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying
the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit
plans whose assets are included in such investment fund have been
disclosed to the Company in writing pursuant to this paragraph
(iii);
(iv) the Source is a governmental plan;
(v) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to the
Company in writing pursuant to this paragraph (v);
(vi) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of
ERISA; or
(vii) the Source is an "insurance company general
account" as such term is defined in the Department of Labor
Prohibited Transaction Class Exemption 95-60 (issued July 12,
1995) ("PTE 95-60") and as of the date of this Agreement there is
no "employee benefit plan" with respect to which the aggregate
amount of such general account's reserves and liabilities for the
contracts held by or on behalf of such employee benefit plan and
all other employee benefit plans maintained by the same employer
(and affiliates thereof as defined in Section V(a)(1) of PTE 95-
60) or by the same employee organization (in each case determined
in accordance with the provisions of PTE 95-60) exceeds 10% of
the total reserves and liabilities of such general account (as
determined under PTE 95-60) (exclusive of separate account
liabilities) plus surplus as set forth in the National
Association of Insurance Commissioners Annual Statement filed
with your state of domicile.
As used in this Section 3.2(b), the terms "employee benefit
plan," "governmental plan," "party in interest" and "separate
account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
<PAGE> 12
4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date
shall be subject to the performance by the Company of its
agreements hereunder, which are to be performed at or prior to
the time of delivery of the Notes, and to the following
conditions to be satisfied on or before the Closing Date:
4.1. Representations and Warranties.
------------------------------- The representations
and warranties of the Company contained in this Agreement or
otherwise made in writing in connection herewith shall be true
and correct on or as of the Closing Date and the Company shall
have delivered to you a certificate to such effect, dated the
Closing Date and executed by the president, the chief financial
officer or the chief accounting officer of the Company.
4.2. Legal Opinions.
--------------- You shall have received from Gardner,
Carton & Douglas, who is acting as your special counsel in this
transaction, and from Randy D. Sims, Chief Legal Officer for the
Company, and Lynn R. Marasco, Senior Corporate Counsel for the
Company, their respective opinions, dated such Closing Date, in
form and substance satisfactory to you and covering substantially
the matters set forth or provided in the attached Exhibits B and
C.
4.3. Events of Default.
------------------- No Default or Event of Default
shall have occurred and be continuing on the Closing Date and the
Company shall have delivered to you a certificate to such effect,
dated the Closing Date and executed by the president, the chief
financial officer or the chief accounting officer of the Company.
4.4. Subsidiary Guaranty.
--------------------- The Guarantors shall have
executed and delivered the Subsidiary Guaranty.
4.5. Payment of Fees and Expenses.
----------------------------- The Company shall have
paid all reasonable fees, expenses, costs and charges, including
the reasonable fees and expenses of Gardner, Carton & Douglas,
your special counsel, incurred by you through the Closing Date
and incident to the proceedings in connection with, and
transactions contemplated by, this Agreement and the Notes.
4.6. Sale of Notes to Other Purchasers.
---------------------------------- The Company shall
have consummated the sale of the entire $100,000,000 principal
amount of Notes to be sold on the Closing Date pursuant to this
Agreement.
4.7. Legality of Investment.
----------------------- Your acquisition of the Notes
shall constitute a legal investment as of the Closing Date under
the laws and regulations of each jurisdiction to which you may be
subject (without resort to any "basket" or "leeway" provision
which permits the making of an investment without restrictions as
to the character of the particular investment being made), and
such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation;
and you shall have received such certificates or other evidence
as you may reasonably request to establish compliance with this
condition.
4.8. Private Placement Numbers.
-------------------------- Private placement numbers
with respect to the Notes shall have been issued by Standard &
Poor's Corporation.
<PAGE> 13
4.9. Proceedings and Documents.
-------------------------- All proceedings taken in
connection with the transactions contemplated by this Agreement,
and all documents necessary to the consummation of such
transactions shall be satisfactory in form and substance to you
and your special counsel, and you and your special counsel shall
have received copies (executed or certified as may be
appropriate) of all legal documents or proceedings which you and
they may reasonably request.
5. INTERPRETATION OF AGREEMENT
5.1. Certain Terms Defined.
------------------------ The terms hereinafter set
forth when used in this Agreement shall have the following
meanings:
Affiliate
--------- - Any Person (other than a Restricted Subsidiary)
(i) who is a director or executive officer of the Company or any
Restricted Subsidiary, (ii) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is
under common control with, the Company, (iii) which beneficially
owns or holds securities representing 5% or more of the combined
voting power of the Voting Stock of the Company or any Restricted
Subsidiary or (iv) securities representing 5% or more of the
combined voting power of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity) of
which is beneficially owned or held by the Company or a
Restricted Subsidiary. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
Agreement
--------- - As defined in Section 1.1.
Business Day
------------- - Any day, other than Saturday, Sunday or a
legal holiday or any other day on which banking institutions in
the United States of America generally are authorized by law to
close.
Capitalized Lease
------------------ - Any lease the obligation for Rentals
with respect to which, in accordance with generally accepted
accounting principles, would be required to be capitalized on a
balance sheet of the lessee.
CERCLA
------ - The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as now or hereafter
amended, and any successor to such law.
Change of Control
----------------- - (i) The acquisition, through purchase or
otherwise (including the agreement to act in concert), by any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act) who is or becomes a "beneficial owner" (as such
term is defined in Rule 13d-3 under the Exchange Act) of shares
of Voting Stock of the Company representing more than 50% of the
combined voting power of the Voting Stock of the Company, or
(ii) individuals constituting a majority of the board of
directors of the Company immediately prior to (A) the entering
into by the Company of any agreement providing or contemplating
an acquisition described in clause (i), or (B) the commencement
of a tender offer with the purpose of completing an acquisition
described in clause (i), or (C) the commencement of an election
contest, cease to constitute such a majority.
<PAGE> 14
Closing Date
------------ - As defined in Section 1.2.
Code
---- - The Internal Revenue Code of 1986, as amended.
Consolidated Income Available for Fixed Charges
----------------------------------------------- - For any
period, the sum of (i) Consolidated Net Income, plus (to the
extent deducted in determining Consolidated Net Income), (ii) all
provisions for any Federal, state, or other income taxes made by
the Company and its Restricted Subsidiaries during such period
plus (iii) Fixed Charges.
Consolidated Indebtedness
------------------------- - The Indebtedness of the Company
and its Restricted Subsidiaries, determined on a consolidated
basis in accordance with generally accepted accounting
principles, less the amount of any contingent reimbursement
obligations under surety bonds.
Consolidated Net Income
----------------------- - For any period, the consolidated
net income (or deficit) of the Company and its Restricted
Subsidiaries after deducting, without duplication, all operating
expenses, provisions for all taxes and reserves (including
reserves for deferred income taxes) and all other proper
deductions, all determined in accordance with generally accepted
accounting principles and after deducting portions of income
properly attributable to outstanding minority interests, if any,
in Restricted Subsidiaries; provided, however, that there shall
be excluded (i) any income (or deficit) of any Person accrued
prior to the date it becomes a Restricted Subsidiary or merges
into or consolidates with the Company or a Restricted Subsidiary;
(ii) the income (or deficit) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has any ownership interest (except that any such
income actually received by the Company or such Restricted
Subsidiary in the form of cash dividends shall be included
without limitation); (iii) any gains or losses, or other income,
properly classified as extraordinary in accordance with generally
accepted accounting principles; (iv) any gains or losses, or
other income, characterized as non-recurring in the financial
statements delivered pursuant to Section 6; (v) any gain or loss
resulting from the sale of fixed or capital assets other than in
the ordinary course of business; (vi) any portion of the net
income of a Restricted Subsidiary which for any reason cannot be
distributed as a cash dividend; (vii) any gain or loss resulting
from the sale or other disposition of any Investment; (viii) any
gains resulting from the reappraisal, revaluation or write-up of
assets and any gains or losses resulting from the reappraisal,
revaluation or write-up of the Company's existing $70,000,000
Investment in Synetic Healthcare Communications, Inc.;
(ix) proceeds of any life insurance policy; (x) any gain or loss
resulting from the acquisition of any securities of the Company
or any Restricted Subsidiary; and (xi) any reversal of any
reserve, except to the extent that provision for such reserve
shall have been made from income arising during the fiscal period
in which such reversal occurs.
Consolidated Net Worth
------------------------ - The consolidated stockholders'
equity of the Company and its Restricted Subsidiaries determined
in accordance with generally accepted accounting principles.
<PAGE> 15
Consolidated Senior Indebtedness
-------------------------------- - Consolidated Indebtedness
less Subordinated Indebtedness.
Consolidated Tangible Net Worth
------------------------------- - Consolidated Net Worth,
less the sum of all goodwill, trade names, trademarks, patents,
organization expense, unamortized debt discount and expense and
other similar intangibles properly classified as such in
accordance with generally accepted accounting principles, which
are incurred or booked subsequent to January 2, 1999, provided
that there shall not be so excluded software development costs
which are capitalized by the Company in accordance with generally
accepted accounting principles on a basis consistent with that
described in Note 1(d) of the most recent audited financial
statements referred to in Section 3.1(d).
Consolidated Total Assets
------------------------- - The consolidated total assets of
the Company and its Restricted Subsidiaries determined in
accordance with generally accepted accounting principles less the
sum of all goodwill, trade names, trademarks, patents,
organization expense, unamortized debt discount and expense and
other similar intangibles properly classified as such in
accordance with generally accepted accounting principles, which
are incurred or booked subsequent to January 2, 1999, provided
that there shall not be so excluded software development costs
which are capitalized by the Company in accordance with generally
accepted accounting principles on a basis consistent with that
described in Note 1(d) of the most recent audited financial
statements referred to in Section 3.1(d).
Consolidated Total Capitalization
--------------------------------- - The sum of Consolidated
Tangible Net Worth and Consolidated Indebtedness.
Default
------- - Any event which, with the lapse of time or the
giving of notice, or both, would become an Event of Default.
Determination Date
------------------ - The day 3 Business Days before the date
fixed for a prepayment pursuant to Section 2.2(a) or (b) or
Section 7.7 or the date of declaration pursuant to Section 8.2.
Environmental Claim
-------------------- - Any notice of violation, claim,
demand, abatement order or other order by any governmental
authority or any Person for any damage, including, without
limitation, personal injury (including sickness, disease or
death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or
restrictions, resulting from or based upon (i) the existence of a
Release (whether sudden or non-sudden or accidental or non-
accidental) of, or exposure to, any Hazardous Material in, into
or onto the environment at, in, by, from or related to any
Facility, (ii) the use, handling, transportation, storage,
treatment or disposal of Hazardous Materials in connection with
the operation of any Facility, or (iii) the violation, or alleged
violation, of any statutes, ordinances, orders, rules,
regulations, permits, licenses or authorizations of or from any
governmental authority, agency or court relating to environmental
matters connected with the Facilities.
<PAGE> 16
Environmental Laws
------------------- - All laws relating to environmental
matters, including, without limitation, those relating to (i)
fines, orders, injunctions, penalties, damages, contribution,
cost recovery compensation, losses or injuries resulting from the
Release or threatened Release of Hazardous Materials and to the
generation, use, storage, transportation, or disposal of
Hazardous Materials, in any manner applicable to the Company or
any of its Subsidiaries or any or their respective properties,
including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. 9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C.
1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. 6901 et seq.), the Federal Water Pollution Control Act
(33 U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C. 7401
et seq.), the Toxic Substances Control Act (15 U.S.C. 2601 et
seq.), the Occupational Safety and Health Act (29 U.S.C. 651 et
seq.), and the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. 11001 et seq.), and (ii) environmental protection,
including, without limitation, the National Environmental Policy
Act (42 U.S.C. 4321 et seq.), and comparable state laws, each
as amended or supplemented, and any similar or analogous local,
state and federal statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
ERISA
----- - The Employee Retirement Income Security Act of 1974,
as amended from time to time and any successor statute.
ERISA Affiliate
--------------- - The Company and (i) any corporation that
is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Code of which the Company is a
member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Code of which
the Company is a member; and (iii) any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the
Code of which the Company, any corporation described in clause
(i) above or any trade or business described in clause (ii) above
is a member.
Event of Default
---------------- - As defined in Section 8.1.
Exchange Act
------------- - The Securities Exchange Act of 1934, as
amended, and as it may be further amended from time to time.
Facilities
---------- - Any and all real property (including, without
limitation, all buildings, fixtures or other improvements located
thereon) now, or heretofore, owned, leased, operated or used
(under permit or otherwise) by the Company or any of its
Subsidiaries or any of their respective predecessors.
Fixed Charges
-------------- - For any period, the sum of (i) interest
expense (including the interest component of Rentals under
Capitalized Leases), amortization of debt discount and expense on
Indebtedness of the Company and its Restricted Subsidiaries
during such period and (ii) Rentals under all leases other than
Capitalized Leases of the Company and its Restricted
Subsidiaries, determined on a consolidated basis in accordance
with generally accepted accounting principles.
<PAGE> 17
Foreign Subsidiary
------------------- - Any Subsidiary that is not organized
under the laws of any state of the United States of America or
that has any permanent place of business outside the United
States of America, and shall include Cerner Corporation PTY
Limited, a corporation organized under the laws of Australia,
Cerner FSC, Inc., a corporation organized under the laws of
Barbados, Cerner Limited, a corporation organized under the laws
of the United Kingdom, Cerner Deutschland GmbH, a corporation
organized under the laws of Germany, Cerner Singapore Limited, a
Delaware corporation, Cerner Canada Limited, a Delaware
corporation, and Cerner (Malaysia) SDN BHD, a corporation
organized under the laws of Malaysia.
Guaranties
---------- - All obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit
or collection) of a Person guaranteeing or, in effect,
guaranteeing any Indebtedness, dividend or other obligation of
any other Person in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance
sheet condition or (z) otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or
obligation, (iii) to lease property or to purchase securities or
other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation against loss in
respect thereof, or (iv) otherwise to assure the owner of the
Indebtedness or obligation against loss in respect thereof. For
the purposes of all computations made under this Agreement,
Guaranties in respect of any Indebtedness for borrowed money
shall be deemed to be Indebtedness equal to the principal amount
of such Indebtedness for borrowed money which has been
guaranteed, and Guaranties in respect of any other obligation or
liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation,
liability or dividend.
Guarantors
---------- - Cerner Properties, Inc., Cerner International,
Inc., Multum Information Services, Inc., Cerner Health
Connections, Inc. and Cerner Health Facts, Inc.
Hazardous Materials
-------------------- - (i) Any chemical, material or
substance defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," or
"toxic substances" or words of similar import under any
applicable Environmental Laws; (ii) any oil, petroleum or
petroleum derived substance, any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, any flammable substances or explosives,
any radioactive materials, any hazardous wastes or substances,
any toxic wastes or substances or any other materials or
pollutants that (a) pose a hazard to any property of Company or
any of its Subsidiaries or to Persons on or about such property
or (b) cause such property to be in violation of any
Environmental Laws; (iii) friable asbestos, urea formaldehyde
foam insulation, electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls
in excess of fifty parts per million; and (iv) any other
chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority.
<PAGE> 18
Indebtedness
------------ - For any Person, without duplication, the
outstanding principal amount of all borrowings which in
accordance with generally accepted accounting principles would be
included in determining total liabilities of such Person as shown
on the liability side of a balance sheet, and in any event all
(i) obligations for borrowed money or to pay the deferred
purchase price of property or services (except trade account
payables), (ii) obligations secured by any Lien upon property or
assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale
or other title retention agreement with respect to property
acquired, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event
of default are limited to repossession or sale of property,
(iv) obligations under Capitalized Leases, (v) reimbursement
obligations, whether or not matured, under letters of credit,
bankers' acceptances, surety bonds and similar instruments, and
(vi) Guaranties of obligations of others of the character
referred to in this definition.
Institutional Holder
--------------------- - Any bank, trust company, insurance
company, pension fund, mutual fund or other similar financial
institution, including, without limiting the foregoing, any
"qualified institutional buyer" within the meaning of Rule 144A
under the Securities Act, which is or becomes a holder of any
Note.
Investments
----------- - All investments made in cash or by delivery of
property, directly or indirectly, in any Person, whether by
acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital
contribution or otherwise; provided, however, that "Investments"
shall not mean or include investments in property to be used,
held for use or consumed in the ordinary course of business.
Lien
---- - Any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including any agreement to grant any
of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to file any financing statement under the Uniform
Commercial Code of any jurisdiction in connection with any of the
foregoing.
Make-Whole Amount
------------------ - As of any Determination Date, to the
extent that the Reinvestment Yield on such Determination Date is
lower than the interest rate payable on or in respect of the
Notes, the excess of (a) the present value of the principal and
interest payments to be foregone by any prepayment (exclusive of
accrued interest on such Notes through the date of prepayment) on
such Notes to be prepaid (taking into account the manner of
application of such prepayment required by Section 2.2(c)),
determined by discounting (semi-annually on the basis of a 360-
day year composed of twelve 30-day months), such payments at a
rate that is equal to the Reinvestment Yield over (b) the
aggregate principal amount of such Notes then to be paid or
prepaid. To the extent that the Reinvestment Yield on any
Determination Date is equal to or higher than the interest rate
payable on or in respect of such Notes, the Make-Whole Amount is
zero.
Material Adverse Effect
----------------------- - (i) A material adverse effect on
the business, properties, assets, results of operations or
condition, financial or otherwise, of (A) the Company and its
<PAGE> 19
Subsidiaries, taken as a whole, when used in Section 3 or (B) the
Company and its Restricted Subsidiaries, taken as a whole, when
used elsewhere in this Agreement, (ii) the impairment of the
ability of the Company to perform its obligations under this
Agreement or the Notes, or (iii) the impairment of the ability of
the holders of the Notes to enforce such obligations.
Multiemployer Plan
------------------- - A "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which the Company or
any ERISA Affiliate is, or ever has, contributed or to which the
Company or any ERISA Affiliate has, or ever has had, an
obligation to contribute.
Notes
----- - As defined in Section 1.1.
Operating Rentals
------------------ - For any period, the aggregate Rentals
payable by the Company and its Restricted Subsidiaries during
such period under all leases other than Capitalized Leases.
PBGC
---- - The Pension Benefit Guaranty Corporation or any
successor thereto.
Person
------ - Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
Plan
---- - Any employee pension benefit plan, as defined in
Section 3(2) of ERISA that is not described in Section 4(b) of
ERISA and that has been established by or contributed to or is
maintained by the Company or any Restricted Subsidiary.
Purchaser
--------- - As defined in Section 1.1.
Reinvestment Yield
------------------- - The sum of (i) 0.50% plus (ii) the
yield as set forth on pages PX2 through PX8 of the Bloomberg
Financial Markets Service (or other on-the-run service acceptable
to the holders of not less than a majority in principal amount of
the outstanding Notes) at 10:00 A.M. (Chicago time) on the
Determination Date for actively traded U.S. Treasury securities
having a maturity equal to the Weighted Average Life to Maturity
of the Notes then being prepaid or paid as of the date of
prepayment or payment, rounded to the nearest month, or if such
yields shall not be reported as of such time or the yields
reported as of such time are not ascertainable in accordance with
the preceding clause, then the arithmetic mean of the yields
published in the statistical release designated H.15(519) of the
Board of Governors of the Federal Reserve System under the
caption "U.S. Government Securities--Treasury Constant
Maturities" (the "statistical release") for the maturity
corresponding to the remaining Weighted Average Life to Maturity
of the Notes then being prepaid or paid as of the date of such
prepayment or payment rounded to the nearest month. For purposes
of calculating the Reinvestment Yield, the most recent weekly
statistical release published prior to the applicable
Determination Date shall be used. If no maturity exactly
corresponding to such rounded Weighted Average Life to Maturity
shall appear therein, yields for the two most closely
corresponding published maturities (one of which occurs prior and
the other subsequent to the Weighted Average Life to Maturity)
shall be calculated pursuant to the foregoing sentence and the
Reinvestment Yield shall be interpolated
<PAGE> 20
from such yields on a
straight-line basis (rounding in each of such relevant periods,
to the nearest month).
Release
------- - Any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), or into or out of any
Facility, including the movement of any Hazardous Material
through the air, soil, surface water, groundwater or property.
Rentals
------- - As of the date of any determination thereof, all
fixed payments (including all payments which the lessee is
obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company or a Restricted
Subsidiary, as lessee or sublessee under a lease of real or
personal property, but exclusive of any amounts required to be
paid by the Company or a Restricted Subsidiary (whether or not
designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes, assessments, amortization
and similar charges. Fixed rents under any so-called "percentage
leases" shall be computed on the basis of the minimum rents, if
any, required to be paid by the lessee, regardless of sales
volume or gross revenues.
Restricted Investment
--------------------- - Any Investment by the Company or a
Restricted Subsidiary other than the following:
(i) Investments in real property to be used or
consumed in the ordinary course of business;
(ii) Investments in obligations issued or fully
guaranteed by the U.S. government maturing within one year from
date of acquisition;
(iii) Investments in certificates of deposit rated
not less than A by Standard & Poor's Corporation or the
equivalent by Moody's Investors Service, Inc. of banks having
capital surplus of at least $250 million and maturing within one
year from date of acquisition;
(iv) Investments in commercial paper rated not less
than A1 or A2 by Standard & Poor's Corporation or P1 or P2 by
Moody's Investors Service, Inc. and maturing within 270 days from
the date of creation;
(v) Investments in tax-exempt mutual funds which are
restricted to investing in tax-exempt securities rated not less
than A by Standard & Poor's Corporation or its equivalent by
Moody's Investors Service, Inc.;
(vi) Investments in Restricted Subsidiaries; provided
that such Restricted Subsidiary is a Wholly-Owned Restricted
Subsidiary, is a Guarantor, is organized under the laws of a
state of the United States of America or the District of
Columbia, has no Indebtedness and will have no Indebtedness while
any Notes are outstanding under this Agreement, other than
<PAGE> 21
Indebtedness owed to the Company or a Wholly-Owned Restricted
Subsidiary that is a Guarantor; and
(vii) Other investments not aggregating greater
than 5% of Consolidated Tangible Net Worth.
Restricted Subsidiary
---------------------- - (i) Any Subsidiary which is
designated in Annex I as a Restricted Subsidiary, (ii) any other
Subsidiary which is organized under the laws of the United States
or any State thereof, which conducts substantially all of its
business and has substantially all of its assets within the
United States, and 100% of the Voting Stock of which is owned by
the Company and/or one or more Wholly-Owned Restricted
Subsidiaries, and (iii) any other Subsidiary designated by the
board of directors of the Company as a Restricted Subsidiary
after not less than 10 days prior notice to holders of the Notes,
provided that, at the time of and after giving effect to such
designation, (A) no Default or Event of Default shall have
occurred and (B) the Company, on a pro forma basis, would be in
compliance with Sections 7.1 and 7.3.
Securities Act
-------------- - The Securities Act of 1933, as amended, and
as it may be further amended from time to time.
Senior Indebtedness
-------------------- - Any Indebtedness of the Company and
its Restricted Subsidiaries other than Subordinated Indebtedness.
Series A Notes
-------------- - As defined in Section 1.1.
Series B Notes
-------------- - As defined in Section 1.1.
Subordinated Indebtedness
------------------------- - Any Indebtedness of the Company
which by its terms is expressly subordinate in right of payment
to the payment of the Notes.
Subsidiary
---------- - Any corporation of which shares of Voting Stock
representing more than 50% of the combined voting power of each
outstanding class of Voting Stock are owned or controlled,
directly or indirectly by the Company.
Subsidiary Guaranty
------------------- - The Subsidiary Guaranty, executed by
the Guarantors, substantially in the form of Exhibit E, as such
agreement may be amended, modified, supplemented or restated from
time to time.
Unrestricted Subsidiary
----------------------- - Any Subsidiary which is not, or
has not been designated by the board of directors or in Annex I
as, a Restricted Subsidiary.
Voting Stock
------------- - Capital stock of any class of a corporation
having power to vote for the election of members of the board of
directors of such corporation, or persons performing similar
functions.
<PAGE> 22
Weighted Average Life to Maturity
----------------------------------- - As applied to any
payment or prepayment of principal of the Notes, at any date, the
number of years obtained by dividing (a) the principal amount of
the Notes to be paid or prepaid into (b) the sum of the products
obtained by multiplying (i) the amount of the then remaining
payment, installment, maturity or other required prepayment,
including payment at final maturity, forgone by virtue of such
payment or prepayment, by (ii) the number of years (calculated to
the nearest 1/12th) which would have elapsed between such date
and the making of such required payment.
Wholly-Owned
------------ - When applied to a Subsidiary, any Subsidiary
100% of the Voting Stock and all of the outstanding Indebtedness
of which is owned by the Company and/or its Wholly-Owned
Subsidiaries.
Terms which are defined in other Sections of this Agreement
shall have the meanings specified therein.
5.2. Accounting Principles.
---------------------- Where the character or amount
of any asset or liability or item of income or expense is
required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of
this Agreement, the same shall be done in accordance with (and
references elsewhere in this Agreement to generally accepted
accounting principles shall mean) generally accepted accounting
principles in effect from time to time.
5.3. Valuation Principles.
----------------------- Except where indicated
expressly to the contrary by the use of terms such as "fair
value," "fair market value" or "market value," each asset, each
liability and each capital item of any Person, and any quantity
derivable by a computation involving any of such assets,
liabilities or capital items, shall be taken at the net book
value thereof for all purposes of this Agreement. "Net book
value" with respect to any asset, liability or capital item of
any Person shall mean the amount at which the same is recorded
or, in accordance with generally accepted accounting principles,
should have been recorded in the books of account of such Person,
as reduced by any reserves which have been or, in accordance with
generally accepted accounting principles, should have been set
aside with respect thereto, but in every case (whether or not
permitted in accordance with generally accepted accounting
principles) without giving effect to any write-up, write-down or
write-off (other than any write-down or write-off the entire
amount of which was charged to Consolidated Net Income or to a
reserve which was a charge to Consolidated Net Income) relating
thereto which was made after the date of this Agreement.
5.4. Direct or Indirect Actions.
---------------------------- Where any provision in
this Agreement refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall
be applicable whether the action in question is taken directly or
indirectly by such Person.
6. AFFIRMATIVE COVENANTS
The Company agrees that, for so long as any amount remains
unpaid on any Note:
6.1. Corporate Existence.
-------------------- The Company will maintain and
preserve, and will cause each Restricted Subsidiary to maintain
and preserve, its corporate existence and right to carry on
<PAGE> 23
its
business and use, and cause each Restricted Subsidiary to use,
its best efforts to maintain, preserve, renew and extend all of
its rights, powers, privileges and franchises necessary to the
proper conduct of its business; provided, however, that the
foregoing shall not prevent any transaction permitted by
Section 7.6.
6.2. Insurance.
---------- The Company will, and will cause each
Restricted Subsidiary to, maintain insurance coverage with
financially sound and reputable insurers in such forms and
amounts, with such deductibles and against such risks as are
required by law or sound business practice and are customary for
corporations engaged in the same or similar businesses and owning
and operating similar properties as the Company and its
Subsidiaries. All such insurance shall be maintained with
carriers rated not less than A/XII by A.M. Best Company, Inc.
6.3. Taxes, Claims for Labor and Materials.
--------------------------------------- The Company
will pay and discharge when due, and will cause each Restricted
Subsidiary to pay and discharge when due, all taxes, assessments
and governmental charges or levies imposed upon it or its
property or assets, or upon properties leased by it (but only to
the extent required to do so by the applicable lease), other than
taxes which individually and in the aggregate are not material in
amount or the non-payment of which would not have a Material
Adverse Effect, provided that neither the Company nor any
Restricted Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim, the payment of which is being
contested in good faith and by proper proceedings that will stay
the forfeiture or sale of any property and with respect to which
adequate reserves are maintained in accordance with generally
accepted accounting principles.
6.4. Maintenance of Properties.
-------------------------- The Company will maintain,
preserve and keep, and will cause each Restricted Subsidiary to
maintain, preserve and keep, its properties (whether owned in fee
or a leasehold interest) in good repair and working order,
ordinary wear and tear excepted, and from time to time will make
all necessary repairs, replacements, renewals and additions.
6.5. Maintenance of Records.
----------------------- The Company will keep, and
will cause each Restricted Subsidiary to keep, at all times
proper books of record and account in which full, true and
correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such
Subsidiary, in accordance with generally accepted accounting
principles consistently applied throughout the period involved
(except for such changes as are disclosed in such financial
statements or in the notes thereto and concurred in by the
independent certified public accountants), and the Company will,
and will cause each Subsidiary to, provide reasonable protection
against loss or damage to such books of record and account.
6.6. Financial Information and Reports.
---------------------------------- The Company will
furnish to you and to any other Institutional Holder (in
duplicate if you or such other holder so request) the following:
(a) As soon as available and in any event within 45 days
after the end of each of the first three quarterly accounting
periods of each fiscal year of the Company, a consolidated
balance sheet of the Company and its Restricted Subsidiaries as
of the end of such period and consolidated statements of earnings
of the Company and its Restricted Subsidiaries for the periods
beginning on the first day of such fiscal year and the first day
of such quarterly
<PAGE> 24
accounting period, and consolidated statements
of cash flows beginning on the first day of such fiscal year and
ending in each case on the date of such balance sheet, setting
forth in comparative form (x) the corresponding consolidated
statements of income for the corresponding periods of the
preceding fiscal year, (y) the corresponding consolidated
statements of cash flows for the corresponding year to date
period of the preceding fiscal year and (z) a consolidated
balance sheet as of the end of the preceding fiscal year, all in
reasonable detail prepared in accordance with generally accepted
accounting principles consistently applied throughout the period
involved (except for changes disclosed in such financial
statements or in the notes thereto) and certified by the chief
financial officer or chief accounting officer of the Company
(i) outlining the basis of presentation, and (ii) stating that
the information presented in such statements presents fairly the
financial position of the Company and its Restricted Subsidiaries
and the results of operations for the period, subject to
customary year-end audit adjustments;
(b) As soon as available and in any event within 90 days
after the last day of each fiscal year, consolidated balance
sheets of the Company and its Restricted Subsidiaries as of the
end of such fiscal year and the related consolidated statements
of earnings, stockholders' equity and cash flows for such fiscal
year, in each case setting forth in comparative form figures for
the preceding fiscal year, all in reasonable detail, prepared in
accordance with generally accepted accounting principles
consistently applied throughout the period involved (except for
changes disclosed in such financial statements or in the notes
thereto) and accompanied by a report, unqualified as to scope of
audit and unqualified as to going concern as to the consolidated
balance sheet and the related consolidated statements of income,
changes in stockholders' equity and cash flows, of KPMG LLP or
any other firm of independent public accountants of recognized
national standing selected by the Company to the effect that such
financial statements have been prepared in conformity with
generally accepted accounting principles and present fairly, in
all material respects, the financial position of the Company and
its Restricted Subsidiaries and that the examination of such
financial statements by such accounting firm has been made in
accordance with generally accepted auditing standards;
(c) Together with the financial statements delivered
pursuant to paragraphs (a) and (b) of this Section 6.6, (i) a
management's discussion and analysis of the financial condition
and results of operations for the periods reported upon by such
financial statements, which discussion and analysis shall satisfy
the requirements of Item 303 of Securities and Exchange
Commission Regulation S-K; and (ii) a certificate of the chief
financial officer or chief accounting officer, in substantially
the form of attached Exhibit D, (x) to the effect that such
officer has re-examined the terms and provisions of this
Agreement and that at the date of such certificate, during the
periods covered by such financial reports and as of the end of
such periods, the Company is not, or was not, in default in the
fulfillment of any of the terms, covenants, provisions and
conditions of this Agreement and that no Default or Event of
Default is occurring or has occurred as of the date of such
certificate, during such periods and as of the end of such
periods, or if the signer is aware of any Default or Event of
Default, such officer shall disclose in such statement the nature
thereof, its period of existence and what action, if any, the
Company has taken or proposes to take with respect thereto, and
(y) stating whether the Company is in compliance with
Sections 7.1 through 7.11 and setting forth, in sufficient
detail, the information and computations required to establish
whether or not the Company was in compliance with the
requirements of Sections 7.1 through 7.8 during the periods
covered by the financial reports then being furnished
<PAGE> 25
and as of
the end of such periods; and (iii) comparable unaudited financial
statements for all Unrestricted Subsidiaries as a group (if any);
(d) Together with the financial reports delivered pursuant
to paragraph (b) of this Section 6.6, a letter of the independent
certified public accountants stating that in making the
examination necessary for expressing an opinion on such financial
statements, nothing came to their attention that caused them to
believe that there is in existence or has occurred any Default or
Event of Default hereunder (the occurrence of which is
ascertainable by accountants in the course of normal audit
procedures) or, if such accountants shall have obtained knowledge
of any such Default or Event of Default, describing the nature
thereof and the length of time it has existed;
(e) Promptly after the Company obtains knowledge thereof,
notice of any litigation or any governmental proceeding pending
against the Company or any Subsidiary in which liability might
reasonably be expected to exceed $5,000,000 or which might
reasonably be expected to otherwise have a Material Adverse
Effect;
(f) As soon as available, copies of each financial
statement, notice, report and proxy statement which the Company
shall furnish to its stockholders; copies of each registration
statement and periodic report, including but not limited to Forms
8-K, 10-K and 10-Q, which the Company may file with the
Securities and Exchange Commission, and any other similar or
successor agency of the Federal government administering the
Securities Act, the Exchange Act or the Trust Indenture Act of
1939, as amended; without duplication, copies of each report
(other than reports relating solely to the issuance of, or
transactions by others involving, its securities) relating to the
Company or its securities which the Company may file with any
securities exchange on which any of the Company's securities may
be registered; copies of any orders in any material proceedings
to which the Company or any of its Subsidiaries is a party,
issued by any governmental agency, Federal or state, having
jurisdiction over the Company or any of its Subsidiaries; and,
except at such times as the Company is a reporting company under
Section 13 or 15(d) of the Exchange Act or has complied with the
requirements for the exemption from registration under the
Exchange Act set forth in Rule 12g-3-2(b), such financial or
other information as any holder of the Notes or prospective
purchaser of the Notes may reasonably determine is required to
permit such holder to comply with the requirements of Rule 144A
under the Securities Act in connection with the resale by it of
the Notes;
(g) As soon as available, a copy of each other report
submitted to the Company or any Restricted Subsidiary by
independent accountants retained by the Company or any Subsidiary
in connection with any interim or special audit made by them of
the books of the Company or any Restricted Subsidiary;
(h) Promptly following any change in the composition of the
Company's Restricted Subsidiaries from that set forth in Annex I,
as theretofore updated pursuant to this paragraph, an updated
list setting forth the information specified in Annex I;
(i) Such additional information as you or such other
Institutional Holder of the Notes may reasonably request
concerning the Company and its Restricted Subsidiaries, including
but
<PAGE> 26
not limited to copies of any management letters submitted to
the Company or any Restricted Subsidiary by independent
accountants.
6.7. Inspection of Properties and Records.
------------------------------------- The Company
will allow, and will cause each Restricted Subsidiary to allow,
any representative of you or any other Institutional Holder, so
long as you or such other Institutional Holder holds any Note, to
visit and inspect any of its properties, to examine its books of
record and account and to discuss its affairs, finances and
accounts with its officers and its public accountants all at such
reasonable times as you or such Institutional Holder may
reasonably request. If no Default or Event of Default has
occurred and is continuing, you or such Institutional Holder
shall be limited to one such visit or inspection per calendar
year. If a Default or Event of Default has occurred and is
continuing, there shall be no limit on such visits and
inspections, and the Company shall bear the expenses of any such
visits or inspections. The Company shall have the right to
schedule any meetings with its accountants, provided that you or
any other Institutional Holder shall have the right to exclude
all Company representatives from such meetings.
6.8. ERISA.
------ (a) All assumptions and methods used to
determine the actuarial valuation of employee benefits, both
vested and unvested, under each Plan of the Company or any ERISA
Affiliate, and each such Plan, whether now existing or adopted
after the date hereof, will comply in all material respects with
ERISA.
(b) The Company will not at any time permit any Plan
established, maintained or contributed to by it or any Subsidiary
in the United States or ERISA Affiliate to:
(i) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Code or in Section 406 of
ERISA;
(ii) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA, whether or not waived;
or
(iii) be terminated under circumstances which are
likely to result in the imposition of a lien on the property of
the Company or any such Subsidiary pursuant to Section 4068 of
ERISA, if and to the extent such termination is within the
control of the Company;
if the event or condition described in clauses (i), (ii) or (iii)
above is likely to subject the Company or any Restricted
Subsidiary or ERISA Affiliate to liabilities which, individually
or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(c) The Company will furnish you or any other Institutional
Holder a copy of the annual report of each pension benefit Plan
(Form 5500) required to be filed with the Internal Revenue
Service no later than 45 days after the date such report has been
filed with the Internal Revenue Service.
(d) Promptly upon obtaining knowledge of the occurrence
thereof, the Company will give you and each other Institutional
Holder notice of (i) a reportable event with respect to any
<PAGE> 27
Plan;
(ii) the institution of any steps by the Company, any Subsidiary,
any ERISA Affiliate, the PBGC or any other Person to terminate
any Plan; (iii) the institution of any steps by the Company, any
Subsidiary, or any ERISA Affiliate to withdraw from any Plan;
(iv) a prohibited transaction in connection with any Plan;
(v) any material increase in the contingent liability of the
Company or any Subsidiary with respect to any post-retirement
welfare liability; or (vi) the taking of any action by the
Internal Revenue Service, the Department of Labor or the PBGC
with respect to any of the foregoing which, in any of the events
specified above, could reasonably be expected to result in a
Material Adverse Effect.
6.9. Compliance with Laws.
--------------------- (a) The Company will comply,
and will cause each Subsidiary to comply, with all laws, rules
and regulations, including Environmental Laws, relating to its or
their respective businesses; provided, however, that the Company
and its Subsidiaries shall not be required to comply with laws,
rules and regulations (i) the validity or applicability of which
are being contested in good faith and by appropriate proceedings
and as to which the Company has established adequate reserves on
its books or (ii) where such failure to comply would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(b) Promptly upon the occurrence thereof, the Company will
give you and each other Institutional Holder notice of the
institution of any proceedings against the Company or any
Subsidiary, or the receipt of notice of any Environmental Claim,
which if determined adversely might reasonably be expected to
have a Material Adverse Effect.
6.10. Acquisition of Notes.
--------------------- Neither the Company nor
any Subsidiary or Affiliate, directly or indirectly, will
repurchase or offer to repurchase any Notes unless the offer is
made to repurchase Notes pro rata from all holders at the same
time and on the same terms. The Company will forthwith cancel
any Notes in any manner or at any time acquired by the Company or
any Subsidiary or Affiliate and such Notes shall not be deemed to
be outstanding for any of the purposes of this Agreement or the
Notes.
6.11. Private Placement Number; NAIC.
-------------------------------- The Company
consents to (i) the filing of copies of this Agreement with
Standard & Poor's Corporation to obtain a private placement
number and (ii) the filing of copies of the financial statements
delivered pursuant to Section 6.6(b) with the National
Association of Insurance Commissioners.
6.12. Proposed Change of Control.
--------------------------- Promptly following
the day on which the Company first learns of a proposed Change of
Control, the Company shall provide information to each holder of
Notes regarding the nature and details of such proposed Change of
Control.
6.13. Nature of Business.
------------------- The Company will, and will
cause each Restricted Subsidiary to, engage only in the business
of designing, marketing, installing and supporting information
systems for the healthcare industry, as described in the Private
Placement Memorandum dated March 1999, except that Cerner
Properties, Inc. is and will be engaged in owning and operating
the Rock Creek Office Park.
<PAGE> 28
6.14. Prepayment of 8.30% Senior Notes.
--------------------------------- The Company
will prepay no later than one Business Day after the Closing Date
its outstanding 8.30% Senior Notes due August 1, 2004 in
accordance with the terms Section 2.2 of the Note Agreement dated
as of July 1, 1994; provided, however, that the Company shall not
be required to give the notice of such prepayment contemplated by
Section 2.3(a) of such Note Agreement.
7. NEGATIVE COVENANTS
The Company agrees that, for so long as any amount remains
unpaid on any Note:
7.1. Tangible Net Worth.
------------------- The Company will not permit its
Consolidated Tangible Net Worth to be less than $200,000,000 plus
the sum of 50% of Consolidated Net Income (without reduction for
any losses) for each fiscal quarter of the Company ending after
January 2, 1999.
7.2. Fixed Charge Ratio.
------------------- The Company will not at any time
permit the ratio of Consolidated Income Available for Fixed
Charges to Fixed Charges for the Company's most recently
completed four fiscal quarters to be less than 2.0 to 1.0.
7.3. Indebtedness Ratios.
-------------------- The Company will not permit at
any time the ratio of (a) Consolidated Indebtedness to
Consolidated Total Capitalization (calculated as of the end of
each fiscal quarter) to be more than .60 to 1.00 or
(b) Consolidated Senior Indebtedness to Consolidated Total
Capitalization (calculated as of the end of each fiscal quarter)
to be more than .45 to 1.00.
7.4. Liens.
------ The Company will not, and will not permit any
Restricted Subsidiary to, create, assume, or incur, or permit to
exist, directly or indirectly, any Lien on its properties or
assets, whether now owned or hereafter acquired except:
(a) Liens existing on property of the Company or any
Restricted Subsidiary as of the date of this Agreement that are
described in attached Annex III;
(b) Liens for taxes, assessments or governmental charges
not then due and delinquent or the validity of which is being
contested in good faith and as to which the Company has
established adequate reserves on its books;
(c) Liens arising in connection with court proceedings,
provided the execution of such Liens is effectively stayed and
such Liens are being contested in good faith and as to which the
Company has established adequate reserves on its books;
(d) Defects in title and Liens arising in the ordinary
course of business and not incurred in connection with the
borrowing of money, including encumbrances in the nature of
zoning restrictions, easements, rights and restrictions of record
on the use of real property, landlord's and lessor's liens in the
ordinary course of business, which in the aggregate do not
materially interfere with the conduct of the business of the
Company and its Restricted Subsidiaries taken as a whole or
materially impair the value of the property subject thereto for
the purpose of such business;
<PAGE> 29
(e) Liens (i) existing on real property at the time of its
acquisition by the Company or a Restricted Subsidiary and not
created in contemplation thereof, whether or not the Indebtedness
secured by such Lien is assumed by the Company or such Restricted
Subsidiary or (ii) on property created substantially
contemporaneously with the date of acquisition or completion of
construction thereof to secure or provide for all or a portion of
the purchase price or cost of construction of such property or
(iii) existing on property of a corporation at the time such
corporation is merged into or consolidated with or is acquired
by, or substantially all of its assets are acquired by, the
Company or a Restricted Subsidiary and not created in
contemplation thereof; provided that such Liens do not extend to
other property of the Company or any Subsidiary, that the
aggregate principal amount of Indebtedness secured by each such
Lien does not exceed 100% of the lesser of the cost or fair
market value (at the time of acquisition or completion of
construction) of the property subject thereto and that no Default
or Event of Default exists immediately prior to or after such
acquisition or incurrence;
(f) Capitalized Leases in existence as of the date of this
Agreement and disclosed in the attached Annex IV;
(g) Pledges or deposits under worker's compensation or
unemployment insurance laws and liens imposed by law, such as
laborers' or other employees', carriers', warehousemen's,
mechanics', materialmen's, vendors' and similar Liens or
priorities, not securing Indebtedness and arising in the ordinary
course of business or which are incidental to the construction,
maintenance or operation of any property, which are either
(i) not of record or (ii) of record but are being contested in
good faith by appropriate proceedings and for which the Company
has set aside on its books adequate reserves in accordance with
generally accepted accounting principles and which do not
materially detract from the usefulness of the property to which
they pertain in the business of the Company or the Restricted
Subsidiary owning the same;
(h) Liens not otherwise permitted by paragraphs (a) through
(g) above incurred subsequent to the Closing Date to secure
Indebtedness, provided that, the sum of without duplication, (x)
outstanding Indebtedness of the Company and its Restricted
Subsidiaries secured by Liens incurred pursuant to this paragraph
(h), (y) other Indebtedness of Restricted Subsidiaries (other
than Indebtedness of a Restricted Subsidiary to the Company or a
Wholly-Owned Restricted Subsidiary) outstanding, and
(z) outstanding preferred stock of Restricted Subsidiaries (other
than preferred stock held by the Company or a Wholly-Owned
Restricted Subsidiary), does not at any time exceed 20% of
Consolidated Tangible Net Worth. Other than Liens to secure
Indebtedness of a Restricted Subsidiary to the Company or another
Wholly-Owned Restricted Subsidiary, no such Liens permitted by
this paragraph (h) shall be created to secure pre-existing
Indebtedness or any extension, renewal or replacement of such
Indebtedness or any Indebtedness (whether or not pre-existing
Indebtedness) under any pre-existing agreement or under any
extension, renewal or replacement of such an agreement; and
(i) Liens resulting from extensions, renewals, refinancings
and refundings of Indebtedness secured by Liens permitted by
paragraph (a) above, provided there is no increase in the
principal amount of Indebtedness secured thereby at the time of
renewal, any new Lien attaches only to the same property
theretofore subject to such earlier Lien, there exists no Default
<PAGE> 30
or Event of Default, and the Company would be in compliance with
Section 7.1 and Section 7.3, on a pro forma basis.
7.5. Restricted Payments.
-------------------- The Company will not, except as
hereinafter provided:
(a) declare or pay any dividends, either in cash or
property, on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of
capital stock of the Company);
(b) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any
class or any warrants, rights or options to purchase or acquire
any shares of its capital stock;
(c) make any other payment or distribution, either directly
or indirectly or through any Subsidiary, in respect of its
capital stock; or
(d) make, or permit any Restricted Subsidiary to make, any
Restricted Investment;
(all such declarations, payments, purchases, redemptions,
retirements, distributions and Investments described in clauses
(a) through (d) being herein collectively called "Restricted
Payments") if, after giving effect thereto, (1) the aggregate
amount of Restricted Payments subsequent to January 2, 1999 to
and including the date of the making of the Restricted Payment in
question, would exceed the sum of (i) $40,000,000 plus, (ii) 50%
of Consolidated Net Income (or less 100% of any net deficit) for
each fiscal quarter of the Company ending after January 2, 1999,
plus (iii) the net cash proceeds received by the Company after
January 2, 1999 from the sale of shares of its common stock or
evidences of Indebtedness which are subsequently converted into
or exchanged for its common stock, or (2) a Default or an Event
of Default would exist, or (3) the Company would no longer be in
compliance with Section 7.1 or 7.3, on a pro forma basis.
7.6. Merger or Consolidation.
------------------------- The Company will not, and
will not permit any Restricted Subsidiary to, merge or
consolidate with, or sell all or substantially all of its assets
to, any Person, except that:
(a) The Company may consolidate with or merge into, or sell
all or substantially all of its assets to, any Person or permit
any Person to merge into it, provided that immediately before and
after giving effect thereto,
(i) Subject to the provisions of Section 2.2(b), the
Company is the successor corporation or, if the Company is not
the successor corporation, the successor corporation is a solvent
corporation organized under the laws of a state of the United
States of America or the District of Columbia with substantially
all of its assets located in the United States of America, shall
expressly assume in writing the Company's obligations under the
Notes and this Agreement, and the holders of the Notes shall
receive a favorable opinion of counsel reasonably acceptable to
them as to the validity and enforceability of such assumption;
(ii) There shall exist no Default or Event of Default;
<PAGE> 31
(iii) The Company would be in compliance with
Sections 7.1 and 7.3 on a pro forma basis; and
(b) Any Restricted Subsidiary may (i) merge into the
Company or another Wholly-Owned Restricted Subsidiary or
(ii) sell, transfer or lease all or any part of its assets to the
Company or to another Wholly-Owned Restricted Subsidiary or
(iii) merge into any Person which, as a result of such merger,
becomes a Wholly-Owned Restricted Subsidiary provided in each
such instance that immediately after giving effect thereto there
shall exist no Default or Event of Default.
7.7. Sale of Assets.
--------------- The Company will not, and will not
permit any Restricted Subsidiary to, sell, lease (including a
sale and leaseback transaction), transfer or otherwise dispose of
(collectively a "Disposition"), any assets (including capital
stock of a Subsidiary), in one or a series of transactions (other
than in the ordinary course of business or as permitted by
Section 7.6) to any Person, other than the Company or a Wholly-
Owned Restricted Subsidiary, if:
(a) during the twelve calendar months immediately preceding
such Disposition, after giving effect to such Disposition the
aggregate book value of all assets subject to Dispositions during
such twelve month period would exceed 10% of Consolidated Total
Assets as of the end of the immediately preceding fiscal quarter,
or the Consolidated Net Income attributable to the assets
included in such Dispositions during such twelve month period
would exceed 10% of Consolidated Net Income for the twelve months
ending as of the most recently completed fiscal quarter of the
Company; or
(b) the aggregate net book value of all assets subject to
Dispositions since the Closing Date would exceed 20% of
Consolidated Total Assets as of the end of the fiscal quarter
immediately preceding such Disposition or the Consolidated Net
Income attributable to the assets subject to Dispositions since
the Closing Date would exceed 20% of Consolidated Net Income for
such period; or
(c) there exists or would exist a Default or Event of
Default.
Notwithstanding the foregoing, the assets subject to a
Disposition shall not be subject to or included in the foregoing
limitation and computation if, within 180 days of such
Disposition, the net proceeds therefrom are either (i) reinvested
in similar assets of the Company or its Restricted Subsidiaries
or (ii) applied by the Company to the pro rata prepayment of
Senior Indebtedness, including prepayment of the Notes pursuant
to Section 2.2(a). Notwithstanding anything in the foregoing to
the contrary, the Company will not, and will not permit any
Restricted Subsidiary to, sell or discount any accounts
receivable; provided that the Company and its Restricted
Subsidiaries may sell without recourse in any fiscal year
accounts receivable that do not exceed in the aggregate 5% of
Consolidated Net Worth as of the beginning of such fiscal year.
7.8. Disposition of Stock of Restricted Subsidiaries.
------------------------------------------------ The
Company will not permit any Restricted Subsidiary to issue or
sell the capital stock of a Restricted Subsidiary, or any
warrants, rights or options to purchase, or securities
convertible into or exchangeable for, such capital stock, to any
Person other than the Company or another Wholly-Owned Restricted
<PAGE> 32
Subsidiary. The Company will not, and will not permit any
Restricted Subsidiary to, sell, transfer or otherwise dispose of
(other than to the Company or another Wholly-Owned Restricted
Subsidiary) any capital stock (including any warrants, rights or
options to purchase, or securities convertible into or
exchangeable for, capital stock) or Indebtedness of any
Restricted Subsidiary unless:
(i) simultaneously therewith all Investments in such
Restricted Subsidiary owned by the Company and any other
Restricted Subsidiary are simultaneously disposed of as an
entirety;
(ii) the board of directors of the Company shall have
determined that such sale, transfer or disposition is in the best
interests of the Company;
(iii) such sale, transfer or other disposition is
to a Person for a cash consideration and on terms reasonably
deemed by the board of directors to be adequate and satisfactory;
(iv) such Restricted Subsidiary does not have any
continuing Investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of; and
(v) such sale, transfer or other disposition is
permitted by Section 7.7.
7.9. Designation of Unrestricted Subsidiaries.
----------------------------------------- The Company
will not designate any Restricted Subsidiary as an Unrestricted
Subsidiary unless immediately before and after such designation:
(a) Such Subsidiary does not own any Investment in the
Company or any Restricted Subsidiary;
(b) There exists no Default or Event of Default; and
(c) The Company is in compliance with Sections 7.1 and 7.3
(on a pro forma basis giving effect to such designation); and
(d) Such Subsidiary has not theretofore at any time been
designated as an Unrestricted Subsidiary.
7.10. Transactions with Affiliates.
----------------------------- The Company will
not, and will not permit any Restricted Subsidiary to, enter into
any transaction (including the furnishing of goods or services)
with an Affiliate except in the ordinary course of business as
presently conducted and on terms and conditions no less favorable
to the Company or such Restricted Subsidiary than would be
obtained in a comparable arm's-length transaction with a Person
not an Affiliate.
7.11. Guaranties.
----------- The Company will not, and will not
permit any Restricted Subsidiary to become or be liable in
respect to any Guaranty of Indebtedness for borrowed money except
Guaranties which are limited in amount to a stated maximum
principal amount of dollar exposure.
<PAGE> 33
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1. Nature of Events.
----------------- An "Event of Default" shall exist
if any one or more of the following occurs:
(a) Any default in the payment of interest when due on any
of the Notes and continuance of such default for a period of five
Business Days;
(b) Any default in the payment when due of the principal of
any of the Notes or the Make-Whole Amount thereon, if any, or the
premium thereon, if any;
(c) Any default (i) in the payment of the principal of or
interest on any other Indebtedness of the Company and its
Restricted Subsidiaries aggregating in excess of $5,000,000 in
principal as and when due and payable (whether by lapse of time,
declaration, call for redemption or otherwise) and the
continuation of such default beyond the period of grace, if any,
allowed with respect thereto, or (ii) (other than a payment
default) under any mortgages, agreements or other instruments of
the Company and its Restricted Subsidiaries under or pursuant to
which such Indebtedness aggregating in excess of $5,000,000 in
principal amount is outstanding which default results in the
acceleration of such Indebtedness;
(d) Any default in the observance of any covenant or
agreement contained in Sections 6.14, 7.1, 7.2, 7.3 or 8.7;
(e) Any default in the observance of any covenant or
agreement contained in Sections 7.4 through 7.11 which is not
remedied within 15 days;
(f) Any default in the observance or performance of any
other covenant or provision of this Agreement which is not
remedied within 20 days;
(g) Any representation or warranty made by the Company in
this Agreement or in any written statement or certificate
furnished by the Company in connection with the issuance and sale
of the Notes or furnished by the Company pursuant to this
Agreement, proves incorrect in any material respect as of the
date of the issuance or making thereof;
(h) Any judgment, writ or warrant of attachment or any
similar process in an aggregate amount in excess of $10,000,000
shall be entered or filed against the Company or any Subsidiary
or against any property or assets of either and remain unpaid,
unvacated, unbonded or unstayed (through appeal or otherwise) for
a period of 30 days after the Company or any Subsidiary receives
notice thereof;
(i) The Company or any Restricted Subsidiary shall
(i) generally not pay its debts as they become due or
admit in writing its inability to pay its debts generally as they
become due;
(ii) file a petition in bankruptcy or for
reorganization or for the adoption of an arrangement under the
Federal Bankruptcy Code, or any similar applicable bankruptcy or
<PAGE> 34
insolvency law, as now or in the future amended (herein
collectively called "Bankruptcy Laws"); file an answer or other
pleading admitting or failing to deny the material allegations of
such a petition; fail to file, within the time allowed for such
purpose, an answer or other pleading denying or otherwise
controverting the material allegations of such a petition; or
file an answer or other pleading seeking, consenting to or
acquiescing in relief provided for under the Bankruptcy Laws;
(iii) make an assignment of all or a substantial
part of its property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment
of a receiver, liquidator, custodian or trustee of it or for all
or a substantial part of its property;
(v) be finally adjudicated a bankrupt or insolvent;
(vi) be subject to the entry of a court order, or the
institution of proceedings, which shall not be vacated, set
aside, stayed or dismissed within 30 days from the date of entry
or institution, (A) appointing, or seeking the appointment of, a
receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property, or (B) for relief pursuant to
an involuntary case brought under, or effecting an arrangement
in, bankruptcy or (C) for a reorganization pursuant to the
Bankruptcy Laws or (D) for any other judicial modification or
alteration of the rights of creditors; or
(vii) be subject to the assumption of custody or
sequestration by a court of competent jurisdiction of all or a
substantial part of its property, which custody or sequestration
shall not be suspended or terminated within 30 days from its
inception.
8.2. Remedies on Default.
---------------------- When any Event of Default
described in paragraphs (a) through (h) of Section 8.1 has
occurred and is continuing, the holders of at least 25% in
aggregate principal amount of the Notes then outstanding may, by
notice to the Company, declare the entire principal, together
with the Make-Whole Amount (to the extent permitted by law), and
all interest accrued on all Notes to be, and such Notes shall
thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of
which are expressly waived. Notwithstanding the foregoing, when
(i) any Event of Default described in paragraphs (a) or (b) of
Section 8.1 has occurred and is continuing, any holder may by
notice to the Company declare the entire principal, together with
the Make-Whole Amount (to the extent permitted by law), and all
interest accrued on the Notes then held by such holder to be, and
such Notes shall thereupon become, forthwith due and payable,
without any presentment, demand, protest or other notice of any
kind, all of which are expressly waived and (ii) where any Event
of Default described in paragraph (i) of Section 8.1 has
occurred, then the entire principal, together with the Make-Whole
Amount (to the extent permitted by law) and all interest accrued
on all outstanding Notes shall immediately become due and payable
without presentment, demand or notice of any kind. Upon the
Notes or any of them becoming due and payable as aforesaid, the
Company will forthwith pay to the holders of such Notes the
entire principal of and interest accrued on such Notes, plus the
Make-Whole Amount which shall be calculated on the Determination
Date.
<PAGE> 35
8.3. Annulment of Acceleration of Notes.
----------------------------------- The provisions of
Section 8.2 are subject to the condition that if the principal of
and accrued interest on the Notes have been declared immediately
due and payable by reason of the occurrence of any Event of
Default described in paragraphs (a) through (h), inclusive, of
Section 8.1, the holder or holders of at least 66-2/3% in
aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that (i) at
the time such declaration is annulled and rescinded no judgment
or decree has been entered for the payment of any monies due
pursuant to the Notes or this Agreement, (ii) all arrears of
interest upon all the Notes and all other sums payable under the
Notes and under this Agreement (except any principal, interest or
premium on the Notes which has become due and payable solely by
reason of such declaration under Section 8.2) shall have been
duly paid and (iii) each and every Default or Event of Default
shall have been cured or waived; and provided further, that no
such rescission and annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right
consequent thereto.
8.4. Other Remedies.
---------------- If any Event of Default shall be
continuing, any holder of Notes may enforce its rights by suit in
equity, by action at law, or by any other appropriate
proceedings, whether for the specific performance (to the extent
permitted by law) of any covenant or agreement contained in this
Agreement or in the Notes or in aid of the exercise of any power
granted in this Agreement, and may enforce the payment of any
Note held by such holder and any of its other legal or equitable
rights.
8.5. Conduct No Waiver; Collection Expenses.
--------------------------------------- No course of
dealing on the part of any holder of Notes, nor any delay or
failure on the part of any holder of Notes to exercise any of its
rights, shall operate as a waiver of such rights or otherwise
prejudice such holder's rights, powers and remedies. If the
Company fails to pay, when due, the principal of, or the interest
on, any Note, or fails to comply with any other provision of this
Agreement, the Company will pay to each holder, to the extent
permitted by law, on demand, such further amounts as shall be
sufficient to cover the cost and expenses, including but not
limited to reasonable attorneys' fees, incurred by such holders
of the Notes in collecting any sums due on the Notes or in
otherwise enforcing any of their rights.
8.6. Remedies Cumulative.
--------------------- No right or remedy conferred
upon or reserved to any holder of Notes under this Agreement is
intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every
other right or remedy given under this Agreement or now or
hereafter existing under any applicable law. Every right and
remedy given by this Agreement or by applicable law to any holder
of Notes may be exercised from time to time and as often as may
be deemed expedient by such holder, as the case may be.
8.7. Notice of Default.
------------------ With respect to Defaults, Events
of Default or claimed defaults, the Company will give the
following notices:
(a) The Company promptly, but in any event within 5 days
after the day on which an executive officer of the Company first
obtains knowledge thereof, will furnish to each holder of a Note
written notice of the occurrence of a Default or an Event of
Default. Such notice shall
<PAGE> 36
specify the nature of such default,
the period of existence thereof and what action the Company has
taken or is taking or proposes to take with respect thereto.
(b) If the holder of any Note or of any other evidence of
Indebtedness of the Company or any Restricted Subsidiary gives
any notice or takes any other action with respect to a claimed
default, the Company will forthwith give written notice thereof
to each holder of the then outstanding Notes, describing the
notice or action and the nature of the claimed default.
9. AMENDMENTS, WAIVERS AND CONSENTS
9.1. Matters Subject to Modification.
-------------------------------- Any term, covenant,
agreement or condition of this Agreement may, with the consent of
the Company, be amended, or compliance therewith may be waived
(either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have
obtained the consent in writing of the holder or holders of at
least 66-2/3% in aggregate principal amount of outstanding Notes;
provided, however, that, without the written consent of the
holder or holders of all of the Notes then outstanding, no such
waiver, modification, alteration or amendment shall be effective
which will (i) change the time of payment (including any required
prepayment) of the principal of or the interest on any Note,
(ii) reduce the principal amount thereof or the premium, if any,
or change the rate of interest thereon, (iii) change any
provision of any instrument affecting the preferences between
holders of the Notes or between holders of the Notes and other
creditors of the Company, or (iv) change any of the provisions of
Section 8.2, Section 8.3 or this Section 9. Notwithstanding
anything contained in this Section 9.1 to the contrary, so long
as any Purchaser and its affiliates, collectively, hold Notes
aggregating at least $20,000,000, any amendment or waiver under
this Agreement shall require the consent of such holders.
For the purpose of determining whether holders of the
requisite principal amount of Notes have made or concurred in any
waiver, consent, approval, notice or other communication under
this Agreement, Notes held in the name of, or owned beneficially
by, the Company, any Subsidiary or any Affiliate thereof, shall
not be deemed outstanding.
9.2. Solicitation of Holders of Notes.
--------------------------------- The Company will
not, directly or indirectly, solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the
provisions of this Agreement or the Notes unless each holder of
the Notes (irrespective of the amount of Notes then owned by it)
shall concurrently be informed thereof by the Company and shall
be afforded the opportunity of considering the same and shall be
supplied by the Company with sufficient information, including
but not limited to the making of updated representations and
warranties comparable in scope to those set forth in Section 3.1,
to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent
effected pursuant to the provisions of this Section 9 shall be
delivered by the Company to each holder of outstanding Notes
forthwith following the date on which the same shall have been
executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly
or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise,
to any holder of the Notes as consideration for or as an
inducement to the entering into by any holder of the Notes of any
waiver or amendment of any of the terms and provisions of this
Agreement unless such
<PAGE> 37
remuneration is concurrently paid, on the
same terms, ratably to each holder of the then outstanding Notes.
9.3. Binding Effect.
--------------- Subject to the last sentence of this
Section 9.3, any amendment or waiver shall apply equally to all
holders of the Notes and shall be binding upon them, upon each
future holder of any Note and upon the Company whether or not
such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect
any obligation not expressly amended or waived or impair any
right related thereto. Any consent made by a holder of Notes
that has transferred or has agreed to transfer its Notes to the
Company, any Subsidiary or any Affiliate thereof and has provided
or has agreed to provide such written consent as a condition to
such transfer shall be void and of no force and effect except
solely as to such holder, and any amendments effected or waivers
granted or to be effected or granted that would not have been or
would not be so effected or granted but for such consent (and the
consents of all other holders of Notes that were acquired under
the same or similar conditions) shall be void and of no force and
effect retroactive to the date such amendment or waiver initially
took or takes effect, except solely as to such holder.
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND
REPLACEMENT
10.1. Form of Notes.
---------------- Each Note initially delivered
under this Agreement will be in the form of one fully registered
Note in the form attached as Exhibit A-1 or A-2, as appropriate.
The Notes are issuable only in fully registered form and in
denominations of at least $100,000 (or the remaining outstanding
balance thereof, if less than $100,000).
10.2. Note Register.
--------------- The Company shall cause to be
kept at its principal office a register (the "Note Register") for
the registration and transfer of the Notes. The names and
addresses of the holders of Notes, the transfer thereof and the
names and addresses of the transferees of the Notes shall be
registered in the Note Register. The Company may deem and treat
the person in whose name a Note is so registered as the holder
and owner thereof for all purposes and shall not be affected by
any notice to the contrary, until due presentment of such Note
for registration of transfer as provided in this Section 10.
10.3. Issuance of New Notes upon Exchange or Transfer.
------------------------------------------------
Upon surrender for exchange or registration of transfer of any
Note at the office of the Company designated for notices in
accordance with Section 11.2, the Company shall execute and
deliver, at its expense, one or more new Notes of any authorized
denominations requested by the holder of the surrendered Note,
each dated the date to which interest has been paid on the Notes
so surrendered (or, if no interest has been paid, the date of
such surrendered Note), but in the same aggregate unpaid
principal amount as such surrendered Note, and registered in the
name of such person or persons as shall be designated in writing
by such holder. Every Note surrendered for registration of
transfer shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note
or by his attorney duly authorized in writing. The Company may
condition its issuance of any new Note in connection with a
transfer by any Person on compliance with Section 3.2, by
Institutional Holders on compliance with Section 2.5 and on the
payment to the
<PAGE> 38
Company of a sum sufficient to cover any stamp tax
or other governmental charge imposed in respect of such transfer.
10.4. Replacement of Notes.
--------------------- Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft
or destruction upon delivery of a bond of indemnity in such form
and amount as shall be reasonably satisfactory to the Company or
in the event of such mutilation upon surrender and cancellation
of the Note, the Company, without charge to the holder thereof,
will make and deliver a new Note of like tenor in lieu of such
lost, stolen, destroyed or mutilated Note. If any such lost,
stolen or destroyed Note is owned by you or any other
Institutional Holder, then the affidavit of an authorized officer
of such owner setting forth the fact of such loss, theft or
destruction and of its ownership of the Note at the time of such
loss, theft or destruction shall be accepted as satisfactory
evidence thereof, and no further indemnity shall be required as a
condition to the execution and delivery of a new Note, other than
a written agreement of such owner (in form reasonably
satisfactory to the Company) to indemnify the Company.
11. MISCELLANEOUS
11.1. Expenses.
--------- Whether or not the purchase of Notes
herein contemplated shall be consummated, the Company agrees to
pay directly all reasonable expenses in connection with the
preparation, execution and delivery of this Agreement and the
transactions contemplated by this Agreement, including, but not
limited to, out-of-pocket expenses, filing fees of Standard &
Poor's Corporation in connection with obtaining a private
placement number, charges and disbursements of special counsel,
photocopying and printing costs and charges for shipping the
Notes, adequately insured, to you at your home office or at such
other address as you may designate, and all similar expenses
(including the fees and expenses of counsel) relating to any
amendments, waivers or consents in connection with this Agreement
or the Notes, including, but not limited to, any such amendments,
waivers or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by the Company of its
obligations under this Agreement and the Notes. The Company
agrees, to the extent permitted by applicable law, to pay and
indemnify each holder of Notes against any reasonable costs and
expenses, including attorneys' fees and disbursements, incurred
by such holder in evaluating (in connection with any
investigation, litigation or other proceedings involving the
Company (including, without limitation, any threatened
investigation or proceeding) relating to this Agreement) and
enforcing any rights or remedies under this Agreement or in
responding to any subpoena or other legal process issued in
connection with this Agreement or the transactions contemplated
hereby, including without limitation costs and expenses incurred
in any bankruptcy of the Company. Without limiting the
foregoing, to the extent permitted by applicable law, the Company
also agrees to pay the reasonable fees, expenses and
disbursements of an investment bank or other firm acting as
financial adviser to any holder of Notes following the occurrence
and during the continuance of a Default or an Event of Default or
in connection with any amendment or waiver proposed in connection
with any Default or Event of Default or any workout,
restructuring or similar negotiations relating to the Notes. The
Company also agrees that it will pay and save you harmless
against any and all liability with respect to stamp and other
documentary taxes, if any, which may be payable, or which may be
determined to be payable in connection with the execution and
delivery of this Agreement or the Notes (but not in connection
with a transfer of
<PAGE> 39
any Notes), whether or not any Notes are then
outstanding. The obligations of the Company under this
Section 11.1 shall survive the retirement of the Notes.
11.2. Notices.
-------- Except as otherwise expressly provided
herein, all communications provided for in this Agreement shall
be in writing and delivered or sent by registered or certified
mail, return receipt requested, or by overnight courier (i) if to
you, to the address set forth below your name in Schedule I, or
to such other address as you may in writing designate, (ii) if to
any other holder of the Notes, to such address as the holder may
designate in writing to the Company, and (iii) if to the Company,
to Cerner Corporation, 2800 Rockcreek Parkway, Kansas City,
Missouri 64117, Attention: President, with a copy to the General
Counsel at the same address, or to such other address as the
Company may in writing designate.
11.3. Reproduction of Documents.
-------------------------- This Agreement and
all documents relating hereto, including, without limitation,
(i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by you at the closing of the
purchase of the Notes (except the Notes themselves), and
(iii) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process, and you may
destroy any original document so reproduced. The Company agrees
and stipulates that any such reproduction which is legible shall
be admissible in evidence as the original itself in any judicial
or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in
the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence; provided that nothing herein
contained shall preclude the Company from objecting to the
admission of any reproduction on the basis that such reproduction
is not accurate, has been altered or is otherwise incomplete.
11.4. Successors and Assigns.
------------------------ This Agreement will
inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
11.5. Law Governing.
-------------- This Agreement shall be governed
by and construed in accordance with the laws of the State of
Illinois.
11.6. Headings.
--------- The headings of the sections and
subsections of this Agreement are inserted for convenience only
and do not constitute a part of this Agreement.
11.7. Counterparts.
------------- This Agreement may be executed
simultaneously in one or more counterparts, each of which shall
be deemed an original, but all such counterparts shall together
constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account
for more than one such counterpart or reproduction thereof
permitted by Section 11.3.
11.8. Reliance on and Survival of Provisions.
----------------------------------------- All
covenants, representations and warranties made by the Company
herein and in any certificates delivered pursuant to this
Agreement, whether or not in connection with a closing, (i) shall
be deemed to have been relied
<PAGE> 40
upon by you, notwithstanding any
investigation heretofore or hereafter made by you or on your
behalf and (ii) shall survive the delivery of this Agreement and
the Notes.
11.9. Integration and Severability.
----------------------------- This Agreement
embodies the entire agreement and understanding between you and
the Company, and supersedes all prior agreements and
understandings relating to the subject matter hereof. In case
any one or more of the provisions contained in this Agreement or
in any Note, or application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this
Agreement and in any Note, and any other application thereof,
shall not in any way be affected or impaired thereby.
11.10. Confidential Information.
------------------------- For the purposes of
this Section 11.10, "Confidential Information" means information
delivered to you by or on behalf of the Company or any Subsidiary
in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that
was clearly marked or labeled or otherwise adequately identified
in writing when received by you as being confidential information
of the Company or such Subsidiary, provided that such term does
not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial
statements delivered to you under Section 6.6 that are otherwise
publicly available. You will maintain the confidentiality of
such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information
of third parties delivered to you, provided that you may deliver
or disclose Confidential Information to (i) your directors,
trustees, officers, employees, agents, attorneys and affiliates
(to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree
to hold confidential the Confidential Information substantially
in accordance with the terms of this Section 11.10, (iii) any
other holder of any Note, (iv) any Institutional Investor to
which you sell or offer to sell such Note or any part thereof or
any participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound
by the provisions of this Section 11.10), (v) any Person from
which you offer to purchase any security of the Company (if such
Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this
Section 11.10), (vi) any federal or state regulatory authority
having jurisdiction over you, (vii) the National Association of
Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other
Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default
has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the
rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of
this Section 11.10 as though it were a party to this Agreement.
On reasonable request by the Company in connection with the
delivery to any holder of a Note of information required to be
<PAGE> 41
delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this
Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this
Section 11.10.
<PAGE> 42
IN WITNESS WHEREOF, the Company and the Purchasers have
caused this Agreement to be executed and delivered by their
respective officer or officers thereunto duly authorized.
CERNER CORPORATION
By: /s/ Marc G. Naughton
______________________________
Name: Marc G. Naughton
Title: Chief Financial Officer
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By: /s/ Jon C. Heiny
______________________________
Its: Counsel
______________________________
By: /s/ Anne Graff Brown
______________________________
Its: Counsel
______________________________
PRINCIPAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE
ACCOUNTS
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By: /s/ Jon C. Heiny
______________________________
Its: Counsel
______________________________
By: /s/ Anne Graff Brown
______________________________
Its: Counsel
______________________________
<PAGE> S-1
COMMERCIAL UNION LIFE INSURANCE
COMPANY OF AMERICA, a Delaware
corporation
By: Principal Life Insurance Company,
an Iowa corporation,
its attorney in fact
By: /s/ Jon C. Heiny
______________________________
Its: Counsel
______________________________
By: /s/ Anne Graff Brown
______________________________
Its: Counsel
______________________________
NIPPON LIFE INSURANCE COMPANY OF
AMERICA, an Iowa corporation
By: Principal Life Insurance Company,
an Iowa corporation,
its attorney in fact
By: /s/ Jon C. Heiny
______________________________
Its: Counsel
______________________________
By: /s/ Anne Graff Brown
______________________________
Its: Counsel
______________________________
<PAGE> S-2
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Stephen J. Blewitt
_______________________________
Name: Stephen J. Blewitt
_____________________________
Title: Authorized Officer
____________________________
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
By: /s/ Stephen J. Blewitt
______________________________
Name: Stephen J. Blewitt
____________________________
Title: Authorized Officer
___________________________
INVESTORS PARTNER LIFE INSURANCE
COMPANY
By: /s/ Stephen J. Blewitt
______________________________
Name: Stephen J. Blewitt
____________________________
Title: Authorized Officer
___________________________
<PAGE> S-3
SCHEDULE I
----------
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- -----------------------------------
Series A Series B
-------- --------
<S> <C> <C>
PRINCIPAL LIFE INSURANCE COMPANY $51,500,000 $1,000,000
5,000,000
</TABLE>
(1) All payments on account of the Notes to be made by 12:00
noon (New York City time) by wire transfer of immediately
available funds to:
<TABLE>
With respect to the Series A Notes: With respect to the Series B Notes
<S> <C>
ABA #073000228 ABA #073000228
Norwest Bank Iowa, N.A. Norwest Bank Iowa, N.A.
7th and Walnut Streets 7th and Walnut Streets
Des Moines, Iowa 50309 Des Moines, Iowa 50309
For credit to Principal For credit to Principal
Life Insurance Company Life Insurance Company
Account No. 0000014752 Account No. 0000014752
OBI PFGSE (S) B0062102()Cerner OBI PFGSE (S) B0062101()Cerner
</TABLE>
In each case with sufficient information (including interest
rate, maturity date, interest amount, principal amount and
premium amount, if applicable) to identify the source and
application of such funds.
(2) All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Fax: 515-248-2643
Confirmation: 515-247-0689
<PAGE> Schedule I
(3) All other communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attn: Investment - Securities
Fax: 515-248-2490
Confirmation: 515-248-3495
(4) Upon closing, deliver Notes to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0301
Attn: Jon C. Heiny, Esq.
Tax ID #42-0127290
2
<PAGE> Schedule I
SCHEDULE I
----------
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- -------------------------------
Series A Series B
-------- --------
<S> <C> <C>
PRINCIPAL LIFE INSURANCE COMPANY $2,500,000 $7,500,000
ON BEHALF OF ONE OR MORE SEPARATE
ACCOUNTS
</TABLE>
(1) All payments on account of the Notes to be made by 12:00
noon (New York City time) by wire transfer of immediately
available funds to:
<TABLE>
With respect to the Series A Notes: With respect to the Series B Notes: Notes:
<S> <C>
ABA #073000228 ABA #073000228
Norwest Bank Iowa, N.A. Norwest Bank Iowa, N.A.
7th and Walnut Streets 7th and Walnut Streets
Des Moines, Iowa 50309 Des Moines, Iowa 50309
For credit to Principal For credit to Principal
Life Insurance Company Life Insurance Company
Account No. 0000032395 Account No. 0000032395
OBI PFGSE (S) B0062102()Cerner OBI PFGSE (S) B0062101()Cerner
</TABLE>
In each case with sufficient information (including interest
rate, maturity date, interest amount, principal amount and
premium amount, if applicable) to identify the source and
application of such funds.
(2) All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Fax: 515-248-2643
Confirmation: 515-247-0689
3
<PAGE> Schedule I
(3) All other communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attn: Investment - Securities
Fax: 515-248-2490
Confirmation: 515-248-3495
(4) Upon closing, deliver Notes to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0301
Attn: Jon C. Heiny, Esq.
Tax ID #42-0127290
4
<PAGE> Schedule I
SCHEDULE I
----------
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ------------------------------------
Series A Series B
-------- --------
<S> <C> <C>
COMMERCIAL UNION LIFE INSURANCE $1,500,000
COMPANY OF AMERICA
</TABLE>
(1) All payments on account of the Notes to be made by 12:00
noon (New York City time) by wire transfer of immediately
available funds to:
First Union (Philadelphia)
ABA #031201467
1500 Market Street
Philadelphia, PA 19102-2509
Attn: Joe Aman
DDA 5000012398064
For further credit to Account No. 060073-02-4 (Commercial
Union Life Insurance Company of America/Principal)
OBI PFGSE (S) B0062101()Cerner
With sufficient information (including interest rate,
maturity date, interest amount, principal amount and premium
amount, if applicable) to identify the source and
application of such funds.
(2) All notices with respect to payments to:
Commercial Union Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Fax: 515-248-2643
Confirmation: 515-247-0689
5
<PAGE> Schedule I
(3) All other communications to:
Commercial Union Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attn: Investment - Securities - Jon Davidson
Fax: 515-248-2490
Confirmation: 515-248-3495
(4) Upon closing, deliver Notes to:
Commercial Union Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0301
Attn: Jon C. Heiny, Esq.
Tax ID #04-2235236
6
<PAGE> Schedule I
SCHEDULE I
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- -----------------------------------
Series A Series B
-------- --------
<S> <C> <C>
NIPPON LIFE INSURANCE COMPANY OF $800,000
AMERICA 200,000
</TABLE>
(1) All payments on account of the Notes to be made by 12:00
noon (New York City time) by wire transfer of immediately
available funds to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 0007051775
OBI PFGSE (S) B0062102()Cerner
With sufficient information (including interest rate,
maturity date, interest amount, principal amount and premium
amount, if applicable) to identify the source and
application of such funds.
(2) All notices with respect to payments to:
Nippon Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Fax: 515-248-2643
Confirmation: 515-247-0689
(3) All other communications to:
Nippon Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attn: Investment - Securities - Jon Davidson
Fax: 515-248-2490
Confirmation: 515-248-3495
7
<PAGE> Schedule I
(4) Upon closing, deliver Notes to:
Nippon Life Insurance Company of America
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0301
Attn: Jon C. Heiny, Esq.
Tax ID #04-2509896
8
<PAGE> Schedule I
SCHEDULE I
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- -------------------------------
Series A Series B
-------- --------
<S> <C> <C>
JOHN HANCOCK MUTUAL LIFE $17,500,000
INSURANCE COMPANY 11,000,000
</TABLE>
(1) All payments on account of the Notes in accordance with the
provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 12:00
noon (Boston time) to:
BankBoston
ABA No. 011000390
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Cerner Corporation; PPN No.: 15678# AC 9
7.66% Series B Senior Notes Due April 15, 2009
(2) Contemporaneous with the above wire transfer, advice setting
forth:
(1) the full name, interest rate and maturity date of the
Notes;
(2) allocation of payment between principal and interest
and any special payment; and
(3) name and address of Bank from which wire transfer was
sent shall be delivered or faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Manager
Investment Accounting Division, B-3
Fax: 617-572-0628
9
<PAGE> Schedule I
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of
maturity shall be delivered or faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Manager
Investment Accounting Division, B-3
Fax: 617-572-0628
(4) All other communications which shall include, but not be
limited to, financial statements and certificates of
compliance with financial covenants, shall be delivered or
faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Group, T-57
Fax: 617-572-1605
(5) A copy of any notices relating to change in issuer's name,
address or principal place of business or location of
collateral and a copy of any legal opinions shall be
delivered or faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Investment Law Division, T-50
Fax: 617-572-9268
Tax ID #04-1414660
10
<PAGE> Schedule I
SCHEDULE I
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- --------------------------------
Series A Series B
-------- --------
<S> <C> <C>
JOHN HANCOCK VARIABLE LIFE $1,000,000
INSURANCE COMPANY
</TABLE>
(1) All payments on account of the Notes in accordance with the
provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 12:00
noon (Boston time) to:
BankBoston
ABA No. 011000390
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Cerner Corporation; PPN No.: 15678# AC 9
7.66% Series B Senior Notes Due April 15, 2009
(2) Contemporaneous with the above wire transfer, advice setting forth:
(1) the full name, interest rate and maturity date of the
Notes;
(2) allocation of payment between principal and interest
and any special payment; and
(3) name and address of Bank from which wire transfer was
sent shall be delivered or faxed and mailed to:
John Hancock Variable Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Manager
Investment Accounting Division, B-3
Fax: 617-572-0628
11
<PAGE> Schedule I
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of
maturity shall be delivered or faxed and mailed to:
John Hancock Variable Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Manager
Investment Accounting Division, B-3
Fax: 617-572-0628
(4) All other communications which shall include, but not be
limited to, financial statements and certificates of
compliance with financial covenants, shall be delivered or
faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Group, T-57
Fax: 617-572-1605
(5) A copy of any notices relating to change in issuer's name,
address or principal place of business or location of
collateral and a copy of any legal opinions shall be
delivered or faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Investment Law Division, T-50
Fax: 617-572-9268
Tax ID #04-2664016
12
<PAGE> Schedule I
SCHEDULE I
<TABLE>
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
- ----------------- ---------------------
Series A Series B
-------- --------
<S> <C> <C>
INVESTORS PARTNER LIFE INSURANCE $500,000
COMPANY
</TABLE>
(1) All payments on account of the Notes in accordance with the
provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 12:00
noon (Boston time) to:
BankBoston
ABA No. 011000390
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Cerner Corporation; PPN No.: 15678# AC 9
7.66% Series B Senior Notes Due April 15, 2009
(2) Contemporaneous with the above wire transfer, advice setting forth:
(1) the full name, interest rate and maturity date of the
Notes;
(2) allocation of payment between principal and interest
and any special payment; and
(3) name and address of Bank from which wire transfer was
sent shall be delivered or faxed and mailed to:
Investors Partner Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Manager
Investment Accounting Division, B-3
Fax: 617-572-0628
13
<PAGE> Schedule I
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of
maturity shall be delivered or faxed and mailed to:
Investors Partner Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Manager
Investment Accounting Division, B-3
Fax: 617-572-0628
(4) All other communications which shall include, but not be
limited to, financial statements and certificates of
compliance with financial covenants, shall be delivered or
faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Group, T-57
Fax: 617-572-1605
(5) A copy of any notices relating to change in issuer's name,
address or principal place of business or location of
collateral and a copy of any legal opinions shall be
delivered or faxed and mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Investment Law Division, T-50
Fax: 617-572-9268
Tax ID #13-3072894
14
<PAGE> Schedule I
ANNEX I
Subsidiaries
The following are Wholly-Owned Subsidiaries of Cerner Corporation
and are Restricted Subsidiaries:
1. Cerner Health Connections, Inc., a Delaware corporation
2. Cerner Health Facts, Inc., a Delaware corporation
3. Multum Information Services, Inc., a Delaware corporation
4. Cerner Healthwise, Inc., a Delaware corporation
5. Cerner Performance Logistics, Inc., a Delaware corporation
6. Cerner Properties, Inc., a Delaware corporation
7. Cerner International, Inc., a Delaware corporation
The following are Subsidiaries of Cerner Corporation or Cerner
International, Inc. and are Wholly-Owned Subsidiaries except as
otherwise noted:
1. Cerner FSC, Inc., a corporation organized under the laws of
Barbados (Wholly-Owned Subsidiary of Cerner Corporation)
2. Cerner Canada Limited, a Delaware corporation (Wholly-Owned
Subsidiary of Cerner Corporation)
3. Cerner (Malaysia) SDN BHD, a corporation organized under the
laws of Malaysia (Cerner Corporation owns 99,998 shares, the
remaining 2 shares are owned by Thomas s/o Mariassosay and
Syed Mohd Tahir Bin Dato' Syed Azman, respectively)
4. Cerner Singapore Limited, a Delaware corporation (Wholly-
Owned Subsidiary of Cerner International)
5. Cerner Corporation PTY Limited, a corporation organized
under the laws of Australia (Wholly-Owned Subsidiary of
Cerner International)
6. Cerner Limited, a corporation organized under the laws of
the United Kingdom (Cerner International, Inc. owns 9,999
shares, the remaining 1 share is owned by Huntsmoor Nominees
Limited)
7. Cerner Deutschland GmbH, a corporation organized under the
laws of Germany (Wholly-Owned Subsidiary of Cerner
International)
<PAGE> Annex I
ANNEX II
Indebtedness
1. Cerner Corporation has a Credit Agreement with Mercantile
Bank, a Kansas banking corporation, dated April 1, 1999, with a
limit of $18,000,000 and is unsecured. The Credit Agreement
terminates on March 31, 2002.
2. Cerner Corporation has a capital lease with LeaseTec dated
October 1, 1997 for Digital Equipment Corporation equipment (now
known as Compaq Computer Corporation) in the total amount of
$78,888.
3. Cerner Corporation has a Letter of Credit dated March 11,
1999 for 1 million Australian dollars with the National Australia
Banks for the benefit of the Queensland Department of
Communication and Information Local Government and Planning.
4. Cerner Corporation has a bank guaranty from HypoVereinsbank
Munchen in the amount of DM 158,000 in favor of Klinikum Chemnitz
with respect to a contract for Pathnet.
5. Cerner Corporation PTY Limited has put 396,836.49 Australian
dollars into escrow in connection with the sale and installation
of Cerner systems to royal Alexandra Hospital.
6. Cerner Corporation has a surety bond issued in favor of the
University Hospital of Brooklyn for a licensed software agreement
in the amount of $1,778,562 dated November 20, 1996.
7. Cerner Corporation has a surety bond issued in favor of the
University of Tennessee for a licensed software agreement in the
amount of $8,063,789 dated June 27, 1997.
8. Cerner Corporation has a surety bond issued in favor of
State University of New York at Stony Brook for a licensed
software agreement in the amount of $949,244 dated September 9,
1998.
9. Cerner Corporation has a surety bond issued in favor of the
County of Los Angeles for a jail hospital information system
agreement in the amount of $20,141,006 dated September 21, 1998.
<PAGE> Annex II
ANNEX III
Liens
1. Cerner Corporation has a Credit Agreement with Mercantile
Bank, a Kansas banking corporation, dated April 1, 1999, with a
limit of $18,000,000 and is unsecured. The Credit Agreement
terminates on March 31, 2002.
2. Cerner Corporation has a capital lease with LeaseTec dated
October 1, 1997 for Digital Equipment Corporation equipment (now
known as Compaq Computer Corporation) in the total amount of
$78,888.
3. Cerner Corporation has a Letter of Credit dated March 11,
1999 for 1 million Australian dollars with the National Australia
Banks for the benefit of the Queensland Department of
Communication and Information Local Government and Planning.
4. Cerner Corporation has a bank guaranty from HypoVereinsbank
Munchen in the amount of DM 158,000 in favor of Klinikum Chemnitz
with respect to a contract for Pathnet.
5. Cerner Corporation PTY Limited has put 396,836.49 Australian
dollars into escrow in connection with the sale and installation
of Cerner systems to royal Alexandra Hospital.
6. Cerner Corporation has a surety bond issued in favor of the
University Hospital of Brooklyn for a licensed software agreement
in the amount of $1,778,562 dated November 20, 1996.
7. Cerner Corporation has a surety bond issued in favor of the
University of Tennessee for a licensed software agreement in the
amount of $8,063,789 dated June 27, 1997.
8. Cerner Corporation has a surety bond issued in favor of
State University of New York at Stony Brook for a licensed
software agreement in the amount of $949,244 dated September 9,
1998.
9. Cerner Corporation has a surety bond issued in favor of the
County of Los Angeles for a jail hospital information system
agreement in the amount of $20,141,006 dated September 21, 1998.
<PAGE> Annex III
ANNEX IV
Capitalized Leases
1. Cerner Corporation has a capital lease with LeaseTec dated
October 1, 1997 for Digital Equipment Corporation equipment (now
known as Compaq Computer Corporation) in the total amount of
$78,888.
<PAGE> Annex IV
EXHIBIT A-1
-----------
CERNER CORPORATION
7.14% SENIOR NOTE
Due April 15, 2006
_____________
Registered Note No. AR- April 15, 1999
$_____________________ PPN: ______________
CERNER CORPORATION, a Delaware corporation (the "Company),
for value received, promises to pay to ____________ or registered
assigns, on April 15, 2006, the principal amount of __________
Dollars ($______________) and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of
7.14% per annum from the date hereof until maturity, payable on
April 15 and October 15 in each year, commencing October
15, 1999, and at maturity, and to pay interest on overdue
principal, Make-Whole Amount and (to the extent legally
enforceable) on any overdue installment of interest at the rate
per annum from time to time equal to the greater of (i) 9.14% or
(ii) 2.0% over the rate of interest publicly announced by The
First National Bank of Chicago from time to time in Chicago as
its "base" or "prime" rate (or the equivalent), until paid.
Payments of the principal of, the Make-Whole Amount, if any, and
interest on this Note shall be made in lawful money of the United
States of America in the manner and at the place provided in
Section 2.5 of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and
provisions of the Note Agreement, dated as of April 1, 1999,
entered into by the Company with the Purchasers named in
Schedule I thereto (the "Note Agreement"), and this Note and any
holder hereof are entitled to all of the benefits provided for by
such Note Agreement or referred to therein. Reference is made to
the Note Agreement for a statement of such benefits.
As provided in the Note Agreement, upon surrender of this
Note for registration of transfer, duly endorsed or accompanied
by a written instrument of transfer duly executed by the
registered holder hereof or its attorney duly authorized in
writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the
payment of the taxes or other governmental charges, if any, that
may be imposed in connection therewith. The Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to
the contrary.
<PAGE> Exhibit A-1
This Note may be declared due prior to its expressed
maturity date, voluntary prepayments may be made hereon and
certain mandatory prepayments and offers to prepay are required
to be made all in the events, on the terms and in the manner as
provided in the Note Agreement.
Should the indebtedness represented by this Note or any part
thereof be collected in any proceeding provided for in the Note
Agreement or be placed in the hands of attorneys for collection,
the Company agrees to pay, in addition to the principal, Make-
Whole Amount, if any, and interest due and payable hereon, all
costs of collecting this Note, including reasonable attorneys'
fees and expenses.
This Note and the Note Agreement are governed by and
construed in accordance with the laws of the State of Illinois.
CERNER CORPORATION
By:_______________________________
Its:______________________________
2
<PAGE> Exhibit A-1
GUARANTY ENDORSEMENT
Payment of principal, interest and Make-Whole Amount, if
any, with respect to this Note is guaranteed pursuant to the
terms of the Subsidiary Guaranty dated April 15, 1999 executed
and delivered by each of the undersigned. Subject to the terms
of such Subsidiary Guaranty, which are incorporated herein by
reference, each of the undersigned, jointly and severally,
guarantees the prompt payment when due of the principal, Make-
Whole Amount, if any, and interest on this Note.
CERNER HEALTH CONNECTIONS, INC. CERNER PROPERTIES, INC.
By:____________________________ By:_________________________________
Print Name:____________________ Print Name:_________________________
Title:_________________________ Title:______________________________
CERNER INTERNATIONAL, INC. MULTUM INFORMATION SERVICES, INC.
By:____________________________ By:_________________________________
Print Name:____________________ Print Name:_________________________
Title:_________________________ Title:______________________________
CERNER HEALTH FACTS, INC.
By:____________________________
Print Name:____________________
Title:_________________________
3
<PAGE> Exhibit A-1
EXHIBIT A-2
-----------
CERNER CORPORATION
7.66% SENIOR NOTE
Due April 15, 2009
_____________
Registered Note No. BR- April 15, 1999
$_____________________ PPN: ______________
CERNER CORPORATION, a Delaware corporation (the "Company),
for value received, promises to pay to ____________ or registered
assigns, on April 15, 2009, the principal amount of __________
Dollars ($______________) and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of
7.66% per annum from the date hereof until maturity, payable on
April 15 and October 15 in each year, commencing October
15, 1999, and at maturity, and to pay interest on overdue
principal, Make-Whole Amount and (to the extent legally
enforceable) on any overdue installment of interest at the rate
per annum from time to time equal to the greater of (i) 9.66% or
(ii) 2.0% over the rate of interest publicly announced by The
First National Bank of Chicago from time to time in Chicago as
its "base" or "prime" rate (or the equivalent), until paid.
Payments of the principal of, the Make-Whole Amount, if any, and
interest on this Note shall be made in lawful money of the United
States of America in the manner and at the place provided in
Section 2.5 of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and
provisions of the Note Agreement, dated as of April 1, 1999,
entered into by the Company with the Purchasers named in
Schedule I thereto (the "Note Agreement"), and this Note and any
holder hereof are entitled to all of the benefits provided for by
such Note Agreement or referred to therein. Reference is made to
the Note Agreement for a statement of such benefits.
As provided in the Note Agreement, upon surrender of this
Note for registration of transfer, duly endorsed or accompanied
by a written instrument of transfer duly executed by the
registered holder hereof or its attorney duly authorized in
writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the
payment of the taxes or other governmental charges, if any, that
may be imposed in connection therewith. The Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to
the contrary.
<PAGE> Exhibit A-2
This Note may be declared due prior to its expressed
maturity date, voluntary prepayments may be made hereon and
certain mandatory prepayments and offers to prepay are required
to be made all in the events, on the terms and in the manner as
provided in the Note Agreement.
Should the indebtedness represented by this Note or any part
thereof be collected in any proceeding provided for in the Note
Agreement or be placed in the hands of attorneys for collection,
the Company agrees to pay, in addition to the principal, Make-
Whole Amount, if any, and interest due and payable hereon, all
costs of collecting this Note, including reasonable attorneys'
fees and expenses.
This Note and the Note Agreement are governed by and
construed in accordance with the laws of the State of Illinois.
CERNER CORPORATION
By:________________________________
Its:_______________________________
2
<PAGE> Exhibit A-2
GUARANTY ENDORSEMENT
Payment of principal, interest and Make-Whole Amount, if
any, with respect to this Note is guaranteed pursuant to the
terms of the Subsidiary Guaranty dated April 15, 1999 executed
and delivered by each of the undersigned. Subject to the terms
of such Subsidiary Guaranty, which are incorporated herein by
reference, each of the undersigned, jointly and severally,
guarantees the prompt payment when due of the principal, Make-
Whole Amount, if any, and interest on this Note.
CERNER HEALTH CONNECTIONS, INC. CERNER PROPERTIES, INC.
By:____________________________ By:_______________________________
Print Name:____________________ Print Name:_______________________
Title:_________________________ Title:____________________________
CERNER INTERNATIONAL, INC. MULTUM INFORMATION SERVICES, INC.
By:____________________________ By:_______________________________
Print Name:____________________ Print Name:_______________________
Title:_________________________ Title:____________________________
CERNER HEALTH FACTS, INC.
By:____________________________
Print Name:____________________
Title:_________________________
3
<PAGE> Exhibit A-2
EXHIBIT B
---------
LEGAL OPINION
OF PURCHASERS' COUNSEL
The opinion of Gardner, Carton & Douglas, special counsel
for the Purchasers, shall be to the effect that:
1. The Company is a corporation validly existing in good
standing under the laws of the State of Delaware, with all
requisite corporate power and authority to enter into the
Agreement and to issue and sell the Notes.
2. The Agreement and the Notes have been duly authorized
by proper corporate action on the part of the Company, have been
duly executed and delivered by an authorized officer of the
Company, and constitute the legal, valid and binding agreements
of the Company, enforceable in accordance with their terms,
except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable
principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
3. Based upon the representations set forth in the
Agreement, the offering, sale and delivery of the Notes and the
issuance do not require the registration of the Notes under the
Securities Act of 1933, as amended, nor the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
4. The issuance and sale of the Notes and compliance with
the terms and provisions of the Notes and the Agreement will not
conflict with or result in any breach of any of the provisions of
the Certificate of Incorporation and By-Laws of the Company.
5. The issuance and sale of the Notes by the Company and
the execution and delivery of the Subsidiary Guaranty by the
Guarantors will not conflict with, or constitute a breach or
violation of, any Federal law or regulation that, in our
experience, is normally applicable both to general business
corporations that are not engaged in regulated business
activities and to transactions of the type contemplated by the
Agreement.
The opinion of Gardner, Carton & Douglas also shall state that
the legal opinion of Randy D. Sims, Chief Legal Officer for the
Company, and Lynn R. Marasco, Senior Corporate Counsel for the
Company, delivered to you pursuant to the Agreement, is
satisfactory in form and scope to it, and, in its opinion, the
Purchasers and it are justified in relying thereon and shall
cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request.
<PAGE> Exhibit B
EXHIBIT C
---------
LEGAL OPINION
OF COMPANY'S COUNSEL
The opinion of Randy D. Sims, Chief Legal Officer for the
Company, and Lynn R. Marasco, Senior Corporate Counsel for the
Company, shall be to the effect that:
1. Each of the Company and each Guarantor is a corporation
duly organized and validly existing in good standing under the
laws of its jurisdiction of incorporation, and each has all
requisite corporate power and authority to carry on the business
now being conducted by it, to own its property and, in the case
of the Company, to enter into and perform the Agreement and to
issue and sell the Notes and, in the case of the Guarantors, to
enter into and perform the Subsidiary Guaranty.
2. The Agreement, the Notes and the Subsidiary Guaranty
have been duly authorized by proper corporate action on the part
of the Company and each of the Guarantors to the extent a party
thereto, have been duly executed and delivered by an authorized
officer thereof, and constitute the legal, valid and binding
agreements of the Company and each of the Guarantors to the
extent a party thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought
in a proceeding in equity or at law.
3. The offering, sale and delivery of the Notes and the
delivery of the Subsidiary Guaranty do not require the
registration of the Notes under the Securities Act of 1933, as
amended, nor the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
4. No authorization, approval or consent of any
governmental or regulatory body is necessary or required in
connection with the lawful execution and delivery by the Company
of the Agreement, the lawful execution and delivery by the
Guarantors of the Subsidiary Guaranty, the lawful offering,
issuance and sale by the Company of the Notes or the lawful
issuance of the Subsidiary Guaranty by the Guarantors, and no
designation, filing, declaration, registration and/or
qualification with any governmental authority is required in
connection with the offer, issuance and sale of the Notes by the
Company or the lawful issuance of the Subsidiary Guaranty by the
Guarantors.
5. The issuance and sale of the Notes by the Company and
compliance with the terms and provisions of the Notes and the
Agreement by the Company and compliance with the terms and
provisions of the Subsidiary Guaranty by each of the Guarantors
will not conflict with, or result in any breach or violation of
any of the provisions of, or constitute a default under, or
<PAGE> Exhibit C
result in the creation or imposition of any Lien upon the
property of the Company or any Subsidiary pursuant to the
provisions of (i) the Certificate of Incorporation (or other
charter document) or By-Laws of the Company or any Subsidiary or
any loan agreement under which the Company or any Subsidiary is
bound, or other agreement or instrument known to such counsel
under which the Company or any Subsidiary is a party or by which
any of them or their property is bound or may be affected or
(ii) any law (including usury laws) or regulation, order, writ,
injunction or decree of any court or governmental authority
applicable to the Company or any Subsidiary.
6. There are no actions, suits or proceedings pending, or
to such counsel's knowledge, threatened against, or affecting the
Company or any Subsidiary, at law or in equity or before or by
any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, which are likely to result, either individually or in
the aggregate, in a Material Adverse Effect.
7. Neither the Company nor any Subsidiary is: (i) a
"public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or
an "affiliate" of such a "subsidiary company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as
amended, or (ii) a "public utility" as defined in the Federal
Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof, as such terms are defined in the
Investment Company Act of 1940, as amended.
8. The issuance of the Notes and the use of the proceeds
of the sale of the Notes to repay Indebtedness of the Company to
banks do not violate or conflict with Regulation T, U or X of the
Board of Governors of the Federal Reserve System (12 C.F.R.,
Chapter II).
The opinion of Randy D. Sims and Lynn R. Marasco shall cover such
other matters relating to the sale of the Notes as the Purchasers
may reasonably request. With respect to matters of fact on which
such opinion is based, such counsel shall be entitled to rely on
appropriate certificates of public officials and officers of the
Company and with respect to matters governed by the laws of any
jurisdiction other than the United States of America and the
States of Delaware and Missouri, such counsel may rely upon the
opinions of counsel deemed (and stated in their opinion to be
deemed) by them to be competent and reliable.
2
<PAGE> Exhibit C
EXHIBIT D
---------
COMPLIANCE CERTIFICATE
I, ___________________________, am the Treasurer and Chief
Financial Officer of _______________________________ (the
"Company"). This certificate is being delivered pursuant to
Section 6.6(c) of the Note Agreement dated as of April 1, 1999,
between the Company and the Purchasers named in Schedule I
thereto.
I hereby certify as follows:
1. Included is the Company's Form 10-Q and other financial
statements for the quarter ended ____________, _____,
in which are set forth the financial statements
required to be provided by the Company pursuant to
Section [6.6(a) or (b)] of the Note Agreement. These
financial statements are complete and correct and have
been prepared in accordance with generally accepted
accounting principles (GAAP).
2. I have reviewed the provisions of the Note Agreement,
and have included in the Covenant Analysis the
information and computations required in order to
establish whether the Company was in compliance with
the requirements of Section 7.1 through 7.9 at the end
of the period covered by the financial statements being
furnished.
3. As of the date of the financial statements being
furnished and as of the date of this certificate or at
any time during the period covered by such financial
statements, there existed or exists no Default or Event
of Default.
_______________________ _____________________________
Date Treasurer and
Chief Financial Officer
<PAGE> Exhibit D
COVENANT ANALYSIS
FOR FISCAL QUARTER ENDED __________________
<TABLE>
$100 million Note Agreement
(all dollar amounts in 000's)
Summary Information:
Section Description Requirement Actual Comments
- ------- ----------- ----------- ------ --------
<S> <C> <C> <C> <C>
7.1 Minimum Consolidated Tangible $________ $_______
Net Worth
7.2 Fixed Charge Ratio 2.00 _______
7.3 Ratio of Consolidated Indebtedness 0.60 _______
to Consolidated Total Capitalization
Ratio of Consolidated Senior 0.45 _______
Indebtedness to Consolidated Total
Capitalization
7.4(i) Maximum Limitation on Liens $________ $_______
7.5 Maximum Restricted Payments $________ $_______
7.6 Mergers or Consolidations (During
the period of this analysis, no
transactions subject to the
limitations of Sec. 7.6 were
completed.)
7.7 Sale of Assets (During the period
of this analysis, no transactions
subject to the limitations of
Sec. 7.7 were completed.)
7.8 Disposition of Stock of Restricted
Subsidiaries (During the period of the
analysis, no transactions subject to
the limitations of Sec. 7.8 were completed.)
2
<PAGE> Exhibit D
7.9 Designation of Unrestricted Subsidiaries
(During the period of the analysis, the
Company did not designate any Restricted
Subsidiary as an Unrestricted Subsidiary.)
7.10 Transactions with Affiliates (During the
period of this analysis, no transactions
subject to the restrictions of Sec. 7.10
were completed.)
7.11 Guaranties
</TABLE>
3
<PAGE> Exhibit D
COVENANT ANALYSIS
FOR FISCAL QUARTER ENDED ______________
<TABLE>
$100 million Note Agreement
(all dollar amounts in 000's)
SECTION SUPPORTING CALCULATIONS
_______ _______________________
7.1 Consolidated Tangible Net Worth Minimum (CTNWM):
Requirement: The consolidated tangible net worth must be greater than the defined
minimum allowable amount.
<S> <C>
CTNWM = $200,000,000 + 50% of Consolidated Net Income after 1/2/99
__________________________________________________________________
Consolidated Net Income after 1/2/99$________________
__________________________________________________________________
CTNWM = $_____________
Consolidated Tangible Net Worth ACTUAL (CTNWA): $___________
CTNWM = Stockholder's Equity - Intangibles
__________________________________________________________________
Stockholder's Equity $
Intangibles $_____________
__________________________________________________________________
CTNWA = $_____________
_____________
Minimum (CTNWM) $_____________
Actual (CTNWA) $_____________
Results: Consolidated Tangible Net Worth (CTNWA) is greater than the minimum
requirement.
7.2 Fixed Charge Ratio
Requirement: The Fixed Charge Ratio must be greater than 2.00
__________________________________________________________________
Consolidated Income Available for Fixed Charges $________________
Fixed Charges $________________
__________________________________________________________________
Fixed Charge Ratio = ________________
Results: Cerner's Fixed Charge Ratio is greater than 2.00.
4
<PAGE> Exhibit D
7.3 Limitations on Debt
Requirement: Cerner cannot exceed certain debt limitations as defined below using
Consolidated Total Capitalization (CTC)
CTC = CTNWA + Total Debt
________________________________________________________________________
ST Debt ______________________
Curr LT Debt ______________________
LT Debt ______________________
----------------------
Total Debt ________________
Consolidated Senior Debt ________________
Consolidated Debt ________________
________________________________________________________________________
CTC = $_______________
7.3(a) Consolidated Debt Limitation = < 60% of CTC
60% of CTC = ________________
Total Debt = ________________
Results: Consolidated Debt is below limitation
7.3(b) Consolidated Senior Debt Limitation < 45% of CTC
45% of CTC = ________________
Total Debt = ________________
Results: Consolidated Senior Debt is below limitation
7.4 Limitation on Liens
Requirement: Cerner cannot exceed lien limitations defined as 20% of CTNWA
______________________________________________________________________
Liens $______________
Indebtedness of Restricted
Subsidiaries $______________
Preferred Stock of
Restricted Subsidiaries $______________
______________________________________________________________________
5
<PAGE> Exhibit D
20% of CNTNWA $______________
Liens + RS Debt +
RS Preferred $______________
Results: Liens are below limitation
7.5 Limitation on Restricted Payments
Requirement: Cerner cannot exceed limitations on restricted payments defined
below as = $40,000,000 + 50% of Consolidated Net Income after 1/2/99
(CNI) + the net proceeds received after 1/2/99 from the sale of common
stock or debt which is subsequently converted to common stock.
_________________________________________________________________
Consolidated Net Income after 1/2/99 (CNI) $_____________
Sale of Common Stock after 1/2/99 $_____________
Restricted Payments after 1/2/99 $_____________
_________________________________________________________________
$40,000,000 + 50% of CNI + stock proceeds $_____________
Restricted Payments after 1/2/99 $_____________
Results: Restricted Payments are below limitations
6
<PAGE> Exhibit D
EXHIBIT E
---------
SUBSIDIARY GUARANTY
-------------------
THIS SUBSIDIARY GUARANTY (this "Guaranty") dated as of
April 15, 1999 is made by Cerner Health Connections, Inc., a
Delaware corporation, Cerner Properties, Inc., a Delaware
corporation, and Cerner International, Inc., a Delaware
corporation, Multum Information Services, Inc., a Delaware
corporation, and Cerner Health Facts, Inc., a Delaware
corporation (each individually a "Guarantor" and collectively the
"Guarantors"), in favor of the holders from time to time of the
Notes hereinafter referred to, including each Purchaser listed on
Schedule I to the Note Agreement hereinafter referred to and
their respective successors and assigns (collectively, the
"Purchasers" and each individually, a "Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Cerner Corporation, a Delaware corporation
(the "Company"), and the Purchasers listed on Schedule I thereto
entered into a Note Agreement dated as of April 1, 1999 (as
amended, supplemented, restated or otherwise modified from time
to time in accordance with its terms and in effect, the "Note
Agreement");
WHEREAS, the Company owns all of the issued and
outstanding capital stock of the Guarantors and, by virtue of
such ownership and otherwise, the Guarantors will derive
substantial benefits as a result of the purchase of the Company's
Notes (as defined in the Note Agreement) by the Purchasers;
WHEREAS, it is a condition precedent to the obligation
of the Purchasers to purchase the Company's Notes that the
Guarantors shall have executed and delivered this Guaranty to the
Purchasers; and
WHEREAS, the Board of Directors of each Guarantor has
determined that the execution, delivery, and performance of this
Guaranty is necessary and convenient to the conduct, promotion
and attainment of such Guarantor's business and each of the
Guarantors desires to execute this Guaranty to satisfy the
condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and
other benefits to the Guarantors, and of the purchase of the
Company's Notes by the Purchasers, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Guarantors hereby makes this Guaranty as
follows:
SECTION 1. Definitions.
------------ Any capitalized terms not
otherwise herein defined, when used herein in capitalized form,
shall have the respective meanings attributed to them in the Note
Agreement.
SECTION 2. Guaranty.
--------- (a) The Guarantors, jointly and
severally, hereby unconditionally and irrevocably guarantee to
the Purchasers the due, prompt and complete
<PAGE> Exhibit E
payment by the
Company of the principal of, Make-Whole Amount, if any, and
interest on, and each other amount due under, the Notes, when and
as the same shall become due and payable (whether at stated
maturity or by required or optional prepayment or by declaration
or otherwise) in accordance with the terms of the Notes and the
Note Agreement (the Notes and the Note Agreement being
collectively hereinafter referred to as the "Note Documents", and
the amounts payable by the Company under any of the Note
Documents, and all other obligations of the Company thereunder,
being sometimes collectively hereinafter referred to as the
"Obligations"). This guaranty is a guaranty of payment and not
just of collectibility and is in no way conditioned or contingent
upon any attempt to collect from the Company or upon any other
event, contingency or circumstance whatsoever. If for any reason
whatsoever the Company shall fail or be unable duly, punctually
and fully to pay such amounts as and when the same shall become
due and payable, whether or not such failure or inability shall
constitute a "Default" or an "Event of Default" under any Note
Document, the Guarantors, without demand, presentment, protest or
notice of any kind, will forthwith pay or cause to be paid such
amounts to the Purchasers under the terms of such Note Document,
in lawful money of the United States, at the place specified in
the Note Agreement, together with interest (to the extent
provided for under such Note Document) on any amount due and
owing from the Company. The Guarantors, promptly after demand,
will pay to the Purchasers the reasonable costs and expenses of
collecting such amounts or otherwise enforcing this Guaranty,
including, without limitation, the reasonable fees and expenses
of counsel. The right of recovery against each of the Guarantors
under this Guaranty is, however, limited to the Fair Net Worth of
such Guarantor, as of the date of any determination thereof, less
$20,000. For purposes of this Guaranty, the "Fair Net Worth" of
any Guarantor shall mean an amount equal to the fair market value
of such Guarantor's assets less all its liabilities (other than
such Guarantor's liabilities under this Guaranty), including all
liabilities, whether fixed or contingent, direct or indirect,
disputed or undisputed, secured or unsecured, and whether or not
required to be reflected on a balance sheet prepared in
accordance with generally accepted accounting principles.
(b) Each Guarantor hereby agrees that to the extent a
Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to
seek and receive contribution from and against any other
Guarantor hereunder who has not paid its proportionate share of
such payment. Each Guarantor's right of contribution shall be
subject to the terms and conditions of Section 6 hereof. The
provisions of this paragraph (b) shall in no respect limit the
obligations and liabilities of any Guarantor to the Purchasers,
and each Guarantor shall remain liable to the Purchasers for the
full amount guaranteed by such Guarantor hereunder.
SECTION 3. Guarantor's Obligations Absolute and
------------------------------------
Unconditional.
--------------
The obligations of each Guarantor under this
Guaranty shall be primary, absolute and unconditional obligations
of such Guarantor, shall not be subject to any counterclaim, set-
off, deduction, diminution, abatement, recoupment, suspension,
deferment, reduction or defense based upon any claim such
Guarantor or any other Person may have against the Company or any
other Person, and to the full extent permitted by applicable law
shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any
circumstance or
2
<PAGE> Exhibit E
condition whatsoever (whether or not any
Guarantor or the Company shall have any knowledge or notice
thereof), including, without limitation:
(a) any termination, amendment or modification of or
deletion from or addition or supplement to or other change
in any of the Note Documents or any other instrument or
agreement applicable to any of the parties to any of the
Note Documents;
(b) any furnishing or acceptance of any security, or
any release of any security, for the Obligations, or the
failure of any security or the failure of any Person to
perfect any interest in any collateral;
(c) any failure, omission or delay on the part of the
Company to conform or comply with any term of any of the
Note Documents or any other instrument or agreement referred
to in paragraph (a) above, including, without limitation,
failure to give notice to any Guarantor of the occurrence of
a "Default" or an "Event of Default" under any Note
Document;
(d) any waiver of the payment, performance or
observance of any of the obligations, conditions, covenants
or agreements contained in any Note Document, or any other
waiver, consent, extension, indulgence, compromise,
settlement, release or other action or inaction under or in
respect of any of the Note Documents or any other instrument
or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or
non-exercise of any right, remedy, power or privilege under
or in respect of any such instrument or agreement or any
such obligation or liability;
(e) any failure, omission or delay on the part of any
of the Purchasers to enforce, assert or exercise any right,
power or remedy conferred on such Purchaser in this
Guaranty, or any such failure, omission or delay on the part
of such Purchaser in connection with any Note Document, or
any other action on the part of such Purchaser;
(f) any voluntary or involuntary bankruptcy,
insolvency, reorganization, arrangement, readjustment,
assignment for the benefit of creditors, composition,
receivership, conservatorship, custodianship, liquidation,
marshalling of assets and liabilities or similar proceedings
with respect to the Company, any Guarantor or to any other
Person or any of their respective properties or creditors,
or any action taken by any trustee or receiver or by any
court in any such proceeding;
(g) any limitation on the liability or obligations of
the Company or any other Person under any of the Note
Documents, or any discharge, termination, cancellation,
frustration, irregularity, invalidity or unenforceability,
in whole or in part, of any of the Note Documents or any
other agreement or instrument referred to in paragraph (a)
above or any term hereof;
3
<PAGE> Exhibit E
(h) any merger or consolidation of the Company or any
Guarantor into or with any other corporation, or any sale,
lease or transfer of any of the assets of the Company or any
Guarantor to any other Person;
(i) any change in the ownership of any shares of
capital stock of the Company or any change in the corporate
relationship between the Company and any Guarantor, or any
termination of such relationship;
(j) any release or discharge, by operation of law, of
any Guarantor from the performance or observance of any
obligation, covenant or agreement contained in this
Guaranty;
(k) any lack of corporate power of the Company or any
other Person at any time liable for part or all of the
Obligations;
(l) the existence of any claim, defense, set-off, or
other rights which the Company or any Guarantor may have at
any time against the Purchasers, the Company or any
Guarantor, or any other Person, whether in connection with
this Guaranty, the Note Documents, the transactions
contemplated thereby, or any other transaction;
(m) any failure of any Purchaser to notify any
Guarantor of any renewal, extension, or assignment of the
Obligations or any part thereof, or the release of any
security, or if any action taken or refrained from being
taken by any Purchaser, it being understood that the
Purchasers shall not be required to give any Guarantor any
notice of any kind under any circumstance whatsoever with
respect to or in connection with the Obligations; or
(n) any other occurrence, circumstance, happening or
event whatsoever, whether similar or dissimilar to the
foregoing, whether foreseen or unforeseen, and any other
circumstance which might otherwise constitute a legal or
equitable defense or discharge of the liabilities of a
guarantor or surety or which might otherwise limit recourse
against any Guarantor.
SECTION 4. Full Recourse Obligations.
-------------------------- The obligations
of each of the Guarantors set forth herein constitute the full
recourse obligations of such Guarantor enforceable against it to
the full extent of all its assets and properties.
SECTION 5. Waiver.
------- Each of the Guarantors
unconditionally waives, to the extent permitted by applicable
law, (a) notice of any of the matters referred to in Section 3,
(b) notice to the Guarantor of the incurrence of any of the
Obligations, notice to the Guarantor or the Company of any breach
or default by the Company with respect to any of the Obligations
or any other notice that may be required, by statute, rule of law
or otherwise, to preserve any rights of the Purchasers against
the Guarantor, (c) presentment to or demand of payment from the
Company or the Guarantor with respect to any amount due under any
Note Document or protest for nonpayment or dishonor, (d) any
right to the enforcement, assertion or exercise by any of the
4
<PAGE> Exhibit E
Purchasers of any right, power, privilege or remedy conferred in
the Note Agreement or any other Note Document or otherwise,
(e) any requirement of diligence on the part of any of the
Purchasers, (f) any requirement to exhaust any remedies or to
mitigate the damages resulting from any default under any Note
Document, (g) any notice of any sale, transfer or other
disposition by any of the Purchasers of any right, title to or
interest in the Note Agreement or in any other Note Document,
(h) any right to assert against any Purchaser as a counterclaim,
set-off or cross-claim, any counterclaim, set-off or claim which
it may now or hereafter have against the Company or other Person
liable on the Obligations, and (i) any other circumstance
whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which
might otherwise limit recourse against the Guarantor.
SECTION 6. No Subrogation, Contribution, Reimbursement
-------------------------------------------
or Indemnity.
-------------
Notwithstanding anything to the contrary in this
Guaranty and the other Note Documents, each of the Guarantors
hereby irrevocably waives any and all claims or other rights
which may have arisen in connection with this Guaranty to be
subrogated to any of the rights (whether contractual, under the
United States Bankruptcy Code, as amended, including Section 509
thereof, under common law or otherwise) of any of the Purchasers
against the Company or against any collateral security or
guaranty or right of offset held by the Purchasers for the
payment of the Obligations. Each of the Guarantors hereby
further irrevocably waives all contractual, common law, statutory
or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company
which may have arisen in connection with this Guaranty, whether
or not such remedy or right arises in equity, or under contract,
statute or common law. So long as the Obligations remain, if any
amount shall be paid by or on behalf of the Company to any of the
Guarantors on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust
for the benefit of the Purchasers, segregated from other funds of
the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Purchasers (duly endorsed by
such Guarantor to the Purchasers, if required), to be applied
against the Obligations, whether matured or unmatured, in such
order as the Purchasers may determine. The provisions of this
paragraph shall survive the term of this Guaranty and the payment
in full of the Obligations. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the sale of the
Notes by the Company and that the waiver set forth in this
Section 6 is knowingly made in contemplation of such benefits.
SECTION 7. Effect of Bankruptcy Proceedings, etc.
----------------------------------------
This Guaranty shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the sums due to any of the Purchasers
pursuant to the terms of the Note Agreement or any other Note
Document is rescinded or must otherwise be restored or returned
by such Purchaser upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or any other Person,
or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with
respect to the Company or other Person or any substantial part of
its property, or otherwise, all as though such payment had not
been made. If an event permitting the acceleration of the
maturity of the principal amount of the Notes shall at any time
have occurred and be continuing, and such acceleration shall at
such time be prevented by reason of the pendency against the
Company or any other Person of a case or proceeding under a
bankruptcy or insolvency law, each of the Guarantors
5
<PAGE> Exhibit E
agrees that,
for purposes of this Guaranty and its obligations hereunder, the
maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the
same effect as if any Purchaser had accelerated the same in
accordance with the terms of the Note Agreement or other
applicable Note Document, and the Guarantors shall forthwith pay
such principal amount, Make-Whole Amount, if any, and interest
thereon and any other amounts guaranteed hereunder without
further notice or demand.
SECTION 8. Term of Agreement.
------------------ This Guaranty and all
guaranties, covenants and agreements of the Guarantors contained
herein shall continue in full force and effect and shall not be
discharged until such time as all of the Obligations shall be
paid and performed in full and all of the agreements of the
Guarantors hereunder shall be duly paid and performed in full.
SECTION 9. Representations and Warranties.
------------------------------- Each of
the Guarantors hereby represents and warrants to each Purchaser
that all representations and warranties set forth in Section 3.1
of the Note Agreement (each of which is incorporated herein by
reference) as to itself and not as to any other Person are true
and correct.
SECTION 10. Notices.
-------- All notices under the terms and
provisions hereof shall be in writing, and shall be delivered or
sent by overnight delivery or telecopy or mailed by first-class
mail, postage prepaid, addressed (a) if to the Company or any
Purchaser at the address set forth in the Note Agreement or
(b) if to any of the Guarantors, at:
2800 Rock Creek Parkway
North Kansas City, Missouri 64117
Attention: President
or at such other address as the Guarantors shall from time to
time designate in writing to the Purchasers. Any notice so
addressed shall be deemed to be given when so delivered or sent
or, if mailed, on the third Business Day after being so mailed.
SECTION 11. Survival.
--------- All warranties, representations
and covenants made by the Guarantors herein or in any certificate
or other instrument delivered by it or on its behalf hereunder
shall be considered to have been relied upon by the Purchasers
and shall survive the execution and delivery of this Guaranty,
regardless of any investigation made by any of the Purchasers.
All statements in any such certificate or other instrument shall
constitute warranties and representations by the Guarantors
hereunder.
SECTION 12. Miscellaneous.
-------------- Any provision of this
Guaranty which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, each of the Guarantors
hereby waives any provision of law that renders any provisions
hereof prohibited or unenforceable in any respect. The terms of
this Guaranty shall be
6
<PAGE> Exhibit E
binding upon, and inure to the benefit of,
the Guarantors and the Purchasers and their respective successors
and assigns. No term or provision of this Guaranty may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Guarantors and the
Purchasers. The section and paragraph headings in this Guaranty
are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof,
and all references herein to numbered sections, unless otherwise
indicated, are to sections in this Guaranty.
SECTION 13. Information.
------------ Each Guarantor acknowledges
and agrees that it shall have the sole responsibility for
obtaining from the Company such information concerning the
Company's financial condition or business operations as such
Guarantor may require, and that none of the Purchasers has any
duty at any time to disclose to any Guarantor any information
relating to the business operations or financial conditions of
the Company.
SECTION 14. GOVERNING LAW.
-------------- THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS AND THE UNITED STATES OF AMERICA. WITHOUT
EXCLUDING ANY OTHER JURISDICTION, EACH GUARANTOR AGREES THAT THE
STATE AND FEDERAL COURTS OF ILLINOIS LOCATED IN CHICAGO, ILLINOIS
SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.
SECTION 15. WAIVER OF JURY TRIAL.
--------------------- EACH GUARANTOR AND
EACH PURCHASER HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND
INTENTIONALLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO EACH PURCHASER ENTERING INTO THE NOTE
AGREEMENT.
SECTION 16. Ratable Benefit.
---------------- This Guaranty is for the
ratable benefit of the Purchasers, each of which shall share any
proceeds of this Guaranty pursuant to the terms of the Note
Agreement.
SECTION 17. Guarantor Insolvency.
---------------------- Should any
Guarantor become insolvent, fail to pay its debts generally as
they become due, voluntarily seek, consent to, or acquiesce in
the benefits of any Bankruptcy Law or become a party to or be
made the subject of any proceeding provided for by any Bankruptcy
Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the rights of any Purchaser granted
hereunder, then the obligations of such Guarantor under this
Guaranty shall be, as between such Guarantor and such Purchaser,
a fully-matured, due, and payable obligation of such Guarantor to
such Purchaser (without regard to whether the Company is then in
default under the Note Agreement or whether any part of the
Obligations is then due and owing by the Company to such
Purchaser), payable in full by such Guarantor to such Purchaser
upon demand, which shall be the estimated amount owing in respect
of the contingent claim created hereunder.
7
<PAGE> Exhibit E
[THE REST OF THIS PAGE LEFT BLANK INTENTIONALLY]
8
<PAGE> Exhibit E
IN WITNESS WHEREOF, each of the Guarantors has caused
this Guaranty to be duly executed as of the day and year first
above written.
CERNER HEALTH CONNECTIONS, INC. CERNER PROPERTIES, INC.
By:___________________________ By:______________________________
Print Name:___________________ Print Name:______________________
Title:________________________ Title:___________________________
CERNER INTERNATIONAL, INC. MULTUM INFORMATION SERVICES, INC.
By:_______________________ By:______________________________
Print Name:_______________ Print Name:______________________
Title:____________________ Title:___________________________
CERNER HEALTH FACTS, INC.
By:_______________________
Print Name:_______________
Title:____________________
9
<PAGE> Exhibit E
</TABLE>
EXHIBIT 99.1
------------
CONTACT:
WENDY COFFEY
INVESTOR RELATIONS
816-201-1976
CERNER'S INTERNET HOME PAGE:
HTTP://WWW.CERNER.COM
CERNER CORPORATION ANNOUNCES 1999 FIRST QUARTER RESULTS
KANSAS CITY, MO - APRIL 21, 1999 -- Cerner Corporation (NASDAQ: CERN)
today announced results for the first quarter ended April 3, 1999.
Revenues were $86.7 million as compared to $73.7 million for the year
ago quarter. Net earnings were $2.8 million, compared with $ 3.8
million for the first quarter of 1998. Diluted earnings per share
were $0.08 per share compared with $0.11 per share (excluding
acquisition-related charges) in the year ago quarter and are within
the range the company previously provided on April 8, 1999.
New business bookings totaled $62.5 million in revenues and $50.1
million in margin, below the $77.6 million in revenue and $63.9
million in margin for the first quarter of 1998.
Neal L. Patterson, Chairman of the Board, President and Chief
Executive Officer, said, "The below-consensus earnings in the first
quarter of 1999 were directly attributed to a shortfall in revenue,
specifically revenue associated with new license bookings. We
believe that Y2K continues to have an impact on the timing of
purchasing decisions within our industry. Some buyers are
approaching the marketplace with a great amount of caution creating a
longer decision process, and other potential buyers have temporarily
left the marketplace until they complete their Y2K projects.
However, we believe there is ample opportunity to continue to grow
the company and that the fundamentals of our business remain sound."
Patterson continued, "While we are disappointed in the shortfall of
new business during the quarter, other operational and financial
measurements remained on plan. We converted an additional 53 HNA
Millennium applications during the quarter, including three new major
applications, bringing the cumulative total of converted applications
to 240. We also converted our first foreign-language implementation,
with 3 applications converted in Berlin, Germany. The successful
rollout of HNA Millennium continues to increase our competitiveness
in the marketplace. Cash collections were a record $84.4 million and
operating cash flow remains positive."
"As we have previously indicated, we expect 1999 to have a higher
than normal level of uncertainty. However, we remain one of the best
positioned companies in the industry, with a broad client base and
industry-leading technology," Patterson concluded.
The company also announced that it completed a $100 million privately
placed debt offering on April 15, 1999. The proceeds will be used to
retire the Company's existing $30 million of debt, fund proposed
capital improvements and strengthen the Company's cash position.
Marc G. Naughton, Vice President and Chief Financial Officer, said,
"The combination of low interest rates and the high level of interest
among institutional debt investors created an opportunity for the
Company to fund certain long-term cash needs at very attractive
rates. The growth of Cerner's balance sheet to over $400 million of
assets and $274 million of equity prior to the financing makes it an
appropriate time to leverage that strength." The Company will record
an extraordinary charge of $1.4 million (net of tax) in connection
with the repayment of its existing debt in the second quarter of
1999.
<PAGE> --MORE--
Cerner April 21, 1999 Earnings - Page 2
Cerner Corporation is a leading supplier of clinical and management
information systems to more than 1,000 healthcare organizations
worldwide. Cerner's mission is to connect the appropriate persons,
knowledge, and resources at the appropriate time and location to
achieve the optimal health outcome. Cerner's vision of proactive
healthcare management drives innovation in the development of
effective solutions for today's healthcare challenges, while creating
a foundation for tomorrow's healthy populations.
Cerner is a trademark of Cerner Corporation. Any and all other
trademarks listed herein are the property of their respective owners.
This release may contain forward-looking statements that involve a
number of risks and uncertainties. It is important to note that any
such performance, and actual results, financial condition or business
could differ materially from those expressed in such forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to: variations in the
Company's quarterly operating results, volatility of the Company's
stock price, market risk of investments, changes in the healthcare
industry, length of the sales and implementation cycles, changes in
technology, significant competition, the Company's proprietary
technology may be subjected to infringement claims or may be
infringed upon, regulation of the Company's software by the U.S. Food
and Drug Administration or other government regulation, the
possibility of product-related liabilities, risks and uncertainties
related to the Year 2000, possible failures or defects in the
performance of the Company's software and the possibility that the
Company's anti-takeover defenses could delay or prevent an
acquisition of the Company. Additional discussion of these and
other factors affecting the company's business and prospects is
contained in the company's periodic filings with the Securities and
Exchange Commission. The company undertakes no obligation to update
or revise forward-looking statements to reflect changed assumptions,
the occurrence of unanticipated events or changes in future operating
results, financial condition or business over time.
# # #
<PAGE>
CERNER CORPORATION AND SUBSIDIARIES
Condensed Summary of Operations
(Unaudited)
<TABLE>
Three Months Ended
4/3/99 4/4/98(1)
------ ---------
(In thousands, except per share amounts)
<S> <C> <C>
Revenues $ 86,743 $ 73,674
Gross Margin 63,175 51,602
Operating Earnings 4,874 5,984
Earnings Before Income Taxes 4,543 6,144
Income Taxes 1,726 2,375
Net Earnings 2,817 3,769
Basic Earnings Per Share $ .08 $ .12
Basic Weighted Average Shares 33,559 32,669
Outstanding
Diluted Earnings Per Share $ .08 $ .11
Diluted Weighted Average 33,923 33,352
Shares Outstanding
</TABLE>
(1) Excludes non-recurring, acquisition-related charge of $3.1
million, net of $1.9 million tax benefit for the quarter ended April
4, 1998. The tax-effected impact of non-recurring charges on
diluted earnings per share was ($0.09) for the quarter.
