SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
December 10, 1998 (December 4, 1998)
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Date of Report (Date of earliest event reported)
PHYSICIAN COMPUTER NETWORK, INC.
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(Exact name of registrant as specified in charter)
New Jersey
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(State or other jurisdiction of incorporation)
0-19666
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(Commission File Number)
22-2485688
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(IRS Employer Identification No.)
1200 The American Road
Morris Plains, New Jersey 07950
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(Address of principal executive offices)
(973) 490-3100
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(Registrant's telephone number, including area code)
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ITEM 5. Other Matters.
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Pursuant to a partnership interest purchase agreement (the
"Partnership Interest Purchase Agreement") entered into on December 4, 1998, the
Registrant's wholly-owned subsidiary, PCN HP Venture Corp.("HP") sold its
partnership interest in HealthMatics G.P. ("HealthMatics")(formerly known as
HealthPoint G. P.) to GW Acquisition Corp., a subsidiary of Glaxo Wellcome Inc.
("Glaxo") for consideration consisting of $4,619,103.25 in cash and the
forgiveness of $380,896.75 owed to HealthMatics by the Registrant and HP.
HealthMatics was a joint venture created by the Registrant and Glaxo in 1996 to,
among other things, develop and market electronic clinical information systems.
The Registrant initiated and elected to enter into the transactions contemplated
by the Partnership Interest Purchase Agreement in order to, among other things,
permit the Registrant to focus more of its development efforts on its core
practice management software business. However, through both its direct sales
force and its own network of value added resellers, the Registrant will continue
to serve as a value-added reseller and distributor of HealthMatics' products and
continue to support its existing base of users of the HealthMatics' products. As
a result of the sale of HP's partnership interest in HealthMatics, the
Registrant will no longer have any obligation to continue to fund HealthMatics
operations.
Contemporaneously with the execution of the Partnership
Interest Purchase Agreement, the Registrant entered into definitive
documentation with the Registrant's senior lenders to, among other things,
extend the maturity date of the Registrant's senior indebtedness from September
30, 1998 until June 30, 1999. In accordance with the agreements with the
lenders, the Registrant: (i) repaid $750,000 of the outstanding principal amount
of its senior debt; (ii) paid the lenders an extension fee of $250,000; (iii)
agreed to pay the lenders an additional fee of $1,000,000 upon the maturity of
the indebtedness; and (iv) deposited $1,000,000 of the proceeds of the sale of
the HealthMatics interest in a cash collateral account maintained by Fleet Bank,
N.A., as agent for the senior lenders, which sum will be released to the
Registrant on April 30, 1999 if certain conditions are satisfied.
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ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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No financial statements or pro forma financial information are required to
be filed as a part of this report. There are no financial exhibits filed as part
of this report.
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(c) Exhibits.
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Exhibit 1 -- Copy of Partnership Interest Purchase
Agreement, dated as of December 4, 1998,
among the Registrant, PCN HP Venture
Corp. and GW Acquisition Corp.
Exhibit 2 -- Copy of Second Forbearance and Amendment
Agreement, dated as of December 4, 1998,
among the Registrant, certain
subsidiaries of the Registrant, the
several banks and other financial
institutions or entities which are
parties thereto and Fleet Bank, N.A., as
administrative agent.
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SIGNATURE
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 thereunto duly authorized.
PHYSICIAN COMPUTER NETWORK, INC.
(REGISTRANT)
Date: December 10, 1998 By: /S/ PAUL ANTINORI
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Paul Antinori
Vice President
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EXHIBIT INDEX
Exhibit 1 -- Partnership Interest Purchase Agreement,
dated as of December 4, 1998, among the
Registrant, PCN HP Venture Corp. and GW
Acquisition Corp.
Exhibit 2 -- Copy of Second Forbearance and Amendment
Agreement, dated as of December 4, 1998,
among the Registrant, certain subsidiaries
of the Registrant, the several banks and
other financial institutions or entities
which are parties thereto and Fleet Bank,
N.A.,as administrative agent.
<PAGE>
PARTNERSHIP INTEREST PURCHASE AGREEMENT
By and Among
HealthMatics G.P.,
GW Acquisition Corp.,
Physician Computer Network, Inc.
and
PCN HP Venture Corp.
Dated as of December 4, 1998
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PARTNERSHIP INTEREST PURCHASE AGREEMENT, dated as of December 4, 1998, by
and among HealthMatics G.P., a New York general partnership (formerly
HealthPoint, G.P.)(the "Partnership"), GW Acquisition Corp., a Delaware
Corporation ("Buyer"), Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and PCN HP Venture Corp., a Delaware corporation
("Seller").
W I T N E S S E T H :
WHEREAS, Seller, a wholly owned subsidiary of PCN, and GW Investment Corp.,
a North Carolina corporation ("GWIC")(as successor in interest to Intelligent
Medical Systems, Inc.), a wholly owned subsidiary of Glaxo Wellcome Inc., a
North Carolina corporation ("Glaxo"), are parties to a Partnership Agreement
dated as of January 25, 1996 (the "Partnership Agreement"), pursuant to which
the Seller and GWIC (each a "Partner" and collectively, the "Partners") formed
the Partnership, a joint venture partnership established to, among other things,
develop and market innovative electronic clinical information systems; and
WHEREAS, Glaxo, PCN and the Partnership are parties to a Transaction
Agreement dated as of January 25, 1996 (the "Transaction Agreement"), pursuant
to which each of the parties thereto entered into certain agreements regarding,
among other things, the distribution by PCN of the Partnership's products and
services; and
WHEREAS, PCN wishes to cause Seller to sell and Buyer wishes to purchase
Seller's right, title and interest in the Partnership (the "Partnership
Interest") on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, in connection with such purchase and sale, PCN, Glaxo and the
Partnership wish to terminate all of their respective rights and obligations
under the Transaction Agreement on the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants, agreements, representations and warranties herein contained, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto intending to be legally bound hereby
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used herein and not otherwise
herein defined shall have the meanings given to such terms in Schedule 1 to the
Transaction Agreement and the Partnership Agreement (such definitions to be
equally applicable to both th singular and plural forms of the terms defined).
<PAGE>
ARTICLE 2
SALE AND PURCHASE OF PARTNERSHIP INTEREST
Section 2.1 SALE OF PARTNERSHIP INTEREST.
At the Closing provided for in Section 3.1, Seller shall sell, assign and
transfer the Partnership Interest to Buyer free and clear of all liens, security
interests and other encumbrances of any kind and Buyer shall purchase the
Partnership Interest for the purchase price provided in Section 2.2.
Section 2.2 PURCHASE PRICE AND PAYMENT FOR PARTNERSHIP INTEREST. (a)
PURCHASE PRICE. The purchase price for the Partnership Interest is
$4,619,103.25, plus the forgiveness of certain debt and liabilities as set forth
on SCHEDULE 7.12 (the "Purchase Price").
(b) CLOSING PAYMENT.
The Purchase Price shall be paid by Buyer as follows. At the Closing, Buyer
shall deliver to Seller $4,619,103.25 in immediately available funds by wire
transfer to an account designated by Seller on the Closing Date (the "Cash
Consideration").
Section 2.3 TRANSACTIONS ON THE CLOSING DATE. (a) At the Closing, Seller
will deliver to Buyer the following:
(i) resignations of the members of the Management
Committee and officers of the Company listed on SCHEDULE 2.3;
(ii) any and all confidential documents and information
concerning the Partnership or the business of the Partnership acquired or held
by the Seller or PCN during Seller's incumbency as a Partner in the Partnership,
other than any such documents or information (a list of the categories of which
shall be delivered to Buyer at the Closing) acquired or held by PCN solely in
its capacity as a reseller of the Partnership's products; and
(iii) each of the payments, certificates and documents
contemplated by Article 7 (which payments shall be made in immediately available
funds).
(b) At the Closing, Buyer will deliver to Seller the following:
(i) the Purchase Price in accordance with Section 2.2
above and Section 7.12 below; and
(ii)each of the certificates and documents contemplated
by Article 8.
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Section 2.4 TERMINATION OF RIGHTS AS PARTNER AND TRANSACTION AGREEMENT.
Effective as of the consummation of the Closing provided for herein, none of
PCN, Seller or any of their respective Affiliates (collectively, "PCN
Entities") shall have any further rights or obligations under or pursuant to the
Partnership Agreement or the Transaction Agreement, the Transaction Agreement
being terminated as of the consummation of the Closing.
Section 2.5 ACKNOWLEDGMENT. The Partnership hereby consents to the
transfer of the Partnership Interestfrom Seller to Buyer in accordance with the
terms of this Agreement and acknowledges that, from and after the Closing (if
the Closing occurs), Seller shall no longer be deemed to be, or have any \
rights or obligations as, a partner of the Partnership.
ARTICLE 3
CLOSING AND TERMINATION CLOSING.
Section 3.1 The closing of the transactions provided for herein (the
"Closing") will take place at the offices of Winthrop, Stimson, Putnam &
Roberts, One Battery Park Plaza, New York, New York, at 10:00 A.M. (local time)
on November 30, 1998 (the "Closing Date") or at such other place, time and date
as may be agreed upon by Buyer and Seller.
Section 3.2 TERMINATION. Anything contained in this Agreement other tha
in this Section 3.2 to the contrary notwithstanding, this Agreement may be
terminated in writing at any time:
(a) without liability on the part of any party hereto (unless
occasioned by reason of a breach by any party hereto of any of its
representations, warranties or obligations hereunder) by mutual consent of Buye
and Seller;
(b) without liability on the part of any party hereto (unless
occasioned by reason of a breach by any party hereto of any of its
representations, warranties or obligations hereunder) by either Buyer or Seller
if the Closing shall not have occurred on or before December 31, 1998 (or such
later date as may be agreed upon in writing by the parties hereto);
(c) by Buyer, if Seller shall breach any of its representations,
warranties or obligations hereunder and such breach shall not have been cured o
waived and Seller shall not have provided reasonable assurance that such breach
will be cured on or before the Closing Date; or
(d) by Seller, if Buyer shall breach any of its representations,
warranties or obligations hereunder and such breach shall not have been cured o
waived and Buyer shall not have provided reasonable assurance that such breach
will be cured on or before the Closing Date.
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Section 3.4 SURVIVAL OF PROVISIONS. Notwithstanding the termination of this
Agreement pursuant to Section 3.2, the provisions of Sections 6.2 (Expenses) and
6.3 (Confidentiality) shall survive such termination and continue in effect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Each of Seller and PCN represents and warrants to Buyer on the date hereof
and on the Closing Date that:
Section 4.1 CORPORATE ORGANIZATION AND AUTHORITY. Each of Seller and PCN is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware and New Jersey, respectively, and has all corporate power and
authority to carry on its business as now being conducted and to own its
properties. Each of Seller and PCN has full corporate power and authority to
enter into this Agreement, the Confidentiality Agreement (as defined below) and
the Releases (as defined below) to which it is a party (the "Party Releases")
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by each of Seller and PCN of the Agreement,
the Confidentiality Agreement and the Party Releases have been duly authorized
by all requisite corporate action. Each of this Agreement, the Confidentiality
Agreement and the Party Releases has been duly executed and delivered by Seller
and PCN, and (assuming due execution and delivery by Buyer and the Partnership
of this Agreement) each of this Agreement, the Confidentiality Agreement and the
Party Releases constitute, and the Associated Document (as defined in Section
7.11 hereto) when executed and delivered will constitute, a valid and binding
obligation of Seller and PCN, enforceable in accordance with their respective
terms.
Section 4.2 OWNERSHIP OF THE PARTNERSHIP INTEREST. Seller is the lawful
record and beneficial owner of the Partnership Interest. Except as set forth on
SCHEDULE 4.2, the Seller owns the Partnership Interest free and clear of all
pledges, liens, security interests, encumbrances, claims, options, restrictions
or charges (the "Encumbrances") except for restrictions on transfer under
federal and state securities laws. Any and all Encumbrances set forth on
SCHEDULE 4.2 shall be released by the Closing, and proof of such release shall
be delivered to the Buyer prior to or at the Closing pursuant to Section 7.10
hereof. Upon the delivery of the Partnership Interest in the manner contemplated
under Section 2.3, Buyer will acquire the beneficial and legal, valid and
indefeasible title to such Partnership Interest, free and clear of all
Encumbrances, except for restrictions on transfer under federal and state
securities laws.
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Section 4.3 NO VIOLATION. Except as set forth on SCHEDULE 4.3, none of
Seller, PCN and, to the best knowledge of PCN, the Partnership is subject to or
bound by any provision of:
(a) any law, statute, rule, regulation or judicial or administrative
decision,
(b) any articles or certificate of incorporation or by-laws,
(c) any mortgage, deed of trust, lease, note, shareholders'
agreement, partnership agreement, agreement regarding debt for money borrowed
bond, indenture, other instrument or agreement, license, permit, trust,
custodianship, other restriction, or
(d) any judgment, order, writ, injunction or decree of any
court, governmental body, administrative agency or arbitrator, that would
prevent or be violated by or that would result in the creation of any
Encumbrance or under which there would be a default or right of termination
as a result of, the execution, delivery and performance by Seller and PCN of
this Agreement or the Releases and the consummation of the transactions
contemplated hereby or thereby. Except as set forth on SCHEDULE 4.3,
no consent, approval or authorization of or declaration or filing with any
individual, corporation, partnership, trust or unincorporated organization
or any government or any agency or political subdivision thereof (a "Person")
is required for the valid execution, delivery and performance by Seller and PCN
of this Agreement or the Releases and the consummation of the transactions
contemplated hereby or thereby. Any required consent, approval or
authorization of or declaration or filing with any Person, as set forth on
SCHEDULE 4.3, shall be delivered to Buyer prior to or at the Closing,
pursuant to Section 7.3 hereof.
Section 4.4 LITIGATION. Except as set forth on SCHEDULE 4.4, there is (i)
no outstanding consent, order, judgment, injunction, award or decree of any
court, government or regulatory body or arbitration tribunal against or
involving the Partnership, PCN, with respect to the Partnership, or Seller in
Seller's capacity as a Partner in the Partnership, (ii) no action, suit, dispute
or governmental, administrative, arbitration or regulatory proceeding pending
or, to Seller's and PCN's best knowledge, threatened against or involving the
Partnership, PCN (with respect to the Partnership) or Seller in Seller's
capacity as a Partner in the Partnership and (iii) to Seller's and PCN's best
knowledge, no investigation pending or threatened against or relating to the
Partnership, PCN (with respect to the Partnership), any of their respective
officers or directors as such or Seller in such Seller's capacity as a Partner
in the Partnership (collectively, "Proceedings").
<PAGE>
Section 4.5 BROKERAGE. No broker or finder has acted directly or indirectly
for either one or both of Seller or PCN in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder is entitled to any
brokerage or finder's fee or other commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of either
one or both of Seller or PCN.
Section 4.6 SELLER'S AND PCN'S BEST KNOWLEDGE. The term "Seller's and PCN's
best knowledge", shall mean the best knowledge of Seller and PCN after due
inquiry.
Section 4.7 BOOKS AND RECORDS. Seller and PCN have and will make available
for inspection by Buyer and its attorneys, accountants and such other
representatives of Buyer as Buyer shall designate in writing, all books of
account of the Partnership which are in the custody or possession of Seller or
PCN.
Section 4.8 CERTAIN LIABILITIES. Neither Seller nor PCN has incurred or
created any liability or obligation of the Partnership, and no such liability or
obligation of the Partnership so created is outstanding.
Section 4.9 NO LENDERS. Each of Seller and PCN is not a party to any
agreement regarding debt for money borrowed with any person other than those
listed on SCHEDULE 4.9.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller on the date hereof and on the
Closing Date that:
Section 5.1 ORGANIZATION. Buyer is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware.
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Section 5.2 CORPORATE AUTHORITY. Buyer has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Buyer of this Agreement has been duly authorized by all requisite corporate
action. This Agreement has been duly executed and delivered by Buyer, and
(assuming due execution and delivery by Seller, PCN and the Partnership) this
Agreement constitutes a valid and binding obligation of Buyer, enforceable in
accordance with its terms.
Section 5.3 NO VIOLATION. None of Buyer, any of its Affiliates, or, to the
best of Buyer's knowledge, the Partnership, is subject to or bound by any
provision of:
(a) any law, statute, rule, regulation or judicial or administrative
decision,
(b) any articles or certificate of incorporation or by-laws,
(c) any mortgage, deed of trust, lease, note, shareholders'
agreement, partnership agreement, agreement regarding debt for money borrowed,
bond, indenture, other instrument or agreement, license, permit, trust,
custodianship, other restriction, or
(d) any judgment, order, writ, injunction or decree of any court,
governmental body, administrative agency or arbitrator,
<PAGE>
that would prevent or be violated by or that would result in the creation of
any Encumbrance or under which there would be a default or right of
termination as a result of, the execution, delivery and performance by Buyer of
this Agreement and the consummation of the transactions contemplated hereby. No
consent, approval or authorization of or declaration or filing with any Person
is required for the valid execution, delivery and performance by Buyer of this
Agreement and the consummation of the transactions contemplated hereby.
Section 5.4 LEGAL PROCEEDINGS, ETC. There is no legal, administrative,
arbitrative or other action or proceeding or governmental investigation relating
to the transactions pursuant to this Agreement or the Partnership Agreement
pending, or, to the knowledge of Buyer, threatened against Buyer, any of its
Affiliates or any director, officer or employee thereof.
Section 5.5 BROKERAGE. No broker or finder has acted directly or indirectly
for Buyer or any of its Affiliates in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder is entitled to any
brokerage or finder's fee or other commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of Buyer
or any of its Affiliates.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
Section 6.1 PERFORMANCE, SATISFACTION OF CONDITIONS. Each of the parties
hereto shall not take or omit to take any action that would result in the
failure of the conditions set forth in this Agreement or that in any way would
prevent the consummation of the transactions contemplated hereby. Seller, PCN
and the Partnership shall use their diligent efforts to satisfy or cause to be
satisfied all the conditions to the obligations of Buyer set forth in this
Agreement. Buyer and the Partnership will use their diligent efforts to satisfy
or cause to be satisfied all conditions to the obligations of the Seller and PCN
set forth in this Agreement.
Section 6.2 EXPENSES. Buyer and Seller will each bear their own fees, costs
and expenses incurred by them in connection with the negotiation, execution and
performance of this Agreement and each shall not be liable to the other for the
payment of such fees, costs and expenses, including without limitation,
brokerage or finder's fees and accountants' and attorneys' fees incurred by the
other party.
Section 6.3 ACCESS TO INFORMATION AND CONFIDENTIALITY. Seller, PCN and the
Partnership agree that Buyer and its attorneys, accountants and such other
representatives of Buyer as Buyer shall designate to them in writing may conduct
such reasonable investigation with respect to the business, business prospects,
assets, liabilities (contingent or otherwise), results of operations,
facilities, management, employees and financial condition of the Partnership as
will permit Buyer to evaluate its interest in the transactions contemplated by
this Agreement. Each of the parties hereto will hold and will cause their
respective representatives to hold in strict confidence, unless compelled to
disclose by judicial or administrative process, or, in the written opinion of
its counsel, by other requirements of law, all documents and information
concerning any one or more of the Seller, PCN and the Partnership furnished to
Buyer and all documents and information concerning Buyer furnished to Seller or
PCN in connection with the transactions contemplated by this Agreement (except
to the extent that such information can be shown to have been (a) in the public
domain through no fault of either Seller or Buyer or (b) later lawfully acquired
by either Seller or Buyer from other sources that are not under an obligation of
confidentiality) and will not release or disclose such information to any other
Person, except in connection with this Agreement to its lenders, auditors,
attorneys, financial advisors and other consultants and advisors.
<PAGE>
Section 6.4 NO SOLICITATION. Seller and PCN shall not, and shall direct
each of their respective affiliates, officers, employees, representatives or
agents not to, directly or indirectly, encourage, solicit, initiate or engage in
discussions or negotiations with, or provide any non-public information to, any
Person concerning any sale of shares of the capital stock of the Seller or the
Partnership Interests or similar transactions involving the Partnership or enter
into any agreement with respect thereto. Seller and PCN will promptly
communicate to Buyer the terms of any proposal which it may receive in respect
of all such transactions prohibited by the foregoing. Nothing contained in this
Section 6.4 shall limit or prevent PCN from engaging, soliciting or initiating
any negotiations with (i) any lender or current secured party of PCN; or (ii)
any Person regarding the sale of all or substantially all of the assets,
business, or shares of capital stock of PCN.
Section 6.5 PRESS RELEASES. Except as required by law or stock exchange
regulation, any public announcements regarding the transactions contemplated
hereby shall be made only with the mutual consent of Seller and Buyer. Each
party shall consult with the other party regarding the timing and content of any
public announcement required by any such law or regulation.
Section 6.6 CONSENTS. Seller, PCN, Buyer and the Partnership will use
diligent efforts to obtain the consents, if any, of other Persons required for
the consummation of the transactions contemplated hereby.
Section 6.7 GOVERNMENT FILINGS. Each party hereto will, as promptly as
practicable, make or cause to be made all governmental filings required to be
made by it and will comply with all applicable government waiting periods or
notification or other procedures required to be complied with by it in
connection with the transactions contemplated by this Agreement.
Section 6.8 THIRD PARTY INDEMNITY. Buyer agrees that to the extent that any
one or more of Buyer, GWIC, Glaxo and their respective Affiliates are
indemnified by or are entitled to seek indemnification from any third party
purchaser of any of the assets, business or interest in HealthMatics (any such
third party being referred to herein as a "Third Party Indemnitor") with respect
to any loss, deficiency, liability, damages, assessments, judgments, costs and
expenses of any kind or nature (an "Indemnified Loss"), none of Buyer, GWIC,
Glaxo or any of their respective Affiliates will assert a claim against or seek
to recover any Indemnified Loss from any of PCN, Seller or any of their
respective Affiliates (to the extent Buyer, GWIC, Glaxo or any such Affiliate
has the right to do so) unless and until the person seeking indemnity shall, in
such person's reasonable judgment, have exercised commercially reasonable
efforts to collect from any Third Party Indemnitor with respect to such
Indemnified Loss. To the extent that any one or more of Buyer, GWIC, Glaxo and
their respective Affiliates does collect an Indemnified Loss from any of PCN,
Seller or any of their respective Affiliates with respect to any matter as to
which there is a Third Party Indemnitor, such paying person shall, to the extent
of such payment, be subrogated to the rights of the payee against such Third
Party Indemnitor.
Section 6.9. ACKNOWLEDGEMENT. Each of PCN and Seller acknowledge and agree
that neither PCN nor Seller shall have, and each of PCN and Seller hereby waive,
any rights whatsoever, including but not limited to patent, trademark,
copyright, trade secret or any other intellectual property rights ("IP Rights")
in any assets (including but not limited to the source code and any upgrades and
enhancements to the source code for any product) owned, created or invented by
or on behalf of the Partnership, including but not limited to past and present
versions of the Partnership's clinical patient record product currently marketed
as HealthMatics Series 4, and work in progress on enhancements and new verions
(all such assets hereinafter referred to as "Partnership Assets"). Without
limiting the foregoing, each of PCN and Seller acknowledge and agree that
neither PCN nor Seller shall have any right to any of the Partnership Assets
through an escrow as contemplated in Section 7.4 of the Partnership Agreement,
and each of PCN and Seller acknowledge and agree that no such escrow for any of
the Partnership Assets shall be established. To the extent that each of PCN and
Seller shall have, or may be deemed to have, rights including but not limited to
IP Rights in any Partnership Assets, each of PCN and Seller hereby assigns to
Buyer all such rights, including but not limited to IP Rights. In connection
with the assignment referred to in the preceding sentence, each of PCN and
Seller hereby agree to perform, during or after the term of this Agreement, any
and all such further acts as may be requested by Buyer or the Partnership,
including the execution and delivery of documents or instruments, as is
necessary or desirable to transfer, perfect or defend Buyer's or the
Partnership's rights including but not limited to IP Rights in the Partnership
Assets.
<PAGE>
ARTICLE 7
CONDITIONS PRECEDENT OF BUYER
Buyer need not consummate the transactions contemplated by this Agreement
unless the following conditions shall be fulfilled:
Section 7.1 REPRESENTATIONS AND WARRANTIES. Except as otherwise
contemplated or permitted by this Agreement, (a) the representations and
warranties of Seller and PCN contained in this Agreement or in any certificate
or document delivered to Buyer pursuant hereto shall be deemed to have been made
again at and as of the Closing Date and shall then be true in all respects and
(b) Seller and PCN shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by Seller
and PCN prior to or on the Closing Date, and Buyer shall have been furnished
with a certificate of an officer of Seller, dated the Closing Date, certifying
to the effect of clauses (a) and (b) of this Section 7.1.
Section 7.2 NO ACTIONS. No action, suit, or proceeding before any court or
governmental or regulatory authority shall be pending, no investigation by any
governmental or regulatory authority shall have been commenced, and no action,
suit or proceeding by any governmental or regulatory authority shall have been
threatened, against Buyer, Seller, PCN, the Partnership or any of the
principals, officers, managers or directors of any of them, seeking to restrain,
prevent or change the transactions contemplated hereby or questioning the
legality or validity of any such transactions or seeking damages in connection
with any such transactions. There shall be in effect no order or injunction of a
court or governmental authority of competent jurisdiction restraining,
prohibiting, invalidating or setting aside, in whole or in part, the
transactions contemplated hereby.
Section 7.3 CONSENTS. All consents of third parties, including, without
limitation, the approval of the Board of Directors of Buyer, governmental
authorities and non-governmental self-regulatory agencies, all consents referred
to on Schedule 4.3 and all filings with and notifications of governmental
authorities, regulatory agencies (including non-governmental self-regulatory
agencies) or other entities which regulate the business of Buyer, Seller, PCN,
or the Partnership necessary on the part of Buyer, Seller, PCN, or the
Partnership, to the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and to permit the continued
operation of the respective businesses of Buyer or the Partnership in
substantially the same manner after the Closing Date as theretofore conducted
shall have been obtained or effected.
Section 7.4 REGULATORY APPROVALS. Any required governmental filings shall
have been made, all applicable waiting periods shall have expired or been
terminated, and all requisite governmental approvals for the consummation of the
transactions contemplated hereby shall have been received on terms satisfactory
to Buyer.
Section 7.5 EMPLOYMENT AGREEMENTS. Each of the persons listed on SCHEDULE
7.5 shall have duly executed and delivered to Buyer his Employment Agreement.
<PAGE>
Section 7.6 CONFIDENTIALITY AGREEMENT. Each of Seller, PCN and the
Partnership shall have duly executed and delivered to Buyer a confidentiality
agreement (the "Confidentiality Agreement") substantially in the form attached
hereto as EXHIBIT A.
Section 7.7 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
condition (financial or otherwise), results of operations, properties, business
or prospects of the Partnership shall have occurred.
Section 7.8 RESIGNATIONS. Seller and PCN shall have delivered to Buyer the
resignations of those persons appointed by Seller and PCN as their
representatives to the Management Committee of the Partnership who are listed on
SCHEDULE 2.3.
Section 7.9 GENERAL RELEASES. Buyer shall have received a general release
through the date of the Closing from (i) all lenders of PCN (the "Lenders") with
respect to any claims, causes of action or demands of whatever nature arising
out of or related to Buyer's relationship with PCN and the Partnership; (ii) all
lenders of Seller with respect to any claims, causes of action or demands of
whatever nature arising out of or related to Buyer's relationship with Seller
and the Partnership; (iii) PCN with respect to any claims, causes of action or
demands of whatever nature arising out of or related to Buyer's relationship
with Seller, PCN or the Partnership; and (iv) Seller with respect to any claims,
causes of action or demands of whatever nature arising out of or related to
Buyer's relationship with Seller, PCN or the Partnership. Notwithstanding the
foregoing, (i) neither the Seller nor PCN shall release or be required to
release any party with respect to the reseller relationship, as provided in the
definitive distribution agreement referred to in Section 7.11 hereof, between
PCN and the Partnership and (ii) neither PCN nor Seller shall release GWIC or
Buyer from any right of contribution against GWIC or Buyer from and with respect
to any liability or obligation of the Partnership to third parties for or with
respect to which the partners of the Partnership are jointly and severally
liable as a result of being or having been partners of the Partnership.
Buyer shall have also received a general release through the date of the
Closing from (i) PCN with respect to any claims, causes of action or demands of
whatever nature against any current or former officer or manager of the
Partnership arising out of or related to such officer's or manager's
relationship with Seller, PCN or the Partnership; and (ii) Seller with respect
to any claims, causes of action or demands of whatever nature of whatever nature
against any current or former officer or manager of the Partnership arising out
of or related to such officer's or manager's relationship with Seller, PCN or
the Partnership.
Section 7.10 RELEASE FROM LIENS ON PARTNERSHIP INTEREST. Seller and PCN
shall have delivered to Buyer evidence reasonably satisfactory to Buyer and its
counsel that all Encumbrances of any kind with respect to the Partnership
Interest listed on SCHEDULE 4.2 hereto have been released and discharged.
Section 7.11 ASSOCIATED DOCUMENT. Prior to the Closing Date, the
Partnership and PCN shall have executed and delivered a definitive distribution
agreement acceptable to the Partnership and PCN (the "Associated Document").
Section 7.12 CERTAIN INDEBTEDNESS. The amounts set forth on SCHEDULE 7.12
hereto reflect the capital contributions and accounts payable which are past due
and owing to the Partnership by Seller and PCN. Such indebtedness is hereby
forgiven by the Partnership effective at the Closing.
<PAGE>
Section 7.13 SATISFACTORY INVESTIGATION. Buyer shall have satisfactorily
completed its investigation of the business, assets and financial condition of
the Partnership in connection with the transactions contemplated hereby and
shall have been satisfied with such results. Buyer shall have satisfactorily
completed its investigation of any event or condition arising or discovered
after the date of this Agreement that could reasonably be expected to result in
a failure of any of Buyer's conditions hereunder to be fulfilled.
ARTICLE 8
CONDITIONS PRECEDENT OF SELLER
Seller need not consummate the transactions contemplated hereby unless the
following conditions shall be fulfilled:
Section 8.1 REPRESENTATIONS AND WARRANTIES. Except as otherwise
contemplated or permitted by this Agreement, (a) the representations and
warranties of Buyer contained in this Agreement or in any certificate or
document delivered to Seller pursuant hereto shall be deemed to have been made
again at and as of the Closing Date and shall then be true in all respects and
(b) Buyer shall have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date, and Seller shall have been furnished a certificate of an
officer of Buyer, dated the Closing Date, certifying to the effect of clauses
(a) and (b) of this Section 8.1.
Section 8.2 NO ACTIONS. No action, suit, or proceeding before any court or
governmental or regulatory authority shall be pending, no investigation by any
governmental or regulatory authority shall have been commenced, and no action,
suit or proceeding by any governmental or regulatory authority shall have been
threatened, against Buyer, Seller, PCN, the Partnership or any of its
principals, officers, managers or directors, seeking to restrain, prevent, or
change the transactions contemplated hereby or questioning the legality or
validity of any such transactions or seeking damages in connection with any such
transactions.
Section 8.3 CONSENTS. All consents of third parties including, without
limitation, the approval of the Board of Directors of Seller and PCN,
governmental authorities, and non-governmental self-regulatory agencies, and all
filings with and notifications of governmental authorities, regulatory agencies
(including non-governmental self-regulatory agencies) or other entities which
regulate the business of Seller or Buyer, necessary on the part of Seller or
Buyer, to the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, other than routine post-closing
notifications or filings, shall have been obtained or effected.
Section 8.4 REGULATORY APPROVALS. All required governmental filings shall
have been made, all applicable waiting periods shall have expired or been
terminated, and all requisite governmental approvals for the consummation of the
transactions contemplated hereby shall have been received on terms satisfactory
to the Seller and PCN.
<PAGE>
Section 8.5 TERMINATION LETTER. Glaxo and the Partnership shall have sent a
letter substantially in the form of SCHEDULE 8.5 hereof terminating its rights
under the Transaction Agreement.
Section 8.6 BUYER'S RELEASE. Glaxo and Buyer shall have delivered to the
Lenders a release through the Closing with respect to any claim, causes of
action or demands of whatever nature arising out of or relating to the Lenders'
relationship with PCN and the Partnership on or prior to the Closing.
ARTICLE 9
INDEMNIFICATION
Section 9.1 INDEMNIFICATION BY SELLER AND PCN. Each of Seller and PCN
hereby agrees to jointly and severally defend, indemnify and hold harmless Buyer
and the Partnership and their respective successors, assigns and affiliates
(collectively, the "Buyer Indemnitees") from and against any and all losses,
deficiencies, liabilities, damages, assessments, judgments, costs and expenses,
including attorneys' fees and expenses (both those incurred in connection with
the defense or prosecution of the indemnifiable claim and those incurred in
connection with the enforcement of this provision) (collectively, "Buyer
Losses"), caused by, resulting from or arising out of:
(a) (i) breaches on the part of Seller or PCN of their representation
and warranties and (ii) failures by Seller or PCN to perform or otherwise
fulfill any undertaking or other agreement or obligation hereunder;
(b) any and all actions, suits, proceedings, claims, demands,
incident to any of the foregoing or such indemnification; and
(c) PROVIDED, HOWEVER, that if any claim, liability, demand,
assessment, action, suit or proceeding shall be asserted in respect of which a
Buyer Indemnitee proposes to demand indemnification ("Buyer Indemnified
Claims"), Buyer or such other Buyer Indemnitee shall notify Seller or PCN
thereof, provided further, however, that the failure to so notify Seller or PCN
shall not reduce or affect Seller's or PCN's obligations with respect thereto
except to the extent that Seller or PCN is materially prejudiced thereby. Seller
and PCN shall have the right promptly upon receipt of such notice to assume the
control of the defense, compromise or settlement of any such Buyer Indemnified
Claims (provided that any compromise or settlement must be reasonably approved
by Buyer), including, at its own expense, employment of counsel reasonably
satisfactory to Buyer; provided, however, that if Seller or PCN shall have
exercised its right to assume such control, Buyer may, in its discretion and at
their expense, employ counsel to represent it (in addition to counsel employed
by Seller or PCN) in any such matter, and in such event counsel selected by
Seller or PCN shall be required to cooperate with such counsel of Buyer in such
defense, compromise or settlement.
<PAGE>
Section 9.2 Indemnification By Buyer Buyer hereby agrees to defend,
indemnify and hold harmless Seller, PCN and their successors, assigns and
affiliates (collectively, "Seller Indemnitees") from and against any and all
losses, deficiencies, liabilities, damages, assessments, judgments, costs and
expenses, including attorneys' fees and expenses (both those incurred in
connection with the defense or prosecution of the indemnifiable claim and those
incurred in connection with the enforcement of this provision) (collectively,
"Seller Losses"), caused by, resulting from or arising out of:
(a) (i) breaches on the part of Buyer of its representations and
warranties; and (ii) failures by Buyer to perform or otherwise fulfill any
undertaking or agreement or obligation hereunder; and
(b) any and all actions, suits, proceedings, claims and demands incident to
any of the foregoing or such indemnification; and
(c) PROVIDED, HOWEVER, that if any claim, liability, demand, assessment,
action, suit or proceeding shall be asserted in respect of which a Seller
Indemnitee proposes to demand indemnification ("Seller Indemnified Claims"),
Seller or such other Seller Indemnitee shall notify Buyer thereof, provided
further, however, that the failure to so notify Buyer shall not reduce or affect
Buyer's obligations with respect thereto except to the extent that Buyer is
materially prejudiced thereby. Buyer shall have the right promptly upon receipt
of such notice to assume the control of the defense, compromise or settlement of
any such Seller Indemnified Claims (provided that any compromise or settlement
must be reasonably approved by Seller or PCN) including, at its own expense,
employment of counsel reasonably satisfactory to Seller or PCN; provided,
however, that if Buyer shall have exercised its right to assume such control,
Seller or PCN may, in their discretion and at their expense, employ counsel to
represent it (in addition to counsel employed by Buyer) in any such matter, and
in such event counsel selected by Buyer shall be required to cooperate with such
counsel of Seller or PCN in such defense, compromise or settlement.
ARTICLE 10
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 10.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The covenants
contained in this Agreement shall survive the Closing Date indefinitely. The
representations and warranties contained herein shall survive the Closing Date
until the third anniversary thereof, it being understood and agreed that any
claim brought on or before such third anniversary date shall survive until the
final resolution of such claim and that such period shall be extended for the
amount of time that relief is being sought from a Third Party Indemnitor as
provided in Section 6.8 hereof.
ARTICLE 11
MISCELLANEOUS
Section 11.1 COOPERATION. Each of the parties hereto shall use its
reasonable efforts to take or cause to be taken all actions, to cooperate with
the other party hereto, with respect to all actions, and to do or cause to be
done all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement.
Section 11.2 ACCESS TO BOOKS AND RECORDS. After the Closing, the Buyer and
the Partnership agree to make reasonably available to the Seller and PCN upon
notice and during normal business hours (including the right to make copies) (i)
any and all books and records reasonably necessary to respond to inquires
regarding the Partnership from regulatory authorities, or to defend claims or to
prepare required financial statements and tax returns, and (ii) in connection
with the Seller's or PCN's review of any such books and records and preparation
of financial statements and tax returns, any and all personnel as are reasonably
requested by the Seller or PCN, who will render assistance as may reasonably be
requested by Seller or PCN; provided, however, that Seller or PCN shall pay all
out of pocket costs and expenses with respect thereto. For a period of four (4)
years following the Closing, none of the Buyer, GWIC nor the Partnership will
dispose of, alter or destroy any such books, records or other data with respect
to the Partnership without giving thirty (30) days prior written notice to the
Seller and PCN in order to permit them, at their own expense, to examine or
duplicate such books, records or other data.
<PAGE>
Section 11.3 WAIVER. Any failure of Seller or PCN to comply with any of its
obligations or agreements herein contained may be waived only in writing by
Buyer. Any failure of Buyer to comply with any of its obligations or agreements
herein contained may be waived only in writing by Seller or PCN.
Section 11.4 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given upon receipt of: hand
delivery; certified or registered mail, return receipt requested; by a
nationally recognized overnight courier service; or telecopy transmission with
confirmation of receipt:
If to Seller or PCN, to:
Physician Computer Network, Inc.
1200 The American Road
Morris Plains, NJ 07950
Telecopier: (973) 490-3103
Attention: President
(with a copy to)
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, NY 10036
Telecopier: (212) 626-0799
Attention: Jonathan Klein, Esq.
If to Buyer to:
GW Acquisition Corp.
C/O Glaxo Wellcome Inc.
Five Moore Drive
Research Triangle Park, NC 27709
Telecopier: (919) 493-0265
Attention: Corporate Secretary
(with a copy to)
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004
Telecopier: (212) 858-1500
Telephone: (212) 858-1000
Attention: Kenneth E. Adelsberg, Esq.
Such names and addresses may be changed by written notice to each
person listed above.
<PAGE>
Section 11.5 GOVERNING LAW AND CONSENT TO JURISDICTION. (a) This Agreement
shall be governed by and construed in accordance with the internal substantial
laws and not the choice of law rules of the State of New York, USA.
(b) Any judicial proceeding brought with respect to this Agreement must be
brought in any court of competent jurisdiction in the State of New York, and, by
execution and delivery of this Agreement, each party (i) accepts, generally and
unconditionally, the exclusive jurisdiction of such courts and any related
appellate court, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement and (ii) irrevocably waives any
objection it may now or hereafter have as to the venue of any such suit, action
or proceeding brought in such a court or that such court is an inconvenient
forum. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO
WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT.
Section 11.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 11.7 HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 11.8 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules hereto and the documents referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
Section 11.9 AMENDMENT AND MODIFICATION. This Agreement may be amended or
modified only by written agreement of the parties hereto.
Section 11.10 BINDING EFFECT; BENEFITS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns; nothing in this Agreement, express or implied, is
intended to confer on any Person other than the parties hereto and their
respective successors and assigns (and, to the extent provided in Sections 9.1
and 9.2, the other Buyer Indemnitees and Seller Indemnitees) any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Section 11.11 ASSIGNABILITY. This Agreement shall not be assignable by any
party hereto without the prior written consent of the other parties, provided,
however, that the Seller and/or PCN shall be entitled to assign their interests
in this Agreement, subsequent to the Closing, in connection with a sale of all
or substantially all of the assets of PCN to a third party.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
GW ACQUISITION CORP.
By:
Name:
Title:
PHYSICIAN COMPUTER NETWORK, INC.
By:
Name:
Title:
PCN HP VENTURE CORP.
By:
Name:
Title:
HEALTHMATICS G.P.
PCN HP VENTURE CORP.
By:
Name:
Title:
GW INVESTMENT CORP.
By:
Name:
Title:
Agreed to and Acknowledged
<PAGE>
as to Sections 6.8 and 11.2:
GW INVESTMENT CORP.
By:
Name:
Title:
Agreed to and Acknowledged
as to Section 6.8:
GLAXO WELLCOME INC.
By:
Name:
Title:
<PAGE>
SCHEDULE 2.3
RESIGNATIONS
The resignations of each of Henry Green and Carter Evans as members of
the Management Committee of HealthMatics, G.P.
<PAGE>
SCHEDULE 4.2
ENCUMBRANCES
Fleet Bank, N.A., as the administrative agent, pursuant to a Guarantee
and Collateral Agreement among certain subsidiaries of Physician Computer
Network, Inc. ("PCN") in favor of Fleet Bank, N.A., as the administrative agent
for the lenders, dated September 10, 1997 ("Lenders Guarantee and Collateral
Agreement"), as modified by the Forbearance and Amendment Agreement among PCN,
the subsidiaries party thereto, Fleet Bank, N.A., as the administrative agent,
and the lenders party thereto, dated April 22, 1998, as further modified by the
Second Forbearance and Amendment Agreement among PCN, the subsidiaries party
thereto, Fleet Bank, N.A., as the administrative agent, and the lenders party
thereto, dated as of the date hereof, shall provide Buyer with evidence of the
release of the following liens prior to or at the Closing:
UCC-1 Financing Statements in favor of Fleet Bank, N.A., as
administrative agent, filed with:
Secretary of State: Delaware
Secretary of State: New Jersey
County Clerk: Morris County, New Jersey
Alvarez & Marsal Inc., as agent, pursuant to a Guarantee and collateral
Agreement among certain subsidiaries of PCN in favor of Alvarez & Marsal, Inc.,
as agent for the lenders, dated July 22, 1998 (the "Guarantee and Collateral
Agreement"), shall provide Buyer with evidence of the release of the following
liens prior to or at the Closing:
UCC-1 Financing Statements in favor of Alvarez & Marsal, Inc., as
agent, filed with:
Secretary of State: Delaware
Secretary of State: New Jersey
County Clerk: Morris County, New Jersey
<PAGE>
SCHEDULE 4.3
NO VIOLATIONS- SELLER
The consent of Fleet Bank, N.A., as the administrative agent, is
required pursuant to the Lenders Guarantee and Collateral Agreement, dated
September 10, 1997 and shall be provided to Buyer prior to or at the Closing.
The consent of Alvarez & Marsal, Inc., as agent, is required pursuant
to the Guarantee and Collateral Agreement, dated July 22, 1998 and shall be
provided to Buyer prior to or at the Closing.
<PAGE>
SCHEDULE 4.4
LIST OF LITIGATION
None
<PAGE>
SCHEDULE 4.9
NO LENDERS
Fleet Bank, N.A., as the administrative agent, pursuant to a Guarantee
and Collateral Agreement among certain subsidiaries of Physician Computer
Network, Inc. ("PCN") in favor of Fleet Bank, N.A., as the administrative agent
for the lenders, dated September 10, 1997 ("Lenders Guarantee and Collateral
Agreement"), as modified by the Forbearance and Amendment Agreement among PCN,
the subsidiaries party thereto, Fleet Bank, N.A., as the administrative agent,
and the lenders party thereto, dated April 22, 1998, as further modified by the
Second Forbearance and Amendment Agreement among PCN, the subsidiaries party
thereto, Fleet Bank, N.A., as the administrative agent, and the lenders party
thereto, dated as of the date hereof.
<PAGE>
SCHEDULE 5.3
NO VIOLATIONS- BUYER
None
<PAGE>
SCHEDULE 7.5
EMPLOYMENT AGREEMENTS
Mr. Alan Rubin shall have executed and delivered his Employment Agreement
with the Partnership to the Buyer prior to or at the Closing.
<PAGE>
SCHEDULE 7.12
CERTAIN PAYMENTS
PCN HP Capital Contributions $183,000.00
Accounts Payable to HM for product licenses $197,896.75
===========
(as of November 24, 1998)
Total $380,896.75
<PAGE>
SCHEDULE 8.5
TERMINATION LETTER
<PAGE>
December 4, 1998
Physician Computer Network, Inc.
PCN HP Venture Corp.
1200 The American Road
Morris Plains, NJ 07950
Attention: President
Re: TERMINATION OF TRANSACTION AGREEMENT
Dear Gentlemen:
Reference is hereby made to the Partnership Interest Purchase Agreement,
dated December 4, 1998, by and among HealthMatics G.P., Physician Computer
Network, Inc. ("PCN"), PCN HP Venture Corp. ("Seller") and GW Acquisition Corp.
(the "Agreement").
This letter is delivered in satisfaction of the condition to Seller's and
PCN's obligations under the Agreement. The undersigned hereby agrees to the
termination of the Transaction Agreement (as defined in the Agreement) as of the
Closing (as defined in the Agreement).
Very truly yours,
GLAXO WELLCOME INC.
By: _____________________
Name:
Title:
SECOND FORBEARANCE AND AMENDMENT AGREEMENT
AMONG
PHYSICIAN COMPUTER NETWORK, INC.,
THE SUBSIDIARIES PARTY HERETO,
FLEET BANK, N.A., AS ADMINISTRATIVE AGENT,
AND
THE LENDERS PARTY HERETO
DATED AS OF SEPTEMBER 30, 1998
<PAGE>
SECOND FORBEARANCE AND AMENDMENT AGREEMENT
SECOND FORBEARANCE AND AMENDMENT AGREEMENT, dated as of September 30,
1998, (this "Agreement" or the "Second Forbearance Agreement") among PHYSICIAN
COMPUTER NETWORK, INC., a New Jersey corporation (the "Borrower"), the several
subsidiaries of the Borrower which are parties hereto (the "Subsidiaries"), the
several banks and other financial institutions or entities which are parties
hereto (the "Lenders"), and FLEET BANK, N.A., as Administrative Agent (in such
capacity, the "Administrative Agent").
R E C I T A L S:
I. The Administrative Agent, Lehman Brothers Commercial Paper, Inc.,
asarranger and as a Lender, the Lenders and the Borrower entered into a Credit
Agreement,dated as of September 10, 1997 (the "Credit Agreement").
II. The Administrative Agent, the Lenders, the Borrower and certain
Subsidiaries of the Borrower (the "Guarantors") also entered into a Guarantee
and Collateral Agreement, dated as of September 10, 1997 (the "Guarantee and
Collateral Agreement").
III. On March 3, 1998, the Borrower issued a Securities and Exchange
Commission Form 8-K and a press release pursuant to which the Borrower disclosed
the existence of certain accounting matters.
IV. On April 2, 1998, the Borrower issued another press release
disclosing, among other things, additional accounting matters and announcing
that the Borrower's auditors had withdrawn their opinion with respect to the
Borrower's 1996 financial statements. A description of the nature of the
disclosures, facts and events described in Recitals III and IV was set forth as
Exhibit A annexed to a First Forbearance Agreement (hereinafter defined) and the
disclosures, facts and events described in Exhibit A are collectively referred
to herein as the "Accounting Matters."
V. The Accounting Matters have resulted in one or more Events of
Default under the Credit Agreement (the "Specified Events of Default").
VI. As a result of the occurrence of the Specified Events of Default,
the Borrower and the Guarantors have requested that the Administrative Agent and
the other Lenders agree to forbear from pursuing their remedies under, and to
amend certain sections of, the Credit Agreement.
VII. The Administrative Agent, the Required Lenders, the Borrowers and
the Guarantors entered into a Forbearance and Amendment Agreement, dated as of
April 22, 1998, pursuant to and subject to the terms and conditions of which the
Administrative Agent and the Required Lenders agreed to forbear from pursuing
their remedies until the Maturity Date (the "First Forbearance Agreement").
-2-
<PAGE>
VIII. Under the terms of the Credit Agreement and First Forbearance
Agreement, the Loans matured on September 30, 1998.
IX. The Borrower and its subsidiary, PCN HP Venture Corp., GW
Acquisition Corp. ("Glaxo") and HealthMatics G.P. have entered into a
Partnership Interest Purchase Agreement (the "HealthMatics Purchase Agreement")
pursuant to which PCN HP's partnership interest in the partnership known as
HealthMatics G.P. (the "Partnership Interest") will be sold to an affiliate of
Glaxo for a purchase price of $4,619,103.25 (the "HealthMatics Proceeds") and
for immediate forgiveness by HealthMatics of unpaid partnership contributions of
$183,400 and accounts payable of $197,896.75 (the "Deductions").
X. The Borrower and the Guarantors have now requested that the
Administrative Agent and the Lenders agree (a) to release their security
interests in the Partnership Interest (b) to agree to a sharing of the
HealthMatics Proceeds, and (c) to extend the Maturity Date and to forbear from
pursuing their remedies for a period to and including June 30, 1999.
XI. The Administrative Agent and the Lenders have advised the Borrower
and Guarantors that they are willing to release their security interests in the
Partnership Interest, to agree to a sharing of the HealthMatics Proceeds and to
extend the Maturity Date and to forbear from pursuing their remedies until June
30, 1999 on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES.
1.1 OTHER DEFINITIONS:
Any capitalized terms used herein that are not defined herein shall
have the meanings ascribed to them in the Credit Agreement and the First
Forbearance Agreement.
1.2 AMENDMENTS OF DEFINITIONS.
The following defined terms in the Credit Agreement and the First
Forbearance Agreement are hereby amended in their entirety as follows:
"ADDITIONAL LOAN DOCUMENTS" means all of the documents executed and
delivered to the Administrative Agent pursuant to the First Forbearance
Agreement and pursuant to SECTION 4 of the Second Forbearance Agreement.
"AUDITORS" means Arthur Andersen LLP or another firm of certified
public accountants reasonably acceptable to the Administrative Agent and the
Lenders.
"BUSINESS COMBINATION" means (a) a sale of all or substantially all of
the assets of the
-3-
<PAGE>
Borrower, (b) the sale of all or substantially all of the shares of Common Stock
of the Borrower (c) a merger, consolidation or other similar transaction
involving the Borrower (d) a loan or refinancing including, without limitation,
a loan or refinancing under an Acceptable Loan Commitment or (e) a sale of
assets or stock, including without limitation, a sale of assets or stock under
an Acceptable Purchase Agreement.
"EXTENSION FEE" means the fee payable to the Lenders by the Borrower
under SECTIONS 2.3(B) of the Credit Agreement.
"MATURITY DATE" means June 30, 1999.
"RESTRUCTURE FEE" has the meaning set forth in SECTION 4(C) hereof.
1.3 ADDITIONAL DEFINITIONS
The following defined terms shall have the following meanings in the
Credit Agreement and this Agreement:
"ACCEPTABLE LOAN COMMITMENT" means a definitive written commitment
which, in the reasonable judgment of all of the Lenders, is from a financially
responsible lending institution to provide to the Borrower a loan or loans in
amounts sufficient to enable the Borrower to pay all of its obligations to the
Lenders (including principal, interest, fees, including the Extension Fee, and
expenses) in full on or before June 30, 1999, which, in the reasonable judgment
of all of the Lenders, shall be unconditional except with respect to (a) matters
that are not within the direct control of the applicable lending institution and
(b) the execution and delivery of closing documentation contemplated by the
commitment and necessary for the consummation of a loan transaction, which are
within the power and control of the respective parties to execute and deliver
without further approvals and consents.
"ACCEPTABLE PURCHASE AGREEMENT" means a definitive written agreement
which, in the reasonable judgment of all of the Lenders, is from a financially
responsible purchaser to purchase assets or stock of the Borrower for a price
that will yield to the Borrower sufficient net, available proceeds to enable the
Borrower to pay all of its obligations to the Lenders (including principal,
interest, fees, including the Extension Fee, and expenses) in full on or before
June 30, 1999, which, in the reasonable judgment of all of the Lenders, shall be
unconditional except with respect to (a) matters that are not within the direct
control of the applicable purchaser and (b) the execution and delivery of
closing documentation contemplated by the agreement and necessary for the
consummation of an asset or stock purchase and sale transaction, which are
within the power and control of the respective parties to execute and deliver
without further approvals and consents.
"CASH COLLATERAL DEPOSIT" has the meaning set forth in SECTION 4(D) of
the Second Forbearance Agreement.
"HEALTHMATICS PARTNERSHIP AGREEMENT" means the Partnership Agreement
dated as of January 25, 1996 among the Borrower, PCN HP Venture Corp. and GW
Investment
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Corp. for the partnership now known as HealthMatics G.P. ("HealthMatics").
"HEALTHMATICS TRANSACTION AGREEMENT" means the Transaction Agreement
dated as of January 25, 1996 among GW Investment Corp., the Borrower and
HealthMatics relating to HealthMatics and the Partnership Agreement.
"SECOND FORBEARANCE EFFECTIVE DATE" means the date on which the Second
Forbearance Agreement is executed by all parties and all of the payments and
documents listed in SECTION 4 of the Second Forbearance Agreement have been
received by the Administrative Agent.
1.4 REFERENCES TO CREDIT AGREEMENT AND CERTAIN DEFINED TERMS.
From and after the Second Forbearance Effective Date (a) all references
herein and in any other Loan Document to the "Credit Agreement" shall be deemed
to be a reference to the Credit Agreement as amended pursuant to the First
Forbearance Agreement and this Agreement, (b) all references in the Credit
Agreement, the Loan Documents or the Additional Loan Documents to the term
"Revolving Credit Termination Date" shall be deemed to be a reference to the
term "Maturity Date", and (c) all references to the term "Notes" in this
Agreement, the Credit Agreement, the Loan Documents and the Additional Loan
Documents shall be deemed to be a reference to the amended and restated notes
delivered to the Lenders pursuant to the First Forbearance Agreement as amended
pursuant to this Agreement.
SECTION 2. ACKNOWLEDGMENTS.
2.1 ACKNOWLEDGMENT OF DEBT
(a) The Borrower hereby acknowledges, confirms and declares that, as of
the date hereof and after giving effect to the principal payment required under
SECTION 4(B) hereof, the outstanding principal balance of the Loans is
$15,411,592.36 and such principal amount and all other amounts due to the
Lenders under the Credit Agreement are unconditionally owed to the Lenders
without any setoff, recoupment, deduction, counterclaim, or defense of any kind
or nature to the payment thereof.
(b) Each of the Guarantors hereby acknowledges, confirms and declares
that the amounts owed by the Borrower to the Lenders and described in SECTION
2.1(A) hereof are owed by each of the Guarantors to the Lenders in accordance
with the terms of the Guarantee and Collateral Agreement without any setoff,
recoupment, deduction, counterclaim or defense of any kind or nature to the
payment thereof.
2.2 ACKNOWLEDGMENT OF RECITALS AND DEFAULTS.
(a) The Borrower and each of the Guarantors acknowledges that the
Recitals are
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true and correct in all material respects.
(b) The Borrower and each of the Guarantors acknowledge (i) the disclosure
of the Accounting Matters and agree that the disclosure of the Accounting
Matters and the results and the effects thereof constitute and, notwithstanding
the execution of this Agreement, will continue to constitute one or more Events
of Default under the Credit Agreement and (ii) the failure of the Borrower and
the Guarantors to pay the Loans on September 30, 1998 constituted an Event of
Default (the "Maturity Default").
2.3 ACKNOWLEDGMENT OF TERMINATION OF COMMITMENTS.
(a) The Borrower acknowledges and agrees that, as a result of and as of
the occurrence of the Specified Events of Default, the Revolving Credit
Commitments contained in SECTION 2.1 of the Credit Agreement and the L/C
Commitment contained in SECTION 3.1 of the Credit Agreement were and remain
irrevocably terminated.
(b) The Borrower acknowledges and agrees that (i) upon the Lenders'
receipt of any payment of principal from and after the date hereof, the
Revolving Credit Commitments shall be further reduced and irrevocably terminated
by the amount of principal repaid and (ii) the Borrower shall not have any right
to borrow and the Lenders shall not have any obligation to re-lend any amount
repaid.
2.4 ACKNOWLEDGMENT OF RESERVATION OF RIGHTS.
The Borrower and the Guarantors acknowledge and agree that nothing
contained in this Agreement is or shall be deemed to be (i) a waiver by the
Administrative Agent or any of the Lenders of any of the Specified Events of
Default (ii) a waiver of any of the Lenders rights and remedies arising from the
occurrence of the Specified Events of Default, or (iii) a release or waiver by
the Administrative Agent or any of the Lenders of any claim, right, or cause of
action arising out of, relating to or in connection with the Accounting Matters
or the Specified Events of Default, all of which are hereby reserved by the
Administrative Agent and the Lenders.
2.5 ACKNOWLEDGMENT OF ADVICE OF COUNSEL AND OTHER MATTERS.
The Borrower and the Guarantors hereby acknowledge that:
(a) they have been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Additional Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower or the Guarantors arising out of or in
connection with this Agreement or any of the Additional Loan Documents, and the
relationship between the
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Administrative Agent and Lenders, on the one hand, and the Borrower and its
Subsidiaries, on the other hand, in connection herewith or therewith is solely
that of creditor and debtor; and
(c) no joint venture is created by this Agreement, the First
Forbearance Agreement, the Credit Agreement or by the Additional Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and its Subsidiaries and the Lenders.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Lenders to enter into this
Agreement, the Borrower hereby represents and warrants to the Administrative
Agent and each Lender that:
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
3.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate power and authority, and the legal
right, to make, deliver and perform this Agreement and the Additional Loan
Documents. Each Loan Party has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and the Additional
Loan Documents. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and the Additional Loan Documents. This
Agreement and the Additional Loan Documents have been duly executed and
delivered on behalf of each Loan Party thereto. This Agreement and the
Additional Loan Documents constitute, and each other Additional Loan Document
upon execution will constitute, a legal, valid and binding obligation of each
Loan Party thereto, enforceable against each such Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.3 NO LEGAL BAR.
The execution, delivery and performance of this Agreement and the
Additional Loan Documents, will not violate any Requirement of Law or any
Contractual Obligation of the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the
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Security Documents).
3.4 USE OF PROCEEDS OF THE SALE OF THE HEALTHMATICS PARTNERSHIP INTEREST.
The Borrower will use (a) $750,000 of the HealthMatics Proceeds to
reduce the principal balance of the Loans, (b) $250,000 of the HealthMatics
Proceeds to pay the Restructure Fee, (c) $2,619,103.25 of the HealthMatics
Proceeds exclusively for working capital and general corporate purposes of the
Borrower and the Subsidiaries and not for any purpose that would violate the
Credit Agreement, and (d) $1,000,000 of the HealthMatics Proceeds will be
remitted to the Agent as a condition to the effectiveness of, and to hold in
accordance with, this Agreement.
3.5 ACCURACY OF INFORMATION, ETC.
No statement or information contained in this Agreement or other
document, certificate or statement furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection
with the transactions contemplated by this Agreement, contained as of the date
any such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
3.6 ENCUMBERED ASSETS
Neither the Borrower nor any Subsidiary owns or has rights in or to any
Property (a) that is not subject to the security interests granted to the
Administrative Agent and the Lenders or (b) that is in Canada, the United
Kingdom or any country other than the United States.
3.7 SOFTWARE PROTECTION
The Borrower and its Subsidiaries have (a) obtained or, where
appropriate, continued copyright registrations under applicable law for any and
all intellectual property owned by the Borrower and its Subsidiaries that is
subject to registration and (b) assigned to the Administrative Agent and granted
to the Administrative Agent a security interest in all of such copyright
registrations.
3.8 CREDIT AGREEMENT AND FIRST FORBEARANCE AGREEMENT REPRESENTATIONS.
The representations and warranties contained in SECTIONS 4.8, 4.9,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.19, 4.20 and 4.21 of the Credit
Agreement, in SECTION 3.4, 3.6, 3.7 AND 3.8 of the First Forbearance Agreement,
and in SECTION 4 of the Guarantee and Collateral Agreement are true and correct
in all material respects as of the date of this Agreement,
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except that with respect to the representations and warranties in (a) in SECTION
4.8 of the Credit Agreement and Section 4.2 of the Guarantee and Collateral
Agreement, the Borrower and Subsidiaries have granted security interests to
Alvarez & Marsal, Inc., subject to and in accordance with the A&M Intercreditor
Agreement and (b) SECTION 4.15 of the Credit Agreement and SECTION 3.7 of the
Forbearance Agreement, Solion Corp. and Medical Network Systems, Inc., are, as
of the date hereof, also each a Subsidiary of the Borrower.
3.9 GLAXO RELATIONSHIP.
(a) Neither the Borrower nor any of its subsidiaries has any
relationships with Glaxo Wellcome Inc. or any of its affiliates except (i) under
the HealthMatics Partnership Agreement and the HealthMatics Transaction
Agreement and (ii) as a reseller of products of HealthMatics, and
(b) Neither Glaxo Wellcome, Inc. nor any of its subsidiaries owe any
monies tothe Borrower or any of its Subsidiaries.
SECTION 4. CLOSING CONDITIONS
This Agreement shall become effective and binding upon the Lenders upon
the Administrative Agent's receipt of the following (which, in the case of
documents, agreements, certificates and opinions, must be satisfactory in form
and substance to the Administrative Agent and its counsel):
(a) SALE OF PARTNERSHIP INTEREST. A copy of the fully executed
HealthMatics Purchase Agreement, certified by an officer of the Borrower to be
true, complete and correct and confirmation that the sale of the Partnership
Interest has closed and that the Borrower has given irrevocable directions to
have the HealthMatics Proceeds distributed in accordance with this Agreement.
(b) PRINCIPAL PAYMENT. $750,000, by wire transfer of immediately
available funds, from the HealthMatics Proceeds, which shall be applied by the
Lenders as a payment in reduction of the principal balance of each Lender's
Loan.
(c) RESTRUCTURE FEE. $250,000, by wire transfer of immediately
available funds, from the HealthMatics Proceeds, which shall be paid to the
Lenders as a fee for entering into this Agreement (the "Restructure Fee").
(d) CASH COLLATERAL DEPOSIT. $1,000,000, by wire transfer of
immediately available funds, from the HealthMatics Proceeds, which shall be held
by the Administrative Agent as collateral for the obligations of the Borrower
and the Subsidiaries to the Administrative Agent and the Lenders in accordance
with this Agreement (the "Cash Collateral Deposit").
(e) LEGAL OPINIONS. Legal opinions of
(i) Gordon Altman Butowsky Weitzen Shalov and Wein, counsel
to the
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Borrower and its Subsidiaries.
(ii) local counsel in New Jersey to the Borrower.
(f) SECRETARY'S CERTIFICATE. A certificate of the Secretary of the
Borrower and its Subsidiaries certifying (i) that attached thereto are true and
complete copies of the resolutions, adopted by the Board of Directors of the
Borrower and its Subsidiaries and all other necessary corporate action
evidencing approval of the transactions contemplated by this Agreement and (ii)
as to the incumbency and specimen signature of each officer of the Borrower and
its Subsidiaries executing the Agreement.
(g) LITIGATION. A schedule of any pleadings filed in any legal actions
commenced against the Borrower and any of its Subsidiaries since April 22, 1998,
and a copy of any such pleadings requested by the Administrative Agent.
(h) PICOWER REAFFIRMATION. An agreement from Picower unconditionally
reaffirming his obligations under the Picower Guarantee and the Picower
Agreement.
(i) FIRST AMENDMENT TO GUARANTEE AND COLLATERAL AGREEMENT. A First
Amendment to Guarantee and Collateral Agreement in form and substance
satisfactory to the Administrative Agent and its counsel.
(j) PROFESSIONAL FEES. Payment of the fees and expenses of Emmet,
Marvin & Martin, LLP and Ernst & Young, LLP, the fees and expenses of counsel of
the Lenders and the allocated costs of in-house counsel of the Administrative
Agent and the Lenders.
SECTION 5. AMENDMENTS OF THE CREDIT AGREEMENT
5.1 AMENDMENTS - EXISTING SECTIONS
5.1.1 AMENDMENT OF SECTION 2.3.
SECTION 2.3 of the Credit Agreement is amended by deleting the text
thereof in its entirety and substituting therefor the following:
"2.3 REPAYMENT OF LOANS; MATURITY DATE AND EXTENSION FEE.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the appropriate Lender the then unpaid
principal amount of the Loan of such Lender on the Maturity Date (or such
earlier date on which the Loans become due and payable under SECTION 8(E)
through (L) of the Credit Agreement or under SECTION 7 of the Second Forbearance
Agreement). The Borrower further agrees to pay interest on the unpaid principal
balance of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
SECTION 2.9.
(b) In consideration of and in order to induce the Lenders to enter
into the Second
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Forbearance Agreement, the Borrower agrees to pay to the Lenders, in addition to
the Restructure Fee payable under SECTION 4 (C) of the Second Forbearance
Agreement, a fee of $1,000,000 (the "Extension Fee").
(c) The Borrower acknowledges and agrees that (i) the Extension Fee has
been earned in full upon execution of the Second Forbearance Agreement, (ii) the
Extension Fee shall be due and payable in full on the earlier to occur of (1)
the Maturity Date (or such earlier date on which the Loans become due and
payable under SECTION 8(E) through (L) of the Credit Agreement or SECTION 7 of
the Second Forbearance Agreement) or (2) the occurrence of a Business
Combination, and (iii) the obligation of the Borrower to pay the Extension Fee
is secured and guaranteed pursuant to the Guarantee and Collateral Agreement.
(d) The Extension Fee payable by the Borrower pursuant to SECTIONS
2.3(B) and the Restructure Fee paid by the Borrower pursuant to SECTION 4(C) of
the Second Forbearance Agreement shall be retained by the Lenders as fees and
not as payments of interest, principal or expenses on the Loans.
(e) Upon the occurrence of a Business Combination the entire principal
balance of the Loans and all other amounts due under the Credit Agreement
(including without limitation, the Extension Fee), shall be immediately due and
payable.
(f) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(g) The Administrative Agent shall maintain the Register pursuant to
SECTION 10.6(E), and a subaccount therein for each Lender, in which shall be
recorded (1) the amount of each Loan made hereunder and any Note evidencing such
Loan, (2) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (3) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(h) The entries made in the Register and the accounts of each Lender
maintained pursuant to SECTION 2.3(G) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(i) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Revolving Credit Loans of such
Lender, substantially in the form of Exhibit E to the First Forbearance
Agreement, with appropriate insertions as to date and principal amount."
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5.1.2 AMENDMENTS OF SECTION 2.9
SECTION 2.9 of the Credit Agreement is amended by deleting the text
thereof in its entirety and substituting therefor the following:
"2.9 INTEREST RATE AND PAYMENT DATES. (a) All outstanding
Loans continue to be Base Rate Loans.
(b) All Base Rate Loans shall bear interest at the Reference Lender's
Base Rate plus 2% per annum for the period from the Second Forbearance Effective
Date to and including the Maturity Date or such earlier date on which the Loans
become due and payable under SECTION 8(E) through (L) of the Credit Agreement or
SECTION 7 of the Second Forbearance Agreement. The Base Rate is subject to daily
adjustment in accordance with the definition of "Base Rate."
(c) If all or a portion of the principal amount of any Loan shall not
be paid when due (whether at the stated maturity, by acceleration or otherwise),
all outstanding Loans and all other amounts due and owing to the Lenders by the
Borrower (whether or not overdue) shall bear interest at a rate per annum which
is equal to the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this SECTION 2.9 PLUS 2%, from the date of such
non-payment until such amount is paid in full (both before and after the entry
of any judgment).
(d) Interest on all of the Base Rate Loans shall be payable in arrears
on the first day of each month."
5.1.3 AMENDMENT OF SECTION 2.12.
SECTION 2.12 of the Credit Agreement is amended by deleting the text
thereof in its entirety and substituting therefor the following:
"2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Each payment by the Borrower on account of the Restructuring Fee
and the Extension Fee shall be made to the Administrative Agent and shall be
distributed by the Administrative Agent to the Lenders PRO RATA according to the
respective outstanding principal balances of the Loans then held by the Lenders.
(b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Loans and payments received from the
proceeds of sale of any Disposition Asset shall be made to the Administrative
Agent and shall be distributed by the Administrative Agent to the Lenders PRO
RATA according to the respective outstanding principal balances of the Loans
then held by the Lenders.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date
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thereof to the Administrative Agent, for the account of the Lenders, at the
Payment Office, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day."
5.2 ADDITIONAL COVENANTS.
5.2.1 The Credit Agreement is amended by adding the following
additional covenants as SECTIONS 6.18 through 6.19:
"6.18 DELIVERY OF AUDITED FINANCIAL STATEMENTS. Deliver to the
Administrative Agent and each of the Lenders on or before March 31, 1999 the
audited financial statements of the Borrower and its Subsidiaries for the years
ended December 31, 1996, December 31, 1997, and December 31, 1998."
"6.19 DELIVERY OF AN ACCEPTABLE LOAN COMMITMENT OR ACCEPTABLE PURCHASE
AGREEMENT. Deliver to Administrative Agent and each of the Lenders on or before
April 30, 1999 either an Acceptable Loan Commitment or an Acceptable Purchase
Agreement."
SECTION 6. FORBEARANCE
The Administrative Agent and the Lenders hereby agree, from and after
the date hereof to and including the earlier of the Maturity Date or the
occurrence of a Termination Event, that the Lenders shall forbear from directing
the Administrative Agent to:
(a) declare the Loans to be due and payable as a result of the
occurrence of (i) the Specified Events of Default or (ii) any existing or future
violations of the covenants contained in SECTION 7.1 of the Credit Agreement,
(b) institute any judicial or non-judicial action or proceeding to
enforce or obtain payment of the Loans or to enforce the Lenders' security
interests as a result of (i) the Specified Events of Default or (ii) any
existing or future violation of the covenants contained in SECTION 7.1 of the
Credit Agreement.
SECTION 7. TERMINATION EVENTS
Each of the following shall constitute a "Termination Event" under this
Agreement:
(a) a Termination Event as defined in the First Forbearance Agreement,
other than events of the kind described in SECTIONS 7(I) and 7(J) of the First
Forbearance Agreement.
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any Additional Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such Additional Loan
Document shall prove to have been inaccurate in any
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material respect on or as of the date made or deemed made.
(c) the Borrower shall fail to comply with the covenants contained in
SECTION 6.18 OR SECTION 6.19 of the Credit Agreement by the dates specified
therein and such default shall continue uncured for a period of 5 days after
notice to the Borrower from the Administrative Agent, with time being of the
essence at the expiration of any such five (5) day period.
(d) the occurrence of an Event of Default specified in SECTIONS 8(E)
through (L) of the Credit Agreement.
SECTION 8. REMEDIES; CONSENT TO RELIEF FROM STAY AND OTHER
REMEDIES.
8.1 REMEDIES.
Upon one (1) business day's written notice of the occurrence of a
Termination Event of the kind described in SECTION 7(E) of the First Forbearance
Agreement (which notice shall describe in reasonable detail the events and
circumstances resulting in a Revised Material Adverse Effect) and immediately
upon the occurrence of any other Termination Event, with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall:
(a) terminate the forbearance agreements contained in SECTION 6 hereof.
(b) declare all amounts due under the Credit Agreement, this Agreement,
under the other Loan Documents and under the Additional Loan Documents, under
the Guarantee and Collateral Agreement, and under the Picower Guarantee to be
due and payable forthwith, whereupon the same shall be immediately due and
payable.
(c) apply the Cash Collateral Deposit to the immediate payment of the
obligations of the Borrower and the Subsidiaries to the Administrative Agent and
the Lenders.
(d) take any action which the Administrative Agent and the Required
Lenders deem necessary or appropriate to collect the Loans and to enforce the
rights and remedies under this Agreement, the Credit Agreement, the Guarantee
and the Collateral Agreement, the Picower Guarantee, the other Loan Documents,
the Additional Loan Documents and under applicable law.
8.2 CONSENT TO RELIEF FROM STAY AND OTHER REMEDIES
(a) AS MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS AGREEMENT BY
THE ADMINISTRATIVE AGENT AND THE LENDERS AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED,
(WITHOUT SUCH MATERIAL CONSIDERATION THE ADMINISTRATIVE AGENT AND THE
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LENDERS WOULD NOT HAVE ENTERED INTO THIS AGREEMENT), THE BORROWER AND ITS
SUBSIDIARIES HEREBY AGREE THAT IN THE EVENT THAT THE BORROWER AND/OR ITS
SUBSIDIARIES SHALL (i) FILE WITH ANY BANKRUPTCY COURT OR BE THE SUBJECT OF ANY
PETITION UNDER TITLE 11 OF THE U.S. CODE, AS IT MAY BE AMENDED FROM TIME TO TIME
("CODE"), (ii) BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER SUCH TITLE 11
OF THE CODE, AS IT MAY BE AMENDED FROM TIME TO TIME, (iii) FILE OR BE THE
SUBJECT OF ANY PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR
FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER
RELIEF FOR DEBTORS, (iv) HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE
APPOINTMENT OF ANY TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR, (v) BE THE
SUBJECT OF ANY ORDER, JUDGMENT, OR DECREE ENTERED BY ANY COURT OF COMPETENT
JURISDICTION APPROVING A PETITION FILED AGAINST SUCH PARTY FOR ANY
REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION,
DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT
OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR RELIEF FOR DEBTORS, WHETHER
VOLUNTARY OR INVOLUNTARY, THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL
THEREUPON BE ENTITLED TO IMMEDIATE RELIEF FROM ANY AUTOMATIC STAY IMPOSED BY
SECTION 362 OF TITLE 11 OF THE CODE, AS MAY BE AMENDED FROM TIME TO TIME, OR
IMPOSED BY ANY SUCH OTHER PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING
TO BANKRUPTCY, INSOLVENCY, OR RELIEF FOR DEBTORS, ON OR AGAINST THE EXERCISE OF
THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO ADMINISTRATIVE AGENT AND THE
LENDERS AS PROVIDED IN THE CREDIT AGREEMENT, THIS AGREEMENT, THE SECURITY
DOCUMENTS OR AS OTHERWISE PROVIDED BY LAW.
(b) THE BORROWERS AND EACH OF THE SUBSIDIARIES FURTHER AGREE THAT UPON
THE OCCURRENCE OF ANY TERMINATION EVENT AND WHETHER OR NOT ANY OF THE EVENTS SET
FORTH ABOVE IN SECTION 8.2(A) HAVE OCCURRED, THE BORROWER AND SUBSIDIARIES SHALL
TAKE, OR CAUSE TO BE TAKEN, ANY AND ALL ACTIONS NECESSARY: (I) TO PERMIT THE
ADMINISTRATIVE AGENT AND THE LENDERS TO PROCEED WITH ANY AND ALL ENFORCEMENT
ACTIONS UNDER THIS AGREEMENT, THE CREDIT AGREEMENT, SECURITY DOCUMENTS AND THE
ADDITIONAL LOAN DOCUMENTS; AND (II) TO PERMIT THE ADMINISTRATIVE AGENT AND THE
LENDERS TO INITIATE AND/OR PROCEED WITH ANY AND ALL FORECLOSURES ON (WHETHER
JUDICIAL OR NON-JUDICIAL), AND REALIZATION OF, ANY AND ALL PROPERTY HELD AS
SECURITY FOR THE LOANS.
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SECTION 9. RELEASES
AS MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS AGREEMENT BY THE
ADMINISTRATIVE AGENT AND THE LENDERS AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED,
(WITHOUT SUCH MATERIAL CONSIDERATION ADMINISTRATIVE AGENT WOULD NOT HAVE ENTERED
INTO THIS AGREEMENT), BORROWER AND EACH SUBSIDIARY, AND ON BEHALF OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS
AND ASSIGNS (COLLECTIVELY, THE "RELEASORS") HEREBY FOREVER WAIVES, RELEASES,
REMISES, ACQUITS AND DISCHARGES THE ADMINISTRATIVE AGENT AND EACH LENDER, AND
ANY OF ADMINISTRATIVE AGENT'S OR LENDER'S RESPECTIVE PARENTS, AFFILIATES,
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, SHAREHOLDERS,
SUBSIDIARIES AND AFFILIATE CORPORATIONS, CONSTITUENT PARTNERS, ATTORNEYS,
ACCOUNTANTS, CONSULTANTS, ADVISORS, SUCCESSORS, HEIRS, ASSIGNS AND
BENEFICIARIES, AND EACH OF THEM (COLLECTIVELY, THE "RELEASEES"), OF AND FROM ANY
AND ALL CONTROVERSIES, PROMISES, DAMAGES, COSTS, LOSSES, EXPENSES, OBLIGATIONS,
INDEBTEDNESS, DEBTS, SUMS OF MONEY, ACCOUNTS, COMPENSATIONS, CONTRACTS,
LIABILITIES, BREACHES OF CONTRACTS, BREACHES OF DUTY OF ANY RELATIONSHIP, ACTS,
OMISSIONS, MISFEASANCE, MALFEASANCE, RIGHTS, CAUSES OF ACTION, SUITS, JUDGMENTS,
CLAIMS, RECOUPMENTS, COUNTERCLAIMS OR DEMANDS, OF EVERY TYPE, KIND, NATURE,
DESCRIPTION OR CHARACTER, AND IRRESPECTIVE OF HOW, WHY, OR BY REASON OF WHAT
FACTS, WHETHER NOW EXISTING OR THAT COULD, MIGHT, OR MAY BE CLAIMED TO EXIST, OF
WHATEVER KIND OR NAME, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED,
LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, FORESEEABLE OR UNFORESEEABLE,
EACH AS THOUGH FULLY SET FORTH HEREIN AT LENGTH, IN LAW, ADMIRALTY OR EQUITY
(ANY OF THE FOREGOING, A "CLAIM"), WHICH ANY OF THE RELEASORS PREVIOUSLY HAD
FROM THE BEGINNING OF THE WORLD OR NOW HAVE AGAINST ANY OF THE RELEASEES THROUGH
THE DATE HEREOF, RELATED TO OR CONNECTED WITH (A) THIS AGREEMENT, THE ADDITIONAL
LOAN DOCUMENTS, THE CREDIT AGREEMENT, THE LOANS OR ANY OF THEM OR THE
TRANSACTIONS CONTEMPLATED BY ANY OF THE FOREGOING, OR (B) ANY DISCUSSIONS OR
ALLEGED ORAL AGREEMENTS AMONG THE RELEASEES AND THE RELEASORS, OR ANY OF THEM,
RELATING TO THE LOANS OR ANY OTHER MATTER, WHICH DISCUSSIONS OR ORAL AGREEMENTS
ARE NOT EMBODIED IN A WRITTEN AGREEMENT EXECUTED BY A PARTIES INTENDED TO BE
BOUND BY SUCH AGREEMENT AND EXPRESSLY STATED TO BE AN AGREEMENT AMONG ALL OF
SUCH PARTIES. THE BORROWER, THE SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE
REQUIRED LENDERS INTEND THAT THIS WAIVER, RELEASE AND DISCHARGE APPLIES TO ALL
SUCH CLAIMS THAT ARE
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BASED ON FACTS OR CIRCUMSTANCES THAT EXISTED PRIOR TO, OR CAME INTO EXISTENCE
CONCURRENTLY WITH, OR THAT COME INTO EXISTENCE PRIOR, THE EXECUTION AND DELIVERY
OF THIS AGREEMENT BUT WHICH DO NOT RIPEN INTO A RIGHT, CAUSE OF ACTION, CLAIM OR
DEMAND UNTIL AFTER THE EXECUTION AND DELIVERY OF THIS AGREEMENT. BORROWER AND
EACH OF THE SUBSIDIARIES HEREBY AGREES AND ACKNOWLEDGES THAT FACTS OR
CIRCUMSTANCES NOW UNKNOWN TO THE BORROWER AND THE SUBSIDIARIES, AS THE CASE MAY
BE, THAT EXISTED PRIOR TO, OR CAME INTO EXISTENCE CONCURRENTLY WITH, THE
EXECUTION AND DELIVERY OF THIS AGREEMENT MAY HAVE GIVEN RISE TO CLAIMS THAT ARE
PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND THE BORROWER AND EACH
SUBSIDIARY FURTHER AGREES THAT THIS SECTION 9 HAS BEEN NEGOTIATED AND AGREED
UPON IN LIGHT OF THAT ACKNOWLEDGMENT AND THAT THE BORROWER AND EACH SUBSIDIARY,
AS THE CASE MAY BE, NEVERTHELESS HEREBY INTENDS IRREVOCABLY TO WAIVE, RELEASE,
REMISE, ACQUIT AND DISCHARGE THE RELEASEES OF AND FROM ANY SUCH UNKNOWN CLAIMS
AS AFORESAID, RELATED TO ANY OF THE TRANSACTIONS OR CIRCUMSTANCES DESCRIBED IN
THIS SECTION.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS.
None of the terms as provisions of this Agreement may be waived,
amended, supplemented or otherwise modified, except in accordance with SECTION
10.1 of the Credit Agreement.
10.2 AGREEMENTS AND ACKNOWLEDGMENTS OF THE ADMINISTRATIVE AGENT AND
REQUIRED LENDERS.
The Administrative Agent and the Lenders:
(a)(i) acknowledge that the Borrower has not delivered the financial
statements required under SECTION 6.1(A) (for the fiscal year ending December
31, 1997) and under SECTION 6.1(B) (for the first three quarters of the fiscal
year ending December 31, 1998) of the Credit Agreement and (ii) agree that the
Borrower's failure to deliver such financial statements does not and will not
constitute a Termination Event, provided the Borrower delivers such financial
statements and the other financial statements required under SECTION 6.18 of the
Credit Agreement to the Administrative Agent and the other Lenders on or before
the earlier of (i) five (5) days after such financial statements are issued and
(ii) March 31, 1999.
(b) (i) acknowledge that certain of the reports required under SECTIONS
6.2(C) AND (D) of the Credit Agreement may be included in the reports required
under SECTION 6.10 of
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the Credit Agreement and (ii) agree that the Borrower shall not be obligated to
provide duplicative reports to the Administrative Agent, provided however, in
the event of any conflicts or inconsistencies between the requirements of
SECTION 6.2 and SECTION 6.10, the requirements of SECTION 6.10 shall control.
(c) agree, subject to the satisfaction of the conditions set forth in
SECTION 4 hereof, to release their security interests in the Partnership
Interest.
(d) agree to transfer the Cash Collateral Deposit to the operating
accounts of the Borrower to use and disburse in accordance with this Agreement,
provided (i) the Borrower has complied with the covenants contained in SECTION
6.18 and 6.19 on or before the dates specified in such sections or within five
days of notice from the Administrative Agent that the Borrower is in default in
compliance with such Sections and (ii) no Termination Event has occurred.
10.3 FURTHER ASSURANCES.
At any time and from time to time, promptly after any request by the
Administrative Agent, the Borrower and the Subsidiaries will make, execute and
deliver, or cause to be made, executed and delivered, and, where appropriate,
cause to be recorded and/or filed and from time to time thereafter to be
re-recorded and/or refiled at such time and in such offices and places as the
Administrative Agent shall deem necessary any and all such other and further
financing statements, continuation statements, certificates, documents,
instruments, documents to correct any technical or inadvertent errors or
omissions in legal descriptions, and other items as the Administrative Agent,
may deem necessary or desirable in order to effectuate and to implement this
Agreement and to effectuate, complete or perfect, or to continue and preserve
the Liens and security interests granted or intended to be granted under this
Agreement, the Credit Agreement, the Security Documents and the Additional Loan
Documents.
10.4 NOTICES.
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered in accordance with SECTION 10.4 of the First Forbearance
Agreement.
10.5 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of either
the Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The
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rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
10.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement.
10.7 PAYMENT OF EXPENSES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, this Agreement
and any amendment, supplement or modification to, this Agreement and the other
Additional Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
fees and disbursements of counsel and other advisors to the Administrative
Agent, and to each of the Lenders (including the allocated fees and expenses of
in-house counsel) (b) to pay or reimburse each Lender and the Administrative
Agent for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold the Administrative Agent and each Lender harmless from, any
and all recording and filing fees or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the
Additional Loan Documents and any such other documents, and (d) to pay,
indemnify, and hold the Administrative Agent and each Lender and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the Additional Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the use of
proceeds of the Loans and the Third Party Contribution or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower any of its Subsidiaries or any of the Properties (all
the foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided, that the Borrower shall have no obligation hereunder to any indemnitee
with respect to indemnified liabilities to the extent such indemnified
liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such indemnitee. The agreements in this SECTION 10.6 shall survive
repayment of the Loans and all other amounts payable hereunder.
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10.8 INTEGRATION.
This Agreement and the other Additional Loan Documents represent the
entire agreement of the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in the
Additional Loan Documents.
10.9 GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OR CONFLICTS
OF LAW.
10.10 SUBMISSION TO JURISDICTION; WAIVERS.
THE BORROWER AND EACH OF THE SUBSIDIARIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 10.4 OF THE FIRST FORBEARANCE
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE
BEEN NOTIFIED PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE
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RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION;
AND
(E) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED
TO IN THIS SECTION 10.9 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
10.11 WAIVERS OF JURY TRIAL.
THE BORROWER, THE SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE OTHER
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER ADDITIONAL DOCUMENT
AND FOR ANY COUNTERCLAIM OR THIRD PARTY CLAIM THEREIN.
10.12 CREDIT AGREEMENT.
Except as amended or modified by this Agreement and the First
Forbearance Agreement, the Credit Agreement shall remain in full force and
effect in accordance with its original terms, provided, however, in the event
that there is any inconsistency between this Agreement and any of the Additional
Loan Documents and the Credit Agreement, the provisions of this Agreement and
the Additional Loan Documents shall control.
10.13 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.14 ENFORCEABILITY; USURY.
In no event shall any provision of this Agreement, the Credit
Agreement, the Notes, or any other instrument evidencing or securing the
indebtedness of the Borrower hereunder ever obligate the Borrower to pay or
allow any Lender to collect interest on the Notes or any other indebtedness of
the Borrower hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower to pay any taxes, assessments, charges, insurance
premiums or other amounts to the extent that such payments, when added to the
interest payable on the Notes, would be held to constitute the payment by the
Borrower of interest at a rate greater
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than the Highest Lawful Rate; and this provision shall control over any
provision to the contrary.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower hereunder shall be accelerated for any reason, then such principal
amount so accelerated shall be credited with any interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration. If,
pursuant to the terms of this Agreement, the Credit Agreement or the Notes, any
funds are applied to the payment of any part of the principal amount of the
indebtedness of the Borrower hereunder prior to the maturity thereof, then (a)
any interest which would otherwise thereafter accrue on the principal amount so
paid by such application shall be canceled, and (b) the indebtedness of the
Borrower hereunder remaining unpaid after such application shall be credited
with the amount of all interest, if any, theretofore collected on the principal
amount so paid by such application and remaining unearned at the date of said
application; and if the funds so applied shall be sufficient to pay in full all
the indebtedness of the Borrower hereunder, then the Lenders shall refund to the
Borrower all interest theretofore paid thereon in advance and remaining unearned
at the time of such acceleration. Regardless of any other provision in this
Agreement, the Credit Agreement or in any of the written evidences of the
indebtedness of the Borrower hereunder, the Borrower shall never be required to
pay any unearned interest on such indebtedness or any portion thereof, and shall
never be required to pay interest thereon at a rate in excess of the Highest
Lawful Rate construed by courts having competent jurisdiction thereof.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date and year first above written.
PHYSICIAN COMPUTER NETWORK, INC.
By:_____________________________
Name:___________________
Title:__________________
VERSYSS INCORPORATED
By:_____________________________
Name:___________________
Title:__________________
SOLION CORPORATION
By:_____________________________
Name:___________________
Title:__________________
WISMER-MARTIN, INC.
By:_____________________________
Name:___________________
Title:__________________
<PAGE>
INTEGRATED HEALTH SYSTEMS, INC.
By:_____________________________
Name:___________________
Title:__________________
PCN HP VENTURE CORP.
By:___________________________
Name:___________________
Title:__________________
PCN SERVICES CORP.
By:_____________________________
Name:___________________
Title:__________________
V HOLDING CORP.
By:_____________________________
Name:___________________
Title:__________________
<PAGE>
MEDICAL NETWORK SYSTEMS, INC.
By:_____________________________
Name:___________________
Title:__________________
FLEET BANK, N.A., as Administrative
Agent and as a Lender
By:____________________________
Name:___________________
Title:__________________
LEHMAN COMMERCIAL PAPER, INC.,
By:____________________________
Name:___________________
Title:__________________
BANK OF MONTREAL
By:____________________________
Name:___________________
Title:__________________
<PAGE>
SKANDINAVISKA ENSKILDA BANKEN
AB (PUBLIC) NEW YORK BRANCH
By:____________________________
Name:___________________
Title:__________________
By:____________________________
Name:___________________
Title:__________________
FIRST UNION NATIONAL BANK
By:____________________________
Name:___________________
Title:__________________
IMPERIAL BANK, A CALIFORNIA
BANKING CORPORATION
By:____________________________
Name:___________________
Title:__________________
SOCIETE GENERALE
By:____________________________
Name:___________________
Title:__________________
<PAGE>
SUMMIT BANK
By:____________________________
Name:___________________
Title:__________________
<PAGE>
