EXHIBIT 10
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (the "Amendment
---------")
is made as of June 30, 2000, by and among CERNER CORPORATION, a
Delaware corporation (the "Borrower
--------"), and FIRSTAR BANK MIDWEST,
N.A., successor to Mercantile Bank, as Agent and, as of the date
hereof, the sole Bank under the Credit Agreement referred to
below, and as Issuing Bank.
Preliminary Statements
(a) The Borrower, the Agent, the Issuing Bank and the Bank
are parties to a Credit Agreement dated as of April 1, 1999 (the
"Credit Agreement
-----------------"). Capitalized terms used and not defined in
this Amendment have the meanings given to them in the Credit
Agreement.
(b) The Borrower has requested that (1) the maturity of the
revolving credit facility be extended to June 30, 2003, (2) the
commitment (non-usage) fee referred to in Section 3.1 of the
Credit Agreement be amended, and (3) the definition of Tangible
Net Worth and certain of the financial covenants in the Credit
Agreement be modified in certain respects.
(c) The Agent, on behalf of the Bank and the Issuing Bank,
is willing to agree to the foregoing requests, subject, however,
to the terms, conditions and agreements set forth below.
NOW, THEREFORE, the parties agree as follows:
1. Termination Date. The definition of Revolving Credit
Termination Date in Section 1.1 of the Credit Agreement is
deleted and is replaced by the following:
"Revolving Credit Termination Date
--------------------------------------"
shall mean June 30, 2003; provided, however,
that if such date would otherwise fall on a
date which is not a Business Day, the
Revolving Credit Termination Date shall be
the next preceding Business Day.
2. Tangible Net Worth. The definition of Tangible Net
Worth in Section 1.1 of the Credit Agreement is deleted and is
replaced by the following:
"Tangible Net Worth
----------------------" shall mean
Consolidated Net Worth, less the sum of all
goodwill, trade names, trademarks, patents,
organization expense, unamortized debt
discount and expense and other similar
intangibles properly classified as such in
accordance with GAAP, which are incurred or
booked subsequent to July 1, 2000, provided
that there shall not be so excluded software
development costs which are capitalized by
the Borrower in accordance with GAAP on a
basis consistent with that described in
Note 1(d) of the Borrower's audited financial
statements dated January 1, 2000.
3. Commitment (Non-Usage) Fee.
(a) Section 3.1. Section 3.1 of the Credit Agreement
is deleted and is replaced by the following:
3.1 Commitment Fees
----------------. The Borrower
shall pay to the Agent, for the pro rata
account of each Bank, a commitment fee at a
rate per annum equal to the Applicable
Commitment Fee Margin on the daily average
unused amount of such Bank's Revolving Credit
Commitment, for the period from and including
the date of the First Amendment to but
excluding the earlier of the date Revolving
Credit Commitments are terminated or the
Revolving Credit Termination Date. Accrued
commitment fees shall be payable on each
Quarterly Date and on the dates referred to
in the immediately preceding sentence.
(b) Conforming Definitions. Section 1.1 of the
Credit Agreement is amended to add the following
definitions in the appropriate alphabetical order:
"Applicable Commitment Fee Margin
--------------------------------" means
as follows: if at the end of any fiscal
quarter the Tangible Net Worth Ratio is
within the respective ranges set forth below,
then the Applicable Commitment Fee Margin at
all times during the second succeeding fiscal
quarter shall be the percentage set forth
opposite such ratio:
Tangible Net Worth Ratio Margin
------------------------ ------
Greater than 1.25 to 1 0.32%
Less than or equal to 1.25
to 1, but greater than .80 to 1 0.25%
Less than or equal to .80 to 1 0.18%
provided, however, that during any period
that the Borrower has failed to deliver the
financial statements or the Borrowing Base
and Compliance Certificate as required by
Section 6.1 hereof, the Applicable Commitment
Fee Margin shall be 0.32%.
"First Amendment
-----------------" means the First
Amendment to Credit Agreement, dated as of
June 30, 2000, among the parties to the
Credit Agreement.
4. Tangible Net Worth Ratio. Section 6.6 of the Credit
Agreement is deleted and is replaced by the following:
6.6 Minimum Tangible Net Worth
---------------------------. The
Borrower shall not permit its Tangible Net
Worth on any date to be less than the sum of
(i) $300,000,000, plus (ii) an amount equal
to 50% of its Consolidated Net
Income (without reduction for any deficit in
its Consolidated Net Income) for the period
from the date of the First Amendment to
and including the date of determination
thereof, computed on a cumulative basis
for such entire period.
5. Fixed Charge Ratio. Section 6.8 of the Credit
Agreement is deleted and is replaced by the following:
6.8 Fixed Charge Coverage Ratio
---------------------------. The
Borrower will not at any time permit the
ratio of Consolidated Income Available for
Fixed Charges to Fixed Charges for the
Borrower's most recently completed four
fiscal quarters to be less than 2 to 1.
For purposes of this Section 6.8 only, the
following terms shall have the following
meanings:
Capitalized Lease
----------------- - Any lease the
obligation for Rentals with respect to
which, in accordance with GAAP, would be
required to be capitalized on a balance
sheet of the lessee.
Consolidated Income Available for
-----------------------------------
Fixed Charges
------------- - For any period, the sum
of (i) Consolidated Net Income, plus (to
the extent deducted in determining
Consolidated Net Income), (ii) all
provisions for any federal, state, or
other income taxes made by the Borrower
and the Subsidiary Guarantors during
such period plus (iii) Fixed Charges.
Consolidated Net Income
----------------------- - For any
period, the consolidated net income (or
deficit) of the Borrower and the
Subsidiary Guarantors after deducting,
without duplication, all operating
expenses, provisions for all taxes and
reserves (including reserves for
deferred income taxes) and all other
proper deductions, all determined in
accordance with GAAP and after deducting
portions of income properly attributable
to outstanding minority interests, if
any, in Subsidiary Guarantors; provided,
however, that there shall be excluded
(i) any income (or deficit) of any
Person accrued prior to the date it
becomes a Subsidiary Guarantor or merges
into or consolidates with the Borrower
or a Subsidiary Guarantor; (ii) the
income (or deficit) of any Person (other
than a Subsidiary Guarantor) in which
the Borrower or any Subsidiary Guarantor
has any ownership interest (except that
any such income actually received by the
Borrower or such Subsidiary Guarantor in
the form of cash dividends shall be
included without limitation); (iii) any
gains or losses, or other income,
properly classified as extraordinary in
accordance with GAAP; (iv) any gains or
losses, or other income, characterized
as non-recurring in the financial
statements delivered pursuant to Section
6.1; (v) any gain or loss resulting from
the sale of fixed or capital assets
other than in the ordinary course of
business; (vi) any portion of the net
income of a Subsidiary Guarantor which
for any reason (other than solely as a
result of any restrictions contained in
Section 6.12 of this Agreement) cannot
be distributed as a cash dividend;
(vii) any gain or loss resulting from
the sale or other disposition of any
Investment; (viii) any gains resulting
from the reappraisal, revaluation or
write-up of assets and any gains or
losses resulting from the reappraisal,
revaluation or write-up of the
Borrower's original $70,000,000
Investment in CareInsite, Inc.;
(ix) proceeds of any life insurance
policy; (x) any gain or loss resulting
from the acquisition of any securities
of the Borrower or any Subsidiary
Guarantor; and (xi) any reversal of any
reserve, except to the extent that
provision for such reserve shall have
been made from income arising during the
fiscal period in which such reversal
occurs.
Fixed Charges
------------- - For any period, the
sum of (i) interest expense (including
the interest component of Rentals under
Capitalized Leases), amortization of
debt discount and expense on
Indebtedness of the Borrower and the
Subsidiary Guarantors during such period
and (ii) Rentals under all leases other
than Capitalized Leases of the Borrower
and the Subsidiary Guarantors,
determined on a consolidated basis in
accordance with GAAP.
Investments
----------- - All investments made
in cash or by delivery of property,
directly or indirectly, in any Person,
whether by acquisition of shares of
capital stock, indebtedness or other
obligations or securities or by loan,
advance, capital contribution or
otherwise; provided, however, that
"Investments" shall not mean or include
investments in property to be used, held
for use or consumed in the ordinary
course of business.
Rentals
------- - As of the date of any
determination thereof, all fixed
payments (including all payments which
the lessee is obligated to make to the
lessor on termination of the lease or
surrender of the property) payable by
the Borrower or a Subsidiary Guarantor,
as lessee or sublessee under a lease of
real or personal property, but exclusive
of any amounts required to be paid by
the Borrower or a Subsidiary Guarantor
(whether or not designated as rents or
additional rents) on account of
maintenance, repairs, insurance, taxes,
assessments, amortization and similar
charges. Fixed rents under any so-
called "percentage leases" shall be
computed on the basis of the minimum
rents, if any, required to be paid by
the lessee, regardless of sales volume
or gross revenues.
Voting Stock
------------ - Capital stock of any
class of a corporation having power to
vote for the election of members of the
board of directors of such corporation,
or persons performing similar functions.
6. Financial Covenants to Apply to Borrower and Subsidiary
Guarantors. The following definitions in Section 1.1 of the
Credit Agreement are amended to read as follows:
"Consolidated Net Income
------------------------" shall mean,
for any period, the net income and net losses
of the Borrower and the Subsidiary Guarantors
on a consolidated basis as defined according
to GAAP.
"Consolidated Net Worth
----------------------" shall mean, at
any date, the amount shown as "total
shareholders' equity" (or any like caption)
on a consolidated balance sheet of the
Borrower and the Subsidiary Guarantors in
accordance with GAAP.
"Current Assets
---------------" shall mean, at any
date, the current assets of the Borrower and
the Subsidiary Guarantors determined on a
consolidated basis as of such date in
accordance with GAAP.
"Current Liabilities
-------------------" shall mean, at any
date, the current liabilities of the Borrower
and the Subsidiary Guarantors determined on a
consolidated basis as of such date in
accordance with GAAP.
"EBITDA
------" shall mean, for any period,
Consolidated Net Income for the period in
question plus
---- (a) the sum of (i) all amounts
deducted in arriving at such Consolidated Net
Income in respect to Interest Expense for
such period; federal, state and local income
taxes for such period; depreciation and
amortization and other noncash nonoperating
charges for such period; and to the extent
not included in the above, miscellaneous
expenses from nonoperating transactions which
do not relate to any extraordinary items for
such period and (ii) extraordinary losses for
such period, minus (b) the sum of (i) all
amounts included in arriving at such
Consolidated Net Income in respect of
miscellaneous income from nonoperating
transactions and which do not relate to any
extraordinary items for such period; and (ii)
all extraordinary profits for the period,
determined on a consolidated basis for the
Borrower and the Subsidiary Guarantors.
"Interest Expense
----------------" shall mean, for any
period, all cash and noncash interest on
Indebtedness (including imputed interest on
Capital Lease Obligations) of the Borrower
and the Subsidiary Guarantors during such
period; provided
--------, however
-------, that there shall
be added to "Interest Expense" any fees or
commissions or net losses amortized during
such period under any Interest Rate
Protection Agreement and any fees or
commissions payable in connection with any
letters of credit during such period and
there shall be subtracted from "Interest
Expense" any net gains under any Interest
Rate Protection Agreement during such period.
"Tangible Net Worth Ratio
-------------------------" shall mean,
at any date, the ratio of (i) the total
liabilities of the Borrower and the
Subsidiary Guarantors determined on a
consolidated basis on such date, to
(ii) Tangible Net Worth
on such date.
7. Release of Cerner Belgium from Guaranty. The Bank
hereby releases Cerner Belgium, Inc., a Delaware corporation
formerly known as Cerner Healthwise, Inc., from all liabilities
and other obligations Cerner Belgium, Inc. has under the
Guaranty, dated April 1, 1999, from Cerner Healthwise, Inc. and
certain other Subsidiary Guarantors in favor of the Bank (the
"Subsidiary Guaranty"). The foregoing release shall not release
or limit the liability of, or impose any duty on the Bank now or
hereafter to release or limit the liability of, any other
existing or future Subsidiary Guarantor under the Subsidiary
Guaranty or any other Person now or hereafter liable in whole or
in part for the payment or performance of any of the Obligations,
whether pursuant to a Guarantee, any of the Credit Documents, or
otherwise.
8. Conditions Precedent to Amendment. Notwithstanding
anything in this Amendment to the contrary, unless and to the
extent the Bank waives the benefits of this sentence by giving
written notice thereof to the Borrower, the Bank shall have no
duties under this Amendment, nor shall any waivers, releases or
other concessions, if any, made or given by the Bank under this
Amendment be effective, in each case until the Bank has received
fully executed originals of each of the following, each in form
and substance satisfactory to the Bank:
(a) Amendment. This Amendment;
(b) Assumption Agreement. An Assumption Agreement in
favor of the Bank, dated on or about the date hereof, from
Cerner Investment Corp., Cerner Campus Redevelopment
Corporation and Health Network Ventures, Inc. whereby such
Persons agree to become Subsidiary Guarantors and be bound
by the Subsidiary Guaranty, together with the related
Secretary's Certificates signed by each such Person in favor
of the Bank; and
(c) Other. Such other documents as the Bank may
reasonably request in connection with the transactions
contemplated hereby.
9. Firstar. Firstar Bank Midwest, N.A. is the successor
to Mercantile Bank. Accordingly, unless the context clearly
requires otherwise, all references in the Credit Agreement and
the other Credit Documents to Mercantile Bank (whether in its
capacity as Agent, the Issuing Bank or as a Bank) are amended to
refer instead to "Firstar Bank Midwest, N.A., and its successors
and assigns".
10. Representations and Warranties. The Borrower
represents and warrants to the Agent. the Bank and the Issuing
Bank as follows: (a) it is a duly organized and validly existing
corporation and has full corporate power and authority to enter
into this Amendment and any documents or transactions
contemplated hereby and to pay and perform its obligations in
respect of each of the foregoing; (b) the execution, delivery and
performance by the Borrower of this Amendment and any documents
contemplated hereby or any transactions contemplated hereby do
not violate or conflict with, or require any consent under, (i)
the Borrower's certificate of incorporation, by-laws, or any
other agreement or document relating to the Borrower's existence
or authority to act, (ii) any agreement or instrument to which
the Borrower is a party or by which the Borrower or any of its
properties is bound, (iii) any court order, judicial proceeding
or any administrative or arbitral order or decree, or (iv) any
applicable law, rule or regulation; and (c) no authorization,
approval or consent of or by, and no notice to or filing or
registration with, any governmental authority or any other Person
is necessary for the Borrower to enter into this Amendment or any
document contemplated hereby or any transaction contemplated
hereby or to perform its obligations with respect to each of the
foregoing.
11. Reaffirmation of Credit Documents. The Borrower
reaffirms its obligations under the Credit Agreement and the
other Credit Documents to which it is a party or by which it is
bound, and represents, warrants and covenants to the Agent, the
Issuing Bank and the Bank, as a material inducement to the Agent,
the Issuing Bank and the Bank to enter into this Amendment and
the transactions contemplated hereby, that: (a) the Borrower has
no (and, in any event, hereby waives any) defense, claim or right
of setoff in respect of the Credit Agreement, any of the other
Credit Documents or the actions or inactions of the Agent, the
Issuing Bank or the Bank; and (b) all representations and
warranties made by the Borrower in the Credit Agreement and the
other Credit Documents are true and complete on the date hereof
as if made on the date hereof.
12. No Other Amendments. Except as amended hereby, the
Credit Agreement and the other Credit Documents shall remain in
full force and effect and be binding on the Borrower in
accordance with their respective terms.
13. Counterparts; Fax Signatures. This Amendment and any
document contemplated hereby may be executed in one or more
counterparts and by different parties thereto, all of which
counterparts, when taken together, shall constitute but one
agreement. This Amendment and any document contemplated hereby
may be executed and delivered by facsimile or other electronic
transmission, and any such execution or delivery shall be fully
effective as if executed and delivered in person.
14. Legal Fees. The Borrower shall pay all legal fees and
expenses incurred by the Agent in connection with the preparation
and closing of this Amendment and any other documents referred to
herein and the consummation of any transactions referred to
herein, such legal fees not to exceed $2,000.
15. Mo.Rev.Stat. ' 432.045 Required Notice. The following
statement is given pursuant to Mo.Rev.Stat. ' 432.045: "ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER
AGREE IN WRITING TO MODIFY IT." All other Credit Documents are
incorporated into this Amendment; provided, however, that, to the
extent of any direct conflict between the terms and conditions of
the other Credit Documents and this Amendment, the terms and
conditions of this Amendment shall prevail and govern.
16. Governing Law. This Amendment shall be governed by the
laws of the State of Missouri without regard to any choice of law
rule thereof giving effect to the laws of any other jurisdiction.
IN WITNESS WHEREOF, the parties have entered into this
Amendment as of the date first above written.
CERNER CORPORATION, a Delaware corporation
By:_______________________________________
Name:
Title:
FIRSTAR BANK MIDWEST, N.A., successor to
Mercantile Bank,as Agent, as Issuing Bank
and as a Bank
By:_______________________________________
Name:
Title:
Consent of Guarantors
Reference is made to the Guaranty dated as of April 1, 1999,
in favor of the Agent, on behalf of the Banks and the Issuing
Bank, to which the undersigned are parties, either as an original
signatory thereto or pursuant to any subsequent assumption,
joinder or other agreements (each a "Guarantor
---------"), and any other
guaranty executed by any Guarantor in favor of the Agent or any
Bank or the Issuing Bank relating to any indebtedness of the
Borrower to any Bank or the Issuing Bank (collectively, with
respect to each Guarantor, such Guarantor's "Guaranty
--------").
Capitalized terms used and not defined in this Consent of
Guarantors have the meanings given to them in the Credit
Agreement referred to in the above Amendment. To induce the
Agent, the Issuing Bank and the Bank to enter into the above
Amendment, each Guarantor: (a) consents to the Borrower, the
Agent, the Issuing Bank and the Bank entering into the above
Amendment; (b) agrees that the execution, delivery and
performance of the above Amendment and any documents or
transactions contemplated thereby shall not discharge, limit or
otherwise impair the obligations of such Guarantor under such
Guarantor's Guaranty; (c) agrees that such Guarantor's Guaranty
is and remains in full force and effect and is enforceable
against such Guarantor in accordance with its terms; (d) waives
any defense, claim or right of setoff such Guarantor may have in
respect of such Guarantor's Guaranty, the Credit Agreement, the
other Credit Documents or the actions or inactions of the Agent,
the Issuing Bank or the Bank; and (e) agrees that neither the
Agent, the Issuing Bank or the Bank has any duty to give such
Guarantor notice of or obtain such Guarantor's consent to the
transactions described in the above Amendment, and that the
Agent, the Issuing Bank and the Bank's giving of notice to such
Guarantor and obtainment of such Guarantor's consent in this
instance shall not impose any similar or other duty upon the
Agent, the Issuing Bank or the Bank in any future matter or
transaction.
This Consent of Guarantors may be validly executed and
delivered by fax or other electronic transmission and in multiple
counterparts and by different parties thereto.
CERNER INTERNATIONAL, INC., CERNER MULTUM, INC.,
a Delaware corporation a Delaware corporation,
formerly known as Multum
Information Services, Inc.
By:________________________ By:_______________________
Name: Name:
Title: Title:
CERNER PROPERTIES, INC., CERNER HEALTH FACTS, INC.,
a Delaware corporation a Delaware corporation
By:________________________ By:_______________________
Name: Name:
Title: Title:
CERNER HEALTH CONNECTIONS, CERNER PERFORMANCE
INC. LOGISTICS, INC.,
a Delaware corporation a Delaware corporation
By:________________________ By:_______________________
Name: Name:
Title: Title:
CERNER INVESTMENT CORP., CERNER CAMPUS
A Nevada corporation REDEVELOPMENT CORPORATION,
a Missouri corporation
By:________________________ By:_______________________
Name: Name:
Title: Title:
HEALTH NETWORK VENTURES, INC.,
a Delaware corporation
By:________________________
Name:
Title:
