Exhibit 10(xiv)

 

EXECUTION COPY

 

WAIVER AND AMENDMENT NO. 8

 

Dated as of March 16, 2005

 

To the banks, financial institutions

and other institutional lenders

(collectively, the “Lenders”)

parties to the Credit Agreement

referred to below and to Merrill Lynch Capital,

a division of Merrill Lynch Business Financial

Services Inc., as Administrative Agent

(in such capacity, the “Administrative Agent”) for the Lenders

 

Ladies and Gentlemen:

 

We refer to the Credit Agreement, dated as of November 26, 2002, among NDCHealth
Corporation, a Delaware corporation (the “Borrower”), the Lenders and agents
from time to time party thereto, Merrill Lynch Capital, a division of Merrill
Lynch Business Financial Services Inc., as Administrative Agent and Swing Line
Lender, Credit Suisse First Boston, as Syndication Agent, Bank of America, N.A.,
as Documentation Agent, and LaSalle Bank National Association, as L/C Issuer, as
amended by Letter Amendment and Waiver No. 1, dated as of May 27, 2003, Letter
Amendment No. 2 dated as of August 29, 2003, Amendment No. 3 dated as of
December 19, 2003, Letter Amendment No. 4 dated as of January 22, 2004, Letter
Amendment No. 5 dated as of August 20, 2004, Letter Amendment No. 6, dated as of
November 22, 2004 and Consent and Amendment No. 7, dated as of February 23, 2005
(as so amended or otherwise modified in writing, the “Credit Agreement”; the
terms defined therein being used herein as therein defined).

 

The Borrower is restating its financial statements (the “Restated Financial
Statements”) with respect to (a) the Physicians Software business and the
information management business for the period from the first quarter of Fiscal
Year 2002 through the first quarter of Fiscal Year 2005 (the “Restatement
Period”) and (b) such other audit adjustments for the Restatement Period
previously identified to the Lenders, in accordance with GAAP (the
“Restatement”), all of which has resulted in a delay in the Borrower’s ability
to report its financial results in its quarterly report for the second fiscal
quarter of the Borrower’s Fiscal Year 2005 (the “Q2 Report”).

 

The Borrower has delivered a notice to the Administrative Agent and the Lenders
stating that Regions Bank, as the trustee (the “Trustee”) under the Indenture
dated as of November 26, 2002 by and among the Trustee, the Borrower, NDC Health
Information Services (Arizona) Inc., The Computer Place, Inc., NDC Health
Intellectual Property Corp., HISIP Corp., NDCIP, Inc., NDCHealth Licensing,
Inc., TechRX Incorporated, NDC of Canada, Inc. and NDC Acquisition Corp. with
respect to the Senior Subordinated Notes (the “Indenture”), has notified the
Borrower that it is in Default (as defined in the Indenture) under Section
501(4) of the

 

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Indenture as a result of the Borrower’s failure to deliver the Q2 Report within
the required time period set forth in the Indenture (the “Cross Default”).

 

SECTION 1. Limited Waivers. We hereby request, and by your execution hereof, you
agree to waive the following:

 

(a) the Event of Default, pursuant to Section 8.01(b) of the Credit Agreement,
resulting from the failure by the Borrower to deliver (i) financial statements
and an officer’s certificate, in accordance with Section 6.01(b) of the Credit
Agreement, for the quarter ended November 26, 2004 and (ii) the related
Compliance Certificate, in accordance with Section 6.02(b) of the Credit
Agreement,

 

(b) the Event of Default, pursuant to Section 8.01(d) of the Credit Agreement,
resulting from the misrepresentations under Sections 5.05(b) and (c) and Section
5.15 of the Credit Agreement with respect to the Restated Financial Statements
solely to the extent that they are the subject of the Restatement, and

 

(c) the Default or Event of Default, pursuant to Section 8.01(e) of the Credit
Agreement, resulting from the Cross Default,

 

provided, that if the following requirements (the “Waiver Requirements”) are not
met, the waivers set forth in Section 1 of this Waiver will immediately
thereupon terminate (such date of termination being the “Waiver Termination
Date”) and the Administrative Agent and the Lenders shall have all of the rights
and remedies afforded to them under the Credit Agreement with respect to any
such Defaults and Events of Default as though no waiver had been granted by them
hereunder:

 

(i) the Restated Financial Statements and the Q2 Report are filed with the SEC
and delivered to the Administrative Agent prior to 12:00 noon eastern standard
time on March 21, 2005; the annual audited financial statements for Fiscal Years
2002, 2003 and 2004 that constitute part of the Restated Financial Statements
(the “Annual Audited Statements”) shall include a report of independent
registered public accounting firm from Ernst & Young LLP, providing that such
Annual Audited Statements were prepared in accordance with generally accepted
auditing standards and are not subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit, and stating that the Annual Audited Statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;
and

 

(ii) the financial statements for the quarter ended on November 26, 2004
required pursuant to Section 6.01(b), the officer’s certificate, and Compliance
Certificates for such quarter and each quarter covered by the Restated Financial
Statements (demonstrating compliance, on a pro forma basis, with all financial
covenants as amended to date) are delivered to the Administrative Agent prior to
12:00 noon eastern standard time on March 21, 2005; and

 

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(iii) the Restatement requires adjustments only to the Restated Financial
Statements for the Restatement Period, as confirmed by a certificate from the
Borrower to the Administrative Agent reasonably satisfactory to the
Administrative Agent; and

 

(iv) the aggregate impact of the Restatement on EBITDA during the Restatement
Period and the impact of the Restatement on EBITDA for any individual fiscal
quarter during the Restatement Period does not exceed the amount outlined in a
letter from the Borrower to the Administrative Agent, dated March 11, 2005, as
confirmed by a certificate from the Borrower to the Administrative Agent
reasonably satisfactory to the Administrative Agent; and

 

(v) the Administrative Agent shall have received, prior to 12:00 noon eastern
standard time on March 21, 2005, a copy of a fully executed waiver of the
default under Section 501(4) of the Indenture from the holders or duly
authorized representatives of such holders representing at least 51% of the
Senior Subordinated Notes (that is in full force and effect as of such time and
not subject to any conditions to effectiveness that will not be satisfied
simultaneously with the effectiveness of this Waiver and Amendment), and neither
the Trustee nor any of the holders of the Senior Subordinated Notes shall have
taken any other actions to enforce their rights or remedies under the Senior
Subordinated Note Documents with respect to such default.

 

SECTION 2. Amendments. Subject to the occurrence and continuance of the
Effective Date, the Credit Agreement is hereby amended as follows:

 

(a) Section 1.01 of the Credit Agreement is hereby amended to add the following
definitions in alphabetical order:

 

“Amendment No. 8 Effective Date” means March 16, 2005.

 

“Annual Audited Statements” means the annual audited financial statements for
Fiscal Years 2002, 2003 and 2004 that constitute part of the Restated Financial
Statements.

 

“Restated Financial Statements” means the Borrower’s consolidated financial
statements as adjusted with respect to the Physicians Software business and the
information management business and such other audit adjustments identified to
the Lenders prior to the Amendment No. 8 Effective Date for the period from the
first quarter of Fiscal Year 2002 through the first quarter of Fiscal Year 2005,
all in conformity with the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended.

 

“Restatement” means the restatement by the Borrower of the Restated Financial
Statements and such other audit adjustments for the Restatement Period
identified to the Lenders prior to the Amendment No. 8 Effective Date, in
accordance with GAAP.

 

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“Restatement Conditions” means:

 

(a) the Restated Financial Statements and the Q2 Report are filed with the SEC
and delivered to the Administrative Agent prior to 12:00 noon eastern standard
time on March 21, 2005; the Annual Audited Statements shall include a report of
independent registered public accounting firm from Ernst & Young LLP, providing
that such Annual Audited Statements were prepared in accordance with generally
accepted auditing standards and are not subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit, and stating that the Annual Audited Statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;
and

 

(b) the financial statements for the quarter ended on November 26, 2004 required
pursuant to Section 6.01(b), the officer’s certificate, and Compliance
Certificates for such quarter and each quarter covered by the Restated Financial
Statements (demonstrating compliance, on a pro forma basis, with all financial
covenants as amended to date) are delivered to the Administrative Agent prior to
12:00 noon eastern standard time on March 21, 2005; and

 

(c) the Restatement requires adjustments only to the Restated Financial
Statements for the Restatement Period, as confirmed by a certificate from the
Borrower to the Administrative Agent reasonably satisfactory to the
Administrative Agent; and

 

(d) the aggregate impact of the Restatement on EBITDA during the Restatement
Period and the impact of the Restatement on EBITDA for any individual fiscal
quarter during the Restatement Period does not exceed the amount outlined in a
letter from the Borrower to the Administrative Agent, dated March 11, 2005, as
confirmed by a certificate from the Borrower to the Administrative Agent
reasonably satisfactory to the Administrative Agent; and

 

(e) the Administrative Agent shall have received, prior to 12:00 noon eastern
standard time on March 21, 2005, a copy of a fully executed waiver of the
default under Section 501(4) of the Indenture from the holders or duly
authorized representatives of such holders representing at least 51% of the
Senior Subordinated Notes (that is in full force and effect as of such time and
not subject to any conditions to effectiveness that will not be satisfied
simultaneously with the effectiveness of this Waiver and Amendment), neither the
Trustee nor any of the holders of the Senior Subordinated Notes shall have taken
any other actions to enforce their rights or remedies under the Senior
Subordinated Note Documents with respect to such default.

 

“Restatement Period” means the period from the first quarter of Fiscal Year 2002
through the first quarter of Fiscal Year 2005.

 

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(b) Section 2.01(a) of the Credit Agreement is hereby amended by adding at the
end of the first sentence therein the following proviso:

 

“; provided further, however, that until the Restatement Conditions have been
satisfied, as confirmed by certificates from the Borrower to the Administrative
Agent reasonably satisfactory to the Administrative Agent, the Borrower agrees
that the Revolving Credit A Outstandings shall not exceed $63,580,000 on or
after the Amendment No. 8 Effective Date without the prior written consent of
the Required Lenders and the Required Revolving Credit A Lenders”

 

SECTION 3. Conditions to Effectiveness. This Waiver and Amendment shall become
effective as of the date first above written (the “Effective Date”), and shall
continue to be effective so long as the Waiver Termination Date shall not have
occurred, when:

 

(a) the Administrative Agent shall have received counterparts of this Waiver and
Amendment executed by the Borrower, the Required Lenders and the Required
Revolving Credit A Lenders or, as to any of the Lenders, advice satisfactory to
the Administrative Agent that such Lender has executed this Waiver and
Amendment,

 

(b) payment in full of all expenses of the Administrative Agent related to this
Waiver and Amendment (including all outstanding legal fees of counsel to the
Administrative Agent incurred in connection with the Credit Agreement since the
last date of payment of such fees) shall have been by the Borrower, and

 

(c) the Administrative Agent shall have received the consent attached hereto
executed by each Guarantor.

 

This Waiver and Amendment is subject to the provisions of Section 10.01 of the
Credit Agreement.

 

Notwithstanding the foregoing, it is understood and agreed that, upon the
occurrence of the Waiver Termination Date, the Administrative Agent and the
Lenders shall have all of the rights and remedies afforded to them under the
Credit Agreement with respect to any Defaults and Events of Default resulting
from the ineffectiveness of such amendments as though no amendments had been
granted by them hereunder.

 

SECTION 4. Covenant to Deliver Account Control Agreements. The parties hereto
agree that, pursuant to Section 5 of the Security Agreement, the Loan Parties
shall deliver to the Administrative Agent, within 30 days after the Effective
Date (which time period may be extended by up to an additional 60 days at the
sole discretion of the Administrative Agent), Account Control Agreements (as
defined in the Security Agreement) or such other “control agreements” in form
and substance satisfactory to the Administrative Agent and covering such of the
Loan Parties’ Account Collateral as may be required by the Administrative Agent
in its sole discretion.

 

SECTION 5. No Default; Representations and Warranties. To induce the Lenders and
the Administrative Agent to enter into this Waiver and Amendment, each Loan
Party hereby represents and warrants to the Lenders and the Administrative Agent
that after giving effect to this Waiver and Amendment, (a) except as set forth
herein, no Default or Event of Default has occurred and is continuing as of the
date hereof and (b) except as set forth herein, the representations and
warranties contained in the Credit Agreement and the other Loan

 

NDCHealth Corporation – Waiver and Amendment

 

5

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Documents are true and correct in all material respects, except (x) to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct in all material respects as
of such earlier date and (y) for the representations and warranties set forth in
Sections 5.05(b) and (c) and in Section 5.15 of the Credit Agreement with
respect to the Restated Financial Statements that are waived hereunder.
Notwithstanding the foregoing, the Borrower represents and warrants that after
the Restatement the Borrower will be in compliance with the financial covenants
set forth in Section 7.11 of the Credit Agreement for the first quarter of
Fiscal Year 2003 through the first quarter of the Fiscal Year 2005.

 

SECTION 6. Reference to and Effect on the Loan Documents. This Waiver and
Amendment constitutes a Loan Document. The Credit Agreement, the Notes and each
of the other Loan Documents, except to the extent of the waiver and amendments
specifically provided above, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, the Collateral Documents and all of the
Collateral described therein do and shall continue to secure the payment of all
Obligations of the Loan Parties under the Loan Documents. The execution,
delivery and effectiveness of this Waiver and Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Administrative Agent under the Credit Agreement, nor
constitute a waiver of any provision of the Credit Agreement. The Waiver set
forth in Section 1 hereof shall be limited precisely as written and shall not be
deemed or otherwise construed to constitute a waiver of any variation from the
Credit Agreement or to waive any Default or Event of Default that has occurred
or may in the future occur under the Credit Agreement, except as expressly set
forth herein.

 

On and after and during the effectiveness of this Waiver and Amendment, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or
words of like import referring to the Credit Agreement, and each reference in
the Notes and each of the other Loan Documents to “the Credit Agreement”,
“thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, as amended by
this Waiver and Amendment.

 

If you agree to the terms and provisions of this Waiver and Amendment, please
evidence such agreement by executing and returning at least four counterparts of
this Waiver and Amendment to Shearman & Sterling LLP, 599 Lexington Avenue, New
York, New York 10022, Attention: Catherine Cataño, Fax No. 646-848-4861.

 

This Waiver and Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Waiver and Amendment by telecopier shall be effective as
delivery of a manually executed counterpart of this Waiver and Amendment.

 

NDCHealth Corporation – Waiver and Amendment

 

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This Waiver and Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.

 

Very truly yours, NDCHEALTH CORPORATION By  

/s/    LEE ADREAN

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Title:   CFO

 

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Agreed as of the date first above written:

 

MERRILL LYNCH CAPITAL, a division

of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as Swing Line Lender

and as Lender

 

By  

[SIGNATURE TO COME]

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Troy A. Oder

Title:  

Vice President

 

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BANK OF AMERICA, N.A. By  

[SIGNATURE TO COME]

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Title:   Senior Vice President

 

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BlackRock Senior Loan Trust

Magnetite Asset Investors LLC

Magnetite IV CLO, Limited

Magnetite V CLO, Limited

Senior Loan Fund

 

By  

[SIGNATURE TO COME]

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Title:   Authorized Signatory

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CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch

 

By

 

[SIGNATURE TO COME]

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Paul L. Colón

Title:

 

Director

By

 

[SIGNATURE TO COME]

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Karim Blasetti

Title:

 

Associate

 

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Denali Capital LLC, managing member of DC

Funding Partners, portfolio manager for DENALI

CAPITAL CLO I, LTD., or an affiliate

 

By

 

[SIGNATURE TO COME]

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David A. Tanny

Title:

 

Vice President

 

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Denali Capital LLC, managing member of

DC Funding Partners, portfolio manager for

DENALI CAPITAL CLO II, LTD., or an affiliate

 

By

 

[SIGNATURE TO COME]

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David A. Tanny

Title:

 

Vice President

 

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Denali Capital LLC, managing member of

DC Funding Partners, portfolio manager for

DENALI CAPITAL CLO III, LTD., or an affiliate

By  

[SIGNATURE TO COME]

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    David A. Tanny Title:   Vice President

 

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Flagship CLO II

by Flagship Capital Management, Inc.

By:  

[SIGNATURE TO COME]

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Name:   Eric S. Meyer Title:   Director

 

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Flagship CLO 2001-1

by Flagship Capital Management, Inc.

 

By:

 

[SIGNATURE TO COME]

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Name:

 

Eric S. Meyer

Title:

 

Director

 

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GENERAL ELECTRIC CAPITAL CORPORATION

 

By

 

[SIGNATURE TO COME]

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Steve J. Warner

Title:

 

Duly Authorized Signatory

 

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ING CAPITAL LLC

By

 

[SIGNATURE TO COME]

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Name:

 

Michael P. Garvin, Jr.

Title:

 

Director

 

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KEY CORPORATE CAPITAL INC.

 

By

 

[SIGNATURE TO COME]

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Title:

 

Senior Vice President

 

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KEYBANK NATIONAL ASSOCIATION, By  

[SIGNATURE TO COME]

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Title:   Senior Vice President

 

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LaSalle Bank National Association

By

 

[SIGNATURE TO COME]

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Title:

 

Vice President

 

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Regions Bank

 

By

 

[SIGNATURE TO COME]

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Title:

 

Senior Vice President

 

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Venture CDO 2002, Limited

 

By its investment advisor, MJX Asset Management LLC

 

By

 

[SIGNATURE TO COME]

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Kenneth Ostmann

Title:

 

Director

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Venture II CDO 2002, Limited By its investment advisor, MJX Asset Management LLC
By  

[SIGNATURE TO COME]

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    Kenneth Ostmann Title:   Director

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CONSENT

 

Dated as of March 16, 2005

 

Each of the undersigned, as Guarantor under the Guaranty dated November 26, 2002
(the “Guaranty”) in favor of the Administrative Agent and, for its benefit and
the benefit of the Lenders parties to the Credit Agreement referred to in the
foregoing Waiver and Amendment, hereby consents to such Waiver and Amendment and
hereby confirms and agrees that (a) notwithstanding the effectiveness of such
Waiver and Amendment, the Guaranty is, and shall continue to be, in full force
and effect and is hereby ratified and confirmed in all respects, and (b) the
Collateral Documents to which each of the undersigned is a party and all of the
Collateral described therein do, and shall continue to, secure the payment of
all of the Secured Obligations (in each case, as defined therein), except that,
on and after the effectiveness of such Waiver and Amendment, each reference in
the Guaranty and the Collateral Documents to the “Credit Agreement”,
“thereunder”, “thereof” or words of like import shall mean and be a reference to
the Credit Agreement, as amended by such Waiver and Amendment.

 

NDC HEALTH INFORMATION SERVICES

(ARIZONA) INC.

By  

/s/    LEE ADREAN

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Title:   EVP NDC OF CANADA, INC. By  

/s/    LEE ADREAN

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Title:   EVP

 

NDCHealth Corporation – Waiver and Amendment