Exhibit 10c
PROMISSORY NOTE EXTENSION,
WAIVER OF COVENANTS
AND
TERMINATION OF PLEDGE AGREEMENT
This agreement is made and entered into as of the 27th day of December,
1995, by and between FIRST FINANCIAL MANAGEMENT CORPORATION, a Georgia
Corporation (Lender); MICROBILT CORPORATION, a Georgia Corporation
(Seller) which is a wholly owned subsidiary of Lender; HOSPITAL COST
CONSULTANTS, INC., a California Corporation ( Borrower ), and C.I.S.
TECHNOLOGIES, INC., a Delaware Corporation, ( Guarantor ).
RECITALS:
Guarantor has acquired all of the outstanding common stock of Borrower
from Seller pursuant to the terms of a Stock Purchase and Sale Agreement
between Lender, Seller and Guarantor dated May 31, 1995 (as amended, the
Purchase Agreement ).
Borrower is obligated to Lender pursuant to the terms of that certain
Promissory Note of Borrower dated May 31, 1995 (the Note ). Pursuant to the
Note and a written notice of extension thereof heretofore delivered by
Borrower to Lender, all amounts owing by Borrower to Lender are due and
payable on December 29, 1995.
In order to secure payment of the Note and related obligations of
Borrower to Lender, Borrower has granted to Lender a Security interest in
certain Collateral as defined in and pursuant to an Accounts Security
Agreement dated May 31, 1995 entered into by Borrower and accepted by Lender
(the Security Agreement ).
Guarantor, which is the 100% parent of Borrower, has unconditionally
guaranteed the due and punctual payment in full of all principal and interest
on the Note pursuant to the terms of a Corporate Guaranty dated May 31, 1995
entered into by Guarantor (the Guaranty ). Pursuant to the terms of a Pledge
Agreement dated May 31, 1995 entered into by Guarantor in its capacity as
Pledgor thereunder (the Pledge ), Guarantor has pledged and granted to
Lender, as security for the Guaranty, a security interest in the outstanding
shares of stock of Borrower and all additional stock of Borrower thereafter
acquired, received, or
owned by Guarantor, together with certificates representing such shares and
all products and proceeds of such shares.
Guarantor and another of Guarantor's wholly owned subsidiaries, C.I.S.,
Inc., have received a written commitment from C.I.S., Inc.'s principal lender,
General Electric Capital Corporation ( GE Capital ), to extend additional
credit sufficient in amount, and restricted in its use, to satisfy all
o b ligations to Lender pursuant to the Note and the Guaranty ( the
Commitment ). The Commitment is contingent upon, inter alia, (1) the
consummation of a corporate reorganization of the subsidiaries of Guarantor,
including Borrower, (the Reorganization ) which will result in the cessation
of the corporate existence of Borrower, and, thereafter, (2) the negotiation,
execution, and delivery of definitive credit documentation reflecting both the
c o r p o rate structure of Guarantor and its affiliates following the
Reorganization and the extension of additional credit by GE Capital (the GE
Documentation ).
Borrower has requested that Lender (1) grant an extension of the due
date of the Note to February 29, 1996 in order to allow sufficient time within
w h i c h to complete the Reorganization and GE Documentation and (2)
conditionally waive any violation of the Security Agreement that would
otherwise result from the Reorganization. Guarantor has requested that Lender
effectively consent to the cessation of the corporate existence of Borrower as
a result of the Reorganization by means of agreeing (1) to a termination of
the Pledge Agreement concurrently with the Reorganization, and (2) together
with Seller, to waive the convenants of Guarantor with respect to the conduct
of the business of the Borrower prior to repayment of the Note contained in
the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants of the parties hereto, the parties hereto do hereby agree as
follows:
1. EXTENSION OF NOTE MATURITY DATE. Lender hereby agrees to extend
the maturity date upon which the principal amount of the Note is due and
payable to February 29, 1996, whereupon the principal amount of the Note shall
be due and payable in full, together will all interest accrued thereon and
unpaid, calculated at the same rate as currently provided for in the Note.
2. CONDITIONAL WAIVER OF CERTAIN COVENANTS OF BORROWER IN SECURITY
AGREEMENT. In order to facilitate the Reorganization and consequent cessation
of the corporate existence of Borrower and on the condition that Borrower
takes all action necessary or reasonably requested by Lender to amend any
financing or continuation statement filed in connection with the Security
Agreement so that such statement(s) is (are) not seriously misleading within
the meaning of Section 9-402(7) of the Uniform Commercial Code of the State of
New York all as set forth in greater detail in Section 5(c) of the Security
Agreement (which action Borrower hereby covenants it will take). Lender does
hereby waive the covenant of Borrower set forth at Section 5(c) of the
Security Agreement together with any other violation of the Security Agreement
which might otherwise result from the Reorganization.
3. TERMINATION OF PLEDGE AGREEMENT. In order to facilitate the
Reorganization and consequent cessation of the corporate existence of
Borrower, Lender does hereby consent and agree to the termination of the
Pledge Agreement effective concurrently with the effectiveness of the
Reorganization, whereupon Lender shall return to Guarantor all certificates
formerly representing outstanding share of stock of Borrower.
4. WAIVER OF CERTAIN COVENANTS OF GUARANTOR IN PURCHASE AGREEMENT.
In order to facilitate the Reorganization and consequent cessation of the
corporate existence of Borrower, Lender and Seller do hereby agree to waive,
effective concurrently with effectiveness of the Reorganization, the covenants
of Guarantor with respect to the conduct of the business of the Borrower prior
to repayment of the Note as set forth at Section 8.13 of the Purchase
Agreement.
5. REPRESENTATIONS AND WARRANTIES OF BORROWER AND GUARANTOR.
Borrower and Guarantor hereby represent and warrant to Lender that
(a) no Event of Default as defined in the Note and in the Pledge
Agreement, respectively, has occurred and is continuing, and
(b) neither Guarantor, C.I.S., Inc., nor any of Guarantor's other
affiliates has received written notice from GE Capital of its intention to
terminate the Commitment.
6. CONDITION PRECEDENT. As a Condition to the effectiveness of this
Agreement, Lender shall have received payment of all unpaid interest on the
Note which accrues or has accrued through December 29, 1995.
7. MISCELLANEOUS PROVISIONS.
(a) This agreement shall be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions)
of the State of New York.
(b) Except as modified hereby, the terms of the Note shall
remain in full force and effect.
LENDER
FIRST FINANCIAL MANAGEMENT CORPORATION
By: /s/
Title: V.P.
SELLER
MICROBILT CORPORATION
By: /s/
Title: V.P.
BORROWER
HOSPITAL COST CONSULTANTS, INC.
By: /s/Richard A. Evans
Title: Treasurer
GUARANTOR
By: /s/Richard A. Evans
Title: Treasurer