Exhibit 10.9
SECOND AMENDMENT and WAIVER dated as of March 21,
2001 (this "AMENDMENT"), to the Credit Agreement dated
as of December 7, 1999 (as previously amended, the
"CREDIT AGREEMENT"), among ▇▇▇▇▇▇ ACQUISITION HOLDINGS,
INC., a Delaware corporation, ▇▇▇▇▇▇ MEDICAL TECHNOLOGY,
INC., a Delaware corporation, the LENDERS from time to
time party thereto, THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent and
collateral agent for such lenders and as issuing bank,
CHASE MANHATTAN BANK, PARIS BRANCH, as the local
facilities lender, and BANK OF AMERICA, N.A., a national
banking association, as syndication agent.
A. Pursuant to the Credit Agreement, the Lenders and the Issuing
Bank have extended credit to the Borrower, and have agreed to extend credit to
the Borrower, in each case pursuant to the terms and subject to the conditions
set forth therein.
B. The Borrower has informed the Administrative Agent that it seeks
an amendment of the Credit Agreement as set forth herein.
C. The Required Lenders are willing to agree to such amendment
pursuant to the terms and subject to the conditions set forth herein.
D. Each capitalized term used and not otherwise defined herein shall
have the meaning assigned to such term in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. (a) The following
definitions are hereby added to Section 1.01 of the Credit Agreement in
appropriate alphabetical positions:
"LENDER AFFILIATE" means, (a) with respect to any Lender, (i)
an Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or an
Affiliate of such Lender and (b) with respect to any Lender that is a fund which
invests in bank loans and similar extensions of credit and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
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"LOAN INSTRUMENT" means any surgical instrument owned by the
Borrower which is made available to physicians for use in surgical procedures to
implant products manufactured or distributed by Borrower.
▇▇▇▇▇▇▇▇▇ SETTLEMENT AGREEMENT" means the Settlement and
Release Agreement dated January 18, 2001, between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
the Borrower.
"▇▇▇▇▇▇▇▇▇ TRANSFER" means the transfer of the patents and
patent applications listed on Schedule 1.01 and inventory, computer files,
manufacturing know how and specifications relating thereto to an entity
designated by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in accordance with the ▇▇▇▇▇▇▇▇▇
Settlement Agreement.
(b) The definition of "Approved Fund" is hereby deleted from Section
1.01 of the Credit Agreement.
(c) The definition of "Consolidated Fixed Charges" is hereby amended
and restated in its entirety to read as follows:
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of (a) Consolidated
Cash Interest Expense for such period, (b) Capital Expenditures for such period
and (c) scheduled principal payments of long-term Indebtedness (whether or not
made) during such period; PROVIDED, HOWEVER, that (i) any Capital Expenditure
financed with Investor Capital shall not be included in the calculation of
Consolidated Fixed Charges to the extent that Investor Capital was used to
finance such Capital Expenditure and (ii) any Capital Expenditure for the
purchase or manufacture of Loaner Instruments shall not be included in the
calculation of Consolidated Fixed Charges.
(d) Schedule 1.01 attached hereto is hereby attached to the Credit
Agreement.
(e) Section 2.04(a) of the Credit Agreement is hereby amended by
deleting the words "(A) The Trade LC Exposure shall not exceed $2,500,000 and
(B)" from the final sentence of clause (i) of such Section.
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(f) Paragraphs (a) and (b) of Section 5.01 of the Credit Agreement
are hereby amended and restated in their entirety as follows:
(a) within 120 days (or if either Holdings or the Borrower is
required to file financial statements with Securities and Exchange
Commission, within 90 days or such longer period not in excess of 120 days
if the Securities and Exchange Commission consents thereto) after the end
of each fiscal year, its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the
end of and for such year, and setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Ernst &
Young LLP, or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to
the effect that such consolidated financial statements present fairly in
all material respects the financial condition and results of operations of
Holdings, the Borrower and the Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 60 days (or if either Holdings or the Borrower is
required to file financial statements with Securities and Exchange
Commission, within 45 days or such longer period not in excess of 60 days
if the Securities and Exchange Commission consents thereto) after the end
of each of the first three fiscal quarters of each fiscal year of
Holdings), its consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, and
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet,
as of the end of) the previous fiscal year, all certified by a Financial
Officer of the Borrower as presenting fairly in all material respects the
financial condition and results of operations of Holdings, the Borrower
and the Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(g) Section 6.05 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
SECTION 6.05. ASSET SALES. Each of Holdings and the Borrower
will not, and will not permit any of the Subsidiaries to, sell, transfer,
lease or otherwise dispose of any asset, including any capital stock of
another Person, and the Borrower will not, and each of Holdings and the
Borrower will not permit any of the Subsidiaries to, issue any additional
shares of capital stock of the Borrower or such Subsidiary or other
ownership interest in the Borrower or such Subsidiary, as the case may be,
except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments, in each case in the ordinary course of
business;
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(b) sales, transfers and dispositions (including the issuance
of capital stock) to the Borrower or a Subsidiary; PROVIDED that the
fair market value of the assets subject to any such sales, transfers
or dispositions (i) to a Subsidiary that is not a Loan Party shall
(A) be deemed an investment in such Subsidiary subject to the
limitations of Section 6.04, to the extent not compensated at fair
market value in cash, and (B) be made in compliance with Section
6.08 and (ii) to a Cremascoli Loan Party from a WMT Loan Party shall
not exceed $10,000,000 in the aggregate (calculated on a net basis
after giving effect to the fair market value of any sale, transfer
or other disposition of assets to a WMT Loan Party from a Cremascoli
Loan Party), to the extent not compensated at fair market value in
cash;
(c) sales, transfers or dispositions of assets constituting
investments permitted under Section 6.04(g);
(d) following the Cremascoli Acquisition, sales of accounts
receivable of the Italian Receivables Subsidiary in connection with
the Italian Receivables Program;
(e) the Ceramtec Sale;
(f) the ▇▇▇▇▇▇▇▇▇ Transfer; and
(g) sales, transfers and dispositions of assets not permitted
by clauses (a) - (f) above not to exceed $2,000,000 or, following
the Cremascoli Acquisition, $3,000,000 during any fiscal year of
Holdings;
PROVIDED that all sales, transfers, leases and other dispositions
permitted hereby shall be made for fair value and (other than sales,
transfers and other dispositions permitted under clauses (b), (e) and (f))
for at least 80% cash consideration.
(h) Section 6.07 (b) of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (iv) thereof, replacing the period
at the end of clause (v) thereof with a semicolon followed by the word "and" and
inserting the following new clause (vi) thereafter:
(vi) prepayments of intercompany Indebtedness issued by any
Foreign Subsidiary or any Loan Party to any Loan Party.
(i) Section 6.11 of the Credit Agreement is hereby amended by
deleting the table set forth therein and substituting in lieu thereof the
following table:
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WMT and
Fiscal Year WMT Amount Cremascoli Amount
----------- ---------- -----------------
2000 $ 7,000,000 $10,500,000
2001 $15,500,000 $19,000,000
2002 $17,000,000 $20,500,000
2003 $18,000,000 $22,500,000
2004 $20,000,000 $25,500,000
2005 $22,000,000 $26,500,000
(j) Section 6.14 of the Credit Agreement is hereby amended by
deleting the table set forth at the end thereof and substituting in lieu thereof
the following table:
Period Ratio
------ -----
Effective Date - December 31, 2001 1.0 to 1.0
January 1, 2002 - December 31, 2002 1.1 to 1.0
Thereafter 1.2 to 1.0
(k) Section 9.04(b) of the Credit Agreement is hereby amended by (i)
deleting the words "an Affiliate of a Lender or an Approved Fund" from clause
(i) of the first proviso to the first sentence of such Section and substituting
in lieu thereof the word "a Lender Affiliate" and (ii) deleting the words "an
Affiliate of a Lender or an Approved Fund" from clause (ii) of the first proviso
to the first sentence of such Section and substituting in lieu thereof the word
"a Lender Affiliate".
SECTION 2. WAIVER. Any Default occurring on or after January 18,
2001 and prior to February 3, 2001 resulting from the Borrower's issuance or
prepayment of a $6,500,000 promissory note due April 1, 2001 to ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
in accordance with the ▇▇▇▇▇▇▇▇▇ Settlement Agreement is hereby waived by the
undersigned Lenders.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to each other party hereto that, after giving effect to this
Amendment, (a) the representations and warranties set forth in Article III of
the Credit Agreement and Article III of the Cremascoli Credit Agreement
(including without limitation Section 3.06 thereof) are true and correct in all
material respects on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties were true and correct in all material
respects as of the earlier date), and (b) no Default or Event of Default has
occurred and is continuing.
SECTION 4. EFFECTIVENESS. This Amendment shall become effective as
of the first date (the "Amendment Effective Date") that the Administrative Agent
or its counsel shall have received counterparts of this Amendment that, when
taken together, bear the signatures of the Borrower, Holdings and the Required
Lenders.
SECTION 5. AMENDMENT FEE. The Borrower agrees to pay to each Lender
that executes and delivers a copy of this Amendment to the Administrative Agent
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(or its counsel) on or prior to March 21, 2001 an amendment fee in an amount
equal to 0.125% of such Lender's aggregate unused Commitments, outstanding
Loans, Standby LC Exposure and Trade LC Exposure, in each case as of the
Amendment Effective Date; PROVIDED that the Borrower shall have no liability for
any such amendment fee if this Amendment does not become effective. Such
amendment fee shall be payable (i) on the Amendment Effective Date, to each
Lender entitled to receive such fee as of the Amendment Effective Date and (ii)
in the case of any Lender that becomes entitled to such fee after the Amendment
Effective Date, within two Business Days after such Lender becomes entitled to
such fee.
SECTION 6. EFFECT OF AMENDMENT. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Issuing Bank, the French Lender, Collateral Agent or the
Administrative Agent, under the Credit Agreement or any other Loan Document, and
shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. Nothing herein shall
be deemed to entitle the Borrower to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document in similar or different circumstances.
SECTION 7. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.
SECTION 8. APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CHOICE OF LAW PROVISIONS THEREOF.
SECTION 9. HEADINGS. The headings of this Amendment are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇▇▇ ACQUISITION HOLDINGS, INC., as
Holdings,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: General Counsel & Secretary
▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC., as
the Borrower,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: General Counsel & Secretary
THE CHASE MANHATTAN BANK,
as a Lender, as Administrative Agent,
Collateral Agent and Issuing Bank,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A.,
as a Lender and as Syndication Agent,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director
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FLEET NATIONAL BANK,
by
/s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
FIRST UNION NATIONAL BANK,
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
by
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANKERS TRUST COMPANY,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SUNTRUST BANK, NASHVILLE, N.A.,
by
/s/ ▇. ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President