[EXECUTION COPY]
EXHIBIT 99.4
SECOND AMENDMENT AND WAIVER TO THE AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
This SECOND AMENDMENT AND WAIVER, dated as of August 6, 2002 (this "SECOND
AMENDMENT"), to the Amended and Restated Loan and Security Agreement, dated as
of March 2, 2001 (as amended, supplemented, or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among PRIMESOURCE HEALTHCARE, INC., f/k/a LUXTEC
CORPORATION, a Massachusetts corporation (the "BORROWER"), the guarantors party
thereto (the "GUARANTORS"), and ARK CLO 2000-1, LIMITED, a Cayman Islands
exempted company (the "LENDER"). Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings given to them in the Credit
Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, Guarantors and Lender are parties to the Credit
Agreement;
WHEREAS, the Guarantors have guaranteed the full and punctual payment when
due, and the performance, of all liabilities, agreements and other obligations
of the Borrower to Lender pursuant to separate Amended and Restated Unlimited
Guaranties, each dated as of March 2, 2001 (collectively, as amended,
supplemented or otherwise modified from time to time, the "GUARANTEE")
WHEREAS, pursuant to a waiver letter dated June 28, 2001 (the "WAIVER
LETTER"), the Lender waived certain Acknowledged Events of Default (as that term
is defined in the Waiver Letter) under the Credit Agreement which have occurred
during the period from March 2, 2001 through June 30, 2001;
WHEREAS, pursuant to the First Amendment to the Amended and Restated Loan
and Security Agreement dated as of August 31, 2001 (the "FIRST AMENDMENT"), the
parties amended certain provisions of the Credit Agreement as specified therein;
WHEREAS, pursuant to the Forbearance and Waiver dated as of May 14, 2002
(the "FORBEARANCE"), the Lender agreed to (i) forbear from taking any
Enforcement Actions in respect of the Outstanding Indebtedness as a result of an
Existing Default (as such terms are defined in the Forbearance) under the Credit
Agreement and (ii) further agreed to defer the balloon payment of the Term Loan
until July 31, 2002;
WHEREAS, the Borrower and Guarantors have requested that (i) the Lender
agree to waive the Existing Default and (ii) further amend, to the extent set
forth herein, the Credit Agreement;
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WHEREAS, the Lender is willing to agree to waive such defaults and make
such additional amendments to the Credit Agreement, subject to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:
1. WAIVER OF DEFAULTS; CONSENT TO TRANSACTIONS. Subject to the terms and
conditions set forth herein, Lender hereby irrevocably waives the Existing
Default as of the date hereof. This waiver of the Existing Default is limited as
specified herein and shall not constitute a modification, amendment or waiver of
any provision of the Credit Agreement (other than as expressly provided for
herein) or constitute a course of dealing between the parties. In addition,
Lender hereby irrevocably consents to the Borrower entering into and
consummating the transactions contemplated by (i) the Exchange and Conversion
Agreement, dated as of August 6, 2002, between the Borrower and certain of its
stockholders thereto and (ii) the Purchase Agreement, dated as of August 6,
2002, between the Borrower and certain of its stockholders thereto (including
without limitation consenting to the application of the net equity proceeds from
such transactions in accordance with Schedule 1 attached hereto).
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended
as follows:
(1) AMENDMENT OF SECTION 1.01.
(i) The definition of "APPLICABLE MARGIN" contained in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:
"APPLICABLE MARGIN: means with respect to the Equipment Loan
1%, with respect to the Term Loan 0.50%, and with respect to
Revolving Credit Loan 3%."
(ii) The definition of "BORROWING BASE" contained in Section 1.01
of the Credit Agreement is hereby amended by replacing subsection (i)
of the definition with the following:
"(i) $1,275,000.00; or".
(2) AMENDMENT OF SECTION 2.02. Section 2.02(a) of the Credit Agreement
is hereby amended as follows:
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(i) The definition of the term "Loan Termination Date" in the
third sentence of Section 2.02(a) is hereby amended by deleting the
reference to "March 31, 2005" and replacing it with "December 31,
2003".
(ii) The definition of the term "Revolving Credit Loans" in the
third sentence of Section 2.02(a) is hereby amended by deleting the
reference to "$2,500,000.00" and replacing it with "$1,275,000.00".
(1) Section 2.02(b)(ii) is hereby amended by deleting such
section in its entirety and replacing it with the following:
"(ii) No material adverse change has occurred in the
business prospects, financial condition, or results of
operations of the Borrower and the Guarantors since the most
recently delivered Borrowing Base Certificate from the
Borrower to the Lender;".
(3) NEW SECTION 2.10. Section 2 of the Credit Agreement is hereby
amended by adding the following new Section 2.10 immediately after Section
2.09 therein to read as follows:
"Section 2.10 Method of Payment.
Notwithstanding anything to the contrary herein, all
payments which are owed, due or otherwise required to be
made by Borrower pursuant the terms of this Agreement shall
be made by wire transfer to the Lender as follows:
Chase Manhattan Bank Texas
Houston, Texas
ABA # ▇▇▇▇▇▇▇▇▇
A/C: 00102619468
BNF Name: Wires Clearing- Asset Backed Securities
BNF Address: Chase Tower Houston, Houston, TX
FFC: Ark CLO 2000-1 / A/C#5503001-23618
OBI: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /Luxtec".
(4) AMENDMENT OF SECTION 5.01. Section 5.01(h) of the Credit Agreement
is hereby amended by deleting the second sentence of subsection (h) therein
in its entirety.
(5) AMENDMENT OF SECTION 6.01.
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(i) Section 6.01(b) of the Credit Agreement is hereby amended by
adding the following new subsections (xi) and (xii) after subsection
(x) therein to read as follows:
"(xi) By August 15th of each fiscal year, so long as any of
the obligations remain unsatisfied or any commitments
hereunder remain outstanding, Borrower's forecasted (A)
balance sheets, (B) profit and loss statements, and (C) cash
flow statements, all prepared on a basis consistent with
Borrower's historical financial statements, together with
appropriate supporting details and a statement of underlying
assumptions (collectively, the "Projections") covering the
next succeeding fiscal year of the Borrower, which
forecasted financial statements are based on good faith
estimates and assumptions believed to be reasonable at the
time made, all in form and substance (including as to scope
and underlying assumptions) reasonably satisfactory to
Lender.
(xii) By January 15th of each calendar year, so long as any
of the obligations remain unsatisfied or any commitments
hereunder remain outstanding, Borrower's Projections for
such calendar year."
(ii) Section 6.01(g) of the Credit Agreement is hereby amended by
deleting all references to and tests for the years 2004 and 2005.
(1) Section 6.01(h) of the Credit Agreement is hereby amended by
deleting the figure "$300,000" set forth in the second line thereof
and replacing it with "$400,000".
(6) AMENDMENT OF SECTION 6.02. Section 6.02(g)(7) of the Credit
Agreement is hereby amended by deleting the reference to "Section 6.01(k)"
therein and replacing it with "Section 6.02(k)".
(7) AMENDMENT OF SECTION 10.05. Section 10.05(A) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
replacing it with the following:
"(A) If to the Borrower
or any Guarantor: PrimeSource Healthcare, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer".
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3. EFFECTIVENESS. This Second Amendment shall become effective as of the
date of receipt by the Lender of (a) counterparts of this Second Amendment
executed by the Borrower and Guarantors, (b) a copy of a waiver or any other
document executed by Citizens Bank of Massachusetts ("CITIZENS") waiving or
otherwise certifying that Citizens has waived all Defaults and Events of
Defaults as of the date hereof under the Amended and Restated Credit Agreement
dated June 14, 1999 among PrimeSource Surgical, Inc., Bimeco, Inc., Medial
Companies Alliance, Inc., ▇▇▇▇▇▇▇ Medical Inc. and State Street Bank and Trust
Company, as amended (the "SURGICAL CREDIT AGREEMENT") or that as of the date
hereof no Defaults or Events of Default exist under the Surgical Credit
Agreement, (c) payment of the outstanding Term Loan balance in the amount of
$150,000, (d) payment of an amendment fee in the amount of $25,000 and (e)
payment of all fees and expenses (including attorneys' fees) and out-of-pocket
expenses of the Lender that are due and payable from the Borrower to the Lender
in accordance with Section 10.04 of the Credit Agreement, including but not
limited to all such amounts incurred in connection with this Second Amendment.
4. REPRESENTATIONS AND WARRANTIES. The Borrower and each Guarantor hereby
confirms, reaffirms and restates the representations and warranties set forth in
Section 5 of the Credit Agreement, as amended by this Second Amendment, except
to the extent such representations and warranties relate to an earlier date. To
induce the Lender to enter into this Second Amendment, the Borrower and each
Guarantor individually and collectively represents and warrants that:
(1) After giving effect to this Second Amendment, no Default or Event
of Default has occurred and is continuing.
(2) There exist no cause of action, offsets, claims, counterclaims or
defenses against Lender with respect to the obligations under the Credit
Agreement or any Collateral Document.
(3) Except for Permitted Liens, Lender has valid, continuing and duly
perfected first and prior liens on and first priority security interest in
the Collateral, including but not limited to each of the patents and
trademarks listed on the Patent and Trademark Assignments, and, except as
set forth on Schedule 2 attached hereto, Borrower has not filed any new
patents or trademarks with the United States Department of Commerce Patent
and Trademark Office since the Closing.
(4) It has taken all necessary action to authorize the execution,
delivery and performance of this Second Amendment.
(5) This Second Amendment has been duly executed and delivered by each
of Borrower and Guarantor and constitutes its legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
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laws affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(6) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by Borrower and Guarantor of this Second Amendment.
5. NEW PATENTS AND TRADEMARKS. To the extent any of the patents or
trademarks listed on Schedule 2 have not been previously assigned to the Lender,
Borrower agrees to use its best efforts to promptly assign or grant a security
interest in (as requested by the Lender) such patents and/or trademarks to the
Lender.
6. RELEASE. The Borrower and Guarantors each hereby release the Lender and
the Lender's respective subsidiaries, affiliates, members, partners, officers,
employees, representatives, agents, managers, counsel, directors, successors and
assigns, both present and former, from any and all actions, causes of action,
claims, demands, damages and liabilities of whatever kind or nature, in law or
in equity, now known or unknown, suspected or unsuspected to the extent that any
of the foregoing arises from any action or failure to act in connection with the
Credit Agreement on or prior to the date hereof.
7. CONTINUING EFFECT OF THE CREDIT AGREEMENT. This Second Amendment shall
not constitute an amendment of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as a waiver or consent
to any further or future action on the part of the Borrower (unless expressly
referred to herein) that would require a waiver or consent of the Lender. Except
for the express waiver, consent and amendments herein, all the terms, provisions
and conditions of the Credit Agreement are and shall remain unchanged and shall
continue in full force and effect.
8. CONTINUING GUARANTY. Each Guarantor hereby acknowledges that it has
reviewed the terms and provisions of this Second Amendment and consents to the
provisions of this Second Amendment. Each Guarantor hereby confirms that the
Guarantee will continue to guaranty or secure, as the case may be, to the
fullest extent possible the payment and performance of all obligations of such
Guarantor in respect of the obligations of Borrower now or hereafter existing
under or in respect of the Credit Agreement and other related documents executed
in connection therewith.
9. SUCCESSORS AND ASSIGNS; COUNTERPARTS. The terms of this Second Amendment
shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns. This Second Amendment may be executed by
telecopy in any number of counterparts and by the parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same document.
Transmission
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by telecopier of an executed counterpart of this Second Amendment shall be
deemed to constitute due and sufficient delivery of such counterpart. Each fully
executed counterpart of this Second Amendment shall be deemed to be a duplicate
original.
10. GOVERNING LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
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THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Signatures on the following pages.]
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Each of the parties hereto has caused a counterpart of this Second
Amendment to be duly executed and delivered as of the date first above written.
BORROWER: PRIMESOURCE HEALTHCARE, INC., f/k/a
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LUXTEC CORPORATION
a Massachusetts corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
GUARANTORS: FIBER IMAGING TECHNOLOGIES, INC.,
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a Massachusetts corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CATHTEC INCORPORATED,
a Massachusetts corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CARDIODYNE, INC.,
a Massachusetts corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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LENDER: ARK CLO 2000-1, LIMITED
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By: Patriarch Partners, LLC,
its Collateral Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Manager
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SCHEDULE 1
to the Second Amendment and Waiver to
the Amended and Restated Loan and Security Agreement
(See Attached Schedule)
SCHEDULE 2
to the Second Amendment and Waiver to
the Amended and Restated Loan and Security Agreement
LIST OF NEW PATENTS AND TRADEMARKS
PATENTS
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Patent No. 6258037 for blood pressure monitoring in noisy environments issued
July 10, 2001.
