EXHIBIT 10
AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of March 29, 2000 (this "Amendment and
Restatement"), among HANGER ORTHOPEDIC GROUP, INC.,
the LENDERS party hereto, THE CHASE MANHATTAN BANK, as
Administrative Agent and Collateral Agent, BANKERS
TRUST COMPANY, as Syndication Agent and PARIBAS as
Documentation Agent.
WHEREAS, on June 16, 1999, HANGER ORTHOPEDIC GROUP, INC., the LENDERS
party thereto, THE CHASE MANHATTAN BANK, as Administrative Agent and
Collateral Agent, BANKERS TRUST COMPANY, as Syndication Agent and PARIBAS as
Documentation Agent, entered into a Credit Agreement (the "Credit Agreement");
WHEREAS, the Borrower (such term and each other capitalized term used
but not otherwise defined herein having the meaning assigned to it in the
Credit Agreement) has requested that the Lenders approve amendments to certain
provisions of the Credit Agreement as forth herein and a restatement of the
Credit Agreement in its entirety giving effect to such amendments; and
WHEREAS, the undersigned Lenders are willing, on the terms and subject
to the conditions set forth herein, to approve such amendments and such
restatement.
NOW, THEREFORE, in consideration of these premises, the Borrower and the
undersigned Lenders hereby agree as follows:
SECTION 1. AMENDMENTS. Effective as of the Amendment Effective Date (as
defined in Section 3 hereof), the Credit Agreement is hereby amended as
follows:
(a) The definition of "Applicable Rate" in Section 1.01 is hereby
amended and restated in its entirety as follows:
"APPLICABLE RATE" means, for any day (a) with respect to any
Tranche B Term Loan, (i) 3.00% per annum, in the case of an ABR Loan, or
(ii) 4.00% per annum, in the case of a Eurodollar Loan, and (b) with
respect to any Revolving Loan or Tranche A Term Loan or with respect to
the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption "ABR
Spread", "Eurodollar Spread" or "Commitment Fee Rate", as the case may
be, based upon the Leverage Ratio as of the most recent determination
date:
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ABR EURODOLLAR COMMITMENT FEE
LEVERAGE RATIO: SPREAD SPREAD RATE
--------------------------------------------------------------------------------------------------
CATEGORY 1
Greater than or equal to 2.00% 3.00% 0.50%
4.00 to 1.00
--------------------------------------------------------------------------------------------------
CATEGORY 2
Greater than or equal to 3.50 to 1.00 but
less than 1.75% 2.75% 0.50%
4.00 to 1.00
--------------------------------------------------------------------------------------------------
CATEGORY 3
Greater than or equal to 3.00 to 1.00 but 1.50% 2.50% 0.375%
less than
3.50 to 1.00
--------------------------------------------------------------------------------------------------
CATEGORY 4
Less than 3.00 to 1.00 1.25% 2.25% 0.375%
==================================================================================================
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal
year based upon the Borrower's consolidated financial statements
delivered pursuant to Section 5.01(a) or (b) and (ii) each change in the
Applicable Rate resulting from a change in the Leverage Ratio shall be
effective during the period commencing on and including the date of
delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately
preceding the effective date of the next such change; PROVIDED that the
Leverage Ratio shall be deemed to be in Category 1 (a) at any time that
an Event of Default has occurred and is continuing or (b) at the option
of the Administrative Agent or at the request of the Required Lenders,
if the Borrower fails to deliver the consolidated financial statements
required to be delivered by it pursuant to Section 5.01(a) or (b),
during the period from the expiration of the time for delivery thereof
until such consolidated financial statements are delivered.
(b) A new Section 2.10(g) shall be inserted after Section 2.10(f) and
shall read as follows:
(g) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of
a dispute regarding the Acquisition (including but not limited to any
arbitration award, judgment or settlement received in respect of any
claim based on the Stock Purchase Agreement or any escrow arrangement
with respect to the Acquisition), the Borrower shall, immediately after
such Net Proceeds are received, prepay Revolving Borrowings in an
aggregate amount equal to such Net Proceeds (or, if the amount of such
Net Proceeds exceed the aggregate amount of Revolving Borrowings then
outstanding, in an amount equal to the aggregate amount of all
outstanding Revolving Borrowings).
(c) Section 6.12 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
SECTION 6.12. INTEREST EXPENSE COVERAGE RATIO. The Borrower will
not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash
Interest Expense, in each case for any period of four consecutive fiscal
quarters (or such lesser number of fiscal quarters as shall have elapsed
since June 30, 1999) ending during any period set forth below,
commencing with the period of four consecutive fiscal quarters (or such
lesser number of fiscal quarters as shall have elapsed since June 30,
1999) ending on December 31, 1999, to be less than the ratio set forth
below opposite such period:
PERIOD RATIO
Quarter ending December 31, 1999 2.25 to 1.00
Quarter ending March 31, 2000 2.20 to 1.00
Quarter ending June 30, 2000 1.95 to 1.00
Quarter ending September 30, 2000 1.90 to 1.00
Quarter ending December 31, 2000 2.10 to 1.00
Quarter ending March 31, 2001 2.15 to 1.00
Quarter ending June 30, 2001 2.20 to 1.00
Quarter ending September 30, 2001 2.30 to 1.00
Quarter ending December 31, 2001 2.35 to 1.00
Quarter ending March 31, 2002 2.75 to 1.00
Quarter ending June 30, 2002 2.75 to 1.00
Quarter ending September 30, 2002 2.75 to 1.00
Quarter ending December 31, 2002 3.00 to 1.00
Thereafter 3.00 to 1.00
(d) Section 6.13 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
SECTION 6.13. LEVERAGE RATIO. The Borrower will not permit the
Leverage Ratio at the end of and for any period of four consecutive
fiscal quarters (or such lesser number of fiscal quarters as shall have
elapsed since June 30, 1999) ending on any date during any period set
forth below, commencing with the period of four consecutive quarters (or
such lesser number of fiscal quarters as shall have elapsed since June
30, 1999) ending on December 31, 1999, to exceed the ratio set forth
opposite such period:
PERIOD RATIO
Quarter ending December 31, 1999 4.75 to 1.00
Quarter ending March 31, 2000 5.25 to 1.00
Quarter ending June 30, 2000 5.25 to 1.00
Quarter ending September 30, 2000 5.25 to 1.00
Quarter ending December 31, 2000 4.85 to 1.00
Quarter ending March 31, 2001 4.70 to 1.00
Quarter ending June 30, 2001 4.55 to 1.00
Quarter ending September 30, 2001 4.40 to 1.00
Quarter ending December 31, 2001 4.25 to 1.00
Quarter ending March 31, 2002 3.50 to 1.00
Quarter ending June 30, 2002 3.50 to 1.00
Quarter ending September 30, 2002 3.50 to 1.00
Quarter ending December 31, 2002 3.25 to 1.00
Thereafter 3.25 to 1.00
(e) Section 6.14 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
SECTION 6.14. CONSOLIDATED ADJUSTED EBITDA/ INTEREST COVERAGE
RATIO. The Borrower will not permit the ratio of (a) Consolidated
Adjusted EBITDA to (b) Consolidated Cash Interest Expense, in each case
for any period of four consecutive fiscal quarters (or such lesser
number of fiscal quarters as shall have elapsed since June 30, 1999)
ending on any date during any period set forth below, commencing with
the period of four consecutive fiscal quarters (or such lesser number of
fiscal quarters as shall have elapsed since June 30, 1999) ending on
December 31, 1999, to be less than the ratio set forth below opposite
such period:
PERIOD RATIO
Fiscal year ending December 31, 1999 1.90 to 1.00
Quarter ending March 31, 2000 1.75 to 1.00
Quarter ending June 30, 2000 1.60 to 1.00
Quarter ending September 30, 2000 1.55 to 1.00
Quarter ending December 31, 2000 1.80 to 1.00
Quarter ending March 31, 2001 1.85 to 1.00
Quarter ending June 30, 2001 1.95 to 1.00
Quarter ending September 30, 2001 2.00 to 1.00
Quarter ending December 31, 2001 2.10 to 1.00
Quarter ending March 31, 2002 2.50 to 1.00
Quarter ending June 30, 2002 2.50 to 1.00
Quarter ending September 30, 2002 2.50 to 1.00
Quarter ending December 31, 2002 2.50 to 1.00
Thereafter 2.50 to 1.00
(f) Section 6.15 of the Credit Agreement is hereby amended by (i)
deleting the figure "$10,500,000" set forth below the caption "BASE AMOUNT"
opposite the fiscal year 1999 and inserting in lieu thereof the figure
"$12,750,000", (ii) deleting the figure "$8,000,000" set forth below the
caption "BASE AMOUNT" opposite the fiscal year 2000 and inserting in lieu
thereof the figure "$12,000,000" and (iii) deleting the figure "$7,800,000"
set forth below the caption "BASE AMOUNT" opposite the fiscal year 2001 and
inserting in lieu thereof the figure "$12,000,000".
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to each of the Lenders that, after giving effect to the amendments
contemplated hereby, (a) the representations and warranties of the Borrower
set forth in the Credit Agreement are true and correct in all material
respects on and as of the date of this Amendment and Restatement, 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 has
occurred and is continuing.
SECTION 3. EFFECTIVENESS. (a) This Amendment and Restatement shall
become effective as of the date (the "Amendment Effective Date") when the
Administrative Agent (or its counsel) shall have received copies hereof that,
when taken together, bear the signatures of the Borrower and the Required
Lenders.
(b) Any change in the interest rate applicable to any outstanding Loans
as a result of the amendments set forth herein shall be effective from and
after the Amendment Effective Date and shall not affect interest or fees
accrued prior to the Amendment Effective Date.
SECTION 4. AMENDMENT FEE. The Borrower agrees to pay to each Lender that
executes and delivers a copy of this Amendment and Restatement to the
Administrative Agent (or its counsel) on or prior to March 29, 2000 an
amendment fee in an amount equal to 0.375% of such Lender's aggregate unused
Commitments, outstanding Loans and 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 and Restatement 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 5. RESTATEMENT. On the Amendment Effective Date, the Credit
Agreement, as amended hereby, shall be deemed incorporated herein by reference
and restated in its entirety. On and after the Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "herein",
or words of like import shall mean and be a reference to the Credit Agreement,
as amended and restated hereby.
SECTION 6. WAIVER. Any Default occurring on or after December 31, 1999
and prior to the Amendment Effective Date that would not have occurred if this
Amendment and Restatement had been in effect during such period is hereby
waived by the undersigned Lenders.
SECTION 7. APPLICABLE LAW. THIS AMENDMENT AND RESTATEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 8. NO OTHER AMENDMENTS. Except as expressly set forth herein,
this Amendment and Restatement shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
any party under, the Credit Agreement, nor alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. This Amendment and
Restatement shall apply and be effective only with respect to the provisions
of the Credit Agreement specifically referred to herein.
SECTION 9. COUNTERPARTS. This Amendment and Restatement may be executed
in two or more counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one contract. Delivery
of an executed counterpart of a signature page of this Amendment and
Restatement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Amendment and Restatement.
SECTION 10. HEADINGS. Section headings used herein are for convenience
of reference only, are not part of this Amendment and Restatement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Amendment and Restatement.
SECTION 11. EXPENSES. The Borrower shall reimburse the Administrative
Agent for its reasonable out-of-pocket expenses incurred in connection with
this Amendment and Restatement, including the reasonable fees and expenses of
Cravath, Swaine & Xxxxx, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the Borrower and the undersigned Lenders have caused
this Amendment and Restatement to be duly executed by their duly authorized
officers, all as of the date first above written.
HANGER ORTHOPEDIC GROUP, INC.,
By: ______________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent,
By: ______________________________
Name:
Title:
BANKERS TRUST COMPANY,
By: ______________________________
Name:
Title:
PARIBAS,
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
ABN AMRO BANK N.V.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY,
By: ______________________________
Name:
Title:
ALLSTATE INSURANCE COMPANY,
By: ______________________________
Name:
Title:
BANKBOSTON, N.A.
By: ______________________________
Name:
Title:
BAYERISCHE HYPO-UND
VEREINSBANK, NEW YORK
BRANCH,
By: ______________________________
Name:
Title:
COMERICA BANK,
By: ______________________________
Name:
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-
BOERENLEENBANK B.A.
"RABOBANK INTERNATIONAL",
NEW YORK BRANCH,
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
CREDIT LYONNAIS NEW YORK
BRANCH,
By: ______________________________
Name:
Title:
CYPRESSTREE INSTITUTIONAL
FUND, LLC,
By: CypressTree Investment
Management Company, Inc. its
Managing Member,
By: ______________________________
Name:
Title:
DEBT STRATEGIES FUND III,
INC.,
By: ______________________________
Name:
Title:
DRESDNER BANK AG, NEW
YORK BRANCH AND GRAND
CAYMAN BRANCH
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
FIRST SOURCE FINANCIAL,
INC.,
By: ______________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
individually and as a co-agent,
By: ______________________________
Name:
Title:
FLEET NATIONAL BANK,
By: ______________________________
Name:
Title:
FRANKLIN FLOATING RATE TRUST,
By: ______________________________
Name:
Title:
XXXXXX FINANCIAL, INC.,
By: ______________________________
Name:
Title:
KZH IV LLC,
By: ______________________________
Name:
Title:
KZH CYPRESSTREE-1 LLC,
By: ______________________________
Name:
Title:
KZH STERLING LLC,
By: ______________________________
Name:
Title:
XXXXXXX XXXXX SENIOR
FLOATING RATE FUND II, INC.,
By: ______________________________
Name:
Title:
METROPOLITAN LIFE
INSURANCE COMPANY,
By: ______________________________
Name:
Title:
XXXXXX XXXXXXX XXXX
XXXXXX PRIME INCOME TRUST,
By: ______________________________
Name:
Title:
NATIONAL BANK OF CANADA,
A CANADIAN CHARTERED
BANK,
By: ______________________________
Name:
Title:
NORTH AMERICAN SENIOR
FLOATING RATE FUND,
By: CypressTree Investment
Management Company, Inc. as
Portfolio Manager
By: ______________________________
Name:
Title:
PINEHURST TRADING, INC.,
By: ______________________________
Name:
Title:
PROVIDENT BANK OF
MARYLAND,
By: ______________________________
Name:
Title:
SCOTIABANC, INC.,
By: ______________________________
Name:
Title:
SEQUILS I, LTD.,
By: TCW Advisors, Inc. as its
Collateral Manager
By: ______________________________
Name:
Title:
SUMMIT BANK,
By: ______________________________
Name:
Title:
THE UNION BANK OF
CALIFORNIA, N.A.,
By: ______________________________
Name:
Title:
U.S. BANK NATIONAL
ASSOCIATION,
By: ______________________________
Name:
Title:
USTRUST,
By: ______________________________
Name:
Title:
KZH SOLEIL-2 LLC,
By: ______________________________
Name:
Title:
GALAXY CLO 1999-1, LTD.,
By: ______________________________
Name:
Title:
XXXXXXXXX CLO, LTD.,
By: ______________________________
Name:
Title:
ELC (CAYMAN) LTD. CDO
SERIES 1999-I,
By: ______________________________
Name:
Title:
FIRST DOMINION FUNDING III,
By: ______________________________
Name:
Title:
SENIOR DEBT PORTFOLIO,
By: ______________________________
Name:
Title:
GREAT POINT CLO 1999-1 LTD.,
By: ______________________________
Name:
Title:
MAGNETITE ASSET
INVESTORS,
By: ______________________________
Name:
Title:
BALANCED HIGH YIELD FUND
II LTD,
By: ______________________________
Name:
Title:
BHF (USA) CAPITAL
CORPORATION,
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
CYPRESSTREE SR. FLOATING
RATE FUND,
By: ______________________________
By: ______________________________
Name:
Title:
ML SENIOR FLOATING RATE
FUND II, INC.,
By: ______________________________
Name:
Title:
NORSE CBO, LTD,
By: ______________________________
Name:
Title:
UNITED OF OMAHA LIFE
INSURANCE CO.,
By: ______________________________
Name:
Title:
