Exhibit 10.16
EXECUTION COPY
AMENDMENT NO.3 TO CREDIT AGREEMENT
This AMENDMENT NO.3 TO CREDIT AGREEMENT is
made and entered into as of June 17, 1999, by and
among XXXXXX RESPIRATORY CARE INC., a California
corporation (the "Borrower"), RIVER HOLDING CORP.,
a Delaware corporation ("Holding") and the
Required Lenders (as defined in Article I of the
Credit Agreement).
RECITALS
A. The Borrower, Holding, the Lenders (as defined in Article I of the
Credit Agreement), Salomon Brothers Inc, as Arranger, Advisor and Syndication
Agent, and Bankers Trust Company, as Administrative Agent and Collateral Agent,
entered into a Credit Agreement dated as of April 7, 1998 (as amended and
otherwise modified to the date hereof, the "Credit Agreement"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Credit Agreement.
B. The Borrower has advised the Lenders that it wishes to engage in the
transactions described in Exhibit A to this Amendment.
C. The Borrower requested certain changes to the Credit Agreement, and has
agreed to certain changes to other provisions of the Credit Agreement to permit
such transactions.
D. The Required Lenders are willing to so amend the Credit Agreement on
the terms and conditions set forth herein.
E. The Borrower, Holding and the Required Lenders are entering this
Amendment pursuant to Section 9.08(b) of the Credit Agreement.
AGREEMENTS
In consideration of the foregoing Recitals, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, Holding and the Required Lenders agree as follows:
1. Annex 4. The Credit Agreement is amended by adding Exhibit A to this
Amendment as Annex 4 to the Credit Agreement.
2. Definitions. (a) The following definitions are inserted in Section
1.01 of the Credit Agreement in alphabetical order:
"Designated Capital Investment" means any equity Investment in Holding
(other than the Investments described in Annex 4), the proceeds of which
are invested by Holding in the Borrower in the form of equity, with respect
to which the Borrower has notified the Administrative Agent in advance in
writing that the proceeds of such investment are to be invested or loaned
by the Borrower to Swedish Acquisitionco, US Holdco or Euro Holdco.
"Euro Holdco" is defined in Annex 4.
"Gibeck AB" is defined in Annex 4.
"Gibeck AB Acquisition" is defined in Annex 4.
"Gibeck Family" is defined in Annex 4.
"Swedish Acquisitionco" is defined in Annex 4.
"US Holdco" is defined in Annex 4.
(b) The following definitions are amended in their entirety to read:
"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by Holding, the Borrower or any Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of (a) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares) or (b) any other
Assets of the Borrower or any Restricted Subsidiary outside of the ordinary
course of business of the Borrower or such Restricted Subsidiary (other
than, in the case of clauses (a) and (b) above, (i) any disposition by a
Restricted Subsidiary to the Borrower or by the Borrower or a Restricted
Subsidiary to a wholly owned Restricted Subsidiary, (ii) any disposition
effected in compliance with Section 6.04). "Asset Disposition" shall not
include (i) any Sale/Leaseback Transaction, (ii) the Investments by the
Borrower in Swedish Acquisitionco, US Holdco and Euro Holdco as described
in Annex 4, or (iii) so long as no Default or Event of Default has occurred
and is continuing, the making of an Investment by the Borrower in Swedish
Acquisitionco, US Holdco and Euro Holdco with the proceeds of any
Designated Capital Investment.
"Capital Expenditures" means capital expenditures of the Borrower and
its Restricted Subsidiaries determined in accordance with GAAP.
"Equity Issuance" means the issuance by Holding or the Borrower of
any equity interests therein, or the issuance or sale by Holding or the
Borrower of any instrument or obligation convertible into or exchangeable
for, or giving any person any right, option or warrant to acquire from
Holding or the Borrower any equity interests therein or any such
convertible or exchangeable instrument or obligation, but excluding (i) the
Excluded Shares, (ii) the issuance of shares of the Borrower to Holding
pursuant to the Gibeck AB Acquisition, and (iii) the issuance of shares by
Holding pursuant to the Gibeck AB Acquisition.
"Prepayment Event" means any Incurrence of Debt of the Borrower or any
Restricted Subsidiary, any Equity Issuance (other than the issuance of
shares of the Borrower to Holding or of Holding in connection with the
Gibeck AB Acquisition), any Restricted Asset Disposition, any Restricted
Sale/Leaseback Transaction, any Casualty or any Condemnation.
"Pro Forma Debt/Pro Forma EBITDA Ratio" means, as of any date with
respect to the Borrower and its consolidated Restricted Subsidiaries, (a)
the total amount of Debt of the Borrower and its consolidated Restricted
Subsidiaries as of such date (after giving effect to any Debt assumed or
Incurred in connection with a proposed acquisition), to (b) Pro Forma
EBITDA of the Borrower and its consolidated Restricted Subsidiaries for the
four most recently completed fiscal quarters for which financial statements
are available.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Borrower
that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of the Borrower in the manner provided
below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of the Borrower may designate any Subsidiary of the Borrower
(including any newly acquired or newly formed Subsidiary
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of the Borrower) to be an Unrestricted Subsidiary; provided, however, that
at the time of such designation and in the case of clauses (A) and (B), at
all times thereafter
(A) neither such Subsidiary nor any of its Subsidiaries owns any
Capital Stock or Indebtedness of, or owns or holds any Lien on any
property of, the Borrower or any Restricted Subsidiary of the
Borrower; and
(B) except to the extent permitted under Section 6.03(c)(iii)(B),
neither Holding, the Borrower nor any Restricted Subsidiary has
Guaranteed any Indebtedness or other obligation of such Subsidiary to
be so designated, and no Indebtedness of such Subsidiary to be
designated shall constitute Indebtedness of Holding, the Borrower or
any Restricted Subsidiary; and
(C) except in the case of Swedish Acquisitionco, US Holdco or
Euro Holdco and any of their Subsidiaries, the Subsidiary to be so
designated has total consolidated assets of $1,000 or less.
(c) The introductory language of the definition of Pro Forma EBITDA is
amended to read as follows:
"Pro Forma EBITDA" means, with respect to the Borrower and its
consolidated Restricted Subsidiaries for the most recently completed period
of four fiscal quarters for which financial statements are available,
EBITDA on a consolidated basis after giving effect to:
3. Financial Statements, Reports, etc. (a) Each reference in Section
5.04(a), (b) and (c) to "Subsidiaries" shall be amended to be a reference to
"Restricted Subsidiaries".
(b) Section 5.04(e) of the Credit Agreement is amended in its entirety to
read:
(e) not later than January 31 of each year, (i) copies of the
Borrower's annual consolidated budget for the Borrower and its consolidated
Restricted Subsidiaries for the current fiscal year, in the form presented
by management to the Borrower's Board of Directors; and (ii) copies of the
Borrower's consolidated financial projections for the Borrower and its
consolidated Restricted Subsidiaries for the current fiscal year and the
next 3 fiscal years prepared in a manner consistent with the financial
projections delivered to the Syndication Agent in connection with the
closing of this Agreement;
(c) Section 5.04 of the Credit Agreement is amended by deleting the word
"and" at the end of clause (f), changing clause (g) to clause (h), and inserting
a new clause (g) as follows:
(g) (i) within 30 days after the end of each fiscal month of Gibeck AB
(other than the last month of a fiscal quarter) copies of the consolidated
profit and loss statement of Gibeck AB and its consolidated Subsidiaries in
the form in which such statement is required to be delivered any non-
Affiliate lender to Gibeck AB, or if such statement is not required to be
delivered to any such lender, as prepared for internal use by Gibeck AB in
a manner consistent with prior practice; (ii) within 45 days after then
end of each fiscal quarter of Gibeck AB (other than the last quarter of a
fiscal year), copies of the consolidated profit and loss statement, balance
sheet and statement of cash flows of Gibeck AB and its consolidated
Subsidiaries, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of Gibeck AB
and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to the absence of footnotes and
normal year-end audit adjustments; and (iii) within 90 days after then end
of each fiscal year of Gibeck AB, copies of the consolidated profit and
loss statement, balance sheet and statement of cash flows of Gibeck AB and
its consolidated Subsidiaries, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of
operations of Gibeck AB and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to the absence
of footnotes and normal year-end audit adjustments; and
4. Indebtedness. Section 6.01 of the Credit Agreement is amended by
deleting the word "and" at the end of clause (j), deleting the period at the end
of clause (k) and substituting a semicolon and the word "and", and inserting a
new clause (i) as follows:
(i) Indebtedness represented by Guarantees constituting Investments
permitted by Section 6.03(c)(iii)(B);
5. Investments, Loans and Advances. Section 6.03(c) of the Credit
Agreement is amended in its entirety to read:
(c) (i) Investments in Unrestricted Subsidiaries (other than US
Holdco, Euro Holdco and Swedish Acquisitionco and their Subsidiaries) not
to exceed $20,000 in the aggregate at any one time;
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(ii) so long as US Holdco, Euro Holdco and Swedish Acquisitionco are
Unrestricted Subsidiaries, the Investment by the Borrower in US Holdco,
Euro Holdco or Swedish Acquisitionco and their Subsidiaries to be made as
part of the Gibeck AB Acquisition as described in Item 7 of Annex 4; and
(iii) so long as US Holdco, Euro Holdco and Swedish Acquisitionco are
Unrestricted Subsidiaries, additional Investments by the Borrower in US
Holdco, Euro Holdco or Swedish Acquisitionco not to exceed in the aggregate
(A) the proceeds of any Designated Capital Investments received by the
Borrower from Holding, plus (B) $2,000,000 at any time;
6. Dividends and Distributions; Restrictions on Ability of Subsidiaries to
Pay Dividends. Section 6.05 of the Credit Agreement is amended by deleting the
word "and" at the end of clause (a)(v), deleting the period at the end of clause
(a)(vi) and substituting a semicolon and the word "and", and inserting a new
clause (a)(vii) as follows:
(vii) To the extent that the tender offer referred to in Item 6 of
Annex 4 is not consummated, and provided that no Default or Event of
Default has occurred and is continuing,
(A) to the extent that the Borrower has received as a return of
capital or dividend any portion of the Investment by the Borrower in
US Holdco, Euro Holdco or Swedish Acquisitionco described in Item 7 of
Annex 4 (or the Borrower does not make the Investment described in
Item 7 of Annex 4), the Borrower may pay as a return of capital or
dividend such amount (less the amount of any costs and expenses
incurred by the Borrower in connection with the transactions described
in Annex 4) to Holding; and
(B) to the extent that Holding has received a return of capital
or dividend pursuant to clause (A), Holding may pay such amount as a
dividend or return of capital to Xxxxxxx Xxxxxx.
7. Transactions with Affiliates. Section 6.06 of the Credit Agreement is
amended by deleting the word "or" at the end of clause (c), deleting the period
at the end of clause (d) and substituting a semicolon and the word "or", and
inserting a new clause (e) as follows:
(e) the Investment by the Borrower in US Holdco, Euro Holdco and
Swedish Acquisitionco in connection with the Gibeck AB Acquisition and
Investments by the Borrower in US Holdco, Euro Holdco and Swedish
Acquisitionco permitted by Section 6.03(c)(iii).
8. Consummation of the Gibeck AB Acquisition. The Borrower agrees not to
consummate the Gibeck AB Acquisition, if after giving effect thereto, any
Default or Event of Default would have resulted therefrom.
9. Binding Effect and Effectiveness. This Amendment may be executed in as
many counterparts as may be convenient and shall become binding when the
Borrower, Holding and the Required Lenders have each executed and delivered at
least one counterpart, and shall become effective when the capital contributions
described in clauses 1 through 4 of Exhibit A shall have been made.
10. Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of New York, without regard to the conflicts
of law provisions thereof.
11. Reference to Credit Agreement. Except as amended hereby, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. On and after the effectiveness of the amendment to
the Credit Agreement accomplished hereby, each reference in the Credit
Agreement, to "this Agreement", "hereunder", "hereof", "herein" or words of like
import, and each reference to the Credit Agreement shall be deemed a reference
to the Credit Agreement, as amended hereby, as the case may be.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers as of the date first above written.
XXXXXX RESPIRATORY CARE INC.,
by /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: CFO
RIVER HOLDING CORP.,
by /s/ Xxx X. Xxxxx
----------------------
Name: Xxx X. Xxxxx
Title: CFO
Acknowledged by:
BANKERS TRUST COMPANY, as Administrative Agent and
Collateral Agent
by /s/ Xxxx Xx Xxxxx
-------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
SALOMON BROTHERS INC, as Arranger, Advisor and
Syndication Agent,
by /s/ Xxxxx X. Wirdnam
---------------------------
Name: Xxxxx X. Wirdnam
Title: Director
LENDERS
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BANKERS TRUST COMPANY,
by /s/ Xxxx Xx Xxxxx
----------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
CITICORP USA, INC.,
by /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director/SCO
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
by /s/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
by /s/ Xxxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT,
by /s/ Xxx Xxxxxxxxxxx
-------------------------
Name: Xxx Xxxxxxxxxxx
Title: Assistant Vice President
by /s/ X. Xxxxx
-------------------
Name: X. Xxxxx
Title: AT
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE,
INC.,
by /s/ Xxxx Xxxx
--------------------------
Name: Xxxx Xxxx
Title: Vice President
by /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
XXXXX FARGO BANK, N.A.,
by /s/ [ILLEGIBLE]
--------------------------
Name:
Title:
ROYAL BANK OF CANADA,
by /s/ Xxxx Xxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Manager
SOCIETE GENERALE,
by /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
IMPERIAL BANK,
by /s/ Xxx Xxxxxxx
---------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President
NATIONSBANK, N.A., as successor to NationsBank of
Texas, N.A.,
by /s/ Xxxxxx Xxxxx
-----------------------
Name: Xxxxxx Xxxxx
Title: Vice President
