EXHIBIT 10.4
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement
(the "Amendment") is entered into as of September 30, 2002 by and among:
Cybex International, Inc., a New York corporation, having a place of
business at 00 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Borrower");
Cybex Capital Corp., Eagle Performance Systems, Inc., General Medical
Equipment, Ltd., Lumex Bed Systems, Inc., Cybex Fitness Gerate Vertriebs
GmBH, and Tectrix Fitness Equipment, Inc. (individually, a "Guarantor" and
collectively, the "Guarantors");
The Lenders party to the Credit Agreement (defined below) (hereinafter
collectively, the "Lenders"); and
Wachovia Bank, National Association (f/k/a First Union National Bank), as
Administrative Agent for the Lenders (hereinafter, in such capacity, the
"Administrative Agent"), having a principal place of business at One First
Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000;
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
WITNESSETH:
1. Background. On December 21, 2001, the Administrative Agent, the Lenders, the
Borrower and the Guarantors entered into an Amended and Restated Credit
Agreement (as amended and in effect, the "Credit Agreement"). The Borrowers and
the Guarantors have requested that the Lenders and the Administrative Agent
amend certain provisions of the Credit Agreement, and the Lenders and the
Administrative Agent are willing to do so, on the terms and conditions set forth
herein.
2. Definitions. All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Credit Agreement.
3. Amendment to Section 1. Section 1 of the Credit Agreement is hereby amended
as follows:
a. By amending the definition of "Borrowing Base" by adding the following
immediately prior to the period at the end thereof:
, plus the Overadvance
b. By adding the following new definition in appropriate alphabetical order:
"Overadvance": (a) From October 1, 2002 through December 31,
2002, the sum of $1,100,000; (b) from and after January 1, 2003
or such earlier date as may be specified in writing by the
Borrower, zero.
4. Amendments to Section 2. The provisions of Section 2.1(d) of the Credit
Agreement are hereby amended by adding the following immediately prior to the
period at the end thereof:
provided that interest on the Overadvance portion of the
Revolving loans shall bear interest at a per annum rate equal to
the sum of the Base Rate plus 3.50%.
5. Amendments to Section 5. Section 5 of the Credit Agreement is hereby amended
as follows:
a. By deleting the number "$4,000,000" in Section 5.9(a) for the period ending
September 30, 2002 and inserting the number "$3,500,000" in its stead.
b. By deleting the covenant for the period ending December 31, 2002 in Section
5.9(a) in its entirety, it being agreed that cumulative Consolidated EBITDA will
not be tested during such period.
c. By adding "(i)" immediately after the subtitle `Consolidated EBITDA in
Section 5.9(a) and adding the following new subsection at the end of the
existing provisions of Section 5.9(a):
(ii) The Borrower will achieve Consolidated EBITDA for the fiscal
quarter ending December 31, 2002 of at least $3,506,000.
d. By adding the following new subsections thereto:
5.20 Crisis Manager
Contemporaneously with the execution of the Second Amendment to this
Agreement, the Borrower shall engage a crisis manager, the identity of
whom shall be reasonably acceptable to the Administrative Agent and
the Lenders. The
Borrower shall present the Administrative Agent and the Lenders with
an engagement letter with such crisis manager which will be reasonably
acceptable to the Administrative Agent and the Lenders. Such letter
will not be acceptable unless the scope of duties and authority of the
crisis manager are reasonably acceptable to the Administrative Agent
and the Lenders. The Administrative Agent and the Lenders shall have
the right to communicate directly with the crisis manager.
5.21 Investment Banker
On or before October 15, 2002, the Borrower shall engage an investment
banker, the identity of whom shall be reasonably satisfactory to the
Administrative Agent and the Lenders. The engagement letter with such
investment bankers shall be satisfactory to the Administrative Agent
and the Lenders in their sole discretion; in that regard, such letter
shall not be satisfactory unless its scope includes the consideration
of all strategic alternatives for the Borrower to permit the Borrower
to promptly retire the Obligations, including sale, equity infusion,
subordinated debt, and refinancing alternatives. The engagement letter
will establish a timetable for performance of the duties of the
investment banker satisfactory to the Administrative Agent and the
Lenders in their sole discretion. The Administrative Agent and the
Lenders shall have the right to communicate directly with the
investment bankers and the Borrower shall, and shall cause the
investment bankers to, furnish the Administrative Agent and the
Lenders with periodic updates as to the status of the investment
bankers' efforts as well as copies of all letters of intent,
commitments and other documents and agreements generated from the
engagement.
6. Amendments to Section 7. Section 7 of the Credit Agreement is hereby amended
by adding the following new clauses thereto immediately after clause (i):
(j) The failure of the Borrower to retain an investment banker within
the time frame set forth in Section 5.21 or to continue to retain the
investment banker, the failure to meet the agreed upon timetables,
and/or the modification of the scope of the engagement of the
investment banker without the consent of the Administrative Agent and
the Lenders.
(k) The failure of the Borrower to continue to employ the crisis
manager and/or the modification of the duties and responsibilities of
the crisis manager retained in accordance with the provisions of
Section 5.20 hereof without the consent of the Administrative Agent
and the Lenders.
7. Waiver of Claims
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a. The Borrower and the Guarantors each acknowledge and agree that they do not
have any offsets, defenses, or counterclaims against the Administrative Agent,
the Issuing Lender, or the Lenders with respect to the Credit Agreement, the
Guaranties, any other Credit Documents, or otherwise. To the extent that any
such offsets, defenses or counterclaims may exist, the Borrower and each
Guarantor hereby WAIVES and RELEASES the Administrative Agent, the Issuing
Lender, the Lenders and their respective officers, representatives, counsel,
trustees, and directors 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. The Borrower and each
Guarantor shall execute and deliver to the Administrative Agent, the Issuing
Lender and each Lender such releases as the Administrative Agent, the Issuing
Lender or any Lender may request to confirm the foregoing.
b. The Borrower and each Guarantor hereby ratifies and confirms that the
Obligations (as modified hereby) are, and will continue to be, secured by the
Collateral and the Guarantor Collateral.
8. Conditions to Effectiveness. This Amendment shall not be effective until each
of the following conditions precedent have been fulfilled to the satisfaction of
the Administrative Agent and the Lenders:
a. This Amendment shall have been duly executed and delivered by the respective
parties hereto and shall be in form and substance satisfactory to the
Administrative Agent and each of the Lenders.
b. All action on the part of the Borrower and each Guarantor necessary for the
valid execution, delivery and performance by the Borrower and each Guarantor of
this Amendment shall have been duly and effectively taken and evidence thereof
satisfactory to the Administrative Agent and the Lenders shall have been
provided to the Administrative Agent and each of the Lenders.
c. UM Holdings Ltd. shall have executed and delivered its unconditional guaranty
of the Overadvance reasonably satisfactory in form and substance to the
Administrative Agent and the Lenders.
d. The Administrative Agent and the Lenders shall have received complete
financial disclosure from UM Holdings Ltd., the results of which shall be
reasonably satisfactory to the Administrative Agent and the Lenders. Such
financial disclosure will include, at a minimum, a balance sheet and income
statement. Together with the balance sheet, full schedules setting forth
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detailed descriptions of each of the assets reflected on the balance sheet will
be included. To the extent that any of the assets constitute investments in
non-publicly owned companies, financial information on each of those companies
will also be required. As to any cash and cash equivalents, UM Holdings Ltd.
will require details thereof including the names of any depository or brokerage
houses where these accounts are maintained.
e. The Borrower shall have paid to the Administrative Agent and Lenders all
expenses (including reasonable attorneys fees) and other amounts then due and
owing pursuant to the Credit Documents for which invoices have been presented as
of the date of execution hereof.
f. The Borrower and the Guarantors shall have provided such additional
instruments and documents to the Administrative Agent and the Lenders as the
Administrative Agent and the Administrative Agent's counsel may have reasonably
requested.
9. General.
a. This Amendment shall be binding upon the Borrower and the Guarantors and
their respective successors and assigns and shall enure to the benefit of the
Administrative Agent, the Lenders, and their respective successors and assigns.
b. Any determination that any provision of this Amendment or any application
thereof is invalid, illegal, or unenforceable in any respect in any instance
shall not affect the validity, legality, or enforceability of such provision in
any other instance, or the validity, legality, or enforceability of any other
provision of this Amendment.
c. No delay or omission by the Administrative Agent or any Lender in exercising
or enforcing any of its rights and remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Administrative Agent or any Lender of any of
its rights and remedies on any one occasion shall be deemed a waiver on any
subsequent occasion, nor shall it be deemed a continuing waiver.
d. This Amendment incorporates all discussions and negotiations among the
Borrower, the Guarantors, the Administrative Agent and the Lenders, either
express or implied, concerning the matters included herein, any custom, usage,
or course of dealings to the contrary notwithstanding. No such discussions,
negotiations, custom, usage, or course of dealings shall limit, modify, or
otherwise affect the provisions hereof. No modification, amendment, or waiver of
any provision of this Amendment or of any provision of any other agreement
between the Borrower, the Guarantors, the Administrative Agent or any Lender
shall be effective unless executed in writing by the party to be charged with
such modification, amendment and waiver.
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e. Except as modified hereby, all terms and conditions of the Credit Agreement
and the other Credit Documents remain in full force and effect, and the Borrower
and Guarantors hereby ratify and confirm all of the terms and conditions and
warranties and representations set forth therein, and shall continue to comply
therewith.
f. This Amendment shall be deemed to constitute a "Credit Document" for all
purposes under the Credit Agreement.
g. The Borrower and each Guarantor shall execute such instruments and documents
as the Administrative Agent and the Lenders may from time to time request in
connection with the Credit Agreement and the other Credit Documents, this
Amendment and the arrangements contemplated hereby.
h. The Agent and the Lenders acknowledge that the Borrower has satisfied its
obligations pursuant to Section 5.19 of the Credit Agreement by having caused UM
Holdings Ltd. To make a further subordinated loan in the amount of $500,000. The
Borrower acknowledges that such loan dated September 17, 2002 is subject to, and
subordinate as provided in, a certain Subordination Agreement dated as of July
24, 2002.
[signature blocks on next pages]
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It is intended that this Second Amendment take effect as a sealed instrument.
CYBEX INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
-------------------------
Title: Vice President
------------------------------
CYBEX CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
-------------------------
Title: Vice President
------------------------------
EAGLE PERFORMANCE SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
-------------------------
Title: Vice President
------------------------------
GENERAL MEDICAL EQUIPMENT, LTD.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
-------------------------
Title: Vice President
------------------------------
LUMEX BED SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
-------------------------
Title: Vice President
------------------------------
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CYBEX FITNESS GERATE VERTRIEBS,
GMBH
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
----------------------
Title: Vice President
-----------------------------
TECTRIX FITNESS EQUIPMENT, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------
Print Name: Xxxxxx X. Xxxxx, Xx.
----------------------
Title: Vice President
-----------------------------
AGREED AND ACCEPTED BY
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxx X. Xxxxxxxx
-------------------------------
Print Name: Xxx X. Xxxxxxxx
-----------------------
Title: Managing Director
----------------------------
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Print Name: Xxxxx X. Xxxxx
-----------------------
Title: Vice President
----------------------------
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Print Name: Xxxxxx X. Xxxxxxx
-----------------------
Title: Senior Vice President
----------------------------
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