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Exhibit 10.12
AMENDMENT NO. 5
TO
REVOLVING CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 5 ("Amendment") is entered into as of April
13, 1998, by and among XXXXXX-FIELD HEALTH PRODUCTS, INC., a corporation
organized under the laws of the State of Delaware ("Holdings"), XXXXXX-FIELD,
INC., a corporation organized under the laws of the State of New York ("Field"),
XXXXXX-FIELD EXPRESS, INC., a corporation organized under the laws of the State
of Delaware ("Express"), XXXXXX-FIELD TEMCO, INC., a corporation organized under
the laws of the State of New Jersey ("Temco"), XXXXXX-FIELD DISTRIBUTION, INC.,
a corporation organized under the laws of the State of Missouri
("Distribution"), XXXXXX-FIELD BANDAGE, INC., a corporation organized under the
laws of the State of Rhode Island ("Bandage"), XXXXXX-FIELD EXPRESS (PUERTO
RICO), INC., a corporation organized under the laws of the State of Delaware
("GFPR"), EVEREST & XXXXXXXX, INC., a corporation organized under the laws of
the State of California ("E & J"), LABAC SYSTEMS, INC., a corporation organized
under the laws of the State of Colorado ("LaBac"), MEDICAL SUPPLIES OF AMERICA,
INC., a corporation organized under the laws of the State of Florida
("Medapex"), HEALTH CARE WHOLESALERS, INC., a corporation organized under the
laws of the State of Georgia ("Health Care"), H C WHOLESALERS, INC., a
corporation organized under the laws of the State of Georgia ("HCW"), CRITICAL
CARE ASSOCIATES, INC., a corporation organized under the laws of the State of
Georgia ("Critical"), LUMEX/BASIC AMERICAN HOLDINGS, INC., a corporation
organized under the laws of the State of Delaware ("Lumex"), BASIC AMERICAN
MEDICAL PRODUCTS, INC., a corporation organized under the laws of the State of
Georgia ("Basic American"), LUMEX MEDICAL PRODUCTS, INC., a corporation
organized under the laws of the State of Delaware ("Lumex Medical"), PRISM
ENTERPRISES, INC., a corporation organized under the laws of the State of
Delaware ("Prism"), BASIC AMERICAN SALES AND DISTRIBUTION CO., INC., a
corporation organized under the laws of the State of Delaware ("Basic
Distribution"), PRISTECH, INC., a corporation organized under the laws of the
State of Delaware ("Pristech"), LUMEX SALES AND DISTRIBUTION CO., INC., a
corporation organized under the laws of the State of Delaware ("Lumex
Distribution") and MUL ACQUISITION CORP. II, a corporation organized under the
laws of the State of Delaware ("Mul Acquisition) (each a "Borrower" and
collectively "Borrowers"), the financial institutions which are now or which
hereafter become a party to (collectively, the "Lenders" and individually a
"Lender") the Loan Agreement (as defined below) and IBJ XXXXXXXX BUSINESS CREDIT
CORPORATION, a New York banking corporation ("IBJS"), as agent for Lenders
(IBJS, in such capacity, the "Agent").
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BACKGROUND
Borrowers, Lenders and Agent are parties to a Revolving Credit
and Security Agreement dated as of December 10, 1996, as amended by an Amendment
Letter dated May 15, 1997, Amendment No. 1 dated June 25, 1997, Amendment No. 2
dated July 9, 1997, Amendment No. 3 dated July 9, 1997, a Letter Amendment dated
September 18, 1997 and an Amendment No. 4 and Joinder Agreement dated December
30, 1997 (as further amended, supplemented or otherwise modified from time to
time, the "Loan Agreement") pursuant to which Lenders provide Borrowers with
certain financial accommodations.
Borrowers have requested that Agent and Lenders waive various
Events of Default that have occurred and to make certain amendments to the Loan
Agreement, and Agent and Lenders are willing to do so on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of any loan or advance or
grant of credit heretofore or hereafter made to or for the account of Borrowers
by Agent and/or Lenders, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.
2. Waiver. Subject to the satisfaction of the conditions
precedent set forth in Section 4 below, Agent and Lenders hereby waive the
Events of Default that have occurred as a result of Borrowers' non-compliance
with (i) Sections 6.6 and 6.7 of the Loan Agreement due to Borrowers' failure to
be in compliance with such sections for the period ending December 31, 1997 and
(ii) Section 9.9 of the Loan Agreement due to Borrowers' failure to deliver the
monthly financial statements referenced therein during 1997 and January and
February of 1998.
3. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, the Loan Agreement is amended
as follows:
(a) The following definitions in Section 1.2 are
amended in their entirety to provide as follows:
"Earnings Before Interest and Taxes" shall mean for
any period the sum of (i) net income (or loss) of Borrowers on a Consolidated
Basis for such period (excluding extraordinary gains and losses), plus (ii) all
interest expense of Borrowers on a Consolidated Basis for such period, plus
(iii) all charges against income of Borrowers on a Consolidated Basis for such
period for federal, state and local taxes incurred.
"Revolving Interest Rate" shall mean an interest rate
per annum equal to (a) the Alternate Base Rate with respect to Domestic Rate
Loans and (b) the sum of the Eurodollar Rate plus two and one-quarter percent
(2.25%) with respect to Eurodollar Rate Loans.
(b) The following definitions are added to Section
1.2:
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"Amendment No. 5" shall mean Amendment No. 5 to
Revolving Credit and Security Agreement dated as of April 13, 1998.
"Amendment No. 5 Effective Date" shall mean the date
all of the conditions set forth in Section 4 of Amendment No. 5 have been
satisfied.
"Availability Reserve" shall mean $20,000,000.
"Restructuring Charges" shall mean the restructuring,
merger and other charges incurred by Borrowers and write-offs of purchased
in-process research and development costs as recorded in the financial
statements of Holdings for the year ending December 31, 1997.
"Restructuring Charge Reserve" shall mean (x)
$12,000,000 less the amount of cash payments of Restructuring Charges made after
the Amendment No. 5 Effective Date with the reduction being effective with the
making of a Revolving Advance and written evidence from Borrowers to Agent that
all or a portion of such Revolving Advance was used for the purpose of making
the applicable cash payment or (y) such other amount as may be mutually agreed
upon by Holdings and Agent based upon the amount of Restructuring Charges
projected to be paid.
(c) Section 2.1(a) of the Loan Agreement is amended
in its entirety to provide as follows:
"2.1 (a) Revolving Advances. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and not jointly,
will make Revolving Advances to Borrowers in aggregate amounts outstanding at
any time equal to such Lender's Commitment Percentage of the lesser of (x) the
Maximum Revolving Advance Amount less the sum of (i) the aggregate amount of
outstanding Letters of Credit and Acceptances and Spot Contracts and (ii) the FX
Reserve and (iii) the Restructuring Charge Reserve or (y) an amount equal to the
sum of:
(i) up to 85%, subject to the provisions of
Section 2.1(b) hereof ("Receivables Advance
Rate"), of Eligible Receivables, plus
(ii) up to the lesser of (A) 60%, subject to the
provisions of Section 2.1(b) hereof
("Inventory Advance Rate"), of the value of
the Eligible Inventory (the Receivables
Advance Rate and the Inventory Advance Rate
shall be referred to collectively, as the
"Advance Rates") or (B) $40,000,000 in the
aggregate at any one time (inclusive of
amounts advanced pursuant to clause (iii)
below), plus
(iii) the product of (a) the aggregate amount of
outstanding trade Letters of Credit times
(b) the Inventory Advance Rate, minus
(iv) the aggregate amount of outstanding Letters
of Credit and Acceptances and Spot
Contracts, minus
(v) the FX Reserve, minus
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(vi) the Availability Reserve, minus
(vii) the Restructuring Charge Reserve, minus
(viii) such reserves as determined in good faith by
Agent from time to time in the exercise of
its discretion in a reasonable manner,
including, without limitation, reserves for
Liens permitted under subparagraphs (h) and
(i) under the definition of Permitted
Encumbrances.
The amount derived from the sum of (x) Sections
2.1(a)(y)(i) and (ii) and (iii) minus the sum of (y) Sections 2.1 (a)(y)(v) and
(vi) and (vii) and (viii) at any time and from time to time shall be referred to
as the "Formula Amount". The Revolving Advances shall be evidenced by the
secured promissory notes ("Revolving Credit Notes") substantially in the form
attached hereto as Exhibit 2.1(a).
At such time as (i) the Receivables and Inventory of
E & J Canada are subject to a first priority perfected security interest in
favor of Agent and (ii) the eligibility criteria set forth in this Agreement are
met (it being deemed for purposes of this determination that E & J Canada is a
"Borrower"), the determination of the Formula Amount shall include the Eligible
Receivables and Eligible Inventory of E & J Canada."
(d) Sections 6.6(d) and 6.6(e) are amended in their
entirety and Section 6.6(f) is added to the Loan Agreement to provide as
follows:
"(d) of not less than 0.80 to 1.00 at the end of the
fiscal quarter ending June 30, 1998 for the
immediately preceding six (6) month period;
(e) of not less than 1.00 to 1.00 at the end of the
fiscal quarter ending September 30, 1998 for the
immediately preceding nine (9) month period; and
(f) of not less than 1.00 to 1.00 at the end of the
fiscal quarter ending December 31, 1998, and at the
end of each fiscal quarter thereafter, in each case
with respect to the four (4) fiscal quarters then
ended."
(e) Section 6.7(b) is amended in its entirety and
Sections 6.7(c), 6.7(d) and 6.7(e) are added to the Loan Agreement to provide as
follows:
"(b) Cause EBITDA to be equal to or greater than
$5,000,000 at the end of the fiscal quarter ending
March 31, 1998, for the immediately preceding three
(3) month period;
(c) Cause EBITDA to be equal to or greater than
$10,000,000 at the end of the fiscal quarter ending
June 30, 1998 for the immediately preceding six (6)
month period;
(d) Cause EBITDA to be equal to or greater than
$16,000,000 at the end of the fiscal quarter ending
September 30, 1998 for the immediately preceding nine
(9) month period; and
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(e) Cause EBITDA to be equal to or greater than
$23,000,000 at the end of the fiscal quarter ending
December 31, 1998 and at the end of each fiscal
quarter thereafter, in each case with respect to the
four (4) fiscal quarters then ended."
(f) The last sentence of Section 13.1 is amended in
its entirety to provide as follows:
"In the event the Obligations are prepaid in full
prior to the last day of the Term (the date of such prepayment hereinafter
referred to as the "Early Termination Date"), Borrowers shall pay to Agent for
the pro rata benefit of Lenders (based on their Commitment Percentages) an early
termination fee in an amount equal to one percent (1.00%) of the Maximum
Revolving Advance Amount if the Early Termination Date occurs on or after the
Closing Date to and including June 10, 1999."
4. Conditions of Effectiveness. This Amendment shall become
effective upon satisfaction of the following conditions precedent: Agent shall
have received (i) eight (8) copies of this Amendment executed by Borrowers and
Required Lenders and consented and agreed to by Guarantor, (ii) a $50,000
Amendment Fee for the ratable benefit of Lenders which execute this Amendment,
(iii) resolutions authorizing Borrowers to enter into this Amendment and the
transactions contemplated hereby and (iv) such other certificates, instruments,
documents, agreements and opinions of counsel as may be required by Agent,
Lenders or their counsel, each of which shall be in form and substance
satisfactory to Agent, Lenders and their counsel.
5. Representations and Warranties. Each Borrower
hereby represents and warrants as follows:
(a) This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrowers and are
enforceable against Borrowers in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each
Borrower hereby reaffirms all covenants, representations and warranties made in
the Loan Agreement to the extent the same are not amended hereby and agree that
all such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and
is continuing or would exist after giving effect to this Amendment.
(d) Borrowers have no defense, counterclaim or offset
with respect to the Loan Agreement.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 3 hereof, each
reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement as amended hereby.
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(b) Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and
are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided in Section 2, operate as a
waiver of any right, power or remedy of Agent or Lenders, nor constitute a
waiver of any provision of the Loan Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.
(d) The Obligations under the Loan Agreement as
amended pursuant to this Amendment benefit fully from all collateral security
and guaranties with respect thereto.
7. Governing Law. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns and shall be governed by and construed in accordance with the laws of
the State of New York.
8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
9. Counterparts. This Amendment may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed an original
and all of which when taken together shall constitute one and the same
agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Amendment has been duly
executed as of the day and year first written above.
XXXXXX-FIELD HEALTH PRODUCTS, INC.
XXXXXX-FIELD, INC.
XXXXXX-FIELD EXPRESS, INC.
XXXXXX-FIELD TEMCO, INC.
XXXXXX-FIELD DISTRIBUTION, INC.
XXXXXX-FIELD BANDAGE, INC.
XXXXXX-FIELD EXPRESS (PUERTO RICO), INC.
EVEREST & XXXXXXXX, INC.
LABAC SYSTEMS, INC.
MEDICAL SUPPLIES OF AMERICA, INC.
HEALTH CARE WHOLESALERS, INC.
H C WHOLESALERS, INC.
CRITICAL CARE ASSOCIATES, INC.
LUMEX/BASIC AMERICAN HOLDINGS, INC.
BASIC AMERICAN MEDICAL PRODUCTS, INC
LUMEX MEDICAL PRODUCTS, INC.
PRISM ENTERPRISES, INC
BASIC AMERICAN SALES AND DISTRIBUTION
CO., INC.
PRISTECH, INC.
LUMEX SALES AND DISTRIBUTION CO., INC.
MUL ACQUISITION CORP. II
By: /s/ Xxxxx Xxxxxxxx
_________________________________
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer of each
of the foregoing corporations
ATTEST:
/s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President, General Counsel
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CONSENTED AND AGREED TO:
EVEREST & XXXXXXXX CANADIAN LIMITED
By:/s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------
Title: Vice President, General Counsel
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IBJ XXXXXXXX BUSINESS CREDIT CORPORATION,
as Lender and as Agent
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice President
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment Percentage: 25.00%
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: /s/The Bank
------------------------------
Name:
-----------------------------
Title:
-----------------------------
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Commitment Percentage: 25.00%
BTM CAPITAL CORPORATION
By: /s/ The Bank
------------------------------
Name:
-----------------------------
Title:
----------------------------
000 Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Commitment Percentage: 25.00%
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DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ The Bank
------------------------------
Name:
----------------------------
Title:
---------------------------
Address:
-------------------------
---------------------------------
Commitment Percentage: 25.00%
