EXHIBIT 10(cc)
FIRST AMENDMENT
TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT, dated as of August 1, 2003 (this "FIRST
AMENDMENT"), is by and among CANTEL MEDICAL CORP., a Delaware corporation (the
"BORROWER"), the Lenders and Fleet National Bank ("FLEET"), as the Initial
Issuing Bank, the Swing Line Bank and the Administrative Agent for itself and
the Lenders (in such capacity, together with its successors in such capacity,
the "ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS
(A) The Borrower, the Lenders and Fleet National Bank, as the Initial
Issuing Bank, the Swing Line Bank, the Administrative Agent and PNC Bank,
National Association, as Documentation Agent, are parties to the Credit
Agreement, dated as of September 7, 2001 (as amended to the date hereof, the
"CREDIT AGREEMENT").
(B) The Borrower has requested that the Lenders consent to (i) the
acquisition (the "MAR COR ACQUISITION") of Mar Cor Services, Inc. d/b/a Mar Cor
Medical Services Inc., a Pennsylvania corporation ("MAR COR") by the Borrower,
the acquisition of Biolab Equipment Atlantic, Ltd., a Pennsylvania corporation
("XXXX") by Borrower (the "XXXX ACQUISITION") and the acquisition of Biolab
Equipment Ltd., a Canadian corporation, Biolab Equipment Canada Ltd., a Canadian
corporation and Biolab Equipment Quebec Ltd., a Canadian corporation ("BEQL") by
Carsen Group Inc. (the "BIOLAB GROUP ACQUISITION" and collectively, with the Mar
Cor Acquisition and the XXXX Acquisition, the "ACQUISITIONS"); (ii) the increase
of the amount outstanding under the Term A Loan from $21,000,000 to $25,000,000
and (iii) the increase of Debt permitted pursuant to the Canadian Credit
Agreement from $5,000,000 to $7,000,000.
(C) The Borrower has requested that the Lenders amend the Credit
Agreement as more fully set forth below.
(D) The Administrative Agent and the Lenders are willing to consent
to the Acquisitions, the increase of the amount outstanding under the Term A
Loan, the increase of Debt permitted pursuant to the Canadian Credit Agreement
and to amend the Credit Agreement on the terms and conditions set forth herein.
(E) The terms defined in the Credit Agreement and not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1. Consents to Acquisitions, Term A Borrowing Increase and Term A
Advance.
SECTION 1.1. Notwithstanding the provisions of Section 6.4 of the Credit
Agreement, the Administrative Agent and the Lenders hereby consent to the
Acquisitions.
SECTION 1.2. The consent set forth in Section 1.1 of this First Amendment
is subject to the satisfaction of each of the conditions precedent set forth in
Section 5 of this First Amendment and shall be limited precisely as written and
shall not be deemed to (a) be a waiver, amendment or modification of any term or
condition of the Credit Agreement or any other Loan Document, except as set
forth in this Article 1 (subject to the terms and conditions set forth herein),
or (b) prejudice any right, power or remedy which the Administrative Agent or
any Lender Party now has or may have in the future under or in connection with
the Credit Agreement or any other Loan Document.
SECTION 1.3. TERM A ADVANCE. Each Term A Lender severally agrees on the
terms and conditions set forth herein to make a single advance to the Borrower
on the First Amendment Closing Date in an amount equal to the difference between
such Lender's Term A Commitment and the principal amount of the Term A Loan
outstanding on the date hereof.
ARTICLE 2. Amendments to Credit Agreement.
This First Amendment shall be deemed to be an amendment to the Credit
Agreement, and shall not be construed in any way as a replacement therefor. All
of the terms and provisions of this First Amendment, including, without
limitation, the representations and warranties set forth herein, are hereby
incorporated by reference into the Credit Agreement as if such terms and
provisions were set forth in full therein. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in the Credit
Agreement. The Credit Agreement is hereby amended in the following respects:
SECTION 2.1. Schedule I, COMMITMENTS AND APPLICABLE LENDING OFFICES, of
the Credit Agreement is hereby amended so that such Schedule shall be as set
forth in EXHIBIT A to this First Amendment;
SECTION 2.2. Schedule II of Annex A to Exhibit B, FORM OF BORROWING BASE
CERTIFICATE, of the Credit Agreement is hereby amended so that such Schedule
shall be as set forth in EXHIBIT B to this First Amendment.
SECTION 2.3. Section 1.1, CERTAIN DEFINED TERMS, of the Credit Agreement
is amended as follows:
(a) Each of the following definitions is amended and restated to read
in its entirety as follows:
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
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"REVOLVING CREDIT TERMINATION DATE" means the earlier of (a) five
years from the First Amendment Closing Date and (b) the Termination Date.
(b) The existing definition of "ELIGIBLE INVENTORY" is hereby amended
by the following:
(i) inserting the following parenthetical after the words
"means Inventory":
"(including, without limitation, Inventory that constitutes raw
materials or work in process)"
(ii) deleting the "," after the conclusion of the parenthetical
in clause (c)(iii)(C) and inserting the word "or" in lieu thereof;
(iii) deleting in its entirety clause "(c)(iii)(D)" thereof; and
(iv) changing the clause designation "(c)(iii)(E)" contained
therein to "(c)(iii)(D)".
(c) The existing definition of "INTEREST PERIOD" is amended by
deleting the word "or" after the word "three" and replacing it with a ","
in the second sentence of the initial paragraph and inserting after the
word "six", the words "or twelve".
(d) The following definitions are inserted in proper alphabetical
order:
"COMPLIANCE CERTIFICATE" with respect to the Borrower and its Subsidiaries,
a certificate to the effect that: (a) as of the effective date of the
certificate, no Default or Event of Default under this Agreement exists or would
exist after giving effect to the action intended to be taken by any Loan Party,
as described in such certificate, including, without limitation, that the
covenants set forth in ARTICLE 8 hereof would not be breached after giving
effect to such action, together with a calculation in reasonable detail, and in
form reasonably satisfactory to the Administrative Agent, of such compliance,
and (b) the representations and warranties contained in ARTICLE 4 hereof are
true and with the same effect as though such representations and warranties were
made on the date of such certificate, unless stated to relate to a specific
earlier date in which case such specified representations and warranties shall
be true and correct as of such earlier date, and, except for changes in the
ordinary course of business not prohibited by this Agreement, none of which,
either singly or in the aggregate, have had a Material Adverse Change on the
Borrower and its Subsidiaries taken as a whole, which certificate shall be
executed and delivered by the chief financial officer of the Borrower.
"FIRST AMENDMENT" means the First Amendment dated as of August 1, 2003 by
and among Borrower, the Lenders and Fleet.
"FIRST AMENDMENT CLOSING DATE" shall mean the date on which all of the
conditions in Article 5 of the First Amendment have been meet.
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"IRS" means the Internal Revenue Service, and any governmental authority
succeeding to any of its principal functions under the Internal Revenue Code.
"NON-U.S. LENDER" has the meaning specified in Section 2.12(e).
"PERMITTED ACQUISITIONS" means any acquisition by the Borrower or any of
the Borrower's Subsidiaries of all or substantially all of the assets or the
capital stock of any Person (or segment of such Person's business) which either
(a) has been consented to in writing by the Administrative Agent and the
Required Lenders, or (b) complies with each of the following: (i) such Person
(or segment of such Person's business) is engaged in substantially the same or
similar line of business as the Borrower or any of its Subsidiaries, (ii) the
aggregate cash consideration payable and Debt assumed in respect of all such
Permitted Acquisitions shall not exceed $5,000,000, during the term of the
Credit Agreement, (iii) such Person (or segment of such Person's business) on a
consolidated basis with its Subsidiaries being acquired in the proposed
acquisition had positive EBITDA for the twelve (12) month period ending on the
last day of the calendar month immediately preceding the closing of such
proposed acquisition, (iv) the Borrower and its Subsidiaries would have been in
compliance on a pro forma consolidated basis after giving effect to such
Permitted Acquisition, with the financial covenants contained herein, recomputed
for the 12 month period ending on the most recent April 30, July 31, October 31
or January 31, as the case may be, as if such Permitted Acquisition had occurred
on the first day of such 12 month period, (v) after giving effect to the
proposed acquisition, the Revolving Credit Commitments of all Lenders MINUS the
sum of (a) Revolving Advances; (b) Letter of Credit Advances; (c) Swing Line
Advances; PLUS (d) the aggregate Available Amount of all Letters of Credit at
such time shall equal at least $5,000,000, (vi) the Borrower shall give the
Administrative Agent and the Lenders not less than ten (10) Business Days prior
written notice of its intention to make a Permitted Acquisition, such notice to
include the proposed amounts, date and form of the proposed transaction, a
reasonable description of the stock or assets to be acquired and the location of
all assets, a description and calculation in reasonable detail of the pro forma
adjustments to EBITDA of the target of such acquisition, and a calculation in
reasonable detail of the pro forma effect of such acquisition on matters covered
by the financial covenants contained herein, (vii) concurrently with the making
of a Permitted Acquisition, the Borrower shall, as additional collateral
security for the Obligations, grant or cause to be granted to the Administrative
Agent for the ratable benefit of the Lenders, prior liens on and security
interests (subject to Permitted Liens existing with respect to such assets at
the time of the Permitted Acquisition) in any of the acquired assets by the
execution and delivery to the Administrative Agent of such agreements,
instruments and documents as shall be reasonably satisfactory in form and
substance to the Administrative Agent, and (viii) the Borrower shall not permit
to be made any acquisition at any time during which a Default or an Event of
Default shall exist and be continuing or would exist after giving effect to such
acquisition and the Borrower shall have delivered to the Administrative Agent a
Compliance Certificate effective as of the date of consummation of such
acquisition.
"TREASURY REGULATIONS" means the regulations from time to time promulgated
under the Internal Revenue Code.
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SECTION 2.4. Section 2.4, REPAYMENT OF ADVANCES, of the Credit Agreement
is amended by deleting the aggregate outstanding principal amounts of the Term A
Advance for the periods ending on September 30, 2003 and all periods thereafter
and replacing them with the following:
Date Amount
---- ------
September 30, 2003 $ 750,000.00
December 31, 2003 $ 750,000.00
March 31, 2004 $ 750,000.00
June 30, 2004 $ 750,000.00
September 30, 2004 $ 750,000.00
December 31, 2004 $ 750,000.00
March 31, 2005 $ 750,000.00
June 30, 2005 $ 750,000.00
September 30, 2005 $ 1,250,000.00
December 31, 2005 $ 1,250,000.00
March 31, 2006 $ 1,250,000.00
June 30, 2006 $ 1,250,000.00
September 30, 2006 $ 1,500,000.00
December 31, 2006 $ 1,500,000.00
March 31, 2007 $ 1,500,000.00
June 30, 2007 $ 1,500,000.00
September 30, 2007 $ 2,000,000.00
December 31, 2007 $ 2,000,000.00
March 31, 2008 $ 2,000,000.00
June 30, 2008 All remaining outstanding
principal
SECTION 2.5. Section 2.5, TERMINATION OR REDUCTION OF THE COMMITMENTS,
subsection (b) clause (i) of the Credit Agreement is amended by deleting the
proviso "PROVIDED, HOWEVER, that the Term A Commitments shall terminate, and all
Advances made thereunder shall be repaid in full, no later than the fifth
anniversary of the Closing Date." and replacing it with the proviso "PROVIDED,
HOWEVER, that the Term A Commitments shall terminate, and all Advances made
thereunder shall be repaid in full, no later than June 30, 2008."
SECTION 2.6. Section 2.12, TAXES, of the Credit Agreement is amended as
follows:
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(i) Subsection 2.12 "(a)" is amended by inserting the following
after the word "Notes" in the last parenthetical of the first sentence of such
subsection (a):
", together with any interest, additions, or similar amounts
with respect thereto and any interest in respect of such additions or
penalties,".
(ii) Subsection 2.12 "(e)" is amended and restated in its entirety
as follows:
"(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States (a "Non-U.S. Lender") shall, on or
prior to the date of its execution and delivery of this Agreement in the
case of each Initial Lender or Initial Issuing Bank, as the case may be,
and on the date of the Assignment and Acceptance pursuant to which it
became a Lender Party in the case of each other Lender Party, and from time
to time thereafter as requested in writing by the Borrower or the
Administrative Agent (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide each of the Administrative Agent
and the Borrower with two (2) original Internal Revenue Service forms
X-0XXX, X-0XXX or W-8IMY, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax
on payments pursuant to this Agreement or the Notes. A Form W-8BEN
completed and delivered by (i) certain foreign trusts, or (ii) persons
claiming an exemption or reduced rate of withholding at source under an
income tax treaty will not be considered duly completed unless the Form
W-8BEN contains such Person's U.S. taxpayer identification number. A
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest" shall deliver a statement substantially in the form of EXHIBIT C
to the First Amendment (a "Certificate of Exemption") and a Form W-8BEN
(certifying as to beneficial ownership) or successor form thereto or any
subsequent versions thereof properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from U.S. federal withholding
tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Thereafter and from time to time, each such Non-U.S. Lender
shall (A) promptly submit to the Administrative Agent such additional duly
completed and signed copies of one of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws
and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from, or
reduction of, United States withholding taxes in respect of all payments to
be made to such Non-U.S. Lender by the applicable Loan Party pursuant to
this Agreement and (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction. If such Non-U.S. Lender fails to deliver the above
forms or other documentation, then the Administrative Agent may withhold
from any interest payment to such Non-U.S. Lender an amount equivalent to
the applicable withholding tax imposed by Sections 1441 and 1442 of the
Code, without reduction, provided that the applicable Loan Party shall not
be required to increase any such amounts payable to any Non-U.S. Lender
pursuant to SECTION 2.12, unless, as a result of any change in an
applicable law,
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treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Non-U.S. Lender
is no longer properly entitled to deliver forms, certificates or other
evidence as to such Non-U.S. Lender's entitlement to exemption from, or
reduction of, U.S. withholding tax.".
(iii) Subsection 2.12 "(f)" is deleted in its entirety and replaced
with subsection 2.12 "(g)", which subsection 2.12(g) is hereby amended by
changing the subsection designation "(g)" contained therein to "(f)".
(iv) Subsection 2.12 is further amended by inserting new
subsections "(g)", "(h)" and "(i)" after subsection "(f)", which
subsections (g), (h) and (i) shall read as follows:
"(g) If any Non-U.S. Lender claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing
IRS Form W-8BEN or W-8IMY (or any successor form) or claims an exemption
from withholding tax by providing an IRS Form W-8ECI (or any successor
form) and such Non-U.S. Lender sells, assigns or (other than pursuant to
CLAUSE (h) below) otherwise transfers all or part of the Obligations of a
Lender Party to a transferee Lender, such Non-U.S. Lender agrees to notify
the Administrative Agent of the percentage amount in which it is no longer
the beneficial owner of such Obligations of a Lender Party. To the extent
of such percentage amount, the Administrative Agent will treat such
Non-U.S. Lender's IRS Form W-8BEN, W-8IMY or W-8ECI (or any successor form)
as no longer valid.
(h) If any Non-U.S. Lender claims an exemption from,
or reduction of, withholding tax under a United States tax treaty by
providing IRS Form W-8BEN or W-8IMY (or any successor form) or claims an
exemption from withholding tax by providing Form W-8ECI (or any successor
form) and such Non-U.S. Lender grants a participation in the Obligations of
a Lender Party to a transferee Lender, such Non-U.S. Lender agrees to
notify the Administrative Agent of the percentage amount in which it is no
longer the beneficial owner of such Obligations of a Lender Party, and such
Non-U.S. Lender agrees to undertake responsibility to provide to the
Administrative Agent such forms and documentation (including IRS Form
W-8IMY and forms and documentation provided by each participant to the
extent required by the IRS) to enable each Lender Party to comply with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(i) If the IRS or any other governmental authority of
the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax or any other amount from
amounts paid to or for the account of any Non-U.S. Lender (because the
appropriate form was not delivered or was not properly executed, or because
such Non-U.S. Lender failed to notify the Administrative Agent of a change
in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Non-U.S. Lender
shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax or otherwise,
including any interest, additions, penalties or similar amounts, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Administrative Agent under this SECTION 2.12, together with all costs
and
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expenses (including attorney fees and expenses). The obligation of the
Lenders under this CLAUSE (i) shall survive the payment of all Obligations
and the resignation or replacement of the Administrative Agent.".
SECTION 2.7. Section 2.14, USE OF PROCEEDS, of the Credit Agreement is
amended to rename existing clauses (c) as (d), and to insert a new clause (c)
which shall read as follows:
"(c) to finance, in part, each of the Mar Cor Acquisition and the XXXX
Acquisition, to pay fees and expenses incurred in connection with each of the
Mar Cor Acquisition and the XXXX Acquisition,"
SECTION 2.8. Section 4.16, TAXES, of the Credit Agreement, is amended by
inserting new subsection (f), which subsection (f) shall read as follows:
"(f) TAX SHELTER REGISTRATION. The Borrower and its
Subsidiaries do not intend to treat any of the transactions contemplated by
any Loan Document as being a "reportable transaction" within the meaning of
Treasury Regulation section 1.6011-4.".
SECTION 2.9. Section 5.7, VISITATION RIGHTS, is amended by inserting new
subsection (c), which subsection (c) shall read as follows:
"(c) Permit the Administrative Agent and the Lender Parties
to conduct a Collateral audit within forty-five (45) days after the First
Amendment Closing Date, at the sole cost and expense of the Borrower."
SECTION 2.10. A new Section 5.17, TAX SHELTER REGISTRATION, is added at the
conclusion of Article V to read in its entirety as follows:
"Section 5.17 TAX SHELTER REGISTRATION.
Borrower shall promptly notify the Administrative Agent of any
action (or the intention to take an action) inconsistent with the
representation in Section 4.16 (f) and shall within 10 days of such notice
provide a duly completed IRS Form 8886 or successor form. The Borrower
acknowledges and agrees that the Lenders and the Administrative Agent may
treat the transactions contemplated hereby (or any single transaction
contemplated hereby) as part of a transaction that is subject to Treasury
Regulation Section 1.6011-4 or Treasury Regulation Section 301.6112-1, and
such Lender or Administrative Agent, as applicable, file such returns or
may maintain the lists and other records required by such Treasury
Regulations. To the extent a Lender or Administrative Agent determines to
maintain such list, the Borrower and its Subsidiaries shall cooperate with
the Lender and Administrative Agent in obtaining any information required
under such Treasury Regulation.".
SECTION 2.11. Section 6.2, DEBT, of the Credit Agreement (i) subsection (d)
is hereby amended by deleting the number "$5,000,000.00" and replacing it with
the number "$7,000,000.00".
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(ii) a new subsection (e) is added to read as follows:
"(e) Debt assumed in connection with a Permitted Acquisition".
SECTION 2.12. Section 6.4, FUNDAMENTAL CHANGES, of the Credit Agreement is
amended and restated in its entirety to read as follows:
"Section 6.4 FUNDAMENTAL CHANGES.
(a) Merge into or consolidate with any Person or permit any
Person to merge into it, or permit any of its Subsidiaries to do so, except that
so long as no Default or Event of Default shall have occurred and be continuing
and so long as no Default or Event of Default would result therefrom, (A) the
Borrower or any Wholly-Owned Subsidiaries of the Borrower may make Permitted
Acquisitions; (B) any Subsidiary of the Borrower may consolidate with or merge
into the Borrower or any Wholly-Owned Subsidiary of the Borrower if the Borrower
or such Wholly-Owned Subsidiary will be the surviving corporation; and (C) any
Subsidiary may sell, lease, transfer, contribute or otherwise dispose of its
assets, in whole or in part, to Borrower or any other Wholly-Owned Subsidiary of
the Borrower, and may, following any such disposition in whole, liquidate and
dissolve and the Borrower may transfer, contribute or otherwise dispose of its
assets in whole or in part to any Wholly-Owned Subsidiary of the Borrower,
PROVIDED that the Borrower shall have given the Administrative Agent not less
than ten (10) Business Days prior written notice and prior to effecting such
merger, Borrower shall take all actions, if any, reasonably required by the
Administrative Agent to preserve the Administrative Agent's security interest in
the Collateral and all other rights and remedies of the Lenders and the
Administrative Agent under the Loan Documents or otherwise then existing by law;
(b) Except as otherwise expressly permitted herein, liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution), convey,
sell, assign, lease, transfer or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or substantially all of its property, business
or assets, or permit any of its Subsidiaries to do any of the foregoing; or
(c) Except for Permitted Acquisitions as expressly permitted
herein, acquire or permit any Subsidiary to acquire all or substantially all of
the assets of any other Person (including capital stock).
SECTION 2.13. Section 6.6, INVESTMENT IN OTHER PERSONS, of the Credit
Agreement is amended as follows:
(i) adding a new subsection "(j)" to read as follows:
"(j) Permitted Acquisitions."
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(ii) deleting the word "and" at the end of "(h)"; and
(iii) deleting the "." at the end of "(i)"; and replacing it
with "; and".
SECTION 2.14. Section 6.17, CAPITAL EXPENDITURES, of the Credit Agreement
is amended as follows:
(i) deleting the number "$4,000,000.00" and replacing it
with the words "the aggregate amount".
(ii) deleting the "." and adding the words "as set forth
below:" and inserting the following chart:
August 1, 2002 through July 31, 2003 $ 5,000,000
August 1, 2003 through July 31, 2004 $ 5,500,000
August 1, 2004 through July 31, 2005 $ 6,000,000
August 1, 2005 through July 31, 2006 $ 6,500,000
August 1, 2006 through July 31, 2007 $ 7,000,000
SECTION 2.15. Section 8.1 of the Credit Agreement is amended by deleting
the minimum EBITDA covenant levels for the period ending on July 31, 2003 and
all periods thereafter and replacing them with the following:
Four Fiscal Quarters ending on: Minimum EBITDA
------------------------------- --------------
July 31, 2003 $ 16,500,000
October 31, 2003 $ 16,500,000
January 31, 2004 $ 18,000,000
April 30, 2004 $ 18,000,000
July 31, 2004 $ 18,000,000
October 31, 2004 $ 19,000,000
January 31, 2005 $ 19,000,000
April 30, 2005 $ 19,000,000
July 31, 2005 $ 19,000,000
October 31, 2005 $ 22,000,000
January 31, 2006 $ 22,000,000
April 30, 2006 $ 22,000,000
July 31, 2006 $ 22,000,000
October 31, 2006 $ 23,500,000
January 31, 2007 $ 23,500,000
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April 30, 2007 $ 23,500,000
July 31, 2007 $ 23,500,000
and each fiscal quarter thereafter
SECTION 2.16. Section 8.2 of the Credit Agreement is amended by deleting
the maximum Ratio of Consolidated Debt to EBITDA covenant levels for the periods
ending on July 31, 2003 and all periods thereafter and replacing them with the
following:
Four Fiscal Quarters ending on: Ratio
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July 31, 2003 2.00
October 31, 2003 1.75
January 31, 2004 1.75
April 30, 2004 1.75
July 31, 2004 1.75
October 31, 2004 1.50
January 1, 2005 1.50
April 30, 2005 1.50
July 31, 2005 1.50
July 31, 2005 and each fiscal quarter thereafter 1.50
Section 8.3 of the Credit Agreement is amended by deleting the Fixed Charge
Interest Coverage Ratio covenant levels for the periods ending on April 30, 2003
and all periods thereafter and replacing them with the following:
Four Fiscal Quarters ending on: Ratio
------------------------------- -----
July 31, 2003 1.50
October 31, 2003 1.50
January 31, 2004 1.50
April 30, 2004 1.50
July 31, 2004 1.50
October 31, 2004 1.50
January 31, 2005 1.50
April 30, 2005 1.50
July 31, 2005 and each Fiscal Quarter thereafter 1.50
SECTION 2.17. Section 8.4 of the Credit Agreement is amended and restated
in its entirety to read as follows:
"Section 8.4 MINIMUM AVAILABLE ADJUSTED U.S. CASHFLOW COVERAGE RATIO. At
all times, Borrower must maintain as of the end of each fiscal quarter a ratio
of (i) U.S. EBITDA for the most recently completed four fiscal quarters of the
Borrower, PLUS dividends received from
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Foreign Subsidiaries (net of applicable withholding taxes), to (ii) the sum of
the Borrower and its Subsidiaries U.S. Fixed Charges during such period, of not
less than the ratio as provided below:
Four Fiscal Quarters ending on: Ratio
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July 31, 2003 1.25
October 31, 2003 1.10
January 31, 2004 1.10
April 30, 2004 1.10
July 31, 2004 1.10
October 31, 2004 1.25
January 31, 2005 1.25
April 30, 2005 1.25
July 31, 2005 and each Fiscal Quarter thereafter 1.25
SECTION 2.18. Section 11.7, ASSIGNMENTS AND PARTICIPATIONS, of the Credit
Agreement is amended by:
(i) inserting the following new paragraph after the existing
paragraph of subsection (d):
"Notwithstanding anything to the contrary contained in the
previous paragraph of this SECTION 11.7(d), the Commitments and
Advances of any Lender Party (including the Notes evidencing the
Commitments of and the Advances owing to any such Lender Party) are
registered obligations and the right, title and interest of the
Lenders and their assignees in and to such Commitments and Advances
shall be transferable only upon recordation of such transfer and of
the transferee and its interest in and to the Commitments and the
Advances in the Register. No transfer by a Lender or an assignee of
any interest in any of the Commitments and the Advances shall be
permitted or effective unless and until the transfer and the
transferee's interest in the Commitments and the Advances are recorded
in the Register. All recordations of transfer and of the transferee's
interest shall be conclusive, absent manifest error, as to beneficial
ownership of interests in the Commitments and the Advances. A Note
shall only evidence the Lender's or an assignee's right, title and
interest in and to the related Commitment and the Advance, and in no
event is any such Note to be considered a bearer instrument or
obligation. This SECTION 11.7(d) shall be construed so that the
Commitments and the Advances are at all times maintained in
"registered form" within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Code and any related Treasury Regulations (or any
successor provisions of the Code or such Regulations). Solely for
purposes of this SECTION _11.7(d), and for U.S. federal income tax
purposes only, the Administrative Agent shall act as the Lender
Parties' agent for purposes of maintaining such notations of transfer
and recordation of the beneficial ownership of the transferee in the
Register. The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Lender Parties and
each of their respective Subsidiaries, the Administrative Agent and
the Lenders may treat each Person whose name is
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recorded in the Register (other than a participant) as a Lender
hereunder for all purposes hereof.".
SECTION 2.19. Section 11.10, CONFIDENTIALITY, of the Credit Agreement is
amended by adding the following new paragraph:
"Notwithstanding anything in this Agreement to the contrary,
the Administrative Agent, the Lenders, the Borrowers and all other
parties to the transactions contemplated hereunder hereby agree that
all parties (and each employee, representative, or other agent of such
parties) may disclose to any and all persons, without limitation of
any kind, the U.S. "tax treatment" or "tax structure" (in each case,
within the meaning of Treasury Regulation section 1.6011-4) of the
transactions contemplated hereunder and all materials of any kind
(including opinions or other tax analyses) that are provided to such
parties relating to such U.S. "tax treatment" and "tax structure" (in
each case, within the meaning of Treasury Regulation section
1.6011-4); PROVIDED, that to the extent any document contains
information that relates to the "tax treatment" or "tax structure" and
contains other information, this paragraph shall only apply to the
information relating to the "tax treatment" or "tax structure." The
intent of this provision is that the transactions contemplated by this
Agreement are not treated as having been offered under conditions of
confidentiality for purposes of Treasury Regulation section
1.6011-4(b)(3) and shall be construed in a manner consistent with such
purpose.".
ARTICLE 3. Confirmations and References.
SECTION 3.1. CONTINUING EFFECT. The Credit Agreement and the other Loan
Documents delivered in connection therewith are, and shall continue to be, in
full force and effect, and are hereby ratified and confirmed in all respects,
except that, on and after the date hereof, (a) all references in the Loan
Documents (i) to the "Credit Agreement," "thereto," "thereof," "thereunder" or
words of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended hereby and (ii) to the "Loan Documents" shall be deemed to
include this First Amendment; and (b) all references in the Credit Agreement to
"this Agreement," "hereto," "hereof," "hereunder" or words of like import
referring to the Credit Agreement shall mean the Credit Agreement as amended
hereby.
SECTION 3.2. INTERCREDITOR AGREEMENT. The Intercreditor Agreement shall
remain in full force and effect, and is hereby ratified and confirmed in all
respects.
SECTION 3.3. CONFIRMATION OF LIENS. The Liens granted pursuant to the
Collateral Documents secure, without limitation, the Obligations of the Borrower
and its Subsidiaries to the Lenders and the Administrative Agent under the
Credit Agreement as amended by this First Amendment. The term "Obligations" as
used in the Collateral Documents (or any other term used therein to refer to the
liabilities and obligations of the Borrower and its Subsidiaries to the Lenders
and the Administrative Agent), include, without limitation, Obligations to the
Lenders and the Administrative Agent under the Credit Agreement as amended by
this First Amendment.
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and each other Loan Party hereby represents and
warrants to the Lenders and the Administrative Agent that:
SECTION 4.1. EXISTING REPRESENTATIONS. As of the date hereof and after
giving effect to this First Amendment, each and every one of the representations
and warranties set forth in the Loan Documents shall, after giving effect to
each of the Mar Cor Acquisition and the XXXX Acquisition, be true, accurate and
complete in all respects and with the same effect as though made on the date
hereof, and each shall hereby be incorporated herein in full by reference as if
restated herein in its entirety, except for any representation or warranty
limited by its terms to a specific date and except for changes contemplated by
this First Amendment or in the ordinary course of business which are not
prohibited by the Credit Agreement (as amended hereby) and which shall not,
either singly or in the aggregate, result in a Material Adverse Change.
SECTION 4.2. NO DEFAULT. As of the date hereof, there exists no Default or
Event of Default under the Credit Agreement, as amended hereby, and no event
which, with the giving of notice or lapse of time, or both, would constitute a
Default or Event of Default.
SECTION 4.3. POWER, AUTHORITY, CONSENTS. The Borrower and each of its
Subsidiaries has the power to execute, deliver and perform the Credit Agreement,
as amended by this First Amendment and to consummate each of the transactions
consented to in Section 1 hereof. The Borrower and each of its Subsidiaries has
taken all necessary action to authorize the execution, delivery and performance
of this First Amendment and the consummation of each of the transactions
consented to in Section 1 hereof. No consent or approval of any Person other
than those that have been obtained is required in connection with the execution,
delivery or performance by the Borrower or any of its Subsidiaries of this First
Amendment or the consummation of any of the transactions consented to in
Section 1 hereof.
SECTION 4.4. NO VIOLATION OF LAW OR AGREEMENTS. The execution, delivery
and performance by the Borrower and each of its Subsidiaries of this First
Amendment and the consummation of each of the transactions consented to in
Section 1 hereof, will not violate any provision of law presently in effect and
will not conflict with or result in a breach of any order, writ, injunction,
ordinance, resolution, decree, or other similar document or instrument presently
in effect of any court or governmental authority, bureau or agency, domestic or
foreign, or the certificate of incorporation or by-laws of the Borrower or such
Subsidiary, or create (with or without the giving of notice or lapse of time, or
both) a default under or breach of any agreement, bond, note or indenture
presently in effect to which the Borrower or any Subsidiary is a party, or by
which any of them is bound or any of their properties or assets is affected, or
result in the imposition of any Lien of any nature whatsoever upon any of the
properties or assets owned by or used in connection with the business of the
Borrower or any of its Subsidiaries, except for the Liens created and granted
pursuant to the Collateral Documents as acknowledged and confirmed herein.
SECTION 4.5. BINDING EFFECT. This First Amendment has been duly executed
and delivered by each of the Borrower, Mar Cor and XXXX and constitutes the
valid and legally
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binding obligation of each of the Borrower, Mar Cor and XXXX, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to or affecting the enforcement of creditors' rights generally, and
except that the remedy of specific performance and other equitable remedies are
subject to judicial discretion.
ARTICLE 5. CONDITIONS TO AMENDMENT.
The effectiveness of the amendments contained in Article 1 shall be subject
to the fulfillment of the following conditions precedent:
SECTION 5.1. AMENDMENT. Each of the Borrower, Mar Cor and XXXX and each of
the Lenders shall have executed and delivered to the Administrative Agent this
First Amendment.
SECTION 5.2. NO DEFAULT. There shall exist no Event of Default or Default
under the Credit Agreement.
SECTION 5.3. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Article 4 hereof shall be true and correct in all
material respects on the date hereof as if made on the date hereof.
SECTION 5.4. REPLACEMENT TERM A PROMISSORY NOTES. The Borrower shall have
delivered Replacement Term A Promissory Notes to the Administrative Agent for
the account of each of the Lenders, in the respective face principal amounts as
set forth on Exhibit A hereto.
SECTION 5.5. RESOLUTIONS. Each of the Borrower, Mar Cor and XXXX shall
have delivered certified copies of resolutions of its respective Board of
Directors approving the Acquisition, this Agreement, the Notes, and each other
Loan Document and any document relating to the Acquisition to which it is or is
to be a party, and of all documents evidencing other necessary corporate action
and governmental and other third party approvals and consents, if any, with
respect to the Acquisition, this Agreement, the Notes, and each other Loan
Document and document relating to the Acquisition.
SECTION 5.6. CHARTER DOCUMENTS. Each of the Borrower, Mar Cor and XXXX
shall have delivered a copy of a certificate of the Secretary of State of the
jurisdiction of its respective incorporation, dated within twenty (20) Business
Days prior to the date hereof, listing the charter of the Borrower and each
amendment thereto on file in its office and certifying that (1) such amendments
are the only amendments to the Borrower's, Mar Cor's and XXXX'x charter, as the
case may be, on file in its office, (2) each of the Borrower, Mar Cor and XXXX
has paid all franchise taxes to the date of such certificate and (3) each of the
Borrower, Mar Cor and XXXX is duly incorporated and in good standing under the
laws of the State of the jurisdiction of its incorporation.
SECTION 5.7. GOOD STANDING CERTIFICATES. Each of the Borrower, Mar Cor and
XXXX shall have delivered a copy of a certificate of the Secretary of State of
each State, dated reasonably near the date hereof, stating that each of the
Borrower, Mar Cor and XXXX, as the
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case may be, is duly qualified and in good standing as foreign corporations in
such State and has filed all annual reports required to be filed to the date of
such certificate.
SECTION 5.8. CERTIFICATES. Each of the Borrower, Mar Cor and XXXX shall
have delivered a certificate signed on behalf of the Borrower, Mar Cor or XXXX,
as the case may be, by a Responsible Officer and the Secretary or an Assistant
Secretary of the Borrower, Mar Cor or XXXX, as the case may be, dated the date
hereof (the statements made in such certificate shall be true on and as of the
date hereof), certifying as to (1) the absence of any amendments to the charter
of the Borrower, Mar Cor or XXXX, as the case may be, since the date of the
Secretary of State's certificate referred to above, (2) the absence of any
amendments to the bylaws of each of the Borrower, Mar Cor and XXXX since the
last date of delivery thereof to the Administrative Agent, (3) the due
incorporation and good standing of each of the Borrower, Mar Cor and XXXX, as
the case may be, as a corporation organized under the laws of the jurisdiction
of its incorporation, and the absence of any proceeding for the dissolution or
liquidation of the each of the Borrower, Mar Cor and XXXX, as the case may be
(4) the truth of the representations and warranties contained in the Loan
Documents as though made on and as of the date hereof, except for any
representation or warranty limited by its terms to a specific date and except
for changes in the ordinary course of business that are not prohibited by the
Credit Agreement and (5) the absence of any event occurring and continuing, or
resulting from the transactions contemplated by this First Amendment, that
constitutes a Default or an Event of Default.
SECTION 5.9. INCUMBANCY CERTIFICATES. Each of the Borrower, Mar Cor and
XXXX shall have delivered a certificate of the Secretary or an Assistant
Secretary of each of the Borrower, Mar Cor and XXXX, as the case may be,
certifying the names and true signatures of the officers of the Borrower, Mar
Cor and XXXX authorized to sign this First Amendment, the Replacement Term A
Promissory Notes and each other Loan Document to which they are or are to be
parties and the other documents to be delivered hereunder and thereunder.
SECTION 5.10. SOLVENCY Certificate. The Borrower shall have delivered a
certificate, in form and substance reasonably satisfactory to the Administrative
Agent, attesting to the Solvency of the Borrower immediately before and
immediately after giving effect to the transactions contemplated by the
Acquisitions and the First Amendment, from its President or a Vice President.
With respect to the Solvency of the Borrower, the Administrative Agent shall
have received such appraisals or other analyses from independent experts of the
Borrower as it may request, and such appraisals and analyses shall be in form
and substance satisfactory to the Administrative Agent.
SECTION 5.11. NOTE ASSIGNMENT AGREEMENT SUPPLEMENTS AND INTERCOMPANY NOTES.
The Administrative Agent shall have received a duly executed Note Assignment
Agreement Supplement for each of Mar Cor and XXXX covering (and together with)
an Intercompany Note made by each of Mar Cor and XXXX payable to the Borrower
and duly endorsed to the Administrative Agent.
SECTION 5.12. LIEN SEARCHES. (a) The Administrative Agent shall be in
receipt of Uniform Commercial Code, tax and judgment lien searches, or the
equivalent, for Mar Cor and each of its Subsidiaries in each jurisdiction in
which Mar Cor or any such subsidiary is
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incorporated or qualified to do business in order to confirm the first priority
of the security interests in the Collateral of Mar Cor.
(b) The Administrative Agent shall be in receipt of Uniform
Commercial Code, tax and judgment lien searches, or the equivalent, for XXXX and
each of its Subsidiaries in each jurisdiction in which XXXX or any such
subsidiary is incorporated or qualified to do business in order to confirm the
first priority of the security interests in the Collateral of XXXX.
SECTION 5.13. RELEASE OF LIENS. The Administrative Agent shall have
received Documents evidencing the satisfaction, termination and release of any
liens or charges over the assets of Mar Cor as set forth in Schedule 5.13
attached hereto; and evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the first
and only priority liens and security interests created under the Security
Agreement has been taken.
SECTION 5.14. LANDLORD WAIVER. The Administrative Agent shall have received
a duly executed and delivered counterpart of landlord waiver from Lucon Business
Park, LLC.
SECTION 5.15. LEGAL OPINION. The Borrower shall have delivered a
satisfactory opinion of Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP, counsel to
the Borrower, to the extent requested by the Administrative Agent, as to the
transactions contemplated hereby.
SECTION 5.16. AMENDMENT FEES. The Borrower shall have paid an amendment fee
to the Administrative Agent, for the account of each Lender which has approved
this First Amendment, as evidenced by such Lender's timely execution and
delivery of a counterpart signature page to this First Amendment, in an amount
equal to 0.15% (I.E. 15 basis points) of the aggregate of such approving
Lenders' Commitments immediately after the effectiveness of this First
Amendment.
SECTION 5.17. FEES AND EXPENSES. The Borrower shall have paid all fees
referred to in the Fee Letter, dated as of the date hereof, from Fleet to
Borrower, at such times and in such manner as set forth therein and all accrued
fees and expenses of the Administrative Agent and the Lenders (including
reasonable fees and expenses of counsel for the Administrative Agent).
SECTION 5.18. ACQUISITION CONDITIONS AND DELIVERIES.
(a) The Acquisitions shall have been consummated pursuant to the
terms and conditions of (i) the Stock Purchase Agreement, by and among the
Borrower, Mar Cor, Xxxxxx Xxxx and The Xxxxxx Xxxx Charitable Trust, in the
case of the Mar Cor Acquisition; (ii) the Stock Purchase Agreement, by and
between the Borrower and BEQL, in the case of the XXXX Acquisition; and
(iii) the Stock Purchase Agreement, by and among Carsen Group Inc., Xxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxxxx and Xxx Xxxxxxxx, in the case of the Biolab
Group Acquisition, and in accordance with applicable law and the
documentation for the financing of the Acquisitions and related
transactions, and otherwise on terms satisfactory to the Administrative
Agent. The conditions of the Acquisitions shall have been satisfied without
giving effect to waivers, amendments, modifications or supplements except
as approved in advance in writing by the
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Administrative Agent and without amendments, modifications or supplements
to any related disclosure letter or schedule not approved in writing in
advance by the Administrative Agent. The documents and materials filed
publicly by the Borrower and Carsen Group Inc., as the case may be, in
connection with the Acquisitions shall have been furnished to the
Administrative Agent in form and substance reasonably satisfactory to the
Administrative Agent. All required stockholder approvals to effect the
Acquisitions shall have been obtained.
(b) Mar Cor and XXXX shall have executed and delivered to the
Administrative Agent a Subsidiary Guaranty Supplement, a Security Agreement
Supplement, an Intellectual Property Security Agreement Supplement, and
such other Collateral Documents (including an assignment of any rights to
indemnity under the Stock Purchase Agreement pursuant to which the Mar Cor
Acquisition is being consummated), as the Administrative Agent shall
request in order to grant to the Administrative Agent, for its benefit and
the ratable benefit of the Secured Parties, a perfected first priority
security interest in all personal property of each such company (including,
without limitation, all stock or other equity interests of each Subsidiary
of each such company), all such documents to be in form and substance
satisfactory to the Administrative Agent.
(c) The Borrower shall have delivered to the Administrative Agent
stock certificates representing all of the issued and outstanding shares of
each of XXXX and Mar Cor, along with an undated stock power duly executed
in blank for each such stock certificate.
(d) Each of Mar Cor and XXXX shall have delivered to the
Administrative Agent evidence of the insurance required by the terms of the
Security Agreement.
(e) The Borrower shall have delivered to the Administrative Agent a
reliance letter with respect to the legal opinion delivered to the Borrower
by Xxxxxx Xxxxxxxx, LLP, counsel to XXXX in connection with the XXXX
Acquisition, in form and substance satisfactory to the Administrative
Agent.
(f) The Borrower shall have delivered to the Administrative Agent
copies of agreements and instruments, with all exhibits and disclosure
schedules thereto, and all amendments thereto, evidencing the Mar Cor
Acquisition and the XXXX Acquisition, all of which shall be in form and
substance satisfactory to the Administrative Agent.
ARTICLE 6. MISCELLANEOUS.
SECTION 6.1. CONTINUED EFFECTIVENESS. Except as specifically amended
herein, the Credit Agreement and each of the other Loan Documents shall remain
in full force and effect in accordance with their respective terms.
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SECTION 6.2. GOVERNING LAW. This First Amendment shall be governed and
construed in accordance with the laws of the State of
New York, without regard
to its rules pertaining to conflicts of laws other than General Obligations Law
Section 5.1401.
SECTION 6.3. SEVERABILITY. The provisions of this First Amendment are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision in this First Amendment
in any jurisdiction.
SECTION 6.4. COUNTERPARTS. This First Amendment may be signed in any
number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument. Delivery of an executed counterpart of
this First Amendment by facsimile shall be as effective as delivery of an
originally executed counterpart.
SECTION 6.5. BINDING EFFECT; ASSIGNMENT. This First Amendment shall be
binding upon and inure to the benefit of the Borrower and its respective
successors and to the benefit of the Administrative Agent and the Lenders and
their respective successors and assigns. The rights and obligations of the
Borrower under this First Amendment shall not be assigned or delegated without
the prior written consent of the Lenders, and any purported assignment or
delegation without such consent shall be void.
SECTION 6.6. EXPENSES. The Borrower shall pay the Administrative Agent
upon demand for all reasonable expenses, including reasonable fees of counsel
for the Administrative Agent, incurred by the Administrative Agent in connection
with the preparation, negotiation and execution of this First Amendment and any
documents required to be furnished herewith.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CANTEL MEDICAL CORP.,
as Borrower
By /s/ Xxxxx X. Xxxxxx
--------------------
Name: Xxxxx X. Xxxxxx
Title: President & Chief Executive Officer
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT,
AS INITIAL ISSUING BANK,
AS SWING LINE BANK AND AS A LENDER
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------
Title: Senior Vice President
--------------------------
21
PNC BANK, NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT AND AS A LENDER
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Title: Senior Vice President
------------------------------
22
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS A LENDER
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Title: Vice President
---------------------------------
23
BIOLAB EQUIPMENT ATLANTIC, LTD.,
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: President & Chief Executive Officer
24
MAR COR SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
25
