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Exhibit Xx. 00
XXXXXX XXX XXXXXXXXX XX. 0
TO
REVOLVING CREDIT AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 6 ("Amendment") is entered into as of
August 18, 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 corporation ("IBJS"), as agent for Lenders (IBJS, in
such capacity, the "Agent").
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.
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3 dated July 9, 1997, a Letter Amendment dated September 18, 1997, Amendment No.
4 and Joinder Agreement dated December 30, 1997 and an Amendment No. 5 dated as
of April 13, 1998 (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 (i) Borrowers' non-compliance with Section 6.6
of the Loan Agreement due to Borrowers' failure to be in compliance with such
section for the period ending June 30, 1998 and (ii) the execution of that
certain Separation Agreement dated as of July 29, 1998 by and between Holdings
and Xxxxx Xxxxxxxx relating to Xx. Xxxxxxxx'x termination of employment as an
officer and director of the Borrowers and severance arrangements for Xx.
Xxxxxxxx. Agent and Required Lenders shall determine, in their sole discretion,
whether any future restructuring or other charges recorded by Borrowers during
the quarter ending September 30, 1998 or December 31,1998, which charges are
identified and segregated in the financial statements as non-recurring charges,
shall be excluded for purposes of calculating compliance with the financial
covenants contained in the Loan Agreement.
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 are added to Section 1.2:
"Amendment No. 6" shall mean Waiver and Amendment No.
6 to Revolving Credit and Security Agreement dated as of August 18, 1998.
"Amendment No. 6 Effective Date" shall mean the date
all of the conditions set forth in Section 4 of Amendment No. 6 have been
satisfied.
"Net Cash Flow" shall mean for any period Cash Flow
during such period minus Total Debt Payments during such period.
"Xxxxxxxx Separation Agreement" shall mean that
certain Separation
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Agreement dated as of July 29, 1998 by and between Holdings and Xxxxx Xxxxxxxx.
(b) The following definitions in Section 1.2 are hereby
amended as follows:
"Maximum Revolving Advance Amount" shall mean
$80,000,000.
"Restructuring Charge Reserve" shall mean
$12,000,000.
"Revolving Interest Rate" shall mean an interest rate
per annum equal to the Alternate Base Rate plus one percent (1.0%).
(c) The penultimate sentence in Section 2.9 of the Loan
Agreement is amended in its entirety to provide as follows:
"The maximum amount of outstanding Acceptances shall
not exceed $0 in the aggregate at any time."
(d) Section 6.6 of the Loan Agreement is amended in its
entirety to provide as follows:
"6.6 Net Cash Flow.
(a) Cause Net Cash Flow to be equal to or
greater than ($4,500,000) at the end of the fiscal
quarter ending September 30, 1998 for the immediately
preceding three (3) month period;
(b) Cause Net Cash Flow to be equal to or
greater than ($8,500,000) at the end of the fiscal
quarter ending December 31, 1998 for the immediately
preceding six (6) month period;
(c) Cause Net Cash Flow to be equal to or
greater than ($10,000,000) at the end of the fiscal
quarter ending March 31, 1999 for the immediately
preceding nine (9) month period;
(d) Cause Net Cash Flow to be equal to or
greater than ($10,000,000) at the end of the fiscal
quarter ending June 30, 1999 for the immediately
preceding twelve (12) month period;
(e) Cause Net Cash Flow to be equal to or
greater than ($6,000,000) at the end of the fiscal
quarter ending September 30, 1999 for the immediately
preceding twelve (12) month period;
(f) Cause Net Cash Flow to be equal to or
greater than ($3,000,000) at the end of the fiscal
quarter ending December 31, 1999 for the immediately
preceding twelve (12) month period;
(g) Cause Net Cash Flow to be equal to or
greater than $0 at
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the end of the fiscal quarter ending March 31, 2000
and at the end of each fiscal quarter thereafter, in
each case with respect to the four (4) fiscal
quarters then ended.
For purposes of calculating Net Cash Flow pursuant to
this Section 6.6, the financial impact of the
Xxxxxxxx Separation Agreement shall be excluded."
(e) Sections 6.7(d) and 6.7(e) are amended in their entirety
and Sections 6.7(f)-(i) are added to the Loan Agreement to provide as follows:
"(d) Cause EBITDA to be equal to or greater than
$3,000,000 at the end of the fiscal quarter ending
September 30, 1998 for such fiscal quarter (excluding
the financial impact of the Xxxxxxxx Separation
Agreement);
(e) Cause EBITDA to be equal to or greater than
$4,000,000 at the end of the fiscal quarter ending
December 31, 1998 with respect to the fiscal quarter
then ended;
(f) Cause EBITDA to be equal to or greater than
$5,000,000 at the end of the fiscal quarter ending
March 31, 1999 with respect to the fiscal quarter
then ended;
(g) Cause EBITDA to be equal to or greater than
$6,000,000 at the end of the fiscal quarter ending
June 30,1999 with respect to the fiscal quarter then
ended;
(h) Cause EBITDA to be equal to or greater than
$7,000,000 at the end of the fiscal quarter ending
September 30,1999 with respect to the fiscal quarter
then ended; and
(i) Cause EBITDA to be equal to or greater than
$8,000,000 at the end of the fiscal quarter ending
December 31,1999, and at the end of each fiscal
quarter thereafter, in each case with respect to the
fiscal quarter then ended."
(f) Sections 16.2(b) is hereby amended by amending clause
(iii) in its entirety to provide as follows:
"(iii) alter the definition of the terms Required
Lenders or Availability Reserve or Restructuring
Charge Reserve or alter, amend or modify this Section
16.2(b)."
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
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by Guarantor, (ii) a $100,000 Amendment Fee for the ratable benefit of Lenders
which execute this Amendment, (iii) payment of all amounts due under the fee
letter of even date herewith between Agent and Borrowers, 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. Covenants. (a) On or before September 2, 1998, Holders shall, and
shall cause each of its Subsidiaries to, pledge (i) all of the stock of each
Borrower (other than Holdings) and of AquaTherm Corp. and Everest & Xxxxxxxx
International Ltd., (ii) sixty-five percent (65%) of the stock of Guarantor and
of Everest & Xxxxxxxx de Mexico S.A. de C.V., and (iii) all of the stock of each
Subsidiary of each Borrower which exists after giving effect to the mergers
described on Schedule 1 to this Amendment (which mergers shall occur as soon as
reasonably practicable after the Amendment No. 6 Effective Date but no later
than October 1, 1998) to Agent pursuant to a Pledge Agreement in form of and
substance satisfactory to Agent, so that Agent shall have a first priority
perfected pledge of such stock.
(b) On or before September 2, 1998, Borrowers shall provide
Agent and Lenders with details regarding material litigation against any
Borrower as of the Amendment No. 6 Effective Date.
(c) Each Borrower shall deliver all notes received by such
Borrower in connection with any Receivable due to such Borrower, endorsed to the
order of IBJ Xxxxxxxx Business Credit Corporation, as Agent, as part of the
Collateral in which Agent has an interest, within five (5) days of receipt of
all such notes by such Borrower; provided, however, with respect to notes
received prior to August 12, 1998, such notes shall be delivered to Agent on or
before August 26, 1998.
6. Eurodollar Rate Loans. Notwithstanding any provision of the Loan
Agreement, Borrowers acknowledge that (i) as of Amendment No. 6 Effective Date,
no Eurodollar Rate Loans shall be available to Borrowers under the Loan
Agreement and (ii) any Eurodollar Rate Loans outstanding on the Amendment No. 6
Effective Date shall be automatically converted without penalty into Domestic
Rate Loans.
7. 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
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exist after giving effect to this Amendment.
(d) Borrowers have no defense, counterclaim or offset with
respect to the Loan Agreement.
8. 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.
(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.
9. 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.
10. 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.
11. 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.
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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/ Xxxxxx X. Xxxxx
-----------------------------------------
Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Xxxxxxx X. Xxxxxxx
----------------------------
Vice-President
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CONSENTED AND AGREED TO:
EVEREST & XXXXXXXX CANADIAN LIMITED
By: Xxxxxx X. Xxxxx
----------------------------
Chairman of the Board and
Chief Executive Officer
IBJ XXXXXXXX BUSINESS CREDIT CORPORATION,
as Lender and as Agent
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx, Vice President
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment Percentage: 25.00%
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Commitment Percentage: 25.00%
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Commitment Percentage: 25.00%
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DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title:Vice President
0000 Xxx Xxxxx Xxxx
Xxxxx 000
X.X. Xxx 00000
Xx. Xxxxx, XX 00000
Commitment Percentage: 25.00%
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