EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made and entered into on April 15, 2004, by and between HORIZON MEDICAL
PRODUCTS, INC., a Georgia corporation (hereinafter referred to as "Borrower"),
with its chief executive office and principal place of business at Xxx Xxxxxxx
Xxx, Xxxxxxxxxx, Xxxxxxx 00000, and STANDARD FEDERAL BANK NATIONAL ASSOCIATION,
a national banking association, acting by and through LASALLE BUSINESS CREDIT,
LLC (as successor to LaSalle Business Credit, Inc.), a Delaware limited
liability company, as its agent (hereinafter referred to as "Lender"), with an
office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000.
RECITALS:
Lender and Borrower are parties to a certain Loan and Security
Agreement dated as of March 18, 2002, as amended by that certain First Amendment
to Loan and Security Agreement dated as of December 23, 2002 (as amended at any
time, the "Loan Agreement"), pursuant to which Lender has made certain loans and
other financial accommodations to Borrower.
The parties desire to amend the Loan Agreement as hereinafter set
forth.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good
and valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. DEFINITIONS. All capitalized terms used in this Amendment,
unless otherwise defined herein, shall have the meaning ascribed to such terms
in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby
amended as follows:
(a) By deleting Section 10 of the Loan Agreement and by
substituting in lieu thereof the following:
10. TERMINATION; AUTOMATIC RENEWAL.
THIS AGREEMENT SHALL BE IN EFFECT FROM THE DATE
HEREOF UNTIL MARCH 17, 2005 (THE "ORIGINAL TERM") AND SHALL
AUTOMATICALLY RENEW ITSELF FROM YEAR TO YEAR THEREAFTER (EACH
SUCH ONE-YEAR RENEWAL BEING REFERRED TO HEREIN AS A "RENEWAL
TERM") UNLESS (A) LENDER MAKES DEMAND FOR REPAYMENT PRIOR TO
THE END OF THE ORIGINAL TERM OR THE THEN CURRENT RENEWAL TERM;
(B) THE DUE DATE OF THE LIABILITIES IS ACCELERATED PURSUANT TO
SECTION 16 HEREOF; (C) BORROWER ELECTS TO TERMINATE THIS
AGREEMENT AT THE END OF THE ORIGINAL TERM OR AT THE END OF ANY
RENEWAL TERM BY GIVING LENDER WRITTEN NOTICE OF SUCH ELECTION
AT LEAST NINETY (90) DAYS PRIOR TO THE END OF THE ORIGINAL
TERM OR THE THEN CURRENT RENEWAL TERM AND BY PAYING ALL OF THE
LIABILITIES IN FULL ON THE LAST DAY OF SUCH TERM; (D) BORROWER
ELECTS TO TERMINATE THIS AGREEMENT PRIOR TO THE END OF THE
ORIGINAL TERM OR ANY THEN CURRENT RENEWAL TERM BY GIVING
LENDER WRITTEN NOTICE OF SUCH ELECTION AT LEAST TEN (10) DAYS
PRIOR TO SUCH TERMINATION AND BY PAYING ALL OF THE LIABILITIES
IN FULL ON OR PRIOR TO THE DATE OF SUCH TERMINATION; OR (E)
LENDER ELECTS TO TERMINATE THIS AGREEMENT ON OR AFTER FEBRUARY
1, 2004, AS A RESULT OF A
TERMINATION EVENT. If one or more of the events specified in
clauses (a), (b), (c), (d) and (e) occurs, then (i) Lender
shall not make any additional Loans on or after the date
identified as the date on which the Liabilities are to be
repaid; and (ii) this Agreement shall terminate on the date
thereafter that the Liabilities are paid in full. At such time
as Borrower has repaid all of the Liabilities and this
Agreement has terminated, Borrower shall deliver to Lender a
release, in form and substance satisfactory to Lender, of all
obligations and liabilities of Lender and its officers,
directors, employees, agents, parents, subsidiaries and
affiliates to Borrower, and if Borrower is obtaining new
financing from another lender, Borrower shall deliver such
lender's indemnification of Lender, in form and substance
satisfactory to Lender, for checks which Lender has credited
to Borrower's account, but which subsequently are dishonored
for any reason or for automatic clearinghouse or wire
transfers not yet posted to Borrower's account. If, during the
term of this Agreement, Borrower prepays all of the
Liabilities from any source other than income from the
ordinary course of operations of Borrower's business and this
Agreement is terminated prior to the end of the Original Term
or any then current Renewal Term, Borrower agrees to pay to
Lender as a prepayment fee, in addition to the payment of all
other Liabilities, an amount equal to five-eighths of one
percent (5/8%) of the Maximum Loan Limit.
(b) By deleting Section (b) of Schedule 14 to the Loan
Agreement and by substituting in lieu thereof the following:
B. FIXED CHARGE COVERAGE.
Borrower shall not permit the ratio of its EBITDA to
Fixed Charges for each period set forth below to be less than
the ratio set forth below for the corresponding period set
forth below, in each case for the immediately preceding four
fiscal quarters:
Period Ratio
------ -----
Fiscal quarter ending December 31, 2002 0.15 to 1.0
Fiscal quarter ending March 31, 2003 0.3 to 1.0
Fiscal quarter ending June 30, 2003 0.3 to 1.0
Fiscal quarter ending September 30, 2003 0.3 to 1.0
Fiscal quarter ending December 31, 2003 0.50 to 1.0
Fiscal quarter ending March 31, 2004 0.50 to 1.0
and each fiscal quarter thereafter
(c) By deleting Section (c) of Schedule 14 to the Loan
Agreement and by substituting in lieu thereof the following:
C. EBITDA.
Borrower shall not permit EBITDA to be less than the
amount set forth below as of the date set forth below
corresponding thereto, based upon the immediately preceding
four fiscal quarters:
Period Amount
------ ------
December 31, 2002 $ 750,000
March 31, 2003 $1,350,000
June 30, 2003 $1,475,000
September 30, 2003 $1,475,000
December 31, 2003 $2,500,000
March 31, 2004 $2,000,000
June 30, 2004 $2,000,000
September 30, 2004 $2,000,000
December 31, 2004 and each fiscal $2,250,000
quarter thereafter based upon the
immediately preceding four
fiscal quarters
(d) By deleting the definition of "Maximum Loan Limit" in
Section 1 of the Loan Agreement and by substituting in lieu thereof the
following:
"MAXIMUM LOAN LIMIT" shall mean, at any time, an
amount equal to the sum of (i) the Maximum Revolving Loan
Limit and (ii) the outstanding principal balance of the Term
Loan at such time.
(e) By deleting the definition of "Medtronic" in Section
1 of the Loan Agreement and by substituting in lieu thereof the following:
"MEDTRONIC" shall mean Medtronic, Inc., a Minnesota
corporation.
(f) By deleting Schedule 11(c) (Loans), Schedule 11(g)
(Litigation), Schedule 11(i) (Affiliate Transactions), and Schedule 11(n)
(Indebtedness) to the Loan Agreement in their entirety and by substituting in
lieu thereof, respectively, Schedule 11(c), Schedule 11(g), Schedule 11(i), and
Schedule 11(n) attached to this Amendment.
3. RATIFICATION AND REAFFIRMATION. Borrower hereby ratifies and
reaffirms the Liabilities, the Loan Agreement, each of the Other Agreements and
all of Borrower's covenants, duties, indebtedness and liabilities under the Loan
Agreement and the Other Agreements.
4. ACKNOWLEDGMENTS AND STIPULATIONS. Borrower acknowledges and
stipulates that the Loan Agreement and the Other Agreements executed by Borrower
are legal, valid and binding obligations of Borrower that are enforceable
against Borrower in accordance with the terms thereof; all of the Liabilities
are owing and payable without defense, offset or counterclaim (and to the extent
there exists any such defense, offset or counterclaim on the date hereof, the
same is hereby waived by Borrower); the security interests and liens granted by
Borrower in favor of Lender are duly perfected, first priority security
interests and liens; the unpaid principal amount of the Revolver Loans on and as
of March 31, 2004, totaled Zero Dollars ($0); and the unpaid principal amount of
the Term Loan on and as of March 31, 2004, totaled Six Hundred Sixty-Six
Thousand Six Hundred Sixty-Six and 56/100 Dollars ($666,666.56).
5. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender, to induce Lender to enter into this Amendment, that no
Default or Event of Default exists on the date hereof; the execution, delivery
and performance of this Amendment have been duly authorized by all requisite
corporate action on the part of Borrower and this Amendment has been duly
executed and delivered by Borrower; and all of the representations and
warranties made by Borrower in the Loan Agreement, as hereby amended, are true
and correct on and as of the date hereof.
6. REFERENCE TO LOAN AGREEMENT. Upon the effectiveness of this
Amendment, each reference in the Loan Agreement to "this Agreement,"
"hereunder," or words of like import shall mean and be a reference to the Loan
Agreement, as amended by this Amendment.
7. BREACH OF AMENDMENT. This Amendment shall constitute an Other
Agreement under the Loan Agreement and shall be entitled to all benefits and
protections thereof.
8. CONDITIONS PRECEDENT. The effectiveness of the amendments
contained in Section 2 hereof is subject to the satisfaction of each of the
following conditions precedent, in form and substance satisfactory to Lender,
unless satisfaction thereof is specifically waived in writing by Lender:
(a) Lender shall have received an original counterpart of this
Amendment, duly executed by Borrower and acknowledged by each Guarantor; and
(b) Lender shall received a duly executed Secretary's Certificate
of Board of Directors Resolutions authorizing Borrower to enter into this
Amendment.
9. AMENDMENT FEE; EXPENSES OF LENDER. In consideration of
Lender's willingness to enter into this Amendment, Borrower agrees to pay to
Lender an amendment fee in the amount of $25,000 in immediately available funds
on the date hereof. Additionally, Borrower agrees to pay, ON DEMAND, all costs
and expenses incurred by Lender in connection with the preparation, negotiation
and execution of this Amendment and any Other Agreements executed pursuant
hereto and any and all amendments, modifications, and supplements thereto,
including, without limitation, the costs and fees of Lender's legal counsel and
any taxes or expenses associated with or incurred in connection with any
instrument or agreement referred to herein or contemplated hereby.
10. EFFECTIVENESS; GOVERNING LAW. This Amendment shall be
effective upon acceptance by Lender in Atlanta, Georgia (notice of which
acceptance Borrower hereby waives), whereupon the same shall be governed by and
construed in accordance with the internal laws of the State of Georgia.
11. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
12. NO NOVATION, ETC. Except as otherwise expressly provided in
this Amendment, nothing herein shall be deemed to amend or modify any provision
of the Loan Agreement or any of the Other Agreements, each of which shall remain
in full force and effect. This Amendment is not intended to be, nor shall it be
construed to create, a novation or accord and satisfaction, and the Loan
Agreement as herein modified shall continue in full force and effect.
13. COUNTERPARTS; TELECOPIED SIGNATURES. This Amendment may be
executed in any number of counterparts and by different parties to this
Amendment on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
14. FURTHER ASSURANCES. Borrower agrees to take such further
actions as Lender shall reasonably request from time to time in connection
herewith to evidence or give effect to the amendments set forth herein or any of
the transactions contemplated hereby.
15. SECTION TITLES. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto.
16. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, COUNTERCLAIM OR PROCEEDING ARISING OUT OF OR RELATED TO
THIS AMENDMENT.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed under seal and delivered by their respective duly authorized officers
as of the date first written above.
ATTEST: HORIZON MEDICAL PRODUCTS, INC.
("Borrower")
/s/ L. Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------ --------------------------------
Secretary Xxxxxx X. Xxxxxx
President
[CORPORATE SEAL]
STANDARD FEDERAL BANK NATIONAL
ASSOCIATION, acting by and through
LASALLE BUSINESS CREDIT, LLC, as its agent
("Lender")
By: /s/ Xxxxxxx Xxxxxx
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Title: First Vice President
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