EXECUTION COPY
THIRD AMENDMENT, dated as of February 24, 2000
(this "Amendment"), to the CREDIT AND GUARANTEE AGREEMENT,
dated as of November 3, 1997 (as amended prior to the date
hereof and as the same may be further amended, supplemented
or otherwise modified from time to time, the "Credit
Agreement"), among KINETIC CONCEPTS, INC., a Texas
corporation (the "Company"), The Subsidiary Borrowers (as
defined in the Credit Agreement) from time to time parties
to the Credit Agreement, the several banks and other
financial institutions from time to time parties thereto
(collectively, the "Lenders"), BANK OF AMERICA, N.A., a
national banking association ("Bank of America"), as
administrative agent for the Lenders thereunder, and BANKERS
TRUST COMPANY, a New York banking corporation ("Bankers
Trust"), as syndication agent for the Lenders thereunder.
W I T N E S S E T H :
WHEREAS, the Company and the Subsidiary Borrowers
have requested that the Lenders amend the Credit Agreement
in the manner provided for herein; and
WHEREAS, the Lenders are willing to amend the
Credit Agreement in the manner and on the terms and
conditions provided for herein;
NOW, THEREFORE, in consideration of the premises
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS AND SECTION REFERENCES
1.1 Defined Terms. Unless otherwise defined
herein, terms which are defined in the Credit Agreement and
used herein are so used as so defined.
1.2 Section References. Unless otherwise
indicated, all Section and subsection references are to the
Credit Agreement.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT
2.1 Amendment to Subsection 1.1. Subsection
1.1 of the Credit Agreement is hereby amended as follows:
(a) by amending and restating in their entireties
the following definitions contained in such subsection
to read as follows:
"Leverage Ratio Level": as to the
Company, the existence of Leverage Ratio Level I,
Leverage Ratio Level II, Leverage Ratio Level III,
Leverage Ratio Level IV or Leverage Ratio Level V,
as the case may be.
"Leverage Ratio Level V": as to the
Company, shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive
fiscal quarters ending on the last day of the
period covered by the financial statements
relating to such Adjustment Date is less than 4.00
to 1.00.
(b) by deleting in its entirety the definition of
"Leverage Ratio Level VI" contained in such
subsection.
(c) by adding the following definitions in the
proper alphabetical order:
"Third Amendment": the Third Amendment
to this Agreement dated as of February 24, 2000.
"Third Amendment Effective Date" the
Effective Date under the Third Amendment.
(d) by adding the following proviso at the end of
clause (iv) of the definition of "EBITDA" contained in
such subsection:
", provided that the aggregate amount of
non-cash charges and expenses that may be added
back pursuant to this clause (iv) in connection
with the calculation of EBITDA of the Company
subsequent to the Third Amendment Effective Date
may not exceed $25,000,000, and"
(e) by adding the following proviso at the end of
the definition of "Net Income" contained in such
subsection:
", provided, however, that the net
income of the Company and its Consolidated
Subsidiaries shall only include 50% of any net
income resulting from the collection of some or
all of the $15,000,000 of outstanding receivables
related to sales and services pertaining to the
Vacuum Assisted Closure Devise prior to December
31, 1999."
(f) by amending and restating in its entirety
clause (d) of the definition of "Permitted Acquisition"
as follows:
"(d) the purchase price (including
assumed indebtedness and the fair market value of
the non-cash consideration in connection with such
Acquisition) of such Acquisition does not exceed
$15,000,000 individually and the purchase price of
all such Acquisitions (i) in any given fiscal year
does not exceed $25,000,000 in the aggregate and
(ii) since the Closing Date does not exceed
$70,000,000 in the aggregate (provided that, if
the Company or any of its Subsidiaries receives
Net Cash Proceeds of capital contributions by, or
from the issuance of any Capital Stock to, the
Buyers after the Merger Date which are not used to
repay Senior Subordinated Bridge Loans, such
aggregate limitation in clause (ii) above shall be
increased by the aggregate amount of such Net Cash
Proceeds, but such increase shall not be in excess
of $25,000,000 in the aggregate),"
2.2 Amendment to Subsection 10.1.
Subsection 10.1 of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting in
lieu thereof the following new Section 10.1:
"10.1 Financial Condition Covenants.
(a) Interest Coverage. Permit for any period of
four consecutive fiscal quarters ending at the end of
any fiscal quarter set forth below the ratio of (i)
EBITDA of the Company for such period to (ii)
Consolidated Cash Interest Expense of the Company for
such period to be less than the ratio set forth
opposite such period below:
Fiscal Quarter Ending Interest Coverage Ratio
December 31, 1999 1.75 to 1.00
March 31, 2000 1.75 to 1.00
June 30, 2000 1.75 to 1.00
September 30, 2000 1.75 to 1.00
December 31, 2000 1.75 to 1.00
March 31, 2001 1.75 to 1.00
June 30, 2001 1.75 to 1.00
September 30, 2001 1.75 to 1.00
December 31, 2001 2.00 to 1.00
March 31, 2002 2.00 to 1.00
June 30, 2002 2.00 to 1.00
September 30, 2002 2.00 to 1.00
December 31, 2002 2.25 to 1.00
March 31, 2003 2.25 to 1.00
June 30, 2003 2.25 to 1.00
September 30, 2003 2.25 to 1.00
December 31,2003 March 2.50 to 1.00
31, 2004 2.50 to 1.00
June 30, 2004 2.50 to 1.00
September 30, 2004 2.50 to 1.00
December 31, 2004 2.75 to 1.00
March 31, 2005 2.75 to 1.00
June 30, 2005 2.75 to 1.00
September 30, 2005 2.75 to 1.00
December 31, 2005 and
each Fiscal Quarter
ending thereafter 3.00 to 1.00
(b) Leverage Ratio. Permit the Leverage Ratio as
of the last day of any fiscal quarter of the Company
set forth below, or at any time thereafter prior to the
last day of the next succeeding fiscal quarter, to be
greater than the ratio set forth opposite such fiscal
quarter below:
Fiscal Quarter Ending Ratio
December 31, 1999 6.00 to 1.00
March 31, 2000 6.00 to 1.00
June 30, 2000 6.00 to 1.00
September 30, 2000 6.00 to 1.00
December 31, 2000 5.50 to 1.00
March 31, 2001 5.50 to 1.00
June 30, 2001 5.50 to 1.00
September 30, 2001 5.50 to 1.00
December 31, 2001 5.00 to 1.00
March 31, 2002 5.00 to 1.00
June 30, 2002 5.00 to 1.00
September 30, 2002 5.00 to 1.00
December 31, 2002 4.50 to 1.00
March 31, 2003 4.50 to 1.00
June 30, 2003 4.50 to 1.00
September 30,2003 4.50 to 1.00
December 31, 2003 4.00 to 1.00
March 31, 2004 4.00 to 1.00
June 30, 2004 4.00 to 1.00
September 30, 2004 4.00 to 1.00
December 31, 2004 and
each Fiscal Quarter
ending thereafter 3.50 to 1.00
(c) Minimum EBITDA. Permit EBITDA of the Company
for any period of four consecutive fiscal quarters
ending at the end of any fiscal quarter set forth below
to be less than the amount set forth opposite such
period:
Fiscal Quarter Ending EBITDA
December 31, 1999 85,000,000
March 31, 2000 85,000,000
June 30, 2000 85,000,000
September 30, 2000 85,000,000
December 31, 2000 94,000,000
March 31, 2001 94,000,000
June 30, 2001 94,000,000
September 30, 2001 94,000,000
December 31, 2001 99,000,000
March 31, 2002 99,000,000
June 30, 2002 99,000,000
September 30, 2002 99,000,000
December 31, 2002 107,000,000
March 31, 2003 107,000,000
June 30, 2003 107,000,000
September 30, 2003 107,000,000
December 31, 2003 115,000,000
March 31, 2004 115,000,000
June 30, 2004 115,000,000
September 30, 2004 115,000,000
December 31, 2004 119,000,000
March 31, 2005 119,000,000
June 30, 2005 119,000,000
September 30, 2005 119,000,000
December 31, 2005 124,000,000"
2.3 Amendment to Subsection 10.8.
Subsection 10.8 of the Credit Agreement is hereby amended by
deleting the table in such subsection in its entirety and
substituting in lieu thereof the following new table:
"Fiscal Year Amount
1999 30,000,000
2000 30,000,000
2001 30,000,000
2002 35,000,000
2003 35,000,000
2004 and each Fiscal Year
thereafter 40,000,000"
2.4 Amendment to Annex A to the Credit
Agreement. Annex A to the Credit Agreement is hereby
amended by deleting such Annex A in its entirety and
substituting in lieu thereof a new Annex A to read in its
entirety as set forth on Annex A attached hereto.
2.5 Termination of Unused Acquisition
Loan Commitments. On the Effective Date, all unfunded
Acquisition Loan Commitments under the Credit Agreement
shall be automatically terminated.
SECTION 3. MISCELLANEOUS
3.1 Representations and Warranties. On and
as of the date hereof, the Company and the Subsidiary
Borrowers hereby confirm, reaffirm and restate the
representations and warranties set forth in Section 7 of the
Credit Agreement mutatis mutandis (after giving effect to
any amendments thereto pursuant to this Amendment), except
to the extent that such representations and warranties
expressly relate to a specific earlier date in which case
the Company and the Subsidiary Borrowers hereby confirm,
reaffirm and restate such representations and warranties as
of such earlier date.
3.2 Effectiveness. This Amendment shall
become effective as of the date upon which the conditions
set forth below shall first be satisfied (the "Effective
Date"):
(a) Amendment. The Administrative Agent shall
have received this Amendment, executed and delivered by
a duly authorized officer of the Company, the
Subsidiary Borrowers and the Required Lenders with a
counterpart for the Administrative Agent and a
counterpart or a conformed copy for each Lender.
(b) Amendment Fee. The Administrative Agent
shall have received for each Lender which executes this
Amendment on or prior to February 24, 2000 (and which
committed to approve this Amendment on or prior to
February 16, 2000), an amendment fee in an amount equal
to .15% of the sum of (i) such Lender's Revolving
Credit Commitment, (ii) such Lender's unused
Acquisition Loan Commitment and (iii) the aggregate
principal amount of the then outstanding Term Loans and
Acquisition Loans of such Lender.
(c) Representations and Warranties. The
Administrative Agent shall have received a certificate
of the chief financial officer of the Company to the
effect that each of the representations and warranties
made by the Company, the Subsidiary Borrowers and the
other Loan Parties in or pursuant to the Loan Documents
shall be true and correct in all material respects on
and as of the Effective Date, except to the extent such
representations and warranties expressly relate to an
earlier date in which case such representations and
warranties shall be true and correct in all material
respects as of such earlier date.
(d) Consent. Each Guarantor under the Guarantee
and Collateral Agreement shall have consented to this
Amendment
(e) Expenses. The Company shall have paid all
other fees and expenses payable in connection with this
Amendment.
3.3 Continuing Effect; No Other Amendments.
Except as expressly amended hereby, all of the terms and
provisions of the Credit Agreement are and shall remain in
full force and effect. The amendments provided for herein
are limited to the specific subsections of the Credit
Agreement specified herein and shall not constitute an
amendment of, or an indication of the Administrative Agent's
or the Lenders' willingness to amend, any other provisions
of the Credit Agreement or the same subsection for any other
date or time period (whether or not such other provisions or
compliance with such subsections for another date or time
period are affected by the circumstances addressed in this
Amendment).
3.4 Expenses. The Company agrees to pay and
reimburse the Administrative Agent for all reasonable costs
and out-of-pocket expenses incurred by the Administrative
Agent in connection with the preparation and delivery of
this Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to the
Administrative Agent.
3.5 Counterparts. This Amendment may be
executed in any number of counterparts by the parties hereto
(including by facsimile transmission), each of which
counterparts when so executed shall be an original, but all
the counterparts shall together constitute one and the same
instrument.
3.6 GOVERNING LAW. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed and delivered by their
respective duly authorized officers as of the date first
above written.
KINETIC CONCEPTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA N.A., as Administrative Agent and as a
Lender
By: /s/F.XXXXX XXXXXXXX
Name: F. Xxxxx Xxxxxxxx
Title: Managing Director
BANKERS TRUST COMPANY, as Syndication Agent and as a Lender
By: /s/XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
ALLIANCE CAPITAL FUNDING, L.L.C., as assignee,
By: /s/X.X. XXXXXXX XXXX
Name: X.X. Xxxxxxx Alex
Title: Vice President
ALLIANCE INVESTMENTS LIMITED
By: /s/X.X. XXXXXXX XXXX
Name: X.X. Xxxxxxx Alex
Title: Vice President
ARCHIMEDES FUNDING II LTD.
By: /s/
Name:
Title:
BANKBOSTON, N.A.
By: /s/XXXXXXX X. XXXX, XX.
Name: Xxxxxxx X. Xxxx, Xx.
Title: Managing Director
BEDFORD CDO LIMITED
By: Pacific Investment Management Company as its
Investment advisor
By: PIMCO Management Inc., a general partner
By: /s/XXXXX X. XXXXXXXXXX
Name: Xxxxx X. Xxxxxxxxxx
Title: Senior Vice President
BHF (USA) CAPITAL CORPORATION
By: /s/ XXX XXXXXXXXXXX By: /S/ XXXXXXX X. XXXXX
Name: Xxx Xxxxxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Asst. Vice President Associate
CAPTIVA III FINANCE LTD.
As advised by Pacific Investment Management Company
By: /s/XXXXX XXXX
Name: Xxxxx Xxxx
Title: Director
CAPTIVA IV FINANCE LTD.
As advised by Pacific Investment Management Company
By: /s/XXXXX XXXX
Name: Xxxxx Xxxx
Title: Director
THE CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. XxXxx
Title: Senior Vice President
CITY NATIONAL BANK
By: /s/XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President
CRESCENT/MACH I PARTNERS L.P.
By: TCW Asset Management Company as its Investment Manager
By: /s/XXXXXXXX X. XXXX
Name: Xxxxxxxx X. Xxxx
Title: Assistant Vice President
CYPRESSTREE INVESTMENT FUND LLC
By: CypressTree Investment Management Company, Inc. its
Managing Member
By: /s/XXXXXXXXX X. XXXXXXXXX
Name: Xxxxxxxxx X. XxXxxxxxx
Title: Principal
CYPRESSTREE INVESTMENT PARTNERS I LTD.
By: CypressTree Investment Management Company, Inc. its
Managing Member
By: /s/XXXXXXXXX X. XXXXXXXXX
Name: Xxxxxxxxx X. XxXxxxxxx
Title: Principal
CYPRESSTREE INVESTMENT PARTNERS II LTD.
By: CypressTree Investment Management Company, Inc. its
Managing Member
By: /s/XXXXXXXXX X. XXXXXXXXX
Name: Xxxxxxxxx X. XxXxxxxxx
Title: Principal
DEUTSCHE BANK AKTIENGESELLSCHAFT
By: /s/
Name:
Title:
FLEET NATIONAL BANK
By: /s/XXXXXXX SO
Name: Xxxxxxx So
Title: Assistant Vice President
FREMONT INVESTMENT & LOAN
By: /s/XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: Vice President
THE FUJI BANK LIMITED
By: /s/XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title: Vice President & Manager
HSBC BANK USA
By: /s/XXXX XXXXX
Name: Xxxx Xxxxx
Title: Senior Vice President
INDOSUEZ CAPITAL FUNDING III LIMITED
By: /s/XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President
INDOSUEZ CAPITAL FUNDING IV LIMITED
By: /s/XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN LIMITED
By: /s/J. XXXXXXX XXXXXX
Name: J. Xxxxxxx Xxxxxx
Title: Senior Vice President
PPM AMERICA, INC. AS ATTORNEY IN FACT, ON BEHALF OF
XXXXXXX NATIONAL LIFE INSURANCE COMPANY
By: /s/XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: Managing Director
KZH ING-2 LLC
By: /s/XXXXX XXX
Name: Xxxxx Xxx
Title: Authorized Agent
KZH CYPRESSTREE-1 LLC
By: /s/XXXXX XXX
Name: Xxxxx Xxx
Title: Authorized Agent
KZH LANGDALE LLC
By: /s/XXXXX XXX
Name: Xxxxx Xxx
Title: Authorized Agent
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/XXXXX X. XXXXXX AND COMPANY, INC.
Name: Xxxxx X. Xxxxxx and Company, Inc.
Title: Investment Advisor
MITSUBISHI TRUST AND BANKING CORPORATION
By: /s/XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Chief Manager
ML CLO XII PILGRIM AMERICA (CAYMAN) LTD.
By: Pilgrim Investment, Inc., as its investment manager
By: /s/XXXXXXX X. XXXXXXX, CFA
Name: Xxxxxxx X. XxXxxxx, CFA
Title: Assistant Vice President
MOUNTAIN CAPITAL CLO I LTD.
By: /s/XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Director
NATEXIS BANQUE BFCE
By: /s/XXXXX X. XXXXXXX, III By:/s/ XXXXXX XXXXX
Name: Xxxxx X. XxXxxxx, III Name: Xxxxxx Xxxxx
Title: Vice President & Mgr. Title: Asst. VP
NATIONAL CITY BANK
By: /s/XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
NORTHERN LIFE INSURANCE COMPANY
By: /s/
Name:
Title:
OAK MOUNTAIN LIMITED
By: /s/
Name:
Title:
PARIBAS
By: /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Vice President
By: /s/XXX X. XXXXXXX
Name: Xxx X. Xxxxxxx
Title: Managing Director
SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as Investment Advisor
By: /s/XXXXXXX XXXXXXXX
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
SUMMIT BANK
By: /s/XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXX XXXXXX CLO I LIMITED
By: Xxx Xxxxxx Management Inc., as Collateral Manager
By: /s/XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXX XXXXXX PRIME RATE INCOME TRUST
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.
By: /s/XXXXX XXXXXXX
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby consents to the
foregoing Amendment and hereby confirms, reaffirms and
restates that its obligations under or in respect of the
Credit Agreement and the documents related thereto to which
it is a party are and shall remain in full force and effect
after giving effect to the foregoing Amendment, and in the
case of KCI Licensing, Inc., hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder:
KCI HOLDINGS COMPANY, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI INTERNATIONAL HOLDING COMPANY
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCII HOLDINGS, L.L.C.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
PLEXUS ENTERPRISES, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
MEDICAL RETRO DESIGN, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI PROPERTIES, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI-RIK ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI REAL PROPERTY LIMITED
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI USA, INC. (f/k/a Therapeutic Services, Inc.)
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI AIR, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
KCI LICENSING, INC.
By: /s/ XXXXXX X. XXXXXX
Title: Vice President
ANNEX A
PRICING GRID
Revolving Loans
(other than
Revolving
Offshore Loans),
Tender Loans,
Tranche
A Term Loans and Tranche B Term Loans Tranche C Term Loans
Acquisition Loans
-------------------- -------------------- --------------------
Applicable Applicable Applicable Applicable Applicable Applicable
Margin Margin Margin Margin Margin Margin
Leverage for for Base for for Base for for Base Revolving
Ratio Eurdollar Rate Eurodolla Rate Eurodollar Rate Offshore Commitment
Level Loans Loans Loans Loans Loans Loans Loans Fees
-------- ----------- --------- ----------- --------- ---------- --------- -------- ----------
Leverage
Ratio
Level I 2.75% 1.75% 3.00% 2.00% 3.25% 2.25% 2.75% 0.50%
Leverage
Ratio
Level II 2.50% 1.50% 3.00% 2.00% 3.25% 2.25% 2.50% 0.375%
Leverage
Ratio
Level III 2.25% 1.25% 3.00% 2.00% 3.25% 2.25% 2.25% 0.375%
Leverage
Ratio
Level IV 2.00% 1.00% 2.75% 1.75% 3.00% 2.00% 2.00% 0.30%
Leverage
Ratio
Level V 1.75% 0.75% 2.50% 1.50% 2.75% 1.75% 1.75% 0.30%
