SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit
10.6
SECOND
AMENDMENT TO CREDIT AGREEMENT
THIS
SECOND AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”) is entered into as of this 12th day of August, 2005, by and among
THERAGENICS
CORPORATION,
a
Delaware corporation (the “Original Borrower”), C.P.
MEDICAL CORPORATION,
an
Oregon corporation (the "Additional Borrower"; the Original Borrower and
the
Additional Borrower are referred to herein individually as a "Borrower" and
collectively as the "Borrowers"), and WACHOVIA
BANK, NATIONAL ASSOCIATION,
successor by merger to SouthTrust Bank (“Bank”).
R
e c
i t a l s:
A.
Bank
and
Borrowers are parties to that certain Credit Agreement dated October 29,
2003,
as amended by that certain Borrower Party Joinder Agreement dated as of
May 6, 2005 (the “Credit Agreement”).
B.
Borrowers
and Bank have hereby agreed to amend the Credit Agreement, subject to the
terms
and conditions contained in this Amendment.
NOW
THEREFORE, in consideration of the recitals and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged by the
parties, the parties hereto agree as follows:
1.
Defined
Terms.
Capitalized terms used, but not defined, in this Amendment shall have that
meaning assigned to them in the Credit Agreement.
2.
Amendments
to Credit Agreement.
Borrowers and Bank agree that the Credit Agreement is hereby amended as
follows:
(a)
The
new
definitions "Second Amendment Date" and "2005 Restructuring Charges" are
hereby
added to Section 1.1 of the Credit Agreement in their appropriate alphabetical
order as follows:
"2005
Restructuring Charges"
means
the non-cash restructuring charges incurred by Theragenics Corporation in
the
third and fourth fiscal quarters of 2005 relating to (i) the closing of its
facility in Oak Ridge, Tennessee, (ii) the closing of its Xxxxxx Terrace
Facility in Buford, Georgia, (iii) elimination of excess cyclotron capacity,
(iv) the discontinuation of its radiochemical activities, and (v) elimination
of
certain of its research and development activities.
"Second
Amendment Date"
means
August 12, 2005.
(b)
The
definitions of "Permitted Acquisition" and "Tangible Net Worth" contained
in
Section 1.1 of the Credit Agreement are hereby amended to read in their entirety
as follows:
"Permitted
Acquisition"
means
any Acquisition if (i) the business acquired is a Permitted Line of Business;
(ii) consideration for such Acquisition, plus the consideration paid for
all
Acquisitions on a cumulative basis on and after the Second Amendment Date,
does
not exceed the aggregate amount of $5,000,000 (which consideration shall
include, without limitation, securities issued by Borrower, Borrower's property
(such securities and property to be
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valued
at
their fair market value on the date of such Acquisition), cash, and the amount
of all Indebtedness assumed in the case of each asset purchase or acquired
in
the case of each equity purchase); (iii) immediately after the Acquisition,
the
business so acquired (and the assets constituting such business) shall be
owned
and operated by a Borrower; and (iv) Borrower shall have delivered to Bank
a
pro-forma compliance certificate demonstrating that, on a pro-forma basis,
after
giving effect to the Acquisition, such Acquisition would not give rise to
a
Default as of the consummation of the Acquisition, or a Financial Covenant
Default as of the four Quarter-Ends immediately following the Acquisition
based
on such pro-forma projections.
"Tangible
Net Worth"
means,
at any time with respect to an applicable Person, Equity Owners' Equity,
plus
Subordinated Debt, less the sum of (without duplication):
(A)
Any (i) surplus resulting from any write-up of assets after the date of Closing
plus (ii) amount attributable to any reversal of charges or write up of assets
related to any portion of the 2005 Restructuring Charges after the Second
Amendment Date;
(B)
Goodwill,
including any amounts, however designated on a balance sheet of such Person,
representing the excess of the purchase price paid for assets or stock acquired
over the value assigned thereto on the books of such Person;
(C)
Patents,
trademarks, trade names and copyrights;
(D)
Any
amount at which shares of Equity Interests of such Person appear as an asset
on
such Person's balance sheet;
(E)
Loans
and
advances to Affiliates, stockholders, directors, officers or employees (other
than Subordinated Debt);
(F)
Deferred
expenses;
(G)
Equity
investments in Affiliates of any nature; and
(H)
Any
other
amount in respect of an intangible that, in accordance with Generally Accepted
Accounting Principles, should be classified as an asset on a balance sheet
of
such Person.
(c)
Section
7.3(A) of the Credit Agreement is hereby amended to read in its entirety
as
follows:
(A)
Ratios.
During
the term of this Agreement, Borrowers will maintain or cause to be
maintained:
(1)
A
ratio
of Liabilities to Tangible Net Worth of not more than 0.5 to 1.0;
(2)
Tangible
Net Worth of not less than $87,500,000.00; and
(3)
Liquid
Assets of not less than $25,000,000.00.
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(d)
A
new
Section 7.3(E) is hereby added to the Credit Agreement as follows:
(E)
Capital
Expenditures.
Borrowers will not make, incur, create, or assume any Capital Expenditures
(other than that portion of Permitted Acquisitions consisting of Capital
Expenditures) on
a
cumulative basis, on and after the Second Amendment Date, exceeding
the aggregate amount of $10,000,000.
3. Conditions
Precedent.
This
Amendment shall not be effective unless and until (i) Borrowers have delivered
to Bank a Compliance Certificate demonstrating, on a pro forma basis, compliance
by the Borrowers with the financial covenants set forth in Section 7.3 for
their
four fiscal quarters immediately following the Second Amendment Date, and
(ii)
each of the parties hereto has executed and delivered this Amendment.
4. Representations
and Warranties.
As a
material inducement to Bank to modify and amend the terms of the Credit
Agreement as aforesaid, each Borrower represents and warrants to Bank
that:
(a)
This
Amendment constitutes the valid and legally binding obligation of each Borrower
enforceable in accordance with its respective terms and does not violate,
conflict with, or constitute any default under any law or regulation binding
on
or applicable to either Borrower, either Borrower’s articles, bylaws, or any
mortgage, lease, credit, loan agreement, contract, or other instrument binding
upon or affecting either Borrower;
(b)
All
representations and warranties contained in the Loan Documents are true and
complete as of the date hereof in all material respects, excluding any
representations or warranties which by their terms are limited to a specific
date;
(c)
No
Event
of Default or event that, with the passage of time or the giving of notice
(or
both) would constitute an Event of Default, under the Loan Documents has
occurred and is continuing as of the date hereof; and
(d)
No
setoffs, defenses, claims, recoupments, or counterclaims on the part of either
Borrower to payment or performance of the Obligations exists as of the date
hereof.
5. Miscellaneous.
(a)
The
parties hereto agree that the Bank's notice address set forth in Section
11.1(B)
of the Credit Agreement is hereby changed as follows:
Wachovia
Bank, National Association
000
00xx
Xxxxxx, X.X., 0xx Xxxxx
Xxxxxxx,
Xxxxxxx 00000
Attn:
Credit Products Manager
(b)
Borrowers
agree to pay or reimburse Bank for all expenses incurred by Bank in connection
with the negotiation, preparation, and execution of the Joinder Agreement
dated
May 6, 2005, and this Amendment, including, without limitation, fees and
expenses of Bank’s counsel.
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(c)
Notwithstanding
any provision of the Credit Agreement or Note to the contrary, whenever any
installment of principal of, or interest on, the Loans or other amount due
under
the Loan Documents, as amended, becomes due and payable on a day which is
not a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day (unless such next succeeding Business Day does not fall within
the
same calendar month, in which case the maturity thereof shall be shortened
to
the immediately preceding Business Day). In the case of any extension in
the
time for payment of any installment of principal, interest shall be payable
thereon at the rate per annum determined in accordance with the Loan Documents,
as amended, during such extension.
(d)
BORROWER
AGREES THAT WITH RESPECT TO ANY CLAIM OF BORROWER ARISING UNDER THE CREDIT
AGREEMENT, AS AMENDED, OR ANY OTHER LOAN DOCUMENT, IN NO EVENT SHALL BORROWER
HAVE A REMEDY OF, OR SHALL BANK BE LIABLE FOR, INDIRECT, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES, AND BORROWER WAIVES ANY RIGHT OR CLAIM TO
SUCH
DAMAGES BORROWER MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION
WITH
THE LOANS OR THE LOAN DOCUMENTS, WHETHER THE SAME IS RESOLVED BY ARBITRATION,
MEDIATION, JUDICIAL PROCESS OR OTHERWISE.
6. No
Novation.
The
execution and delivery of this Amendment shall not be interpreted or construed
as, and in fact does not constitute, a novation, payment, or satisfaction
of all
or any portion of the Loans; rather, this Amendment is strictly amendatory
in
nature.
7. Document
Protocols.
This
Amendment shall be governed by the terms set forth in Articles X and XI of
the
Credit Agreement (subject to the address change in paragraph 5(a)
above),
which are incorporated herein by reference.
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of page intentionally left blank; signature page follows]
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IN
WITNESS WHEREOF, Borrowers have executed this Amendment under seal as of
the
date first above written, with the intention that this Amendment take effect
as
an instrument under seal.
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BORROWERS:
C.P.
MEDICAL CORPORATION
By: /s/
Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Secretary and Treasurer
THERAGENICS
CORPORATION
By: /s/
Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Executive Vice President for Strategy,
Development
and Acquisitions & Acting Chief
Financial
Officer
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IN
WITNESS WHEREOF, Bank has executed this Amendment under seal as of the date
first above written, with the intention that this Amendment take effect as
an
instrument under seal.
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BANK:
WACHOVIA
BANK, NATIONAL ASSOCIATION,
successor
by merger to SouthTrust Bank
By:____________________________________
Name:
Title:
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