EXHIBIT 10.15
EXECUTION COPY
AMENDMENT NO. 2 TO CREDIT AGREEMENT
This AMENDMENT NO. 2 TO CREDIT AGREEMENT is
made and entered into as of March 12, 1999,
by and among XXXXXX RESPIRATORY CARE INC., a
California corporation (the "Borrower"),
RIVER HOLDING CORP., a Delaware corporation
("Holding") and the Required Lenders (as
defined in Article I of the Credit
Agreement).
RECITALS
A. The Borrower, Holding, the Lenders (as defined in Article I of the
Credit Agreement), Salomon Brothers Inc, and Bankers Trust Company, entered into
a Credit Agreement dated as of April 7, 1998 (as amended and otherwise modified
to the date hereof, the "Credit Agreement"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the Credit
Agreement.
B. The Borrower requested certain changes to the Credit Agreement, and has
agreed to certain changes to other provisions of the Credit Agreement.
C. The Required Lenders are willing to so amend the Credit Agreement on
the terms and conditions set forth herein.
D. The Borrower, Holding and the Required Lenders are entering this
Amendment pursuant to Section 9.08(b) of the Credit Agreement.
AGREEMENTS
In consideration of the foregoing Recitals, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, Holding and the Required Lenders agree as follows:
1. Definitions. (a) Clause (e)(ii)(A) of the definition of "Permitted
Acquisition" is amended in its entirety to read:
(A) Revolving Loans, the aggregate principal amount of which,
when added to the aggregate outstanding principal amount of all other
Revolving Loans made to finance Permitted Acquisitions, shall not
exceed $45,000,000 at any one time outstanding; and
(a) The table in the definition of "Pricing Adjustment" is amended in its
entirety to read:
Category 1 Category 2 Category 3 Category 4
Debt/Adjusted Debt/Adjusted Debt/Adjusted Debt/Adjusted
EBITDA Ratio EBITDA Ratio EBITDA Ratio EBITDA Ratio
greater than or equal less than 5.5:1.0 less than 4.0:1.0 and less than 3.5:1.0
to 5.5:1.0 and greater than or greater than or
equal to 4.0:1.0 equal to 3.5:1.0
--------------------- ------------------- -------------------- -----------------
Commitment Fees 0% 0% .0625% .125%
ABR Loans 0% .250% .500% .750%
Eurodollar Loans 0% .250% .500% .750%
2. Interest on Loans. Sections 2.06(a) and (b) of the Credit Agreement are
amended in their entirety to read:
(a) Subject to the provisions of Section 2.07, the Loans comprising
each ABR Borrowing, including each Swingline Loan, shall bear interest
(computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at
all other times) at a rate per annum equal to the Alternate Base Rate plus
1.50% less the applicable Pricing Adjustment.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum
equal to the Adjusted Eurodollar Rate for the Interest Period in effect for
such Borrowing plus 2.50% less the applicable Pricing Adjustment.
3. Use of Proceeds. Section 3.13 of the Credit Agreement is amended by
adding a new clause (e) as follows:
(e) Notwithstanding anything in this Agreement to the contrary, not
more than $45,000,000 of the Aggregate Revolving Credit Exposure
outstanding at any time may be used by the Borrower for purposes of
Permitted Acquisitions pursuant to Section 6.04(c), and not more than
$15,000,000 of the Aggregate Revolving Credit Exposure outstanding at any
time may be used by the Borrower for any corporate purpose other than
Permitted Acquisitions pursuant to Section 6.04(c).
4. Financial Statements, Reports, etc. Section 5.05(d) of the Credit
Agreement are amended in its entirety to read:
(d) concurrently with any delivery of financial statements under
clause (a), (b) or (c), a certificate of the accounting firm or a Financial
Officer opining on or certifying such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying that no
Event of Default or Default has occurred or, if such an Event of Default or
Default
has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the Administrative
Agent demonstrating compliance with the covenants contained in Section
3.13(e) and Section 6.09 through Section 6.12;
5. Dividends and Distributions; Restrictions on Ability of Subsidiaries to
Pay Dividends. Section 6.05 of the Credit Agreement is amended by deleting the
word "and" at the end of clause (a)(iii), deleting the word "or" at the end of
clause (a)(iv), and inserting new clauses (a)(v) and (a)(vi) as follows:
(v) the Borrower may pay dividends on the Borrower's Exchangeable
Preferred Stock in cash, but only (A) to the extent that such cash is to be
used by Holding to pay in cash dividends on Holding's Exchangeable
Preferred Stock that, if paid in kind, would otherwise have required the
issuance of a fractional share of Holding's Exchangeable Preferred Stock,
and (B) up to an aggregate amount of $25,000 in any fiscal year of the
Borrower; and
(vi) Holding may pay dividends on Holding's Exchangeable Preferred
Stock in cash, but only (A) to the extent that such dividend, if paid in
kind, would otherwise have required the issuance of a fractional share of
Holding's Exchangeable Preferred Stock, and (B) up to an aggregate amount
of $25,000 in any fiscal year of Holding; or
6. Debt/Adjusted EBITDA Ratio. Section 6.09 of the Credit Agreement is
amended in its entirety to read as follows:
Section 6.09. Debt/Adjusted EBITDA Ratio. The Debt/Adjusted EBITDA
Ratio shall not exceed the following amounts as of the ends of fiscal quarters
of the Borrower ending nearest to the following dates:
------------------------------------------------------------------------------------------------------
Fiscal Quarter Debt/Adjusted EBITDA Ratio
Ending Nearest
to
------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004
------------------------------------------------------------------------------------------------------
March 31 6.40:1.00 5.60:1.00 4.75:1.00 3.75:1.00 3.50:1.00 3.50:1.00
------------------------------------------------------------------------------------------------------
June 30 6.75:1:00 6.40:1.00 5.35:1.00 4.50:1.00 3.75:1.00 3.50:1.00
------------------------------------------------------------------------------------------------------
September 30 6.75:1:00 6.20:1.00 5.10:1.00 4.25:1.00 3.75:1.00 3.50:1.00
------------------------------------------------------------------------------------------------------
December 31 6.40:1.00 6.00:1.00 5.00:1.00 4.00:1.00 3.50:1.00 3.50:1.00
------------------------------------------------------------------------------------------------------
and thereafter, 3.50:1.00.
7. Minimum EBITDA. Section 6.10 of the Credit Agreement is amended in its
entirety to read as follows:
SECTION 6.10. Minimum EBITDA. The Borrower's EBITDA for the four
fiscal quarters ending nearest to the following dates shall not be less
than the following amounts:
------------------------------------------------------------------------------------------------------
Fiscal Quarter Minimum EBITDA
Ending Nearest
to
------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
------------------------------------------------------------------------------------------------------
March 31 $24,000,000 $26,500,000 $30,000,000 $34,500,000 $37,500,000
------------------------------------------------------------------------------------------------------
June 30 $24,000,000 $27,500,000 $31,000,000 $35,000,000 $38,000,000
------------------------------------------------------------------------------------------------------
September 30 $24,500,000 $28,000,000 $32,000,000 $36,000,000 $38,500,000
------------------------------------------------------------------------------------------------------
December 31 $24,000,000 $25,000,000 $28,500,000 $34,000,000 $37,000,000 $39,000,000
------------------------------------------------------------------------------------------------------
and thereafter, $39,000,000.
8. Interest Coverage Ratio. Sections 6.11(c) and (d) of the Credit
Agreement are amended in their entirety to read as follows:
(c) The ratio of
(i) the EBITDA for the period of four fiscal quarters ending
nearest to December 31, 1998 to
(ii) the product of 1.33 times the Consolidated Interest Expense
for the period of three fiscal quarters ending nearest to December 31,
1998,
shall not be less than 1.60:1.00.
(d) The ratio of EBITDA to Consolidated Interest Expense for the
period of four fiscal quarters ending nearest to each of the following
dates, shall not be less than the following ratios:
------------------------------------------------------------------------------------------------
Consolidated Interest Coverage Ratio
Fiscal Quarter Ending
Nearest to
------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
------------------------------------------------------------------------------------------------
March 31 1.55:1.00 1.80:1.00 2.10:1.00 2.75:1.00 3.00:1:00 3.00:1:00
------------------------------------------------------------------------------------------------
June 30 1.55:1.00 1.85:1.00 2.20:1.00 2.75:1.00 3.00:1:00
------------------------------------------------------------------------------------------------
September 30 1.65:1.00 1.95:1.00 2.30:1.00 2.75:1.00 3.00:1:00
------------------------------------------------------------------------------------------------
December 31 1.65:1.00 2.00:1.00 2.50:1.00 3.00:1.00 3.00:1:00
------------------------------------------------------------------------------------------------
and thereafter, 3.00:1.00.
9. Fixed Charge Coverage Ratio. Section 6.12 of the Credit Agreement is
amended in its entirety to read as follows:
SECTION 6.12. Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio as of the end of the period of four fiscal quarters ending
nearest to the following dates shall not be less than the following ratios,
beginning with the fiscal quarter ending nearest to March 31, 1999:
------------------------------------------------------------------------------------------------
Fixed Charge Coverage Ratio
Fiscal Quarter Ending
Nearest to
------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
------------------------------------------------------------------------------------------------
March 31 1.05:1.00 1.00:1.00 1.10:1.00 1.20:1.00 1.20:1.00 1.20:1.00
------------------------------------------------------------------------------------------------
June 30 1.00:1.00 1.07:1.00 1.15:1.00 1.20:1.00 1.20:1.00
------------------------------------------------------------------------------------------------
September 30 1.00:1.00 1.07:1.00 1.15:1.00 1.20:1.00 1.20:1.00
------------------------------------------------------------------------------------------------
December 31 1.00:1.00 1.07:1.00 1.20:1.00 1.20:1.00 1.20:1.00
------------------------------------------------------------------------------------------------
and thereafter, 1.20:1.00.
10. Binding Effect and Effectiveness. This Amendment may be executed in
as many counterparts as may be convenient and shall become binding when the
Borrower, Holding and the Required Lenders have each executed and delivered at
least one counterpart, and shall become effective (with retrospective effect
from December 31, 1998) upon satisfaction of the following conditions precedent:
(a) The Borrower shall have paid to each Lender that executes this
Amendment an amendment fee equal to 0.125% of such Lender's Revolving
Credit Commitment and outstanding Term Loans as of the date of this
Amendment.
(b) The Borrower shall have paid to the Administrative Agent all fees
which are due and payable to the Administrative Agent under the Credit
Agreement as amended.
11. Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of New York, without regard to the conflicts
of law provisions thereof.
12. Reference to Credit Agreement. Except as amended hereby, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. On and after the effectiveness of the amendment to
the Credit Agreement accomplished hereby, each reference in the Credit
Agreement, to "this Agreement", "hereunder", "hereof", "herein" or words of like
import, and each reference to the Credit Agreement shall be deemed a reference
to the Credit Agreement, as amended hereby, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers as of the date first above written.
XXXXXX RESPIRATORY CARE INC.,
by_________________________________
Name:
Title:
RIVER HOLDING CORP.,
by_________________________________
Name:
Title:
Acknowledged by:
BANKERS TRUST COMPANY, as Administrative
Agent and Collateral Agent
by_________________________________
Name:
Title:
SALOMON BROTHERS INC, as Arranger,
Advisor and Syndication Agent,
by_________________________________
Name:
Title:
LENDERS
-------
BANKERS TRUST COMPANY,
by_________________________________
Name:
Title:
CITICORP USA, INC.,
by_________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
by_________________________________
Name:
Title:
by_________________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
by_________________________________
Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT,
by_________________________________
Name:
Title:
by_________________________________
Name:
Title:
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.,
by_________________________________
Name:
Title:
by_________________________________
Name:
Title:
XXXXX FARGO BANK, N.A.,
by_________________________________
Name:
Title:
ROYAL BANK OF CANADA,
by_________________________________
Name:
Title:
SOCIETE GENERALE,
by_________________________________
Name:
Title:
IMPERIAL BANK,
by_________________________________
Name:
Title:
NATIONSBANK, N.A., as successor to
NationsBank of Texas, N.A.,
by_________________________________
Name:
Title:
