EX-10.1
2
ex10-1.htm
EXHIBIT 10.1
Exhibit
10.1
THIRD
AMENDMENT TO
CREDIT AGREEMENT
THIS
THIRD AMENDMENT TO
CREDIT AGREEMENT (this
“Amendment”) is entered into as of this 29th day of June, 2006, 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, and that certain Second Amendment dated August 12, 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
following new definitions are hereby added to Section 1.1 of the
Credit
Agreement in their appropriate alphabetical order as follows:
“Consolidated
Fixed Charges”
means
the sum of interest expense, including the interest component of any payments
with respect to Capitalized Lease obligations, plus rent and lease expense
plus
taxes plus current maturities of long-term Indebtedness.
"Daily
Adjusted LIBOR Rate"
means,
for each day, an interest rate equal to the sum of (i) the applicable Daily
LIBOR Rate, plus (ii) the Applicable Margin.
"Daily
LIBOR Rate"
means,
for any day, a per annum rate of interest equal to the quotient obtained
(stated
as an annual percentage rate rounded upward to the next higher 100th of
1%) by
dividing (A) the London Interbank Offered Rate ("LIBOR") as determined
by Bank
from Telerate for the 30-Day LIBOR Rate on such day (or such other reasonably
similar source as Bank may select if such a rate index is not available
from
Telerate), by (B) 1.00 minus any Reserve Requirement for a 30-Day LIBOR
Rate
Interest Period (expressed as a decimal).
"Daily
LIBOR Rate Notice"
means a
written notice given to Bank by a Borrower's Representative providing for
Borrower's election for all or any portion (but if a portion, in increments
of
not less than $1,000,000.00) of the outstanding principal balance of the
Note to
bear interest at the applicable Daily Adjusted LIBOR Rate thereafter, such
notice to be given at least two (2) Business Days prior to and specifying
the
date of the commencement thereof; provided, however, that, except as may
be
waived by Bank in Bank's discretion, (i) in no event may the Daily LIBOR
Rate
apply until the expiration of any current LIBOR Rate Interest Period, (ii)
if
any such Daily LIBOR Rate Notice would cause there to be more than four (4)
Interest Rates in effect with respect to the Note on the day of the commencement
of the Daily LIBOR Rate, then such Daily LIBOR Rate Notice shall not be
effective with respect to such Note, and (iii) if any such Daily LIBOR Rate
Notice is not timely received or is otherwise not properly made, such Daily
LIBOR Rate Notice, at Bank's election, shall not be effective.
“Fixed
Charge Coverage Ratio”
means,
for each fiscal quarter and the immediately preceding 3 fiscal quarters,
the sum
of (x) earnings before interest, taxes, depreciation and amortization, plus
rent
and lease expense minus Capital Expenditures minus Restricted Payments, divided
by (y) Consolidated Fixed Charges.
“Restricted
Payments”
means
any payment for the purpose of (i) paying dividends or making distributions
to
shareholders of Theragenics Corporation, (ii) purchasing, redeeming or otherwise
acquiring any stock or other equity interests, (iii) paying or acquiring
any
debt subordinate to the Loans, or (iv) acquiring or repaying any notes, advances
or loans to affiliates, shareholders and employees of Borrower.
“Senior
Liabilities”
means
the sum of total Liabilities, including capitalized leases and all reserves
for
deferred taxes and other deferred sums appearing on the liabilities side
of the
balance sheet, in accordance with Generally Accepted Accounting Principles
applied on a consistent basis, excluding Subordinated Debt.
“Telerate”
means
Telerate page 3750 as of 11:00 a.m., London time.
"Third
Amendment Date"
means
June 29, 2006.
(b) The
following definitions contained in Section 1.1 of the
Credit Agreement are
hereby amended to read in their entirety as follows:
"Applicable
Margin"
means
1.00% per annum.
"Base
Rate Notice"
means a
written notice given to Bank by a Borrower's Representative providing for
Borrower's election for a LIBOR Rate Borrowing to no longer bear interest
at, as
applicable, the Daily Adjusted LIBOR Rate, the 30-Day Adjusted LIBOR Rate,
the
60-Day Adjusted LIBOR Rate or the 90-Day Adjusted LIBOR Rate, such notice
(other
than with respect to a Daily Adjusted LIBOR Rate) to be given at least two
(2)
Business Days prior to the expiration of the applicable LIBOR Rate Interest
Period; provided, however, that, except as may be waived by Bank in Bank's
discretion, if any such Base Rate Notice is not timely received or is otherwise
not properly made, such Base Rate Notice, at Bank's election, shall not be
effective.
-2-
“LIBOR
Rate Borrowing"
means
any borrowing with respect to which Borrower has properly given a Daily LIBOR
Rate Notice, a 30-Day LIBOR Rate Notice, a 60-Day LIBOR Rate Notice or a
90-Day
LIBOR Rate Notice.
"LIBOR
Rate Notice"
means
any applicable Daily LIBOR Rate Notice, 30-Day LIBOR Rate Notice, 60-Day
LIBOR
Rate Notice or 90-Day LIBOR Rate Notice.
"Maturity
Date"
means
October 31, 2009.
"Payment
Due Date"
means,
with respect to Loan Advances bearing interest at the Base Rate or Daily
Adjusted LIBOR Rate, the first (1st) day of each month during the term of
this
Agreement, and with respect to Loan advances bearing interest at a 30-Day
Adjusted LIBOR Rate, 60-Day Adjusted LIBOR Rate or 90-Day Adjusted LIBOR
Rate,
the last day of the relevant interest period.
"Permitted
Acquisition"
means
Acquisitions after the Third Amendment Date 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
Third Amendment Date, does not exceed the aggregate amount of $7,500,000
(which
consideration shall include, without limitation, securities issued by Borrower,
Borrower's property (such securities and property to be 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 if acquired via an equity purchase, such Person
shall
contemporaneously comply with the Joinder Requirements; 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
total assets minus intangible assets (as defined below) minus Senior
Liabilities. For purposes of this definition, “intangible assets” has the
meaning under Generally Accepted Accounting Principles, including, without
limitation, the book value of goodwill, franchises, licenses, non-competition
agreements, patents, trademarks, trade names, copyrights, service marks,
and
brand names, plus the amount of any accounts, notes, advances and/or loans
to
affiliates, shareholders, and employees of the Borrowers shall be subtracted
from total assets.
“Threshold
Amount”
means
$1,000,000.00.
-3-
(c) Section
1.7 of the Credit Agreement is hereby amended to read in its entirety as
follows:
1.7 Computation
of Financial Covenants.
For
purposes of computation of the financial covenants set forth in this Agreement,
such computation shall be (i) determined by Bank as of each Quarter-End,
based
on the Compliance Certificate most recently delivered by Borrower in accordance
with the terms of this Agreement, and (ii) based on an Annualized Rolling
Period, if applicable.
(d) Section
2.4 of the Credit Agreement is hereby amended to read in its entirety as
follows:
2.4 Interest
Rate.
Interest on the Loan shall be calculated as follows:
(A) During
the entire term of the Note, except with respect to LIBOR Rate Borrowings,
the
outstanding principal balance of the Note shall bear interest at the Base
Rate,
to fluctuate daily with any change in the Base Rate.
(B) A
Borrower's Representative may from time to time deliver to Bank (i) a 30-Day
LIBOR Rate Notice, in which case the applicable LIBOR Rate Borrowing shall
bear
interest at the applicable 30-Day Adjusted LIBOR Rate during the applicable
30-Day LIBOR Rate Interest Period, (ii) a 60-Day LIBOR Rate Notice, in which
case the applicable LIBOR Rate Borrowing shall bear interest at the applicable
60-Day Adjusted LIBOR Rate during the applicable 60-Day LIBOR Rate Interest
Period, (iii) a 90-Day LIBOR Rate Notice, in which case the applicable LIBOR
Rate Borrowing shall bear interest at the applicable 90-Day Adjusted LIBOR
Rate
during the applicable 90-Day LIBOR Rate Interest Period or (iv) a Daily LIBOR
Rate Notice, in which case the applicable LIBOR Rate Borrowing shall bear
interest at the applicable Daily Adjusted LIBOR Rate thereafter until another
notice is delivered with respect to the Interest Rate. Following the expiration
of any applicable LIBOR Rate Interest Period, if a Borrower's Representative
shall not have timely and properly delivered a Base Rate Notice or a LIBOR
Rate
Notice for a LIBOR Rate Interest Period to commence as of the expiration
of the
applicable expiring LIBOR Rate Interest Period, then any LIBOR Rate Borrowing
shall bear interest at the Daily Adjusted LIBOR Rate thereafter until another
notice is delivered with respect to the Interest Rate.
(e) Section
4.6 of the Credit Agreement is hereby amended to read in its entirety as
follows:
4.6 Indemnification.
If Borrower makes any payment of principal with respect to any portion of
the
Loan not bearing interest at the Base Rate or Daily Adjusted LIBOR Rate on
any
other date than the last day of an interest period applicable thereto, or
if
Borrower fails to borrow the Loan after notice has been given to Bank to
borrow
at the 30-Day Adjusted LIBOR Rate, the 60-Day Adjusted LIBOR Rate or the
90-Day
Adjusted LIBOR Rate in accordance with this Agreement, or if Borrower fails
to
make any payment of principal or interest in respect of the Loan when due,
Borrower shall reimburse Bank on demand
for any resulting loss or expense incurred by Bank, including without limitation
any loss incurred by Bank in obtaining, liquidating or employing deposits
from
third parties, whether or not Bank shall have funded or committed to fund
the
Loan. A statement as to the amount of such loss or expense, prepared in good
faith and in reasonable detail by Bank and submitted by Bank to Borrower,
shall
be conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to Bank under this Section shall be made
as
though Bank shall have actually funded or committed to fund the portion of
the
Loan so prepaid or not borrowed through the purchase of an underlying deposit
in
an amount equal to the amount of the Loan in the relevant market and having
a
maturity comparable to the related interest period and through the transfer
of
such deposit to a domestic office of Bank in the United States; provided,
however, that Bank may fund the Loan in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation of amounts
payable under this Section.
-4-
(f) A
new
Section 7.1(C)(6) of the Credit Agreement is hereby added in its entirety
as
follows:
(6) Not
later
than the sixtieth (60th)
day
after the commencement of each fiscal year, deliver Projections (as hereinafter
defined) to Bank for the Borrowers and their Subsidiaries for such fiscal
year.
"Projections" means forecasted consolidated and consolidating (i) balance
sheets
prepared on an annual basis, (ii) profit and loss statements prepared on
a month
by month basis, and (iii) cash flow statements prepared on an annual basis,
all
prepared on a consistent basis with Borrowers’ historical financial statements,
together with appropriate supporting details and a statement of underlying
assumptions.
Accordingly,
(i) the word “and” at the end of Section 7.1(C)(4) is deleted and (ii) the
period at the end of Section 7.1(C)(5) is deleted and in its place is
substituted “; and”.
(g) 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,
tested as of the end of each fiscal quarter:
(1) A
ratio
of Senior Liabilities to Tangible Net Worth of not more than 0.5 to
1.0;
(2) Fixed
Charge Coverage Ratio of not less than 1.25 to 1.0; and
(3) Liquid
Assets of not less than the following amounts during the following
periods:
|
Period
|
Amount
of Liquid Assets
|
|
From
the Third Amendment Date through and including June 30, 2007
|
$15,000,000
|
|
From
July 1, 2007 through and including June 30, 2008
|
$17,500,000
|
|
From
July 1, 2008, and thereafter
|
$20,000,000
|
-5-
(h) Section
7.3(E) of the Credit Agreement is hereby amended to read in its entirety
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) exceeding the aggregate amount of $10,000,000 in any fiscal
year.
(i) Exhibit
A
to the Credit Agreement is amended and restated in its entirety as Exhibit
A to
this Amendment.
3.
Conditions
Precedent.
This
Amendment shall not be effective unless and until 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) Borrowers
agree to pay or reimburse Bank for all expenses incurred by Bank in connection
with the negotiation, preparation, and execution of this Amendment, including,
without limitation, fees and expenses of Bank’s counsel.
(b) 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.
-6-
(c) 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, which are incorporated herein by reference.
[Remainder
of page intentionally left blank; signature page follows]
-7-
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.
BORROWERS:
THERAGENICS
CORPORATION
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X.
Xxxxxxx
Title:
Chief
Financial Officer
C.P.
MEDICAL
CORPORATION
By:
/s/
Xxxx X. Xxxxxx
Name:
Xxxx X.
Xxxxxx
Title:
Secretary and
Treasurer
-8-
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.
BANK:
WACHOVIA
BANK,
NATIONAL ASSOCIATION,
successor
by merger
to SouthTrust Bank
By:
/s/
Xxxxxxx Xxxxxxxx
Name:
Xxxxxxx
Xxxxxxxx
Title:
Vice
President
-9-
EXHIBIT
A
FORM
OF COMPLIANCE CERTIFICATE
COMPLIANCE
CERTIFICATE
FOR
THE PERIOD ENDING _______________
To: Wachovia
Bank, National Association
000
00xx Xx., 0xx Xxxxx
Xxxxxxx,
XX 00000
Pursuant
to that certain Credit Agreement, dated as of October 29, 2003 (as amended
from
time to time, the "Credit Agreement", capitalized terms used herein as therein
defined), between THERAGENICS
CORPORATION,
a
Delaware corporation and the other “Borrowers” thereto (collectively, the
"Borrower"), and WACHOVIA
BANK, NATIONAL ASSOCIATION (the
"Bank"), the undersigned submits this Compliance Certificate and certifies
that
the covenants and financial tests described in the Credit Agreement are as
follows:
I. Financial
Statements and Reports Compliance
(Please Indicate)
A. Annual
CPA audited, Fiscal Year-End financial
statements within 120 days after each Fiscal Year-End
Yes
No
B. Quarterly
unaudited financial statements within 45 days
after each Quarter-End
Yes
No
II. Senior
Liabilities to Tangible Net Worth
Maximum
of 0.5 to 1.0 allowed.
As
of the
Quarter ending _______________
$_________
/$__________
= ________ Yes
No
Senior
Liabilities TNW Ratio
-10-
III. Fixed
Charge Coverage Ratio
Minimum
of 1.25 to 1.0 allowed.
As
of the Quarter ending _______________
|
$____________
|
/$____________
|
=
____________
|
Yes
|
No
|
|
earnings
before interest, taxes,
depreciation
and amortization, plus
rent
and lease expense minus
Capital
Expenditures minus
Restricted
Payments
|
Fixed
Charges
|
Ratio
| | |
IV. Liquid
Assets
|
Period
|
Minimum
Amount of Liquid Assets
|
|
From
the Third Amendment Date through and including June 30, 2007
|
$15,000,000
|
|
From
July 1, 2007 through and including June 30, 2008
|
$17,500,000
|
|
From
July 1, 2008, and thereafter
|
$20,000,000
|
Actual
Liquid Assets for this
reporting
period equals $_____________ Yes
No
V. Capital
Expenditures
Maximum
of $10,000,000 per fiscal year
Actual
Capital Expenditures for this
reporting
period equals $_____________
Yes
No
-11-
A. The
undersigned has individually reviewed the provisions of the Credit Agreement
and
a review of the activities of Borrower during the period covered by this
Compliance Certificate has been made in reasonable detail by or under the
supervision of the undersigned with a view to determining whether Borrower
has
kept, observed, performed and fulfilled all of its obligations under the
Credit
Agreement.
B. Such
review did not disclose, and I have no knowledge of, the existence of any
Default or Event of Default which has occurred and is continuing [except
as
disclosed on the attachment hereto].
Executed
this ______ day of __________________, 20___.
THERAGENICS
CORPORATION
By:
Its:
-12-
