EXHIBIT 4.2
AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (the "Amendment") dated as of April 27, 1998, to
the Credit Agreement referenced below, is by and among XXXXX & MINOR, INC., a
Virginia corporation, (the "Borrower"), the Guarantors and Lenders identified
therein, and NATIONSBANK, N.A., as Administrative Agent.
W I T N E S S E T H
WHEREAS, the Lenders have established a $225 million credit facility
for the benefit of the Borrower pursuant of the terms of that Credit Agreement
dated as of September 15, 1997 (as amended and modified, the "Credit Agreement")
among the Borrower, the Guarantors and Lenders identified therein and
NationsBank, N.A., as Administrative Agent;
WHEREAS, the Borrower has requested certain modifications to the Credit
Agreement;
WHEREAS, the modifications requested hereby require the consent of the
Required Lenders; and
WHEREAS, the Required Lenders have consented to the requested
modifications on the terms and conditions set forth herein and have authorized
the Administrative Agent to enter into this Amendment on their behalf to give
effect to this Amendment;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Terms used but not otherwise defined shall have the
meanings provided in the Credit Agreement.
2. Amendment. The Credit Agreement is amended and modified in the
following respects:
2.1 The following definitions are amended or added in Section 1.01 to
read as follows:
"Consolidated Fixed Charges" means, for the applicable period
ending as of a Determination Date, the sum of (i) all Interest Expense
on all Indebtedness during such period (including for purposes hereof,
dividends paid on the Preferred Securities without duplication for
interest payable under the Junior Subordinated Debentures), (ii) all
Rentals (other than Rentals on Capitalized Leases to the extent such
Rentals are included in Interest Expense or as a current maturity of a
Capitalized Lease under subsection (iii) hereof) payable during such
period, (iii) current maturities of Funded Debt and current maturities
of Capitalized Leases as of such Determination Date, and (iv) all
dividends paid in cash or property and redemptions made of capital
stock (other than dividends paid to, or redemptions of capital stock
owned by, the Borrower or a wholly-owned Subsidiary, and without
duplication for items treated as Interest Expense hereunder in respect
of the Preferred Securities and Junior Subordinated Debentures) during
such period, in each case for the Borrower and its Subsidiaries on a
consolidated basis determined, except as provided above, in accordance
with generally accepted accounting principles.
"Consolidated Net Income Available for Fixed Charges" means,
for the applicable period ending as of a Determination Date, the sum of
Consolidated Net Income
plus (to the extent deducted in determining
Consolidated Net Income) (i) all provisions for any federal,
state or other income taxes, (ii) depreciation, amortization
and other non-cash charges, including without limitation any
accrual necessary for purposes of conforming with Financial
Accounting Standards Board Statement Number 106 (as defined by
generally accepted accounting principles) to the extent that
the accrued portion thereof constitutes a non-cash charge,
(iii) Interest Expense (including for purposes hereof,
dividends paid on the Preferred Securities without duplication
for interest payable under the Junior Subordinated
Debentures), and (iv) all Rentals,
minus (v) all Capital Expenditures,
for the Borrower and its Subsidiaries on a consolidated basis
determined, except as provided above, in accordance with generally
accepted accounting principles.
"Consolidated Net Worth" means total stockholders' equity for
the Borrower and its Subsidiaries on a consolidated basis as determined
in accordance with generally accepted accounting principles (but
including, without duplication, in any event, for purposes hereof, the
Preferred Securities and the Indebtedness evidenced by the Junior
Subordinated Debentures).
"Consolidated Tangible Net Worth" means Consolidated Net Worth
minus goodwill, patents, trade names, trade marks, copyrights,
franchises, organizational expense, deferred assets other than prepaid
insurance and prepaid taxes and such other assets as are properly
classified as "intangible assets", for the Borrower and its
Subsidiaries on a consolidated basis as determined in accordance with
generally accepted accounting principles.
"Consolidated Total Debt" means all Indebtedness of the
Borrower and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles plus to the
extent not included under generally accepted accounting principles,
items referenced in the definition of "Indebtedness" (but excluding,
without duplication, in any event, for purposes hereof, the Preferred
Securities and the Indebtedness evidenced by the Junior Subordinated
Debentures and the Borrower's Guaranty Obligations with respect to the
Preferred Securities).
"Funded Debt" means, for any Person, (i) all Indebtedness of
such Person for borrowed money or which has been incurred in connection
with the acquisition of assets, in each case having a final maturity of
one or more years from the date of origin thereof (or which is
renewable or extendable at the option of the obligor for a period or
periods more than one year from the date of origin), (ii) all
Capitalized Lease obligations for such Person, and (iii) all Guaranty
Obligations by such Person of Funded Debt of others. For purposes
hereof, Funded Debt shall include, without duplication, payments in
respect of Funded Debt which constitute current liabilities of the
obligor under generally accepted accounting principles, and shall
exclude, without duplication, the Preferred Securities and the
Indebtedness evidenced by the Junior Subordinated Debentures.
"Junior Subordinated Debentures" means junior subordinated
convertible deferrable interest debentures or other similar
subordinated debt securities issued by the Borrower or any Subsidiary
the interest payments on which are used to make cash distributions on
Preferred Securities, on substantially the terms described in Exhibit A
to Amendment No. 1.
"Permitted Investments" means (i) cash and Cash Equivalents,
(ii) receivables owing to the Borrower or its Restricted Subsidiaries
or any of its receivables and advances to suppliers, in each case if
created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms,
(iii) subject to the limitations set out in Section 7.05(b),
investments by the Borrower and its Restricted Subsidiaries in and to a
Credit Party, including any investment in a corporation which, after
giving effect to such investment, will become an Additional Credit
Party (provided such Additional Credit Party shall execute a Joinder
Agreement), (iv) loans and advances in the usual and ordinary course of
business to officers, directors and employees for expenses (including
moving expenses related to a transfer) incidental to carrying on the
business of the Borrower or any Restricted Subsidiary in an aggregate
amount not to exceed $3,000,000 at any time outstanding, (v)
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business,
(vi) investments in a Securitization Subsidiary or Special Purpose
Vehicle relating to a Qualified Securitization Transaction, (vii)
investments in a PS Affiliate of up to $5,000,000 in the aggregate; and
(viii) additional loan advances and/or investments of a nature not
contemplated by the foregoing clauses hereof, provided that such loans,
advances and/or investments made pursuant to this clause (viii) shall
not exceed $10,000,000 in aggregate amount at any time outstanding. As
used herein, "investment" means all investments, in cash or by delivery
of property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan advance, capital contribution or
otherwise.
"Preferred Securities" means pass-through securities, capital
securities or other preferred securities issued by a statutory business
trust or other similar special purpose entity owned or controlled by
the Borrower or any Subsidiary the proceeds of which are invested in or
exchanged for Junior Subordinated Debentures.
"PS Affiliate" means any trust or other special purpose entity
which is the issuer of Preferred Securities.
"Restricted Subsidiary" means any Subsidiary other than a
Securitization Subsidiary or PS Affiliate (i) which is organized under
the laws of the United States or any State thereof; (ii) which conducts
substantially all of its business and has substantially all of its
assets within the United States; and (iii) of which more than 50% (by
number of votes) of the Voting Stock is beneficially owned, directly or
indirectly, by the Borrower.
"Subordinated Debt" means (i) the indebtedness evidenced by
the Senior Subordinated Notes, (ii) the indebtedness evidenced by the
Junior Subordinated Debentures and (iii) any other Indebtedness which
by its terms is specifically subordinated in right of payment to the
prior payment of the Loans and obligations hereunder and under the
other Credit Documents on terms and conditions satisfactory to the
Required Banks.
2.2 The reference in the second sentence of Section 5.15
to"(not including any Securitization Subsidiary)" is amended to read as follows:
(not including any Securitization Subsidiary or any PS
Affiliate)
2.3 The references in Section 6.12 to the phrase "(other than
a Securitization Subsidiary)" are amended to read as follows:
(other than a Securitization Subsidiary or PS Affiliate)
2.4 Section 7.01(e) is amended to read as follows:
(e) (i) Indebtedness evidenced by the Senior Subordinated
Notes, (ii) Indebtedness evidenced by the Junior Subordinated
Debentures in an aggregate principal amount up to $143,750,000, and
(iii) other Subordinated Debt acceptable to the Required Lenders in
their sole discretion.
2.5 In Section 7.03, clause (v) is renumbered as "(vi)" and a
new clause (v) is added immediately preceding to read as follows:
(v) guaranty by the Borrower of the Preferred Securities on
substantially the terms described in Exhibit A to Amendment No. 1, and
2.6 Section 7.07 is amended in the following respects:
(a) In subsection (c), clause (i) is amended to read
as follows:
(i) regularly scheduled non-default principal payments on the
Senior Subordinated Notes and the Junior Subordinated Debentures, and
regularly scheduled non-default interest payments on the Senior
Subordinated Notes and the Junior Subordinated Debentures, and
(b) A new subsection (d) is added to read as
follows:
(d) designate any other indebtedness as "Designated Senior and
Subordinated Debt" within the meaning provided in the indenture or
other governing instruments relating to the Junior Subordinated
Debentures without the prior written consent of the Required Banks.
2.7 In the second sentence of Section 7.09, the "or"
immediately preceding clause (ii) is amended to "," and a new clause (iii) is
added to the end to read as follows:
or (iii) a PS Affiliate.
2.8 Section 7.11 is amended in the following respects:
(a) The parenthetical references to "(other than a
Securitization Subsidiary pursuant to a Qualified Securitization
Transaction permitted hereunder)" is amended to read as follows:
(other than a Securitization Subsidiary pursuant to a
Qualified Securitization Transaction permitted hereunder or
any PS Affiliate)
(b) There shall be inserted at the very end of
thereof, immediately after the phrase "except as may be provided herein
or in the indenture relating to the Senior Subordinated Notes" the
following:
or in the indenture relating to the Junior
Subordinated Debentures
2.9 In Section 7.12 there shall be added at the very end of
subsection (ii) thereof the following:
(except that no such demonstration shall be necessary for
payments made under the Preferred Securities and the Junior
Subordinated Debentures)
2.10 A new section 7.14 is added to read as follows:
Section 7.14 Repurchase of Series B Preferred Stock; Issuance
of Preferred Securities and Junior Subordinated Debentures.
As part of the refinancing contemplated by Amendment No. 1 to
this Credit Agreement, the Borrower and the PS Affiliate will enter
into a series of transactions to repurchase all of the Borrower's
Series B Cumulative Preferred Stock pursuant to agreements with
Wilmington Securities (copies of which will be made available to the
Administrative Agent and the Banks), and to issue the Preferred
Securities and the Junior Subordinated Debentures on substantially the
terms described in Exhibits A and B to Amendment No. 1. It is
understood and agreed that the execution and delivery of these
agreements and performance by the Borrower and the PS Affiliate and
their Subsidiaries of their obligations thereunder and under any
related agreements shall not, in and of themselves, constitute a
default under this Credit Agreement.
3. In connection with the issuance of the Preferred Securities, the
Borrower is also seeking a consent from the holders of the Senior Subordinated
Notes and certain amendments to the indenture relating thereto in connection
therewith, a copy of which is attached as Exhibit B. The Administrative Agent
hereby confirms consent by the Required Banks to the amendments described in
Exhibit B hereto.
4. This Amendment shall be effective upon satisfaction of the following
conditions:
(a) execution of this Amendment by the Borrower and the
Administrative Agent;
(b) receipt by the Bank of legal opinions of counsel to the Credit
Parties relating to this Amendment in form and substance satisfactory to the
Administrative Agent and the Required Lenders;
(c) receipt by the Administrative Agent for the ratable benefit of
the consenting Lenders of an Amendment Fee of 12.5 basis points on the aggregate
amount of Commitments held by each of the Lenders consenting to this Amendment.
5. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including Schedules and Exhibits) shall remain in full force
and effect.
6. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the reasonable fees and expenses
of Xxxxx & Xxx Xxxxx, PLLC.
7. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and it shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.
8. This Amendment shall be deemed to be a contract made under, and for
all purposes shall be construed in accordance with the laws of the Commonwealth
of Virginia.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed under seal and delivered as of the date
and year first above written.
BORROWER: XXXXX & MINOR, INC.,
a Virginia corporation
By:_______________________________
Name:
Title:
GUARANTORS: XXXXX & MINOR MEDICAL, INC.,
a Virginia corporation
NATIONAL MEDICAL SUPPLY CORPORATION,
a Delaware corporation
XXXXX & MINOR WEST, INC.,
a California corporation
KOLEY'S MEDICAL SUPPLY, INC.,
a Nebraska corporation
XXXXX PHYSICIAN SUPPLY COMPANY,
an Ohio corporation
X. XXXXXXX & COMPANY,
a Michigan corporation
STUART MEDICAL, INC.,
a Pennsylvania corporation
By:_______________________________
Name:
Title:
ADMINISTRATIVE
AGENT: NATIONSBANK, N.A., as Administrative Agent
for and on behalf of the Lenders
By:_______________________________
Name:
Title:
CONSENT TO AMENDMENT NO. 1
NationsBank, N.A.,
as Administrative Agent
000 X. Xxxxx Xxxxxx
Independence Center, 15th Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Re: Credit Agreement dated as of September 15, 1997 (as amended
and modified, the "Credit Agreement") among Xxxxx & Minor,
Inc., the Guarantors and Lenders identified therein and
NationsBank, N.A., as Administrative Agent. Terms used but not
otherwise defined shall have the meanings provided in the
Credit Agreement.
Amendment No. 1 dated April __, 1998 (the "Subject Amendment")
relating to the Credit Agreement
Ladies and Gentlemen:
This should serve to confirm our receipt of, and consent to, the
Subject Amendment. We hereby authorize and direct you, as Administrative Agent
for the Lenders, to enter into the Subject Amendment on our behalf in accordance
with the terms of the Credit Agreement upon your receipt of such consent and
direction from the Required Lenders, and agree that the Borrower may rely on
such authorization.
Sincerely,
-----------------------------
[Name of Lender]
By:__________________________
Name:
Title:
Exhibit A
Description of Junior Subordinated Debentures and Preferred Securities
Exhibit B
Description of Amendments relating to Senior Subordinated Notes
