Exhibit 10.3
SEVENTH AMENDMENT TO CREDIT AGRE'EMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
October 29, 1999, among MERIDIAN MEDICAL TECHNOLOGIES, INC. (as successor by
merger to Brunswick Biomedical Corporation) a Delaware corporation (the
"Borrower"), and ING (U.S.) CAPITAL, LLC, a Delaware limited liability company
(formerly known as ING (U.S.) Capital Corporation ("ING"). consisting the sole
Lender under the Credit Agreement referenced below (together with its successors
and assigns, the "Lenders", and ING in its capacity as Agent for the Lenders.
WITNESSETH:
RECITALS:
A. The Borrower, the Lenders and the Agent have entered into a certain Credit
Agreement dared as of April 15, 1996 (the "Credit Agreement"), capitalized terms
used herein and not otherwise defined shall have the meaning ascribed to such
terms in the Credit Agreement.
B. The Borrower has requested an amendment to the Credit Agreement to reflect an
extension in the nine period during which the Revolving Credit Commitment is
$8,500.000 and to reflect changes in the financial covenants, and the Lenders
have agreed to so amend the Credit Agreement on the terms and conditions set
forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 - Amendment to Section 1.1 of the Credit Agreement is hereby
amended by replacing the definition of EBITDA in its entirety with the
following:
"EBITDA" means, for any period, an amount equal to Net Income plus (to the
extent deducted in determining Net Income) interest expense, provisions for
income taxes, depreciation, amortization of intangible assets and the right-off
of in-process research and development expense, in each case for the Borrower
and its Subsidiaries on a consolidated basis; provided, that (a) any calculation
of EBITDA that takes into account the fourth quarter of the Borrower's 1997
Fiscal Year shall exclude from such calculation the $1,539,400 pre-tax charge
incurred during the fourth quarter of the Borrower's 1997 Fiscal Year, which
charge is related to the voluntary producer exchange program instituted during
such period, (b) any calculation of EBITDA shall exclude any extraordinary item
associated with the extinquishment of Indebtedness as a result of any
refinancing of all or any part of the Indebtedness evidenced by the Estate
Subordinated Note or the Junior Subordinated Note or the Obligations, (c) any
calculation of EBITDA that takes into account the third quarter of the
Borrower's 1998 Fiscal Year shall exclude from such calculation the $2,244,000
pre-tax charge incurred during such third quarter of the Borrowers' 1998 Fiscal
Year, which charge is related to the EpiPen(R) product recall announced in May
1998, (d) any calculation of EBITDA that takes into account the fourth quarter
of the Borrower's 1998 Fiscal Year shall exclude from such calculation the
$500,000 pre tax charge incurred during such fourth quarter of the Borrower's
1998 Fiscal Year, which charge is related to the revision of the estimated costs
of the EpiPen(R) product recall, and (e) my calculation of EBITDA that takes
into account the fourth quarter of all Borrower's 1998 Fiscal Year shall exclude
from such calculations the $166,000 pre tax charge incurred during such fourth
quarter of the Borrower's 1998 Fiscal Year, which charge is related to the
amendment to the Senior Subordinated Note Warrants amending the exercise price
thereunder from $11.988 to $7.50 per share of Common Stock that may be purchased
under the Senior Subordinated Note Warrants' provided, further, that
notwithstanding anything contained herein to the contrary, calculation of EBITDA
for my period ending prior to July 31, 2000 shall be made by annualizing all
items relating to income or expense for the period consisting of the full Fiscal
Quarter(s) elapsed from July 31, 1999 to the end of such period (such
annualizing to be calculated by multiplying such items of income and expense by
a fraction the numerator of which is 4 and the denominator of which is the
actual number of Fiscal Quarters in such period).
SECTION 2. Amendment to Section 1.1 of the Credit Agreement is hereby
amended by replacing the definition of "Revolving Loan Commitment Amount" in its
entirety with the following:
"Revolving Loan Commitment Amount" means (I) for the period commencing November
6, 19998 and ending October 31, 2000, $8,500,000 and (ii) for the period
commencing November 1, 2000 and ending on the Revolving Loan Commitment
Termination Date, $6,500.00.
SECTION 3. Amendment to Section 6.2.4. Section 6.2.4 of the credit
Agreement is hereby amended by replacing said Section in its entirety with the
following:
SECTION 6.2.4 Financial Condition. From and after the Merger
Consummation Date, the Borrower hereby covenants and agrees as set forth below:
(A) Senior Debt Leverage Ratio. The Borrower will not permit its Senior
Debt Leverage Ratio with respect to the twelve-month period ending on the last
day of any Fiscal Quarter to be greater than the ratio set forth opposite such
Fiscal Quarter (for each Fiscal Quarter ending prior to the first anniversary of
the Merger Consummation Date, such ratio to be calculated as provided in clause
(g) of this Section 6.2.4.
Fiscal Quarter Ending: Ratio
--------------------- -----
October 31, 1996 3.5:1.0
January 31, 1997 3.5:1.0
April 30, 1997 3.5:1.0
July 31, 1997 3.5:1.0
October 31, 1997 2.0:1.0
January 31, 1998 2.2:1.0
April 30, 1998 2.1:1.0
July 31, 1998 1.9:1.0
October 31, 1998 1.8:1.0
January 31, 1999 1.8:1.0
April 30, 1999 1.6:1.0
July 31, 1999 1.6:1.0
October 31, 1999 1.75:1.0
January 31, 2000 1.75:1.0
April 30, 2000 1.5:1.0
July 31, 2000 1.25:1.0
October 31, 2000 and 1.4:1.0
thereafter
(b) Total Debt Leverage Ratio. The Borrower will not permit its Total
Debt Leverage Ratio with respect to the twelve-month period ending on the last
day at any Fiscal Quarter to be greater than the ratio set forth opposite such
Fiscal Quarter (for each Fiscal Quarter ending prior to the first anniversary of
the Merger Consummation Date, to be calculated as provided in clause (g) of this
Section 6.2.4):
Fiscal Quarter Ending: Ratio
---------------------- -----
October 31, 1997 3.0:1.0
January 31, 1998 3.2:1.0
April 30, 1998 3.2:1.0
July 31, 1998 3.0:1.0
October 31, 1998 3.0:1.0
January 31, 1999 2.9:1.0
April 30, 1999 2.8:1.0
July 31, 1999 2.5:1.0
October 31, 1999 3.75:1.0
January 31, 2000 3.75:1.0
April 30, 2000 3.5:1.0
July 31, 2000 3.0:1.0
October 31, 12000 and 2.2:1.0
Thereafter
Senior Debt Service Ratio. The Borrower will not permit its Senior Debt Service
Ratio with respect to the twelve-month period ending on the last day of any
Fiscal Quarter to be less than the ratio set forth below opposite such Fiscal
Quarter (for each Fiscal Quarter ending prior to the first anniversary of the
Merger Consummation Date, such ratio to be calculated as provided in clause (g)
of this Section 6.2.4.
Fiscal Quarter Ending Ratio
--------------------- -----
October 31, 1996 2.0:1.0
January 31, 1997 2.0:1.0
April 30, 1997 2.0:1.0
July 31, 1997 2.0:1.0
October 31, 1997 3.7:1.0
January 31, 1998 3.0:1.0
April 30, 1998 2.4:1.0
July 31, 1998 2.3:1.0
October 31, 1998 2.3:1.0
January 31, 1999 2.3:1.0
April 30, 1999 2.4:1.0
July 31, 1999 2.5:1.0
October 31, 1999 1.75:1.0
January 31, 2000 1.75:1.0
April 30, 2000 1.75:1.0
July 31, 2000 2.0:1.0
October 31, 2000 and 2.7:1.0
Thereafter
(c) Interest Coverage Ratio. The Borrower will not permit its Interest
Coverage Ratio with respect to the twelve-month period ending on the last day of
any Fiscal Quarter to be less than the ratio set forth below opposite such
Fiscal Quarter (for each Fiscal Quarter ending prior to the first anniversary of
the Merger Consummation Date, such ratio to be calculated as provided in clause
(g) of this Section 0.0.0.:
Fiscal Quarter Ending: Ratio
---------------------- -----
October 31, 1997 2.5:1.0
January 31, 1998 2.6:1.0
April 30, 1998 2.7:1.0
July 31, 1998 2.8:1.0
October 31, 1998 2.9:1.0
January 31, 1999 3.0:1.0
April 30, 1999 3.1:1.0
July 31, 1999 3.2:1.0
October 31, 1999 2.25:1.0
January 31, 2000 2.25:1.0
April 30, 2000 2.5:1.0
July 31, 2000 2.75:1.0
October 31, 2000 and 3.5:1.0
Thereafter
(c) Net Worth. The Borrower will not permit its net worth determined In
accordance with GAAP as of the last day of my Fiscal Quarter, (1) commencing
with the Fiscal Quarter ending on July 31, 1997 and continuing thereafter and
including July 31, 1998 to be less than $12,250,000 (2) commencing with the
Fiscal Quarter ending on October 31, 1998 and continuing thereafter through and
including July 31, 1999, to be less than (A) $12,250,000 plus (B) 80% of Net
Income (but not loss) for each Fiscal Quarter ending after July 31, 1997 through
and including the last day of the Fiscal Quarter in which this covenant is being
tested, (3) commencing with the Fiscal Quarter ending on July 31, 1999 and
continuing thereafter through and including October 31, 1999 to be less than
$11,500,000, (4) commencing with the Fiscal Quarter ending on October 31, 1999
and continuing thereafter through and including January 31, 2000 to be less than
$11,850,000, (5) commencing with the Fiscal Quarter ending on January 31, 2000
and continuing thereafter through and including April 30, 2000 to be less than
$12,250,000, (6) commencing with the Fiscal Quarter ending on April 30, 2000 and
continuing thereafter through and including July 31, 2000 to be less than
$13,000,000 and (7) commencing with the Fiscal Quarter ending on July 31, 2000
and continuing thereafter to be less than (A) $13,000,000 plus (B) 80% of Net
Income (but not loss) for each Fiscal Quarter ending after July 31, 2000 through
and including the last day of the Fiscal Quarter in which this covenant is being
tested: provided, however, that any calculation of net worth and Net Income (and
loss) shall exclude the after-tax effect of any extraordinary item associated
with the extinquishment of Indebtedness as a result of any partial refinancing
of the Obligations.
(f) EBITDA. The Borrower will not permit EBITDA for the twelve-month
period ending on the last day of any Fiscal Quarter to be less than the amount
set forth opposite such Fiscal Quarter (for each Fiscal Quarter ending prior to
the first anniversary of the Merger Consummation Date, such amount to be
calculated as provided in clause (g) of this Section 6.2.4):
Fiscal Quarter Ending Amount
--------------------- ------
October 31, 1996 $5,000,000
January 31, 1997 $5,000,000
April 30, 1997 $5,000,000
July 31, 1997 $5,000,000
October 31, 1997 $7,600,000
January 31, 1998 $7,200,000
April 30, 1998 $7,300,000
July 31, 1998 $7,400,000
October 31, 1998 $7,600,000
January 31, 1999 $8,000,000
April 30, 1999 $8,500,000
July 31, 1999 $9,500,000
October 31, 1999 $7,000,000
January 31, 2000 $6,900,000
April 30, 2000 $7,250,000
July 31, 2000 $8,350,000
October 31, 2000 and $10,000,000
Thereafter
(g) Calculations for Stub Periods. Notwithstanding anything contained
herein to the contrary, calculation of all items relating to income or expense
(including, without limitation, EBITDA and Interest Expense) for any period
ending prior to the first anniversary of the Merger Consummation Date shall be
made by annualizing all items relating to income or expense for the period
consisting of the full Fiscal Quarter(s) elapsed from the Merger Consummation
Date to the end of such period and by using the actual scheduled repayments of
indebtedness occurring during such period.
SECTION 4. Amendment to Section 6.2.5. Section 6.2.5 of the Credit
Agreement is hereby amended by replacing said Section in its entirety with the
following:
SECTION 5.2.5 Capital Expenditures. The Borrower will not, and will not permit
any Subsidiary to make or commit to make any Consolidated Capital Expenditures,
except the Borrower and its Subsidiaries may make Consolidated Capital
Expenditures during any fiscal year provided (x) no Default or Event of Default
has occurred and is continuing and (y) the aggregate amount of Consolidated
Capital Expenditures made during such fiscal year (including the amount of
Capital Lease Liabilities incurred during such Fiscal Year that in accordance to
GAAP is attributable to principal) does not exceed the amount set forth below
opposite such fiscal year,
Fiscal Year Amount
----------- ------
1998 $3,800,000
1999 $5,000,000
2000 and each Fiscal $3,000,000
Year thereafter
provided further, however, that expenditures from insurance proceeds received
upon the occurrence of a loss which are made to replace or repair damaged or
destroyed assets will not be included in the foregoing calculation.
SECTION 5. Continuing Effectiveness of Credit Agreement. The Credit
Agreement and each of the other Loan Documents shall remain in full force and
effect in accordance with their respective terms, except as expressly amended or
modified by this Amendment.
SECTION 6. Cost and Expenses. The Borrower agrees to pay all
out-of-pocket expenses of the Agent for the negotiation, preparation, execution
and delivery of this Amendment (including fees and expenses of counsel to the
Agent).
SECTION 7. Effectiveness: This Amendment shall become effective upon
the prior or concurrent receipt by the Agent of each of the following:
(a) a copy of this Amendment, duly executed by each of the Borrower
and the Agent:
(b) payment by the Borrower of all outstanding fees and expenses of
King & Spalding, counsel to the Agent, in the amount of
$17,998.34, reimbursable by the Borrower pursuant to Section 9.3
of the Credit Agreement, and acknowledgement of receipt of such
payment by King & Spalding.
SECTION 8 Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provision hereof.
SECTION 9. Counterparts. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together that one and the same agreement. This
Amendment shall become effective when counterparts hereof executed on behalf of
the Borrower and each Lender (or notice thereof satisfactory to the Agent) shall
have been reserved by the Agent and notice thereof shall have been given by the
Agent to the Borrower and each Lender.
SECTION 10. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 11. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrower may not assign or
transfer its rights to obligations hereunder or under the Credit Agreement
except in accordance with the terms of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
MERIDIAN MEDICAL TECHNOLOGIES, INC.
By: /S/ Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx
President
(CORPORATE SEAL)
ING (U.S. CAPITAL LLC, in its capacity
As agent and Lender
By: /S/ Xxxxxx X. Xxxxx
-----------------------
Xxxxxx X. Xxxxx
Director
(SIGNATURE PAGE TO SEVENTH AMENDMENT TO CREDIT AGREEMENT)
