Exhibit 10(mm)
NUTRAMAX PRODUCTS, INC.
0 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Dated as of: November 26, 1997
BankBoston, N.A.
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
National Bank of Canada
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
The Sumitomo Bank, Limited
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Senior Debt Portfolio
c/o Xxxxx Xxxxx Management
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Second Amendment to Revolving Credit and Term Loan Agreement
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Ladies and Gentlemen:
We refer to the Revolving Credit and Term Loan Agreement dated as of
December 30, 1996, as amended by a First Amendment to Revolving Credit and Term
Loan Agreement dated as of September 11, 1997, (as so amended, the "Loan
Agreement"), among NutraMax Products, Inc. (the "Borrower"), the banking
institutions referred to therein as Banks (the "Banks") and The First National
Bank of Boston (now known as BankBoston, N.A.), as agent (the "Agent"). Upon
the terms and subject to the conditions contained in the Loan Agreement, you
agreed to make Revolving Loans and Term Loans to, and issue Letters of Credit
for the account of, the Borrower.
Terms used in this letter of agreement (the "Second Amendment") which are
not defined herein, but which are defined in the Loan Agreement, shall have the
same respective meanings herein as therein.
We have requested and you have agreed to make certain modifications and
waivers of the Loan Documents (collectively, the "Modifications"), and you have
advised us that you are prepared and would be pleased to make the Modifications
so requested by us on the condition that we join with you in this Second
Amendment.
Accordingly, in consideration of these premises, the promises, mutual
covenants and agreements contained in this Second Amendment, and fully intending
to be legally bound by this Second Amendment, we hereby agree with you as
follows:
ARTICLE I
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AMENDMENTS TO LOAN AGREEMENT
----------------------------
Effective as of September 26, 1997 (the "Second Amendment Date"), the Loan
Agreement is amended in each of the following respects:
(a) The terms "Loan Documents" and "Security Documents" shall,
wherever used in any of the Loan Documents or Security Documents, be deemed to
also mean and include this Second Amendment.
(b) The term "Chilmark Documents" shall, whenever used in any of the
Loan Documents or Security Documents, be deemed to also mean and include the
documents, in form and substance reasonably satisfactory to the Banks and the
Agent, entered into between the Borrower and Cape Xxx Investors, L.L.C. in
connection with the Repurchase Transaction (as defined in Article II below).
(c) The term "Subordinated Debt Documents" shall, whenever used in
any of the Loan Documents or Security Documents, be deemed to also mean and
include any required consents in form and substance reasonably satisfactory to
the Banks and the Agent, between the Borrower and ING, as referenced in Section
IV(f)(iv)(d) below.
(d) Section 1.1, containing various definitions, is amended in each
of the following respects:
(i) the definition of "Base Net Worth" is amended to read in
its entirety as follows:
Base Net Worth. An amount equal to $7,500,000, increasing to $23,000,000
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effective as of September 27, 1997.
(ii) the definition of "EBITDA" is amended by adding at the end
thereof the following:
For purposes of calculating EBITDA for the Acquiring Subsidiaries (Adhesive
Coatings, Inc. and First Aid Products, Inc.) with respect to the 1996-97
and 1997-98 fiscal years, EBITDA shall be calculated as follows:
Fiscal year ending $6,837,000
September 30, 1997
First Quarter ending Actual EBITDA results for the
December 31, 1997 first quarter plus $5,127,750
($6,837,000 x 0.75)
Second Quarter ending Actual EBITDA results for the
March 31, 1998 first two quarters plus $3,418,500
($6,837,000 x 0.50)
Second Quarter ending Actual EBITDA results for the
June 30, 1998 first three quarters plus $1,709,250
($6,837,000 x 0.25)
Fourth Quarter ending Actual EBITDA results for the previous
September 30, 1998 four quarters
(iii) the definition of "Term Loan A" is amended to read in its
entirety as follows:
Term Loan A. The term loan in the principal amount of up to $30,000,000
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(as reduced from $32,000,000) made or to be made to the Borrower between
the Closing Date and the Stock Purchase LC Expiry Date by the Banks having
a Term Loan A Commitment pursuant to this Agreement (including Section
2.1(b) hereof), and subject to the limitations contained herein.
(iv) the definition of "Total Commitment" is amended to read in
its entirety as follows:
Total Commitment. As of any date, the sum of the then-current Commitments
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of the Banks, provided that the Total Commitment shall not at any time
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exceed $89,222,693.
(v) the following new definition is added to Section 1.1:
Second Amendment. The Second Amendment to Revolving Credit and Term Loan
----------------
Agreement dated as of September 26, 1997, among the Borrower, the Banks and
the Agent.
(c) Section 2.13(b) is amended to read in its entirety as follows:
(e) The entire principal of the Term Notes A shall be payable by the
Borrower to the Banks in 20 consecutive quarter-annual installments of
principal. Such quarter-annual installments of principal shall be payable on
the installment payment dates, and shall be in the amounts, set forth below:
Installment Aggregate Amount
Payment Date of Payment
-------------- ----------------
12/31/97 $ 725,000
03/31/98 $ 725,000
06/30/98 $ 725,000
09/30/98 $ 725,000
12/31/98 $1,475,000
03/31/99 $1,475,000
06/30/99 $1,475,000
09/30/99 $1,475,000
12/31/99 $1,787,500
03/31/00 $1,787,500
06/30/00 $1,787,500
09/30/00 $1,787,500
12/31/00 $1,975,000
03/31/01 $1,975,000
06/30/01 $1,975,000
09/30/01 $1,975,000
12/31/01 $2,037,500
03/31/02 $2,037,500
06/31/02 $2,037,500
09/30/02 $ 37,500
Notwithstanding the foregoing, the last 4_quarter-annual installments set forth
in the table above shall be reduced in the inverse order of maturity by the
difference between (i)_$30,000,000 and (ii)_the aggregate amount borrowed under
Term Loan_A as of the Stock Purchase LC Expiry Date. All of the indebtedness
evidenced by each Term Note_A shall, if not sooner paid, be in any event
absolutely and unconditionally due and payable in full by the Borrower to the
Banks on the Term Loan_A Maturity Date.
(f) Section 5.1(b) is amended to read in its entirety as follows:
(b)(1) as soon as available, but in any event within 45 days
after the end of each fiscal quarter of the Borrower and its Subsidiaries,
a Consolidated balance sheet as of the end of, and a related Consolidated
statement of income, changes in stockholders' equity and cash flow for, the
portion of the fiscal year then ended and for the fiscal quarter then
ended, prepared in accordance with GAAP and certified by the chief
financial officer of the Borrower, but subject, however, to normal,
recurring year-end adjustments that shall not in the aggregate be material
in amount;
(b)(2) as soon as available, but in any event within 30 days
after the end of each calendar month of the Borrower and its Subsidiaries
(commencing with the month ending October 31, 1997), a Consolidated balance
sheet as of the end of, and a related Consolidated statement of income,
changes in stockholders' equity and cash flow for, the portion of the
fiscal year then ended and for the calendar month then ended, prepared in
accordance with GAAP and certified by the chief financial officer of the
Borrower, but subject, however, to normal, recurring year-end adjustments
that shall not in the aggregate be material in amount;
(g) Section 5.7 is amended to read in its entirety as follows:
5.7. Minimum Net Worth. The Borrower shall maintain a minimum
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Consolidated Net Worth at least equal to Base Net Worth plus, on a
----
cumulative basis, 75% of the positive Consolidated net income of the
Borrower and its Subsidiaries earned in each of its fiscal quarters. Any
quarterly or annual losses incurred by the Borrower or any Subsidiary shall
not reduce the amount of Consolidated Net Worth required to be maintained
from time to time pursuant to this Section 5.7.
(h) Section 6.6 is amended to read in its entirety as follows:
6.6. Funded Debt Ratio. The Borrower shall not at any time permit the
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Funded Debt Ratio of the Borrower and its Subsidiaries as at the last day
of any fiscal quarter in any fiscal period identified below to be greater
than the ratio specified below opposite such fiscal period:
Maximum
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Period Ratio
------ -----
For any fiscal quarter ending on or after March 31, 4.25 to 1
1997 through June 30, 1997
For any fiscal quarter ending on or after September 30, 4.50 to 1
1997 through December 31, 1997
For any fiscal quarter ending on or after March 31, 1998 4.25 to 1
through June 30, 1998
For the fiscal quarter ending on September 30, 1998 3.75 to 1
For any fiscal quarter ending on or after December 31, 3.25 to 1
1998 through March 31, 1999
For the fiscal quarter ending on June 30, 1999 3.00 to 1
For the fiscal quarter ending on September 30, 1999 2.50 to 1
For any fiscal quarter ending on or after December 31, 2.00 to 1
1999
(i) Section 6.8 is amended to read in its entirety as follows:
6.8. Cash Flow Ratio. The Borrower shall not permit the Cash Flow
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Ratio of the Borrower and its Subsidiaries for any fiscal period identified
below to be less than the ratio specified below opposite such fiscal
period:
Period Minimum Ratio
------ -------------
For the fiscal quarter ending March 31, 1997 1.05 to 1
For the two consecutive fiscal quarters ending June 1.10 to 1
30, 1997
For the three consecutive fiscal quarters ending 1.20 to 1
September 30, 1997
For any four consecutive fiscal quarters ending on or 1.20 to 1
after December 31, 1997 through September 30, 1999
(determined at the end of each fiscal quarter for the
four quarters then ending)
For any four consecutive fiscal quarters ending on or 1.30 to 1
after December 31, 1999 (determined at the end of
each fiscal quarter for the four quarters then ending)
(j) Section 6.9 is amended to read in its entirety as follows:
6.9. Minimum Interest Coverage. The Borrower shall not permit the
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Interest Coverage Ratio of the Borrower and its Subsidiaries for any fiscal
period identified below to be less than the ratio specified below opposite
such period:
Period Minimum Ratio
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For the fiscal quarter ending March 31, 1997 2.50 to 1
For the two consecutive fiscal quarters ending June 2.50 to 1
30, 1997
For the three consecutive fiscal quarters ending 2.75 to 1
September 30, 1997
For any four consecutive fiscal quarters ending on or 2.75 to 1
after December 31, 1997 through June 30, 1998
(determined at the end of each fiscal quarter for the
four quarters then ending)
For the four consecutive fiscal quarters ending on 3.00 to 1
September 30, 1998 (determined at the end of such
fiscal quarter for the four quarters then ending)
For the four consecutive fiscal quarters ending on 3.25 to 1
December 31, 1998 (determined at the end of such
fiscal quarter for the four quarters then ending)
For any four consecutive fiscal quarters ending on or 3.50 to 1
after March 31, 1999 through June 30, 1999
(determined at the end of each fiscal quarter for the
four quarters then ending)
For any four consecutive fiscal quarters ending on or 4.00 to 1
after September 30, 1999 (determined at the end of
each fiscal quarter for the four quarters then ending)
(k) Section 6.10 is amended by deleting the table set forth therein
in its entirety and by inserting the following table in place thereof:
Maximum
Fiscal Year Capital Expenditures
----------- --------------------
1997 $4,000,000
1998 $8,000,000
1999 $7,000,000
2000, and each
fiscal year thereafter $6,750,000
(l) The portion of Schedule 1 to the Loan Agreement setting forth the
Commitment and Commitment Percentages of the Banks with respect to Term Loan A
is amended as set forth in Annex 1 attached hereto.
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ARTICLE II
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WAIVER
------
At the Borrower's request, the Banks hereby waive Section 5.10 (Use of
Proceeds), Section 6.11 (Restricted Payments), and Section 6.17 (No Amendments
to Certain Documents) of the Loan Agreement to the extent necessary for the
Borrower to proceed with the following transaction (the "Repurchase
Transaction"):
Cape Xxx Investors, L.L.C. ("Chilmark"), Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx
and Xxxxxx X. Xxxxxxx will finance the Borrower's repurchase of a designated
number of shares (not to exceed 400,000) of the Borrower's outstanding common
stock (the "Designated Number of Shares"), in return for the receipt of the
Borrower's warrants. Such repurchase will be conducted via a modified Dutch
auction tender offer (the "Offer"), pursuant to which the Borrower will offer to
repurchase the Designated Number of Shares at a price between a stated range
(the "Range"). Those stockholders who desire to tender their shares in
connection with the Offer will select a price within the Range at which they are
willing to tender their shares. Upon expiration of the Offer, the Borrower will
select a per share purchase price (the "Purchase Price") which will enable it to
acquire the Designated Number of Shares. Subject to proration of shares
accepted for
tender in the event the number of shares tendered at or below the Purchase Price
exceeds the Designated Number of Shares, the Borrower will pay the Purchase
Price for all shares tendered at or below the Purchase Price.
The Banks hereby waive the provisions of Sections 2.13(f), 5.10, 6.11, 6.14
and 6.17 of the Loan Agreement for the limited purpose of allowing the Borrower
to consummate the Repurchase Transaction upon the terms and conditions described
above, it being expressly agreed that no other waiver, modification or consent
is hereby granted.
ARTICLE III
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REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
The Borrower hereby represents, warrants and covenants to you as follows:
(a) Representations in Loan Agreement. Each of the representations and
---------------------------------
warranties made by the Borrower to you in the Loan Agreement was true, correct
and complete when made and is true, correct and complete in all material
respects on and as of the date hereof with the same full force and effect as if
each of such representations and warranties had been made by the Borrower on the
date hereof and in this First Amendment.
(b) No Defaults or Events of Default. No Default or Event of Default
--------------------------------
exists on the date of this Second Amendment (after giving effect to all of the
arrangements and transactions contemplated by this Second Amendment).
(c) Binding Effect of Documents. This Second Amendment has been duly
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executed and delivered to you by the Borrower and the Subsidiaries (as the case
may be) and is in full force and effect as of the date hereof, and the
agreements and obligations of the Borrower and the Subsidiaries (as the case may
be) contained herein constitute legal, valid and binding obligations of the
Borrower and the Subsidiaries (as the case may be) enforceable against them in
accordance with their terms.
ARTICLE IV
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PROVISIONS OF GENERAL APPLICATION
---------------------------------
(a) No Other Changes. Except to the extent specifically amended and
----------------
supplemented hereby, all of the terms, conditions and the provisions of the Loan
Agreement, the Notes and each of the other Loan Documents shall remain
unmodified, and the Loan Agreement, the Notes and each of the other Loan
Documents, as amended and supplemented by this Second Amendment, are confirmed
as being in full force and effect.
(b) Governing Law. This Second Amendment is intended to take effect as a
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sealed instrument and shall be deemed to be a contract under the laws of the
Commonwealth of Massachusetts. This Second Amendment and the rights and
obligations of each of the parties hereto shall be governed by and interpreted
and determined in accordance with the laws of the Commonwealth of Massachusetts.
(c) Binding Effect; Assignment. This Second Amendment shall be binding
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upon and inure to the benefit of each of the parties hereto and their respective
successors in title and assigns.
(d) Counterparts. This Second Amendment may be executed in any number of
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counterparts, each of which when executed and delivered shall be deemed an
original, but all of which together shall constitute one instrument. In making
proof of this Second Amendment, it shall not be necessary to produce or account
for more than one counterpart hereof signed by each of the parties hereto.
(e) Conflict with Loan Agreement. If any of the terms of this Second
----------------------------
Amendment shall conflict in any respect with any of the terms of the Loan
Agreement or any other Loan Document, the terms of this Second Amendment shall
be controlling.
(f) Conditions Precedent. This Second Amendment shall become and be
--------------------
effective as of the Second Amendment Date, but only if:
(i) the form of acceptance at the end of this Second Amendment
shall be signed by the Borrower, each Subsidiary and the Banks;
(ii) the Agent shall have received originals of the Second
Amendment, together with any and all schedules, exhibits, annexes,
agreements and instruments required to be delivered in connection
therewith, each duly executed and delivered by the parties
thereto, and each in form and substance satisfactory to the Agent;
(iii) the Banks and the Agent shall have received satisfactory
evidence of appropriate corporate and, if necessary, shareholder
approval of the proposed transactions (including both the
Repurchase Transaction and the Modifications);
(iv) the Banks and the Agent shall have received satisfactory
evidence that (a) the Borrower has successfully completed (or,
upon funding by Chilmark of the entire purchase price, will
successfully complete) the Repurchase Transaction, such
transaction to be in form and substance reasonably satisfactory to
the Banks and the Agent and (b) Internationale Nederlanden (U.S.)
Capital Corporation ("ING") has provided any and all required
consents to the Repurchase Transaction and the Modifications and
has entered into modifications to the Subordinated Debt Documents
in form and substance satisfactory to the Banks and the Agent in
connection therewith (it being understood and agreed by the
Borrower that its failure to enter into with ING, on or before
February 12, 1998, such modifications to the Subordinated Debt
Documents in form and substance satisfactory to the Banks and the
Agent shall constitute an Event of Default under (and as defined
in) the Loan Agreement); and
(v) the Agent shall have received, for the ratable benefit of
those Banks who are signatories to this Second Amendment, the
amendment fee from the Borrower in the amount of $111,528.36.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Second Amendment and return such
counterpart to the undersigned, whereupon this Second Amendment, as so accepted
by you, shall become a binding agreement among you and the undersigned.
Very truly yours,
The Borrower:
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NUTRAMAX PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Title: Vice President
(remainder of page intentionally left blank)
The foregoing Second Amendment is hereby accepted by the undersigned
effective as of September 26, 1997.
The Agent:
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BANKBOSTON, N.A. (f/k/a The First National Bank of Boston),
individually and as Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Xxx X. Xxxxx
---------------------------------
Title: Vice President
NATIONAL BANK OF CANADA
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President & Manager
By: /s/ Xxxxxx XxXxxxxx
---------------------------------
Title: Vice President
SENIOR DEBT PORTFOLIO
By: /s/ Xxxxx X. Page
--------------------------------
Title: Vice President
CONSENT OF GUARANTORS
---------------------
Each of the undersigned has guaranteed the Obligations under (and as
defined in) the Agreement by executing separate Guaranties, each dated as of
December 30, 1996 (or, in the case of the last three signatories listed below,
as of September 11, 1997). By executing this letter, each of the Subsidiaries
hereby absolutely and unconditionally reaffirms the Guaranty to which it is a
party, and acknowledges and agrees to the terms and conditions of this letter
agreement and the Loan Agreement and the other Loan Documents as amended hereby
(including, without limitation, the making of the representations and warranties
and the performance of the covenants applicable to it herein or therein).
NUTRAMAX HOLDINGS, Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
NUTRAMAX HOLDINGS II, Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
OPTOPICS LABORATORIES, INC., Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
FAIRTON REALTY, INC., Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
ORAL CARE, INC., Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
XXXXXXXX REALTY, INC., Guarantor
-13-
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
POWERS PHARMACEUTICAL CORP.,
Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
CERTIFIED CORP., Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
ADHESIVE COATINGS, INC.,
Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
ELMWOOD PARK REALTY, INC.,
Guarantor
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
FIRST AID PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
ANNEX 1
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Commitment and Commitment Percentages
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Term Loan A
Bank Commitment Percentage
---- ------------ ----------
BankBoston, N.A. $11,011,335.90 36.70445300%
Fleet National Bank $ 7,684,683.09 25.61561030%
National Bank of Canada $ 6,981,511.22 23.27170405%
The Sumitomo Bank, Limited $ 4,322,469.89 14.40823295%
TOTAL $30,000,000.00 100.0000030%
* Notwithstanding the foregoing Commitments of the Banks, the Total Commitment
shall not at any time exceed $89,222,693.
-15-
