FOURTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
Exhibit
10.01
FOURTH
AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AND
SECURITY AGREEMENT (this “Amendment”), dated as
of February 26, 2010, is by and among GE BUSINESS FINANCIAL SERVICES
INC., formerly known as
Xxxxxxx Xxxxx Business Financial Services Inc., in its capacity as successor
Administrative Agent and as a Lender under the Credit Agreement (as defined
below) (“Agent”), DERMA SCIENCES, INC., a
Pennsylvania corporation, DERMA
FIRST AID PRODUCTS, INC., a Pennsylvania corporation, SUNSHINE PRODUCTS, INC., a
Missouri corporation and any additional Borrower that may hereafter be added to
this Agreement (each individually as a “Borrower” and
collectively as “Borrowers”).
WHEREAS,
Borrower and Agent (in its capacity as Administrative Agent and as a Lender
thereunder) are parties to that certain Credit and Security Agreement, dated as
of November 8, 2007 (the “Credit
Agreement”);
WHEREAS,
Borrower and Agent entered into that certain First Amendment to Credit and
Security Agreement on March 28, 2008;
WHEREAS,
Borrower and Agent entered into that certain Second Amendment to Credit and
Security Agreement on August 13, 2008;
WHEREAS,
Borrower and Agent entered into that certain Third Amendment to Credit and
Security Agreement on March 31, 2009;
WHEREAS,
Borrower and Agent have agreed to amend certain provisions of the Credit
Agreement;
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Defined
Terms. Capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Credit
Agreement, as amended.
2. Amendments to Credit
Agreement.
a. Section
2.1(a)(ii)(D). Mandatory Prepayments. The
following is added as a new subsection (D) under Section
2.1(a)(ii):
“(D)
Agent and Borrower acknowledge and agree that Borrower shall repay the Term Loan
with the proceeds from that certain follow-on equity raise closed by Borrower in
February 2010. In addition, Agent agrees to waive any applicable
prepayment fee with respect to Borrower’s repayment of the Term Loan, provided
that such repayment occurs on or before March 1, 2010 and the Term Loan is
repaid in full.”
b. Section
2.1(b)(ii). Mandatory Revolving Loan Repayments
and Prepayments. The following is added as a new subsection
(D) under Section 2.1(b)(ii):
“(D) Borrower
shall apply the balance of the proceeds of that certain follow-on equity
offering closed by Borrower in February 2010 toward repayment of the Revolving
Loan Outstandings, following application of such proceeds first towards the
repayment of the full amount outstanding of the Term Loan.”
c. Section
4.6(d). Section 4.6(d) is amended by deleting “$1,250,000” and
replacing it with $2,250,000.”
d. Section 4.12. Post Closing
Requirements. The following is added to the end of Section
4.12:
“Borrower
acknowledges and agrees that Borrower shall enter into a Fifth Amendment to the
Credit Agreement within thirty (30) days from the date of this Amendment, which
further amendment shall provide for revised financial covenants pursuant to
Article 6 hereunder.”
e. Section 5.5. Purchase of
Assets, Investments; New Subsidiaries. The following is added
to the end of Section 5.5(a):
“Agent
hereby acknowledges and agrees that Borrower is permitted to acquire the
worldwide rights of MedihoneyÒ from Comvita, up to a
maximum purchase price of $2,250,000, provided that: (i) Borrower
has repaid the full outstanding amount of the Term Loan; (ii) Agent has received
the full amount of Cash Collateral Account; and (iii) Borrower has applied the
remaining portion of the proceeds from such follow-on equity raise toward the
repayment of the Revolving Loan Outstandings pursuant to Section 2.1(b)(ii)(D)
hereunder.”
3. Representations and
Warranties. Borrower represents and warrants to Agent as
follows:
a. After
giving effect to this Amendment, the representations and warranties set forth in
each of the Financing Documents shall be true and correct in all respects on and
as of the Effective Date (as defined below) with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date.)
b. The
execution, delivery and performance by Borrower of this Amendment are within
Borrower’s powers, have been duly authorized and do not:
i. (A)
contravene any of Borrower’s Organizational Documents, or (B) result in a
default under any contractual restriction binding on or affecting Borrowers, or
any law or governmental regulation binding on or affecting Borrower;
or
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ii. result
in, or require the creation or imposition of, any Lien on any of Borrower’s
properties.
c. This
Amendment and the Credit Agreement, as amended hereby, constitute the legal,
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms (except, in any case, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally at law or by principles of equity).
d. After
giving effect to this Amendment, no Default or Event of Default has occurred and
is continuing.
4. Conditions to
Effectiveness. This Amendment shall become effective as of the
date hereof (the “Effective Date”),
subject to (a) the due authorization, execution and delivery of this Amendment
by Borrower and Agent, and (b) Agent’s receipt of all amounts due and owing
under the Term Loan. In addition, Borrowers shall be responsible for
the payment of all reasonable fees incurred by Agent (including legal fees)
incurred in connection with the preparation of this Amendment and in
consideration of the modifications set forth herein. Borrower hereby
authorizes Agent to deduct all of such fees from the proceeds of the next
Revolving Loan.
5. Documents to Remain in
Effect; Confirmation of Obligations; References. The Financing
Documents shall remain in full force and effect as originally executed and
delivered by the parties, except as expressly modified and amended herein.
Borrower hereby (a) confirms and reaffirms all of its respective obligations
under the Financing Documents, as modified and amended herein; (b) acknowledge
and agree that Agent, by entering into this Agreement, does not waive any
existing or future Default or Event of Default under any of the Financing
Documents, or any rights or remedies under any of the Financing Documents; (c)
acknowledge and agree that Agent has not heretofore waived any Default or Event
of Default under any of the Financing Documents, or any rights or remedies under
any of the Financing Documents, other than as expressly provided for hereunder;
and (d) acknowledge that they do not have any defense, set-off or counterclaim
to the payment or performance of any of their respective obligations under the
Financing Documents, as modified and amended herein. From and after
the date hereof, this Amendment shall be deemed a Financing Document for all
purposes of the Credit Agreement and the other Financing Documents and each
reference to the Financing Documents shall be deemed to include this
Amendment.
6. Counterparts;
Integration. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same
instrument. Signatures by facsimile or by electronic mail delivery of
an electronic version of an executed signature page shall bind the parties
hereto. This Amendment constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. In the event of any irreconcilable inconsistency between this
Amendment and any of the other Financing Documents, the terms of this Amendment
shall control.
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7. Governing
Law. THIS AMENDMENT, AND ALL MATTERS RELATING HERETO OR
ARISING HEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE),
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARDING TO CONFLICTS OF LAWS
PRINCIPLES.
[Remainder
of page intentionally left blank; signature pages follow.]
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IN
WITNESS WHEREOF, the undersigned have duly executed this Amendment as of the
date first set forth above.
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BORROWER:
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By:
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Name:
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Title:
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DERMA
FIRST AID PRODUCTS, INC.
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By:
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Name:
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Title:
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SUNSHINE
PRODUCTS, INC.
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By:
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Name:
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Title:
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AGENT:
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GE
BUSINESS FINANCIAL SERVICES INC.
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(formerly
known as Xxxxxxx Xxxxx Business Financial Services
Inc.),
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as
Administrative Agent
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By:
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Name:
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Its
Duly Authorized Signatory
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LENDER:
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GE
BUSINESS FINANCIAL SERVICES INC.
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(formerly
known as Xxxxxxx Xxxxx Business Financial Services
Inc.),
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as
a Lender
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By:
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Name:
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Its
Duly Authorized Signatory
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