EXHIBIT 10.2
FOURTH AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
This FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
(the "AMENDMENT"), dated June , 1998 but effective as of May 29, 1998, is made
by and between XXXXXX HEALTHCARE, INC. ("BORROWER"), a Texas corporation
formerly known as Lasermedics, Inc., and COMERICA BANK-TEXAS ("LENDER"), a Texas
banking association.
RECITALS:
A. Borrower and Lender entered into that certain Amended and Restated Loan
Agreement dated as of June 30, 1997 (as the same may have heretofore been
amended, modified, restated or supplemented from time to time, the "Loan
Agreement").
B. Borrower and Lender now desire to make certain changes to the Loan
Agreement, all of which is more fully described hereinbelow, which such
provisions contained below shall control over any inconsistencies with the
foregoing recitals.
AGREEMENTS:
In consideration of the premises and the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
1. BORROWING BASE DEFINITION AMENDED. CLAUSE (C) of the definition of
"Borrowing Base" contained in Section 1.1 of the Loan Agreement is hereby
amended in its entirety to be and read as follows:
(c) (i) prior to June 30, 1998, forty percent (40%) of the book
value of the Obligors' Eligible Inventory (exclusive of Tens Units), and
(ii) on June 30, 1998 and at all times thereafter, thirty percent (30%) of
the book value of the Obligors' Eligible Inventory (exclusive of Tens
Units) plus
2. PERMITTED OVERAGE DEFINITION AMENDED. The definition of "Permitted
Overage" contained in Section 1.1 of the Loan Agreement is hereby amended in its
entirety to be and read as follows:
"'PERMITTED OVERAGE' shall mean from May 29, 1998 through and
including June 29, 1998, $1,000,000. After June 29, 1998, the "Permitted
Overage" shall be $-0-."
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3. REVOLVING NOTE DEFINITION AMENDED. The definition of "Revolving Note"
is hereby amended in its entirety to be and read as follows:
"'REVOLVING NOTE' shall mean a promissory note, in the original
principal sum of $9,000,000, dated as of May 29, 1998, and otherwise in
the form of EXHIBIT B to this Agreement, and any and all renewals,
extensions, modifications, rearrangements and/or replacements thereof."
4. TANGIBLE NET WORTH STEP-UP DEFINITION AMENDED. The definition of
"Tangible Net Worth Step-Up" contained in Section 1.1 of the Loan Agreement is
hereby amended in its entirety to be and read as follows:
"TANGIBLE NET WORTH STEP-UP" shall mean, on any date it is
determined, an amount equal to the sum of (a) the greater of (x) the pro
rata portion of the minimum quarterly Net Income requirement (if any) set
forth in Section 6.20 hereof with respect to the applicable quarter or (y)
seventy-five percent of the aggregate amount of Net Income of the
Companies earned during each calendar month which has ended as of such
date of determination, beginning with the calendar month ending January
31, 1998 plus (b) 100% of the net proceeds realized from the issuance of
any equity securities or borrowings under the Subordinated Note (or other
subordinated indebtedness approved by Bank in writing) by Borrower or its
Subsidiaries during that period.
5. SECTION 6.1.4 AAMENDED. Section 6.1.4 of the Loan Agreement is hereby
amended in its entirety to be and read as follows:
6.1.4.AGING AND BORROWING BASE CERTIFICATE. Furnish to the Bank (x)
monthly by the 10th of each month and (y) beginning June 5, 1998, weekly
as of the last Business Day of each week by the first Business Day of the
following week, a Borrowing Base Certificate confirming that the sum of
(1) the aggregate unpaid principal balance of all the Revolving Loans PLUS
(2) the aggregate Letter of Credit Liabilities, does not exceed the
Maximum Available Amount as then in effect (or if such is not the case,
accompanied by a prepayment of the Revolving Note or Cover for Letters of
Credit or a cancelled Letter of Credit, or combination thereof, in
accordance with SECTION 2.8 of this Agreement), an aging as of the end of
the preceding month of the Obligors' Accounts in a form satisfactory to
the Bank, a summary of the Obligors' Inventory as of the end of such
calendar month, prepared in reasonable detail and containing such other
information as the Bank may request, and an aging as of the end of the
preceding month of the Obligors' accounts payable in a form satisfactory
to the Bank in its sole and absolute discretion. In addition, furnish the
Bank by the 10th of the month, a Borrowing Base Certificate confirming
that the sum of (1) the aggregate unpaid principal balance of all the
Revolving Loans PLUS (2) the aggregate Letter of Credit Liabilities, does
not exceed the Maximum Available Amount as then in effect (or if such is
not the case, accompanied by a prepayment of the Revolving Note or Cover
for Letters of Credit or a cancelled Letter of Credit, or a combination
thereof, in accordance with
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Section 2.8 of this Agreement).
6. LEVERAGE RATIO AMENDED. Section 6.6 of the Loan Agreement is hereby
amended in its entirety to be and read as follows:
"6.6. MAINTAIN LEVERAGE RATIO. Have on a consolidated statement
basis, at all times on or after June 29, 1998, a ratio of (a) Debt less
the Debt evidenced by the Subordinated Debt Documents to (b) Effective
Tangible Net Worth of not more than 2.50 to 1.00."
7. SECTION 6.20 ADDED. A new Section 6.20 is hereby added to the Loan
Agreement, such new section to read in its entirety as follows:
6.20. MAINTAIN NET INCOME. Have on a consolidated basis, (i) for the
quarter ending June 30, 1998, Net Income equal to or greater than
$200,000, (ii) for the quarter ending September 30, 1998, Net Income equal
to or greater than $400,000 and (iii) for the quarter ending on December
31, 1998, Net Income equal to or greater than $600,000.
8. NEW EXHIBIT B ATTACHED. Exhibit B to the Loan Agreement (which is the
form of Revolving Note) is hereby deleted in its entirety and there is hereby
substituted therefor a new Exhibit B, which shall be in the form of Exhibit A
attached hereto and incorporated herein by reference.
9. CONSENTS REGARDING FOREIGN SUBSIDIARY. Lender hereby consents, for the
purposes of Sections 7.4 and 7.6 of the Loan Agreement, to the Borrower's
guaranty of up to (but no more than) $4,500,000 of indebtedness incurred by
Xxxxxx Healthcare, B.V. ("Xxxxxx B.V."), a wholly-owned Subsidiary of the
Borrower (Lender also consenting, for the purposes of Section 7.4 of the Loan
Agreement, to the incurrence of such indebtedness by Xxxxxx B.V.). Xxxxxx B.V.
shall not be required to execute any Additional Security Documents covering any
of its assets. The Lender shall not require any pledge of the stock of Xxxxxx
B.V. Xxxxxx B.V. shall constitute an "Approved Subsidiary" for purposes of the
Loan Agreement, notwithstanding the failure to satisfy the conditions set forth
in the definition of "Approved Subsidiary" set forth in the Loan Agreement as to
Xxxxxx B.V.; provided, however, that the Borrower and its Subsidiaries (other
than Xxxxxx B.V.) shall not be permitted to extend credit to Xxxxxx B.V. and
provided further, however, that the Borrower and its Subsidiaries (other than
Xxxxxx B.V.) shall not be permitted to make investments in Xxxxxx B.V.
which exceed, in the aggregate, $1,000,000.
10. CERTAIN DEFINITIONS AND REFERENCES. Terms used but not defined herein,
but which are defined in the Loan Agreement or in the other Loan Documents,
shall have the meanings herein ascribed to them therein. The term "Agreement" as
used in the Loan Agreement and the term "Loan Agreement," as used in the other
Loan Documents or any other instrument, document or writing finished to Lender
by Borrower shall mean the Loan Agreement as hereby amended.
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11. CONDITIONS. No part of this Amendment shall become effective until the
Borrower shall have delivered (or shall have caused to be delivered) to Bank
(unless otherwise waived or deferred by Bank) each of the following, in Proper
Form:
(1) certificates dated as of the date hereof of the Secretary or
any Assistant Secretary of Borrower authorizing the execution,
delivery and performance of this Amendment, and such other
related documents and information as Lender may request;
(2) Lender's facility fee in the amount of $60,000;
(3) the replacement Revolving Note in the form attached hereto as
Exhibit A, duly executed by Borrower;
(4) a dominion of fluids processing account agreement, in Proper
Form;
(5) a Joinder Agreement executed by Xxxxxx B.V.;
(6) an Amendment to Subordination Agreement, duly executed and in
Proper Form;
(7) a legal opinion of counsel for the Obligors, in Proper Form;
(8) All actions, proceedings, instruments and documents required
to carry out the transactions contemplated by this Amendment
or incidental thereto and all other related legal matters
shall have been satisfactory to and approved by Liddell, Sapp,
Zivley, Hill & XxXxxx, L.L.P., legal counsel for Bank.
12. EXPENSES; INDEMNIFICATION. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW, BORROWER WILL PAY ALL COSTS AND EXPENSES AND REIMBURSE LENDER FOR ANY AND
ALL EXPENDITURES OF EVERY CHARACTER INCURRED OR EXPENDED FROM TIME TO TIME,
REGARDLESS OF WHETHER A DEFAULT HAS OCCURRED, IN CONNECTION WITH THE
PREPARATION, NEGOTIATION, DOCUMENTATION, RECORDING, CLOSING, RENEWAL, REVISION,
MODIFICATION, INCREASE, REVIEW OR RESTRUCTURING OF THIS AMENDMENT.
13. NO USURY INTENDED; SPREADING. Notwithstanding any provision to the
contrary contained in this Amendment, the Notes or any of the other Loan
Documents, it is expressly provided that in no case or event shall the aggregate
of (i) all interest on the unpaid balance of the Notes, accrued or paid from the
date hereof and (ii) the aggregate of any other amounts accrued or paid pursuant
to the Notes or any of the other Loan Documents, which under applicable laws are
or may be deemed to constitute interest upon the indebtedness evidenced by the
Notes ever exceed the Maximum Legal Rate. In this connection, the parties hereto
expressly stipulate and agree that it is their common and overriding intent to
contract in strict compliance with the applicable usury laws. In furtherance
thereof, none of the terms of the Notes or any of the other Loan Documents shall
ever
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be construed to create a contract to pay, as consideration for the use,
forbearance or detention of money, interest at a rate in excess of the Maximum
Legal Rate. No Borrower nor any other parties now or hereafter becoming liable
for payment of the indebtedness evidenced by the Notes shall ever be liable for
interest in excess of the Maximum Legal Rate. If, for any reason whatever, the
interest paid or received on the Notes during its full term produces a rate
which exceeds the Maximum Legal Rate, the holder of the Notes shall credit
against the principal of the Notes (or, if such indebtedness shall have been
paid in lull, shall refund to the payor of such interest) such portion of said
interest as shall be necessary to cause the interest paid on the Notes to
produce a rate equal to the Maximum Legal Rate. All sums paid or agreed to be
paid to the holder of the Notes for the use, forbearance or detention of the
indebtedness evidenced thereby shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread in equal parts throughout the lull
term of the Notes, so that the interest rate is uniform throughout the lull term
of the Notes. The provisions of this paragraph shall control all agreements,
whether now or hereafter existing and whether written or oral, between Borrower
and Lender.
14. BUSINESS LOANS. Borrower warrants and represents to Lender and all
other holders of the Notes that all loans evidenced by the Notes are and will be
for business, commercial, investment or other similar purpose and not primarily
for personal, family, household or agricultural use, as such terms are used in
Chapter Chapter 1D of Title 79, Tex. Rev. Civ. Stats. 1925.
15. WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE THE
RIGHT TO TRAIL BY JURY WITH RESPECT TO ANY AND ALL ACTIONS OR PROCEEDINGS AT ANY
TIME IN WHICH THE BORROWER AND LENDER ARE PARTIES ARISING OUT OF THIS AMENDMENT,
THE LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
16. LIEN CONTINUATION; MISCELLANEOUS. Borrower and Lender hereby
acknowledge, confirm and agree that the Security Documents secure and shall
continue to secure the obligations of Borrower and any other party to any of the
Loan Documents (other than Lender) under the Loan Documents, including, without
limitation, this Amendment, the Notes, the Letter of Credit Liabilities and the
Security Documents are hereby deemed modified to the extent necessary to
evidence the foregoing acknowledgments, agreements and confirmations. Nothing
contained in this Amendment or the Notes or any other document, instrument or
other writing executed in connection with this Amendment shall be construed as a
release or impairment of any of the liens, assignments and security interests
created or granted pursuant to the Security Documents and such liens,
assignments and security interests are hereby ratified and confirmed. The Liens
are not waived. To the extent of any conflict between the Loan Agreement or any
of the other Loan Documents (or any earlier modification of any of them) and
this Amendment, this Amendment shall control. Except as hereby expressly
modified, all terms of the Loan Agreement and the other Loan Documents (as any
of them may have been previously modified by any written agreement) remain in
lull force and effect. This Amendment (a) shall bind and benefit Borrower and,
except as herein expressly limited, Lender, and their respective receivers,
trustees, successors and assigns (provided, that Borrower may not assign its
rights hereunder without the prior written consent of Lender); (b) may be
modified or amended only by a writing signed by each party; (c) SHALL BE
GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT; (d) may be executed
in several counterparts, and by the patties hereto in separate counterparts, and
each counterpart, when executed and delivered, shall constitute an original
agreement enforceable against all who signed it without production of or
accounting for any other counterpart, and all separate counterparts shall
constitute the same agreement and (e) embodies the entire agreement and
understanding between the parties with respect to modifications of instruments
provided for herein and supersedes all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter.
Borrower acknowledges and agrees that there are no oral agreements among the
patties with respect to the transactions contemplated by the Loan Documents
which have not been incorporated in this Amendment or in the Loan Documents. If
any provision of this Amendment should be determined by any court of competent
jurisdiction to be illegal, invalid or unenforceable under present or future
laws, the legality, validity and enforceability of the remaining provisions of
this Amendment shall not be affected thereby. Each waiver in this Amendment is
subject to the overriding and controlling rule that it shall be effective only
if and to the extent that (a) it is not prohibited by applicable law and (1,)
applicable law neither provides for nor allows any material sanctions to be
imposed against Lender for having bargained for and obtained it. Wherever the
term "including" or a similar term is used in this Amendment, it shall be read
as if it were "including by way of example only and without in any way limiting
the generality of the clause or concept referred to." Any exhibits, appendices
and annexes described in this Amendment as being attached to it are hereby
incorporated into it. The headings in this Amendment shall be accorded no
significance in interpreting it. BORROWER HEREBY RELEASES, DISCHARGES AND
ACQUITS FOREVER LENDER AND ITS OFFICERS, DIRECTORS, TRUSTEES, AGENTS, EMPLOYEES
AND COUNSEL (IN EACH CASE, PAST, PRESENT AND FUTURE) FROM ANY AND ALL CLAIMS
EXISTING AS OF THE DATE HEREOF (OR THE DATE OF ACTUAL EXECUTION HEREOF BY THE
APPLICABLE PERSON OR ENTITY, IF LATER). AS USED HEREIN, THE TERM "CLAIM" SHALL
MEAN ANY AND ALL LIABILITIES, CLAIMS, DEFENSES, DEMANDS, ACTIONS, CAUSES OF
ACTION, JUDGMENTS, DEFICIENCIES, INTEREST, LIENS, COSTS OR EXPENSES (INCLUDING
BUT NOT LIMITED TO COURT COSTS, PENALTIES, ATTORNEYS' FEES AND DISBURSEMENTS,
AND AMOUNTS PAID IN SETTLEMENT) OF ANY KIND AND CHARACTER WHATSOEVER, INCLUDING
BUT NOT LIMITED TO CLAIMS FOR USURY, BREACH OF CONTRACT, BREACH OF COMMITMENT,
NEGLIGENT MISREPRESENTATION OR FAILURE TO ACT IN GOOD FAITH, IN EACH CASE
WHETHER NOW KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED
OR PRIMARY OR CONTINGENT, AND WHETHER ARISING OUT OF WRITTEN DOCUMENTS,
UNWRITTEN UNDERTAKINGS, COURSE OF CONDUCT, TORT, VIOLATIONS OF LAWS OR
REGULATIONS OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER HEREBY WAIVES ALL RIGHTS, REMEDIES, CLAIMS AND DEFENSES BASED UPON OR
RELATED TO SECTIONS 51.003, 51.004 AND 51.005 OF THE TEXAS PROPERTY CODE, TO THE
EXTENT THE SAME PERTAIN OR MAY PERTAIN TO ANY ENFORCEMENT OF ANY OF THE LOAN
DOCUMENTS.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SS.26.02
THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
BY ANY OF THE PARTIES BEFORE OR SUBSTANTIALLY
CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH
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REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
EXECUTED effective as of the date first set forth above.
XXXXXX HEALTHCARE, INC.,
a Texas corporation
By: /S/ XXXXXXX X. XXXXXXX
Name: XXXXXXX X. XXXXXXX
Title: PRESIDENT
COMERICA BANK-TEXAS,
a Texas banking association
By: /S/ XXXXX X. XXXXXX
Name: XXXXX X. XXXXXX
Title: VICE PRESIDENT
Attachments:
EXHIBIT A - Revolving Note
(Exhibit B to the Loan Agreement)
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The undersigned hereby joins in this Amendment to evidence its consent to
execution by Borrower of this Amendment, to confirm that each Loan Document now
or previously executed by the undersigned applies and shall continue to apply to
the Loan Agreement, as amended hereby (and that the Guaranty executed by the
undersigned or which it has joined in pursuant to a joinder agreement apply to
the "Notes" as such term is amended by this Amendment), to acknowledge that
without such consent and confirmation, Lender would not execute this Amendment
and to join in the notice pursuant to Tex. Bus. & Comm. Code ss.26.02 set forth
above.
XXXXXX COMPANY, a Minnesota corporation
By: /S/ XXXXXXX X. XXXXXXX
Name: XXXXXXX X. XXXXXXX
Title: PRESIDENT
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