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Exhibit 10.1
AMENDMENT NO. 8
TO
REVOLVING CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 8 ("Amendment") is entered into as of August 12, 1999,
by and among XXXXXX-FIELD HEALTH PRODUCTS, INC., a corporation organized under
the laws of the State of Delaware ("Holdings"), XXXXXX-FIELD, INC., a
corporation organized under the laws of the State of New York ("Field"),
XXXXXX-FIELD TEMCO, INC., a corporation organized under the laws of the State of
New Jersey ("Temco"), XXXXXX-FIELD DISTRIBUTION, INC., a corporation organized
under the laws of the State of Missouri ("Distribution"), XXXXXX-FIELD BANDAGE,
INC., a corporation organized under the laws of the State of Rhode Island
("Bandage"), XXXXXX-FIELD EXPRESS (PUERTO RICO), INC., a corporation organized
under the laws of the State of Delaware ("GFPR"), EVEREST & XXXXXXXX, INC., a
corporation organized under the laws of the State of California ("E & J"), LABAC
SYSTEMS, INC., a corporation organized under the laws of the State of Colorado
("LaBac"), MEDICAL SUPPLIES OF AMERICA, INC., a corporation organized under the
laws of the State of Florida ("Medapex"), HEALTH CARE WHOLESALERS, INC., a
corporation organized under the laws of the State of Georgia ("Health Care"), H
C WHOLESALERS, INC., a corporation organized under the laws of the State of
Georgia ("HCW"), CRITICAL CARE ASSOCIATES, INC., a corporation organized under
the laws of the State of Georgia ("Critical"), LUMEX/BASIC AMERICAN HOLDINGS,
INC., a corporation organized under the laws of the State of Delaware ("Lumex"),
BASIC AMERICAN MEDICAL PRODUCTS, INC., a corporation organized under the laws of
the State of Georgia ("Basic American"), LUMEX MEDICAL PRODUCTS, INC., a
corporation organized under the laws of the State of Delaware ("Lumex Medical"),
PRISM ENTERPRISES, INC., a corporation organized under the laws of the State of
Delaware ("Prism"), BASIC AMERICAN SALES AND DISTRIBUTION CO., INC., a
corporation organized under the laws of the State of Delaware ("Basic
Distribution"), PRISTECH, INC., a corporation organized under the laws of the
State of Delaware ("Pristech"), LUMEX SALES AND DISTRIBUTION CO., INC., a
corporation organized under the laws of the State of Delaware ("Lumex
Distribution") and MUL ACQUISITION CORP. II, a corporation organized under the
laws of the State of Delaware ("Mul Acquisition") (each a "Borrower" and
collectively "Borrowers"), the financial institutions which are now or which
hereafter become a party to (collectively, the "Lenders" and individually a
"Lender") the Loan Agreement (as defined below) and IBJ WHITEHALL BUSINESS
CREDIT CORPORATION, a New York corporation ("IBJ"), as agent for Lenders (IBJ,
in such capacity, the "Agent").
BACKGROUND
Borrowers, Lenders and Agent are parties to a Revolving Credit and
Security Agreement dated as of December 10, 1996, as amended, modified and
supplemented (as further amended, supplemented or otherwise modified from time
to time, the "Loan Agreement") pursuant to which Agent and Lenders provide
Borrowers with certain financial accommodations.
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Borrowers have requested that Agent and Lenders make certain amendments to
the Loan Agreement, and Agent and Lenders are willing to do so on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrowers by Agent and/or
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 3 below, the Loan Agreement is amended as
follows:
(a) The following definitions are added to Section 1.2:
"Amendment No. 8" shall mean Amendment No. 8 to Revolving
Credit and Security Agreement dated as of August 10, 1999.
"Amendment No. 8 Effective Date" shall mean the date all of
the conditions set forth in Section 5 of Amendment No. 8 have
been satisfied.
"December 2000 Business Plan" shall have the meaning set forth
in Section 6.18 hereof.
"December 31st, 1999 Waiver Fee" shall have the meaning set
forth in Section 6.19 hereof.
"New Payment Date" shall have the meaning set forth in Section
6.19 hereof.
"Term Loan Collateral" shall mean the mortgages in favor of
Agent for the benefit of IBJ on the real estate and
improvements located at 81 and 000 Xxxxxx Xxxxxx, Xxx Xxxxx,
Xxx Xxxx.
(b) The following definitions in Section 1.2 are amended as follows:
"Availability Reserve" shall mean (x) from the Amendment No. 8
Effective Date until December 31, 1999, $15,500,000 and (y)
thereafter, $16,500,000.
"Maximum Revolving Advance Amount" shall mean $35,000,000.
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"Revolving Interest Rate" shall mean an interest rate per
annum equal to the Alternate Base Rate plus two percent
(2.0%).
(c) Section 2.1(a)(y)(iii) of the Loan Agreement is amended in its
entirety to provide as follows:
"(iii) up to the lesser of (A) the product of (a) the
aggregate amount of outstanding trade Letters of Credit times
(b) the Inventory Advance Rate, or (B) $500,000 in the
aggregate at any one time, minus"
(d) Sections 6.6(d), (e) and (f) of the Loan Agreement are amended
in their entirety to provide as follows:
"(d) Cause Net Cash Flow to be equal to or greater than
($9,000,000) at the end of the fiscal quarter ending June 30,
1999 for the immediately preceding fiscal quarter;
(e) Cause Net Cash Flow to be equal to or greater than
($6,900,000) at the end of the fiscal quarter ending September
30, 1999 for the immediately preceding fiscal quarter;
(f) Cause Net Cash Flow to be equal to or greater than
($3,000,000) at the end of the fiscal quarter ending December
31, 1999 for the immediately preceding fiscal quarter;"
(e) New Sections 6.18 and 6.19 are added to the Loan Agreement which
provide as follows:
"6.18. Business Plan. Borrowers shall provide Agent with a new
business plan for the fiscal year ending December 31, 2000
(the "December 2000 Business Plan") on or prior to December
31, 1999. The December 2000 Business Plan shall be reasonably
satisfactory to Agent in all respects.
6.19. December 31st, 1999 Waiver Fee. In the event that the
Obligations have not been repaid in full and the Loan
Agreement irrevocably terminated on or prior to December 31,
1999 (the "December 31 Payment Date"); Borrowers shall pay
Agent for the ratable benefit of Lenders a waiver fee of
$175,000 (the December 31st, 1999 Waiver Fee"), provided,
however, if Borrowers have submitted the December 31 Business
Plan on or prior to December 31, 1999 and the terms and
conditions of the December 31 Business Plan are satisfactory
to all Lenders in their sole discretion, then Lenders, in
their sole and absolute discretion, shall consider waiving
Borrowers' requirement to pay the December 31st, 1999 Waiver
Fee and any such waiver shall only be effective upon the
written consent of all Lenders; provided, however, that
Lenders shall not have any obligation whatsoever to waive such
fee. Notwithstanding the foregoing,
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in the event Borrowers are in receipt on or before December
31, 1999 of a letter of intent (which is satisfactory to Agent
in its reasonable discretion), a binding commitment letter or
a binding agreement (Agent in its reasonable discretion shall
determine whether such commitment letter or agreement is
binding) to (x) sell all or a part of Borrowers' assets or
equity securities in a sale, merger, consolidation or other
similar transaction for sufficient cash proceeds to effect the
repayment in cash of all outstanding Obligations or (y)
refinance and repay in cash all outstanding Obligations (the
transactions referred to in clauses (x) and (y) are
individually referred to as a "New Significant Transaction"),
the payment date for the December 31st, 1999 Waiver Fee will
be extended until the earlier to occur of (i) the consummation
of a New Significant Transaction which results in the
repayment of all outstanding Obligations, or (ii) March 31,
2000, or (iii) termination or expiration of such letter of
intent, commitment letter or binding commitment (unless prior
to or simultaneously with such termination or expiration of
any such letter of intent, commitment letter or binding
commitment of any transaction under clause (x), Borrowers
enter into definitive agreements with respect to such sale).
For purposes of this Section 6.19 only, the term "Lenders"
shall include only those financial institutions that were
Lenders on the Amendment No. 8 Effective Date."
(f) Section 13.1 is amended in its entirety to provide as follows:
"13.1. Term. This Agreement, which shall inure to the benefit
of and shall be binding upon the respective successors and
permitted assigns of each Borrower, Agent and each Lender
(except that only the financial institutions that were Lenders
on the Amendment No. 8 Effective Date shall be entitled to
share the December 31st, 1999 Waiver Fee), shall become
effective on the date hereof and shall continue in full force
and effect until May 31, 2000 (the "Term") unless sooner
terminated as herein provided. Borrowers may terminate this
Agreement at any time upon thirty (30) days' prior written
notice upon payment in full of the Obligations."
(g) Article XVII is amended in its entirety to provide as follows:
"XVII. Term Loan.
17. Term Loan.
(a) On the Amendment No. 8 Effective Date, Agent will
make a Term Loan to Borrowers in the amount of $4,500,000 (the
"Term Loan") with principal payable on the first day of each
month, commencing with September 1, 1999, in the amount of
$250,000 and increasing to $500,000 per month, commencing
January 1, 2000, with the outstanding principal balance and
interest due due on the last day of the Term. No other Lender
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shall have any obligation to join the funding of the Term
Loan. Interest on the Term Loan shall be payable in arrears on
the first day of each month with a final payment of interest
due upon the repayment of the Term Loan. Interest on the
outstanding principal balance of the Term Loan shall be
payable at a rate per annum equal to the Alternate Base Rate
plus two percent (2.0%) (the "Term Loan Rate"). Whenever,
subsequent to the date of this Agreement, the Alternate Base
Rate is increased or decreased, such interest rate shall be
similarly changed without notice or demand of any kind by an
amount equal to the amount of such change in the Alternate
Base Rate during the time such change or changes remain in
effect. Upon the occurrence of an Event of Default, and during
the continuation thereof, the Term Loan shall bear interest at
the Term Loan Rate plus two (2%) percent per annum. Only Agent
shall be entitled to earn interest on the Term Loan and such
interest shall only be for Agent's account. The Term Loan
shall be evidenced by a secured promissory note in
substantially the form attached hereto as Exhibit 17.
(b) Subject to the provisions of Section 17(d), but
notwithstanding any of the other provisions of this Agreement
to the contrary, any amounts received by Agent to be applied
to the outstanding Obligations, other than amounts received
from the proceeds of the Term Loan Collateral and amounts
specifically designated to repay the Term Loan, shall be
applied first to the Obligations other than the Term Loan in
such order as Agent in its sole discretion may determine or as
set forth in Sections 2.13 and 11.1 (as applicable) and,
second, to the Term Loan.
(c) "Exhibit 17 to the Loan Agreement is replaced with
Exhibit 17 to this Amendment."
(d) When any Borrower sells or otherwise disposes of any
Equipment, Borrowers shall repay the Term Loan in an amount
equal to the product of 12.5% multiplied by the net proceeds
of such sale (i.e., gross proceeds less the reasonable costs
of such sales or other dispositions), such repayments to be
made promptly but in no event more than one (1) Business Day
following receipt of such net proceeds, and until the date of
payment, such proceeds shall be held in trust for Agent. The
balance of such proceeds shall be applied to the Obligations
in accordance with the terms of this Agreement. The foregoing
shall not be deemed to be implied consent to any such sale
otherwise prohibited by the terms and conditions hereof.
3. Conditions of Effectiveness. This Amendment shall become effective upon
satisfaction of the following conditions precedent: Agent shall have received
(i) eight (8) copies of this Amendment executed by Borrowers and Lenders and
consented and agreed to by Guarantor, (ii) an $87,500 Amendment Fee for the
ratable benefit of Lenders, (iii) payment of all amounts due under the fee
letter of even date herewith between Agent and Borrowers, (iv)
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payment of the June 30th, 1999 Waiver Fee, (v) the Term Loan Collateral and all
other documents set forth on the attached checklist, and (vi) such other
certificates, instruments, documents, agreements and opinions of counsel as may
be required by Agent, Lenders or their counsel, each of which shall be in form
and substance satisfactory to Agent, Lenders and their counsel.
4. Acknowledgement. The Term Loan, constituting Indebtedness of Borrowers
to Agent, is included within the definition of "Obligations".
5. Representations and Warranties. Each Borrower hereby represents and
warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrowers and are enforceable
against Borrowers in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all such
covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(d) No Borrower has any defense, counterclaim or offset with respect
to the Loan Agreement.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
like import shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except as specifically amended herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of Agent or Lenders,
nor constitute a waiver of any provision of the Loan Agreement, or any other
documents, instruments or agreements executed and/or delivered under or in
connection therewith.
(d) The Obligations under the Loan Agreement as amended pursuant to
this Amendment benefit fully from all collateral security and guaranties with
respect thereto.
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7. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which when taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
XXXXXX-FIELD HEALTH PRODUCTS, INC.
XXXXXX-FIELD, INC.
XXXXXX-FIELD TEMCO, INC.
XXXXXX-FIELD DISTRIBUTION, INC.
XXXXXX-FIELD BANDAGE, INC.
XXXXXX-FIELD EXPRESS (PUERTO RICO), INC.
EVEREST & XXXXXXXX, INC.
LaBac SYSTEMS, INC.
MEDICAL SUPPLIES OF AMERICA, INC.
HEALTH CARE WHOLESALERS, INC.
H C WHOLESALERS, INC.
CRITICAL CARE ASSOCIATES, INC.
LUMEX/BASIC AMERICAN HOLDINGS, INC.
BASIC AMERICAN MEDICAL PRODUCTS, INC
LUMEX MEDICAL PRODUCTS, INC.
PRISM ENTERPRISES, INC
BASIC AMERICAN SALES AND
DISTRIBUTION CO., INC.
PRISTECH, INC.
LUMEX SALES AND DISTRIBUTION CO., INC.
MUL ACQUISITION CORP. II
By:/s/ Xxxxxxx X. Xxxxxxx
________________________________
Name:___________________________
Title: Vice President of each of
the foregoing corporations
ATTEST:
__________________________
Name:
Title:
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CONSENTED AND AGREED TO:
EVEREST & XXXXXXXX CANADIAN LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name:
--------------------------
Title: Vice President
-------------------------
IBJ WHITEHALL BUSINESS CREDIT CORPORATION, as
Lender and as Agent
By: /s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx, Vice President
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment Percentage: 25.00%
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title:
------------------------------
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Commitment Percentage: 25.00%
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title:
------------------------------
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Commitment Percentage: 25.00%
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DEUTSCHE FINANCIAL SERVICES CORPORATION
/s/ Xxxxx Xxxxxxx
By:_______________________________
Name: Xxxxx Xxxxxxx
Title:____________________________
0000 Xxx Xxxxx Xxxx
Xxxxx 000
X.X. Xxx 00000
Xx. Xxxxx, XX 00000
Commitment Percentage: 25.00%
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