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EXHIBIT 10.54
SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING/
TERM LOAN AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING/TERM
LOAN AGREEMENT (this "Amendment"), dated as of June 30, 1999, is entered into by
and between SAFESKIN CORPORATION, a Florida corporation ("Borrower"), and UNION
BANK OF CALIFORNIA, N.A., as Administrative Agent for the Lenders referred to
below, with reference to the following facts:
RECITALS
A. Borrower, the Lenders identified therein and the
Administrative Agent are parties to that certain Amended and Restated
Revolving/Term Loan Agreement, dated as of March 5, 1999, as amended by that
certain First Amendment to Amended and Restated Revolving/Term Loan Agreement,
dated as of March 31, 1999 (collectively, the "Loan Agreement"), pursuant to
which such Lenders have provided Borrower with the revolving and term loan
financing described therein.
B. Borrower, the Lenders and the Administrative Agent wish
to amend the Loan Agreement as set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. Defined Terms. All initially capitalized terms used in this
Amendment without definition shall have the respective meanings ascribed thereto
in the Loan Agreement.
2. Addition of "Adjusted Fixed Charge Coverage Ratio" Definition.
Section 1.1 of the Loan Agreement is hereby amended and supplemented by adding
therein a new definition of "Adjusted Fixed Charge Coverage Ratio" as follows:
"'Adjusted Fixed Charge Coverage Ratio' means as of the last day
of any Fiscal Quarter, the ratio of (a) EBITDA for the fiscal period consisting
of the four (4) Fiscal Quarters ended on that date minus Capital Expenditures
made by Borrower and its Subsidiaries during the Fiscal Quarter ended on that
date minus the amount of Capital Expenditure permitted to be made by Borrower
and its Subsidiaries pursuant to Section 6.19 for the three (3) succeeding
Fiscal Quarters to (b) the sum of (i) Interest Expense of Borrower and its
Subsidiaries for such fiscal period plus (ii) Cash Income Taxes of Borrower with
respect to such fiscal period plus (iii) Cash dividends on Common Stock paid
during such period plus (iv) the current portion of long-term debt
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of Borrower and its Subsidiaries on such date plus (v) the current portion of
long-term lease obligations of Borrower and its Subsidiaries on such date."
3. Amendment to Definition of "Applicable Commitment Fee Rate".
Section 1.1 of the Loan Agreement is hereby amended such that the definition of
"Applicable Commitment Fee Rate" shall read in full as follows:
" 'Applicable Commitment Fee Rate' means, for each Pricing
Period, the rates set forth below (expressed in basis points per annum)
opposite the Applicable Pricing Level for that Pricing Period:
Applicable Pricing Level Commitment Fee
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I 45.0
II 50.0
III 50.0
IV 62.5
V 62.5;
provided, however, upon the Administrative Agent's receipt of a
Compliance Certificate from Borrower evidencing Borrower's compliance as
of any compliance testing date with each of the financial covenants set
forth in Sections 6.12 through 6.24, as such covenants were in effect
under this Agreement as of March 5, 1999, the Applicable Commitment Fee
Rate shall be as set forth below:
Applicable Pricing Level Commitment Fee
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I 20
II 25
III 25
IV 37.5
V 37.5.
Promptly following any reduction in the Applicable Commitment Fee Rate
pursuant to the proviso set forth in the preceding sentence, Borrower
and the Administrative Agent shall enter into a written amendment to
this Agreement restoring the financial covenants set forth in Sections
6.12 through 6.24 to their respective levels under this Agreement as of
March 5, 1999."
4. Amendment to Definition of "Applicable Eurodollar Rate Margin".
Section 1.1 of the Loan Agreement is hereby further amended such that the
definition of "Applicable Eurodollar Rate Margin" shall read in full as follows:
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" 'Applicable Eurodollar Rate Margin' means, for each Pricing
Period, the interest rate margin set forth below (expressed in basis
points per annum) opposite the Applicable Pricing Level for that Pricing
Period:
Applicable Pricing Level Margin
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I 150
II 175
III 187.5
IV 200
V 212.5;
provided, however, upon the Administrative Agent's receipt of a
Compliance Certificate from Borrower evidencing Borrower's compliance as
of any compliance testing date with each of the financial covenants set
forth in Sections 6.12 through 6.24, as such covenants were in effect
under this Agreement as of March 5, 1999, the Applicable Eurodollar Rate
Margin shall be as set forth below:
Applicable Pricing Level Margin
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I 87.5
II 112.5
III 125
IV 137.5
V 150.
Promptly following any reduction in the Applicable Eurodollar Rate
Margin pursuant to the proviso set forth in the preceding sentence,
Borrower and the Administrative Agent shall enter into a written
amendment to this Agreement restoring the financial covenants set forth
in Sections 6.12 through 6.24 to their respective levels under this
Agreement as of March 5, 1999."
5. Amendment to Definition of "Fixed Charge Coverage Ratio".
Section 1.1 of the Loan Agreement is hereby further amended such that the
definition of "Fixed Charge Coverage Ratio" shall read in full as follows:
"'Fixed Charge Coverage Ratio'" means, as of the last day of any
Fiscal Quarter, the ratio of (a) EBITDA for the fiscal period consisting
of the four (4) Fiscal Quarters ended on that date minus Capital
Expenditures made by Borrower and its Subsidiaries during such fiscal
period to (b) the sum of (i)
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Interest Expense of Borrower and its Subsidiaries for such fiscal period
plus (ii) Cash Income Taxes of Borrower with respect to such fiscal
period plus (iii) Cash dividends on Common Stock paid during such period
plus (iv) the current portion of long-term debt of Borrower and its
Subsidiaries on such date plus (v) the current portion of long-term
lease obligations of Borrower and its Subsidiaries on such date."
6. Amendment to Fixed Charge Coverage Ratio Provision. Section 6.14
of the Loan Agreement is hereby amended to read in full as follows:
"6.14 Fixed Charge Coverage Ratio. (a) Permit the Adjusted Fixed
Charge Coverage Ratio as of June 30, 1999, September 30, 1999, December
31, 1999, March 31, 2000 or June 30, 2000 to be less than the ratio set
forth below opposite such date:
Date Ratio
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June 30, 1999 1.15 to 1.00
September 30, 1999 1.25 to 1.00
December 31, 1999 1.25 to 1.00
March 31, 2000 1.50 to 1.00
June 30, 2000 1.50 to 1.00;
or (b) permit the Fixed Charge Coverage Ratio as of September 30, 2000,
December 31, 2000, or as of the last day of any Fiscal Quarter occurring
during a period set forth below, to be less than the ratio set forth
below opposite such Fiscal Quarter:
Fiscal Quarter Ratio
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September 30, 2000 1.50 to 1.00
December 31, 2000 1.50 to 1.00
January 1, 2001 through December 31, 2001 1.75 to 1.00
January 1, 2002 through December 31, 2002 2.00 to 1.00
January 1, 2003 through the Maturity Date 2.00 to 1.00."
7. Amendment to Net Income Covenant. Section 6.17 of the Loan
Agreement is hereby amended to read in full as follows:
"6.17 Net Income. Permit (a) Net Income for any Fiscal Quarter
to be less than zero, (b) Net Income for the 1999 Fiscal Year to be less
than $20,000,000, or (c) Net Income for the 2000 Fiscal Year or any
subsequent
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Fiscal Year to be less than an amount equal to 10% of consolidated gross
revenues of Borrower and its Subsidiaries for such Fiscal Year."
8. Amendment to Capital Expenditures Provisions. Section 6.19 of
the Loan Agreement is hereby amended to read in full as follows:
"6.19 Capital Expenditures. Make any Capital Expenditure, if to
do so would result in either of the following applicable limits being
exceeded:
(a) If the aggregate of all Capital Expenditures
made in any Fiscal Year would exceed the sum of (i) $65,000,000
for the 1998 Fiscal Year, $55,000,000 for the 1999 Fiscal Year,
$22,500,000 for the 2000 Fiscal Year, $30,000,000 for the 2001
Fiscal Year or $35,000,000 for the Fiscal Year 2002 or for any
subsequent Fiscal Year, plus (ii) the amount, if any, by which
Capital Expenditures of Borrower and its Subsidiaries for the
immediately preceding Fiscal Year was less than the applicable
foregoing limit for such Fiscal Year; or
(b) If the aggregate of all Capital Expenditures
made in the Fiscal Quarters ending March 31, 1999, June 30, 1999
or September 30, 1999 would exceed the sum of (i) $20,000,000
for the Fiscal Quarter ended March 31, 1999, $17,000,000 for the
Fiscal Quarter ending June 30, 1999, or $11,000,000 for the
Fiscal Quarter ending September 30, 1999, plus (ii) the amount,
not to exceed 25% of such preceding Fiscal Quarter's limit, by
which Capital Expenditures of Borrower and its Subsidiaries for
the immediately preceding Fiscal Quarter was less than the
applicable foregoing limit for such Fiscal Quarter."
9. Amendment to EBITDA Covenant. Section 6.23 of the Loan Agreement
is hereby amended to read in full as follows:
"6.23 EBITDA. Permit EBITDA for the Fiscal Quarters indicated
below to be less than the applicable amount set forth below for such
Fiscal Quarters:
Fiscal Quarter Ending Minimum EBITDA
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March 31, 1999 $ 8,000,000
June 30, 1999 $14,000,000
September 30, 1999 $10,000,000
December 31, 1999 $11,000,000
March 31, 2000 $12,000,000
June 30, 2000 $12,000,000
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September 30, 2000 $12,000,000
December 31, 2000 $12,000,000."
10. Amendment to Maximum Inventory Covenant. Section 6.24 of the
Loan Agreement is hereby amended to read in full as follows:
"6.24 Inventory. Maintain inventory having an aggregate value
(determined at the lower of cost, on a first-in-first-out basis, or
market, on a net realizable value basis, as determined by Borrower
consistent with its past practices) as of the Fiscal Quarters ending
September 30, 1999 and December 31, 1999 of greater than the correlative
amount set forth below:
Fiscal Quarter Ending Maximum Permitted Inventory
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September 30, 1999 $43,000,000
December 31, 1999 $43,000,000."
11. Amendment Fee. In consideration of the accommodations provided
to Borrower pursuant to this Amendment, Borrower shall pay to the Administrative
Agent, for the ratable benefit of Lenders, an amendment fee in the amount of
$250,000 (the "Amendment Fee"). Borrower hereby acknowledges and agrees that the
Administrative Agent may effect payment of the Amendment Fee by charging the
full amount of the Amendment Fee to Borrower's Revolving Loan account on the
effective date of this Amendment.
12. Conditions Precedent. The effectiveness of this Amendment is
subject to the prior satisfaction of each of the following conditions:
(a) Execution and Delivery of this Amendment by
Borrower. The Administrative Agent shall have
received a copy of this Amendment, duly executed
by Borrower; and
(b) Written Approval of the Lenders. The
Administrative Agent shall have received written
approval of the terms of this Amendment from
each of the Lenders.
13. Otherwise Not Effected. Except as expressly amended hereby, the
Loan Agreement shall remain unaltered and in full force and effect.
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14. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall constitute an original, and all of which,
taken together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment by
their respective duly authorized officers as of the date first set forth above.
BORROWER:
SAFESKIN CORPORATION,
a Florida corporation
By /s/ Xxxxx X. Xxxxxx
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Title: Executive Vice-President,
Chief Financial Officer
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ADMINISTRATIVE AGENT:
UNION BANK OF CALIFORNIA, N.A.
a national banking association
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President
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