AMENDMENT NO. 4 AND WAIVER TO CREDIT AGREEMENT
AMENDMENT
NO. 4 AND WAIVER TO CREDIT AGREEMENT
AMENDMENT
NO. 4 AND WAIVER, dated
as
of December 9, 2005 (this “Amendment and Waiver”), with respect to the Credit
Agreement, dated as of May 20, 2002 (as same has been and may be further
amended, restated, supplemented or modified, from time to time, the “Credit
Agreement”), by and between AMERICAN
MEDICAL ALERT CORP., a
New
York corporation (the “Company”) and THE
BANK OF NEW YORK,
a New
York banking corporation (the “Lender”).
RECITALS
The
Company has requested, and the Lender has agreed subject to the terms and
conditions of this Amendment and Waiver, to increase the Term Loan and to
amend
and waive certain provisions of the Credit Agreement as herein set
forth.
Accordingly,
in consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1.
Amendments.
(a) The
following definitions in Section 1.01 of the Credit Agreement are hereby
amended
and restated in their entirety to provide as follows:
“Consolidated
Fixed Charge Coverage Ratio” shall mean, on the date of determination, the ratio
of (a) Consolidated EBITDA to (b) the sum of (i) the Consolidated Current
Portion of Long Term Debt as of the date of calculation, plus (ii) Consolidated
Interest Expense (excluding Subordinated Debt) for the four fiscal quarters
then
ending, plus (iii) Consolidated Dividends for the four fiscal quarters then
ending, plus (iv) Consolidated Capital Expenditures which are not financed
with
the proceeds from any Indebtedness (other than any Revolving Credit Loans)
for
the four fiscal quarters then ending, plus (v) cash taxes paid during the
four
fiscal quarters then ending.
“Maturity
Date” shall mean December 1,
2010.
“Term
Loan Commitment” shall mean the Lender’s obligation to make the Term Loan to the
Company (a) on the Closing Date, in the amount of $1,500,000 (of which $450,000
remains outstanding as of the Effective Date) and (b) on the Effective Date,
in
the amount of $2,550,000, for a total of $3,000,000, as of the Effective
Date.
“Total
Commitment” shall mean, at any time, the aggregate of the Commitments in effect
at such time which shall be $4,500,000.
(b) The
following definition is hereby added to Section 1.01 of the Loan Agreement,
in its appropriate alphabetical order:
“Effective
Date” shall mean December 9, 2005.
(c) Section
2.03 of the Credit Agreement is hereby amended and restated in its entirety
to
provide as follows:
“(a)
Subject to the terms and conditions hereof, and relying on the representations
and warranties set forth herein, the Lender agrees to make a term loan (the
“Term Loan”) to the Company on
the
Closing Date, in the original principal amount of $1,500,000 (of which $450,000
is outstanding as of the Effective Date), plus the $2,550,000 increase in
the
Term Loan made by the Lender to the Company as of the Effective Date, resulting
in an aggregate Term Loan of $3,000,000 as of the Effective Date.
The
Company shall give the Lender irrevocable written notice (or telephonic notice
promptly confirmed in writing) not later than 11:00 a.m. New York, New York
time
three Business Days prior to the Closing Date and the Effective Date, as
applicable, specifying the amount to be borrowed, which shall not result
in the
aggregate principal amount of the Term Loan exceeding $3,000,000. The Term
Loan
may be (i) an Adjusted Libor Loan, (ii) an Alternate Base Rate Loan or (iii)
a
combination thereof. The Term Loan Commitment shall terminate upon funding
of
the Term Loan on the Closing Date and the Effective Date.”
(d) The
fourth sentence of Section 2.04 of the Credit Agreement is hereby amended
and
restated in its entirety to provide as follows:
“The
Term
Note shall (a) be dated the Effective Date, (b) be stated to mature on the
Maturity Date and (c) be payable as to principal in sixty (60) consecutive
monthly principal installments of $50,000 each, commencing January 1,
2006,
and on the first day of each month thereafter, provided
that the
final installment on the Maturity Date shall be in an amount equal to the
remaining principal amount then outstanding Date.”
(e) Section
7.02(g) of the Credit Agreement is hereby amended and restated in its entirety
to provide as follows:
“(g)
Indebtedness
incurred in connection with any Permitted Acquisition (but not including
any
Indebtedness consisting of earn out payments to be made by the Company or
any
Corporate Guarantor in a Permitted Acquisition), provided that such Indebtedness
is unsecured and does not exceed $1,325,000, in the aggregate, without the
prior
written consent of the Lender.”
(f) Section
7.13(a) of the Credit Agreement is hereby amended and restated in its entirety
to provide as follows:
“(a)
Consolidated
Fixed Charge Coverage Ratio.
Permit
the Consolidated Fixed Charge Coverage Ratio at
the
end of each fiscal quarter of the Company, to be less than the ratio set
forth
below opposite the relevant period:
| Fiscal Quarter Ending | Ratio |
| December 31, 2005 | 1.05:1.00 |
| March 31, 2006 | 1.05:1.00 |
| June 30, 2006 | 1.05:1.00 |
| September 30, 2006 | 1.10:1.00 |
| December 31, 2006 and thereafter | 1.20:1.00” |
(g)
The
first
sentence of Section 3.02 of the Credit Agreement is hereby amended and restated
in its entirety to provide as follows:
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“The
proceeds of the Term Loan shall be used by the Company solely to pay a portion
of the Existing Indebtedness on the Closing Date, and to fund the Company’s
acquisition of Answer Connecticut, Inc. on the Effective Date and for other
general corporate purposes.”
(h) Exhibit
B
attached to the Credit Agreement is hereby amended and replaced with Exhibit
B
attached to this Amendment and Waiver.
(i) Schedules
I, II, III, V and VI attached to the Credit Agreement are hereby amended
and
replaced with Schedules I, II, III, V and VI attached to this Amendment and
Waiver.
2.
Waiver. Compliance
by the Company with (i) the requirements of a “Permitted Acquisition”, as
described in the Credit Agreement and (ii) the provisions of Sections 4.18,
7.01
and 8.01(m) of the Credit Agreement (including, provisions in the other Loan
Documents which supplement such Sections or are related thereto), are hereby
waived solely in order to permit the acquisition by Answer
Connecticut Acquisition Corp., a wholly-owned Subsidiary of the Company
(“Acquisition
Corp.”) of Answer Connecticut, Inc., a Connecticut corporation (“Answer CT”),
subject to the pre-existing liens on the assets of Answer CT acquired by
Acquisition Corp. as described in Schedule 1 attached hereto (the “Existing
Liens”), provided
such
waiver shall be conditioned upon receipt by the Lender of evidence that all
Existing Liens have been released on or before January 13, 2006. Notwithstanding
the foregoing, the Acquisition shall be considered a “Permitted Acquisition” for
all purposes in determining compliance with the Credit Agreement.
3. Conditions
of Effectiveness.
This
Amendment and Waiver shall become effective upon receipt by the Lender of
(a)
this Amendment and Waiver, duly executed by the Company and each Guarantor,
(b)
a certificate of the Secretary or Assistant Secretary of the Company, dated
as
of the date hereof, in the form of Exhibit
1
hereto,
(c) an amendment fee of $4,500 and (d) a copy of the executed Asset Purchase
Agreement among Answer CT, Xxxxxx X. Xxxxxxx and Acquisition Corp., along
with
all Schedules and Exhibits thereto, the related Xxxx of Sale and the Settlement
Agreement. The Company acknowledges and agrees that it is required to deliver
to
the Lender, within 10 days of the date hereof, a Joinder Agreement from
Acquisition Corp., along with an Opinion of Counsel and Secretary’s Certificate
of Acquisition Corp. (with Certificate of Incorporation, By-laws, Resolutions
and Good Standing Certificate), all satisfactory to the Lender, and such
other documents, instruments and agreements that the Lender shall reasonably
require with respect thereto.
4.
Miscellaneous.
(a)
This
Amendment and Waiver shall be governed by and construed in accordance with
the
laws of the State of New York.
(b) All
terms
used herein shall have the same meaning as in the Credit Agreement, as amended
hereby, unless specifically defined herein.
(c) This
Amendment and Waiver shall constitute a Loan Document.
(d) Except
as
expressly amended and waived hereby, the Credit Agreement remains in full
force
and effect in accordance with the terms thereof. The Credit Agreement and
the
Loan Documents are each ratified and confirmed in all respects by the Company.
The amendments and waiver herein are limited specifically to the matters
set
forth above and for the specific instance and purpose for which given and
do not
constitute directly or by implication an amendment or waiver of any other
provisions of the Credit Agreement or a waiver of any Default or Event of
Default which may occur or may have occurred under the Credit Agreement or
any
other Loan Document.
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(e)
Upon
the
effectiveness of this Amendment and Waiver, each reference in the Credit
Agreement and the other Loan Documents to “this Agreement”, “hereunder”,
“hereof”, “herein” or words of like import shall mean and be a reference to the
Credit Agreement, as amended hereby.
(f) The
Company hereby represents and warrants that, (i) except with respect to the
matters described in the Press Release (as defined in Amendment No. 2 to
Credit
Agreement, dated as of of March 28, 2005 between the Company and the Lender),
the representations and warranties by the Company pursuant to the Credit
Agreement and each other Loan Document, as updated by the Schedules attached
hereto, are true and correct, in all material respects, on the date hereof,
and
(ii) no Default or Event of Default exists under the Credit Agreement or
any
other Loan Document; provided that, the Lender hereby acknowledges and agrees
that the representations and warranties of the Company contained in the Credit
Agreement and those covenants set forth in Sections 6.05, 6.06, 6.07, and
6.12
of the Credit Agreement shall not be deemed (prior to, at or after this date
of
this Amendment and Waiver) to be breached as a result of the matters described
in the Press Release, provided that such matter or matters do not now or
shall
not hereafter cause a Material Adverse Effect or cause the occurrence of
any
other Event of Default, it being agreed and understood that the $1,500,000
charge described in the Press Release, in itself, will not be deemed to
constitute a Material Adverse Effect.
(g)
The
Company hereby: (a) acknowledges and confirms that, notwithstanding the
consummation of the transactions contemplated by this Amendment and Waiver,
(i)
all terms and provisions contained in the Security Documents are, and shall
remain, in full force and effect in accordance with their respective terms
and
(ii) the liens heretofore granted, pledged and/or assigned to the Lender
as
security for the Company’s obligations under the Notes, the Credit Agreement and
the other Loan Documents shall not be impaired, limited or affected in any
manner whatsoever by reason of this Amendment and Waiver; and (b) represents,
warrants and confirms the non-existence of any offsets, defenses, or
counterclaims to its obligations under the Credit Agreement or any Loan
Document.
(h)
This
Amendment and Waiver may be executed in one or more counterparts, each of
which
shall constitute an original, but all of which, when taken together, shall
constitute but one Amendment and Waiver.
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IN
WITNESS WHEREOF,
the
Company and the Lender have caused this Amendment and Waiver to be duly executed
by their duly authorized officers as of the day and year first above
written.
| AMERICAN MEDICAL ALERT CORP. | ||
| |
|
|
| By: | /s/ Xxxx Rhian | |
|
Name: Xxxx Rhian |
||
| Title: President | ||
| THE BANK OF NEW YORK | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxx, Xx. | |
|
Name: Xxxxxx X. Xxxxxx, Xx. |
||
| Title: Vice President | ||
The
undersigned, not parties to the Credit Agreement but as Guarantors under
their
respective Guaranties executed in favor of the Lender, dated as of May 20,
2002,
each hereby (a) accept and agree to the terms of the foregoing Amendment
and
Waiver; and (b) acknowledge and confirm that all terms and provisions contained
in their respective Guaranty are, and shall remain, in full force and effect
in
accordance with their respective terms and that its obligations thereunder
include obligations of the Company owing to the Lender pursuant to the Term
Loan, as same has been increased as set forth above.
| HCI ACQUISITION CORP. | SAFE COM INC. | ||
| By: /s/ Xxxx Rhian | By: /s/ Xxxx Rhian | ||
|
Name: Xxxx Rhian |
Name: Xxxx Rhian |
||
| Title: President | Title: President |
| LIVE MESSAGE AMERICA ACQUSITION CORP. | NORTH SHORE ANSWERING SERVICE, INC. | ||
| By: /s/ Xxxx Rhian | By: /s/ Xxxx Rhian | ||
|
Name: Xxxx Rhian |
Name: Xxxx Rhian |
||
| Title: President | Title: President |
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