EXHIBIT 4.2
FOURTH AMENDMENT AGREEMENT
FOURTH AMENDMENT AGREEMENT, dated as of March 31, 2003 (this "Amendment
Agreement"), to the Amended and Restated Credit Agreement, dated as of May 14,
2001, as amended to date (and as the same may be further amended, supplemented
or modified from time to time in accordance with its terms, the "Credit
Agreement"), among Microtek Medical Holdings, Inc., formerly known as Isolyser
Company, Inc., a Georgia corporation ("MMH") and Microtek Medical, Inc., a
Delaware corporation ("Microtek", together with MMH, each a "Borrower" and,
jointly and severally, the "Borrowers"), the lenders named therein (the
"Lenders"), the guarantors named therein (the "Guarantors") and JPMorgan Chase
Bank, formerly known as The Chase Manhattan Bank, as agent (the "Agent") for the
Lenders. Terms used herein and not otherwise defined herein shall have the
meanings attributed thereto in the Credit Agreement.
WHEREAS, the Borrowers have requested and the Lenders have agreed to amend
the Credit Agreement as described herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and subject to the fulfillment of the conditions
set forth below, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO CREDIT AGREEMENT.
1.1 Section 7.07 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"SECTION 7.07. Capital Expenditures. Permit the aggregate amount of
payments made for capital expenditures including Capitalized Lease
Obligations and Indebtedness secured by Liens permitted under Section
7.01(e) hereof, to exceed (i) $3,000,000 for the Fiscal Year ending on
December 31, 2003, and (ii) $2,500,000 for the Fiscal Year ending on
December 31, 2004, and each Fiscal Year thereafter."
1.2 Section 7.09 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"SECTION 7.09 EBITDA. Permit EBITDA of the Borrowers and their
subsidiaries on a Consolidated basis to be less than (i) $8,000,000
for the four quarter periods ending on March 31, 2003, and June 30,
2003, (ii) $9,000,000 for the four quarter period ending on September
30, 2003, (iii) $10,000,000 for the four quarter period ending on
December 31, 2003 and each four quarter period thereafter. For
purposes hereof, EBITDA shall mean for the applicable period the sum
of Net Income, depreciation and amortization, federal, state and local
income taxes and interest expense for such period, computed and
calculated in accordance with GAAP."
SECTION 2. CONDITIONS PRECEDENT.
This Amendment Agreement shall become effective upon the execution and
delivery of counterparts hereof by the parties listed below and the fulfillment
of the following conditions:
(a) All representations and warranties contained in this Amendment
Agreement or otherwise made in writing to the Agent in connection herewith shall
be true and correct.
(b) No unwaived event has occurred and is continuing which constitutes an
Event of Default under the Credit Agreement or would constitute such an Event of
Default but for the requirement that notice be given or time elapse or both.
(c) The Agent shall have received an amendment fee in the amount of $3,500.
(d) The Agent shall have received such other documents as the Lenders or
the Agent or the Agent's counsel shall reasonably deem necessary.
SECTION 3. MISCELLANEOUS.
3.1 Each Borrower and each Guarantor reaffirms and restates the
representations and warranties set forth in Article IV of the Credit Agreement
and all such representations and warranties shall be true and correct on the
date hereof with the same force and effect as if made on such date, except as
they may specifically refer to an earlier date. Each Borrower and each Guarantor
represents and warrants (which representations and warranties shall survive the
execution and delivery hereof) to the Agent that:
(a) It has the corporate power and authority to execute, deliver and carry
out the terms and provisions of this Amendment Agreement and the transactions
contemplated hereby and has taken or caused to be taken all necessary corporate
action to authorize the execution, delivery and performance of this Amendment
Agreement and the transactions contemplated hereby;
(b) No consent of any other person (including, without limitation,
shareholders or creditors of any Borrower or any Guarantor), and no action of,
or filing with any governmental or public body or authority is required to
authorize, or is otherwise required in connection with the execution, delivery
and performance of this Amendment Agreement;
(c) This Amendment Agreement has been duly executed and delivered on behalf
of each Borrower and each Guarantor by a duly authorized officer, and
constitutes a legal, valid and binding obligation of each Borrower and each
Guarantor enforceable in accordance with its terms, subject to bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and the exercise of judicial
discretion in accordance with general principles of equity;
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(d) The execution, delivery and performance of this Amendment Agreement
will not violate any law, statute or regulation, or any order or decree of any
court or governmental instrumentality, or conflict with, or result in the breach
of, or constitute a default under any contractual obligation of any Borrower or
any Guarantor; and
(e) As of the date hereof there exists no Default or Event of Default.
By its signature below, each Borrower and each Guarantor agree that it
shall constitute an Event of Default if any representation or warranty made
above should be false or misleading in any material respect.
3.2 Upon presentation of its invoice, the Borrowers covenant and agree to
pay in full all legal fees charged, and all costs and expenses incurred, by Kaye
Scholer LLP, counsel to the Agent, in connection with the transactions
contemplated under this Agreement and instruments in connection herewith and
therewith.
3.3 Each Borrower and each Guarantor confirms in favor of the Agent and
each Lender that it agrees that it has no defense, offset, claim, counterclaim
or recoupment with respect to any of its obligations or liabilities under the
Credit Agreement or any other Loan Document and that nothing herein shall be
deemed to be a waiver of any covenant or agreement contained in the Credit
Agreement, and except as herein expressly amended, the Credit Agreement and
other Loan Documents are each ratified and confirmed in all respects and shall
remain in full force and effect in accordance with their respective terms.
3.4 All references to the Credit Agreement in the Credit Agreement, the
Loan Documents and the other documents and instruments delivered pursuant to or
in connection therewith shall mean such agreement as amended hereby and as each
may in the future be amended, restated, supplemented or modified from time to
time.
3.5 This Amendment Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
3.6 THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
3.7 The parties hereto shall, at any time and from time to time following
the execution of this Amendment Agreement, execute and deliver all such further
instruments and take all such further action as may be reasonably necessary or
appropriate in order to carry out the provisions of this Amendment Agreement.
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MICROTEK MEDICAL HOLDINGS, INC.,
formerly known as ISOLYSER COMPANY, INC.
By: /s/ Dan R. Lee
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Name: Dan R. Lee
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Title: CEO, President
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MICROTEK MEDICAL, INC.
By: /s/ Dan R. Lee
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Name: Dan R. Lee
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Title: CEO, President
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ISOLYSER - MSI, INC., formerly known as
MEDSURG INDUSTRIES, INC., as Guarantor
By: /s/ Dan R. Lee
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Name: Dan R. Lee
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Title: CEO, President
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JPMORGAN CHASE BANK, formerly known as
THE CHASE MANHATTAN BANK, as Agent and
as Lender
By: /s/ Donna M. DiForio
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Name: Donna M. DiForio
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Title: Vice President
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