EXHIBIT 10.1
Execution Copy
NINTH AMENDMENT AGREEMENT
NINTH AMENDMENT AGREEMENT, dated as of June 30, 2005 (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, N. A. (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 informed the Agent that they desire to extend
the Revolving Credit Termination Date, modify the pricing of Loans in connection
therewith and modify certain of the applicable financial covenants; and
WHEREAS, the Agent and the Lenders are willing to so modify the Credit
Agreement subject to the terms and conditions of this Amendment Agreement.
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 Article I of the Credit Agreement is hereby amended in the following
respects:
(a) The definition of "Funds from Operations" is hereby deleted.
(b) The definition of "Eligible Receivables" is hereby amended by adding at
the end thereof the following sentence:
"Notwithstanding the foregoing, all Receivables of any single Customer
which, in the aggregate, exceed 15 (or 20, in the case of Cardinal Health)
% of the Total Eligible Receivables at the time of any such determination
may, in the Administrative Agent's discretion, be deemed not to be Eligible
Receivables to the extent of such excess."
(c) The definition of "Final Maturity Date" is hereby amended in its
entirety to read as follows:
"'Final Maturity Date' shall mean June 30, 2008."
(d) The definition of "Interest Margin" is hereby amended in its entirety
to read as follows:
"'Interest Margin' shall mean, with respect to any Loan or Commitment
Fee, the amount or percentage, as applicable, as set forth below as
corresponds to the Leverage Ratio set forth below. The Interest Margin will
be adjusted, if applicable, following the delivery of the financial
statements to the Agent required pursuant to Section 6.05(a) or (b), as
applicable, together with the corresponding compliance certificates
required pursuant to Section 6.05(e) and, if the Borrowers believe they are
entitled to a lower Interest Margin, a written request for an Interest
Margin adjustment, commencing with the financial statements and
certificates for the period ending June 30, 2005, or if the Borrowers shall
fail to timely deliver such statements and certificates for any such
period, then at the highest Interest Margin provided for herein, such
adjustments to be made (i) to a higher Interest Margin, at the discretion
of the Agent, or (ii) to a lower Interest Margin, within five (5) Business
Days after receipt of the Borrowers' request for an Interest Margin
adjustment; provided, however, that any adjustment shall not be effected
with respect to any Eurodollar Loan until the continuation or conversion
thereof at its expiration:
Interest Margin for Interest Margin for Commitment Fee
Leverage Ratio Eurodollar Loans Alternate Base Loans Percentage
-------------- -------------------- -------------------- ---------------
Less than 1.75:.00 1.50 0.25 0.30%
Equal to or greater than 1.75:1.00 1.75 0.50 0.30%
but less than 2.50:1.00
Equal to or greater than 2.50:1.00 2.00 0.75 0.375%
but less than 3.25:1.00
Equal to or greater than 3.25:1.00 2.50 1.25 0.375%"
(e) The definition of "Leverage Ratio" is hereby amended in its entirety to
read as follows:
"'Leverage Ratio' means, for determining the applicable Interest
Margin with respect to the Borrowers, the ratio of (i) total Funded Debt of
the Borrowers as at each date of determination to (ii) EBITDA of the
Borrowers for the period of four fiscal quarters most recently ended on or
prior to each such date of determination."
(f) A new definition of "EBITDA" is hereby added to read in its entirety as
follows:
"'EBITDA' means, with respect to any person for any period, (a) the
sum of (i) Net Income, (ii) interest expense determined in accordance with
GAAP, (iii) Federal, state, local and foreign income taxes and (iv)
2
depreciation and amortization and other non-cash items properly deducted in
determining Net Income in accordance with GAAP, minus (b) non-cash items
properly added in determining Net Income in accordance with GAAP."
(g) A new definition of "Fixed Charge Coverage Ratio" is hereby added to
read in its entirety as follows"
"'Fixed Charge Coverage Ratio' means, with respect to the Borrowers
for any period, the ratio of (i) EBITDA less capital expenditures
(including Capitalized Lease Obligations and Indebtedness secured by Liens
permitted under Section 7.01(e) hereof) for such period to (ii) regularly
scheduled principal payments of Funded Debt made or to be made during such
period plus dividends and other distributions during such period plus
interest expense paid in cash during such period."
1.2 Section 2.06 of the Credit Agreement is hereby amended by deleting the
reference in subsection (a)(iii) thereof to "of three-eights of one percent
(3/8%)" and substituting therefor a reference to "at the applicable Interest
Margin."
1.3 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 $3,000,000 in any Fiscal Year."
1.4 Sections 7.08 and 7.09 of the Credit Agreement are hereby deleted in
their entirety.
1.5 A new Section, Section 7.18 (Fixed Charge Coverage Ratio) is hereby
added to the Credit Agreement to read in its entirety as follows:
"Section 7.18. Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for the Borrowers and their Subsidiaries on a Consolidated
basis for any four consecutive fiscal quarter period, commencing June 30,
2005, to be less than 1.75:1.00."
3
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
$39,500.
(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;
4
(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 (after giving effect to the consummation of the
transactions contemplated under this Amendment Agreement) 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 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.
3.3 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 the other Loan Documents and instruments
in connection herewith and therewith.
3.4 All references to the Credit Agreement and the other Loan Documents in
the Credit Agreement, the Loan Documents and the other documents and instruments
delivered pursuant to or in connection therewith shall mean such agreements 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 INTERNAL LAWS OF THE STATE OF NEW YORK.
5
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.
MICROTEK MEDICAL HOLDINGS, INC. (f/k/a
ISOLYSER COMPANY, INC.)
By:______________________________
Name:
Title:
MICROTEK MEDICAL, INC.
By:______________________________
Name:
Title:
JPMORGAN CHASE BANK, N. A. (f/k/a THE
CHASE MANHATTAN BANK), as Agent and as Lender
By:______________________________
Name:
Title:
6