Exhibit 4 (e)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT (the "First Amendment") dated as of February 28,
1995 is to that Credit Agreement dated as of April 29, 1994 (as amended and
modified hereby and as further amended and modified from time to time
hereafter, the "Credit Agreement"; terms used but not otherwise defined
herein shall have the meanings assigned in the Credit Agreement), by and
among OWENS & MINOR, INC., a Virginia corporation (formerly known as O & M
Holding, Inc.) (the "Borrower"), CERTAIN OF ITS SUBSIDIARIES identified as a
"Guarantor" in the definition thereof and on the signature pages hereof
(hereinafter sometimes referred to individually as a "Guarantor" and
collectively as the "Guarantors"), the various banks and lending
institutions identified on the signature pages hereto (each a "Bank" and
collectively, the "Banks"), NATIONSBANK, N.A. (CAROLINAS) (formerly known as
NationsBank of North Carolina, N.A.) as agent (in such capacity, the
"Agent"), CHEMICAL BANK and CRESTAR BANK as co-agents (in such capacity, the
"Co-Agents") and NATIONSBANK, N.A. (CAROLINAS) (formerly known as
NationsBank of North Carolina, N.A.) as administrative agent for the Banks
(in such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Banks have, pursuant to the terms of the Credit
Agreement, made available to the Borrower a $350,000,000 credit facility;
and
WHEREAS, the Borrower has requested an increase in the size of the
credit facility to $425,000,000; and
WHEREAS, the Banks have agreed to an increase in the credit facility
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
A. By execution of this First Amendment, the Borrower, the
Guarantors, the Banks and the Agents hereby agree as follows:
(i) As to Committed Revolving Loans which are Base Rate Loans
("Existing Floating Rate Loans") outstanding on the date this First
Amendment shall be effective pursuant to Section D of this First
Amendment (the "Effective Date"), the Revolving Committed Amounts of
the Banks shall be adjusted as of the Effective Date based on the
reallocation provided in Section B(1) hereof. On the Effective Date,
each Bank whose relative share of the Revolving Committed Amount (the
"Revolving Commitment Percentage") shall increase based on Schedule
2.01(a) as revised, shall increase the amount of its Committed
Revolving Loans outstanding to the Borrower by paying to the
Administrative Agent an amount equal to the increase in such Bank's
Revolving Commitment Percentage multiplied by the Existing Floating
Rate Loans, and the Administrative Agent shall in turn pay to each of
the Banks whose Revolving Commitment Percentages shall decrease an
amount equal to the decrease in such Reducing Bank's Revolving
Commitment Percentage multiplied by the Existing Floating Rate Loans
for application to the outstanding principal balance of such Loans.
(ii) As to Committed Revolving Loans which are Eurodollar Loans
outstanding on the Effective Date ("Existing Fixed Rate Loans"), each
Bank's interest in such Existing Fixed Rate Loans and the Revolving
Commitment Percentage for each Bank in such Existing Fixed Rate Loans
shall remain as in effect immediately prior to the Effective Date
until the end of the applicable Interest Periods relating thereto. At
the maturity of each Interest Period for Existing Fixed Rate Loans,
the Reducing Banks shall be paid an amount equal to the decrease in
such Reducing Bank's Revolving Commitment Percentage multiplied by the
Eurodollar Loans maturing on such date for application to the
outstanding principal balance of such Loans, from the amounts paid on
the Committed Revolving Loans by the Borrower or with the proceeds of
New Loans (as hereafter defined).
(iii) As to Loans made on or after the Effective Date (including
extensions and conversions of Existing Fixed Rate Loans at the end of
an Interest Period, hereafter "New Loans"), the Revolving Commitment
Percentages of the Banks shall be as provided in Schedule 2.01(a) as
reallocated and amended as provided in Section B(1) hereof.
(iv) Notwithstanding anything contained herein to the contrary,
no Bank shall be obligated to make Loans in an aggregate amount at any
time outstanding in excess of its Revolving Committed Amount, as
reallocated and amended pursuant to Section B(1) hereof.
(v) The Borrower shall not be liable for any amounts under
Section 2.15 of the Credit Agreement as a result of the increase in
the size of the credit facility under the Credit Agreement or the
reallocation of Commitments in respect thereof as contemplated by this
First Amendment.
B. The Credit Agreement is amended in the following respects:
1. In connection with the increase in the size of the credit
facility made available under the Credit Agreement, the Revolving Committed
Amounts of the respective Banks have been reallocated among the Banks to be
as provided in Schedule 2.01(a) attached hereto. Schedule 2.01(a) of the
Credit Agreement is hereby amended and modified to read as provided in
Schedule 2.01(a) attached hereto.
2. The definition of "Credit Agreement" as used in the Credit
Documents shall mean the Credit Agreement as amended by this First Amendment
and as further amended, modified, extended, renewed or replaced from time to
time.
3. The following definitions in Section 1.01 are amended and
modified to read as follows:
"Consolidated Fixed Charges" means, for the applicable
period ending as of a Determination Date, the sum of (i) all
Interest Expense on all Indebtedness during such period, (ii) all
Rentals (other than Rentals on Capitalized Leases to the extent
such Rentals are included in Interest Expense or as a current
maturity of a Capitalized Lease under subsection (iii) hereof)
payable during such period, (iii) current maturities of Funded
Debt and current maturities of Capitalized Leases as of such
Determination Date, and (iv) all dividends paid in cash or
property and redemptions made of capital stock (other than
dividends paid to, or redemptions of capital stock owned by, the
Borrower or a wholly-owned Restricted Subsidiary) during such
period, in each case for the Borrower and its Restricted
Subsidiaries on a consolidated basis determined in accordance with
generally accepted accounting principles; but excluding, for
purposes hereof:
(a) amounts owing under the 9.10% Convertible
Subordinated Note due May 31, 1996 in the principal amount
of $3,332,912 made by the Borrower payable to Hygeia
Limited, in an amount not to exceed $3,500,000; and
(b) Rentals related to leases of certain medical
supply equipment manufactured by Omnicell and Pyxis or
other manufacturers of similar equipment, in an aggregate
annual amount not to exceed $5,000,000.
"Consolidated Net Income" means, for the applicable period
ending as of a Determination Date, the net income of the Borrower
and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with generally accepted
accounting principles, but excluding for purposes of determining
compliance with the Fixed Charge Coverage Ratio in Section 6.11(e)
hereof:
(a) any extraordinary gains or losses on the
sale or other disposition of assets, and any taxes on such
excluded gains and any tax deductions or credits on
account of any such excluded losses;
(b) restructuring costs taken in fiscal year
1994 associated with the acquisition of Stuart Medical,
which shall include those costs associated with the
restructuring of corporate administrative functions,
including without limitation the closure of certain
distribution facilities, employee relocation and
termination, and writedown of certain software, in an
amount not to exceed $24,000,000 in the aggregate;
(c) the proceeds of any life insurance policy;
(d) net earnings of any business entity (other
than a Restricted Subsidiary) in which the Borrower or any
Restricted Subsidiary has an ownership interest unless
such net earnings shall have actually been received by the
Borrower or such Restricted Subsidiary in the form of cash
distributions;
(e) any portion of the net earnings of any
Restricted Subsidiary which for any reason is unavailable
for payment of dividends to the Borrower or any other
Restricted Subsidiary; and
(f) one-time restructuring charges taken after
December 31, 1994 but before January 1, 1996 in an amount
not to exceed $12,000,000 in the aggregate.
"Consolidated Net Income Available for Fixed Charges"
means, for the applicable period ending as of a Determination
Date, the sum of Consolidated Net Income
plus (to the extent deducted in determining
Consolidated Net Income) (i) all provisions for any
federal, state or other income taxes, (ii) depreciation,
amortization and other non-cash charges, including without
limitation any accrual necessary for purposes of
conforming with Financial Accounting Standards Board
Statement Number 106 (as defined by generally accepted
accounting principles) to the extent that the accrued
portion thereof constitutes a non-cash charge, (iii)
Interest Expense, and (iv) all Rentals (except for Rentals
relating to leases of medical supply equipment
manufactured by Omnicell and Pyxis and any other
manufacturer of similar equipment to the extent such
Rentals are excluded from the definition of "Consolidated
Fixed Charges", and without duplication for the interest
component under the Capitalized Leases to the extent
included in Interest Expense),
minus (v) all Capital Expenditures,
for the Borrower and its Restricted Subsidiaries on a consolidated
basis determined in accordance with generally accepted accounting
principles.
"Consolidated Total Debt" means all Indebtedness of the
Borrower and its Restricted Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting
principles, but excluding, for purposes hereof, the amount of
capital lease obligations attributable to those leases of certain
medical supply equipment manufactured by Omnicell and Pyxis and
any other manufacturer of similar equipment to the extent Rentals
thereunder shall not exceed an aggregate annual amount of
$5,000,000.
4. Clause (i) of Section 2.01, defining the "Revolving
Committed Amount," is amended and modified to read as follows:
(i) with regard to the Banks collectively, the amount
of the Committed Revolving Loans outstanding shall not at any time
exceed FOUR HUNDRED TWENTY-FIVE MILLION DOLLARS ($425,000,000) in
the aggregate (as such aggregate maximum amount may be reduced
from time to time as hereinafter provided, the "Revolving
Committed Amount"), and
5. The reference in Section 2.02(a) to "10:00 A.M."
and in Section 2.07(b)(i) to "11:00 A.M.", being the time by which notice
must be given in the case of Revolving Loans and Swingline Loans,
respectively, is amended and modified in each case to "12:00 Noon".
6. The table in Section 2.05, regarding the Applicable
Margin, is amended and modified to read as follows:
Applicable Margin
Consolidated Total Debt Eurodollar Loan
to Consolidated Total and Fed Funds Base Rate
Ratings Capitalization Ratio Swingline Loan Loan
BB/Ba2 >=55% 1.000% .25%
BB+/Ba1 <55% but >=50% .875% 0%
BBB-/Baa3 <50% but >=45% .750% 0%
BBB/Baa2 <45% but >=40% .625% 0%
BBB+/Baa1 <40% .500% 0%
7. Clause (i) of Section 2.08, defining the
"Competitive Loan Maximum Amount," is amended and modified to read as
follows:
(i) the aggregate amount of Competitive Loans shall not
at any time exceed the lesser of FOUR HUNDRED TWENTY-FIVE MILLION
DOLLARS ($425,000,000) or the Revolving Committed Amount (the
"Competitive Loan Maximum Amount"), and
8. Section 2.11(b), regarding the Commitment Fee, is
amended and restated in its entirety to read as follows:
(b) Commitment Fees. In consideration for the
Commitments by the Banks hereunder, the Borrower agrees to pay to
the Administrative Agent quarterly in arrears on the 15th day
following the last day of each of the Borrower's fiscal quarters
for the ratable benefit of the Banks a commitment fee (the
"Commitment Fee") of (i) one-fourth of one percent (1/4%) per
annum, on the first $75,000,000 of the average daily unused amount
of the Revolving Committed Amount for such prior quarter, and (ii)
one-eighth of one percent (1/8%) per annum, on the remaining
average daily unused amount of the Revolving Committed Amount for
such prior quarter. This Commitment Fee shall accrue from the
Effective Date of the First Amendment to Credit Agreement. For
purposes of computation of the Commitment Fee, neither Swingline
Loans nor Competitive Loans shall be counted toward or considered
usage under the Committed Revolving Loan facility.
9. Section 6.10, regarding the use of proceeds, is
amended and restated in its entirety to read as follows:
6.10 Use of Proceeds. The proceeds of the Loans
hereunder shall be used for the purpose of (i) financing the
acquisition of the capital stock of Stuart Medical, (ii)
refinancing approximately $150,000,000 in existing indebtedness of
Stuart Medical, (iii) financing costs and expenses incurred in
connection with the acquisition of Stuart Medical, (iv)
refinancing and replacing the existing credit facility extended to
Owens & Minor, Inc. by NationsBank of Virginia, N.A. and Crestar
Bank and other existing bank indebtedness, (v) negotiating
discounts from trade suppliers in return for quicker trade
payments, (vi) general working capital purposes, (vii) capital
expenditures and (viii) other general corporate purposes.
10. Section 6.11, regarding financial covenants, is
amended and modified to read as follows:
6.11 Financial Covenants.
(a) Consolidated Current Ratio. The Borrower will
maintain at all times a Consolidated Current Ratio of at least 1.5
to 1.0.
(b) Consolidated Tangible Net Worth. The Borrower will
maintain Consolidated Tangible Net Worth, as determined on each
Determination Date, of not less than $50,000,000; provided,
however, the minimum Consolidated Tangible Net Worth required
hereunder shall be increased on the last day of each of the
Borrower's fiscal quarters to occur after January 1, 1995, by an
amount equal to 50% of Consolidated Net Income for the fiscal
quarter then ended (or if Consolidated Net Income for such period
is a deficit figure, then zero).
(c) Consolidated Net Worth. The Borrower will maintain
Consolidated Net Worth, as determined on each Determination Date,
of not less than $240,000,000; provided, however, the minimum
Consolidated Net Worth required hereunder shall be increased on
the last day of each of the Borrower's fiscal quarters to occur
after January 1, 1995, by an amount equal to 50% of Consolidated
Net Income for the fiscal quarter then ended (or if Consolidated
Net Income for such period is a deficit figure, then zero).
(d) Leverage Ratio. On each Determination Date the
ratio of Consolidated Total Debt to Consolidated Total
Capitalization will not exceed:
Leverage Ratio
From the Closing Date through the
First Anniversary Date of the
Closing Date .65 to 1.0
Thereafter through the Third
Anniversary Date of the Closing
Date .60 to 1.0
Thereafter .55 to 1.0
(e) Fixed Charge Coverage Ratio. As of each
Determination Date for the Applicable Period set forth below,
the Fixed Charge Coverage Ratio will not be less than:
Fixed Charge
Coverage Ratio
From the Closing Date through
the fiscal quarter ending on
December 31, 1994 1.5 to 1.0
From the fiscal quarter ending on
March 31, 1995 through and
including the fiscal quarter
ending on March 31, 1997 1.3 to 1.0
From the fiscal quarter ending on
June 30, 1997 and thereafter 1.5 to 1.0
The Applicable Period for which the Fixed Charge Coverage Ratio
shall be determined shall be as follows:
Duration of Applicable
Period ending as of
Determination Date Determination Date*
End of Fourth Quarter 1994 Three Quarters
End of First Quarter 1995 and
thereafter Four Quarters
* Components of the Fixed Charge Coverage Ratio shall be
determined for the Applicable Period ending as of the
Determination Date, except that determination of current
maturities of Funded Debt and current maturities of Capitalized
Leases under subsection (iii) of the definition of Consolidated
Fixed Charges shall be for the duration shown for the
Applicable Period above as of the Determination Date.
11. Section 7.01(h) is amended and restated to read as
follows:
(h) Obligations under or arising in connection with
Interest Rate Protection Agreements relating to Loans under
this Credit Agreement.
12. The address for the Agent, the Administrative Agent
or the Swingline Lender, as referenced in Section 10.01 is amended to read
as follows:
NationsBank, N.A. (Carolinas)
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Iris Boger
Agency Services
Telephone: (704) 386-9372
Telecopy: (704) 386-9923
With a copy to:
NationsBank, N.A. (Carolinas)
1111 East Main Street
Fourth Floor Pavilion
VA2-310-04-07
Richmond, Virginia 23219-2321
Attn: Robert Y. Bennett
Senior Vice President
Telephone: (804) 788-3631
Telecopy: (804) 788-3669
13. The Committed Revolving Notes shall be amended,
restated and substituted in the form attached as Schedule 2.06, such
amended, restated and substituted Committed Revolving Notes thereupon being
considered as the "Committed Revolving Notes" for all purposes under the
Credit Agreement. The Competitive Loan Notes shall be amended, restated and
substituted in the form attached as 2.08(h), such amended, restated and
substituted Competitive Loan Notes thereupon being considered as the
"Competitive Loan Notes" for all purposes under the Credit Agreement.
C. The Borrower hereby represents and warrants that:
(i) any and all representations and warranties
made by the Borrower and contained in the Credit Agreement (other
than those which expressly relate to a prior period) are true and
correct in all material respects as of the date of this First
Amendment; and
(ii) No Default or Event of Default currently
exists and is continuing under the Credit Agreement as of the date
of this First Amendment.
D. This First Amendment shall not be effective until
receipt by the Administrative Agent of the following in form and substance
satisfactory to the Banks:
1. Executed Documents. Executed copies of this
First Amendment, Amended, Restated and Substituted Committed
Revolving Notes, Amended, Restated and Substituted Competitive Loan
Notes, and related documentation.
2. Legal Opinions. Legal opinions of Drew St.J.
Carneal, Esq., Senior Vice President and Corporate Counsel of the
Borrower, and Hunton & Williams, special counsel to the Borrower and
the Guarantors, addressed to the Administrative Agent and the Banks
in form acceptable to the Administrative Agent and the Required
Banks.
3. Corporate Documents.
(i) Articles of Incorporation. Copies of
the articles of incorporation or charter documents of the
Borrower and the Guarantors certified to be true and complete as
of a recent date by the appropriate governmental authority of
the state of its incorporation.
(ii) Resolutions. Copies of resolutions of
the Board of Directors of the Borrower and the Guarantors
approving and adopting this First Amendment, the Amended,
Restated and Substituted Committed Revolving Notes, and the
Amended, Restated and Substituted Competitive Loan Notes, the
transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant
secretary as of the Closing Date to be true and correct and in
force and effect as of such date and containing therein
certification of the incumbency and specimen signatures of the
officers of the Credit Parties executing the First Amendment,
the Amended, Restated and Substituted Committed Revolving Notes,
and the Amended, Restated and Substituted Competitive Loan
Notes.
(iii) Bylaws. A copy of the bylaws of the
Borrower and the Guarantors certified by a secretary or
assistant secretary as of the date hereof to be true and correct
and in force and effect as of such date.
(iv) Good Standing. Copies of (i)
certificates of good standing, existence or its equivalent with
respect to the Borrower and the Guarantors certified as of a
recent date by the appropriate governmental authorities of the
state of incorporation and each other state in which the failure
to so qualify and be in good standing would have a Material
Adverse Effect and (ii) a certificate indicating payment of all
corporate franchise taxes in such states of incorporation
certified as of a recent date by the appropriate governmental
taxing authorities, to the extent generally available from such
authorities.
4. Other Information. Such other information
and documents as the Administrative Agent may reasonably request.
E. The Borrower will execute such additional documents
as are reasonably requested by the Administrative Agent to reflect the terms
and conditions of this First Amendment.
F. Except as modified hereby, all of the terms and
provisions of the Credit Agreement (and Schedules) remain in full force and
effect.
G. The Borrower agrees to pay all reasonable costs and
expenses in connection with the preparation, execution and delivery of this
First Amendment, including without limitation the reasonable fees and
expenses of Moore & Van Allen, special counsel to the Administrative Agent.
H. This First Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be
deemed an original and it shall not be necessary in making proof of this
First Amendment to produce or account for more than one such counterpart.
I. This First Amendment and the Credit Agreement, as
amended hereby, shall be deemed to be contracts made under, and for all
purposes shall be construed in accordance with the laws of the Commonwealth
of Virginia.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to Credit Agreement to be duly executed
under seal and delivered as of the date and year first above written.
BORROWER:
OWENS & MINOR, INC.,
a Virginia corporation
(formerly known as O & M Holding, Inc.)
By____________________________
Title_________________________
GUARANTORS:
OWENS & MINOR MEDICAL, INC.
a Virginia corporation
(formerly known as Owens & Minor, Inc.)
By____________________________
Title_________________________
NATIONAL MEDICAL SUPPLY CORPORATION
a Delaware corporation
By____________________________
Title_________________________
OWENS & MINOR WEST, INC.
a California corporation
By____________________________
Title_________________________
KOLEY'S MEDICAL SUPPLY, INC.
a Nebraska corporation
By____________________________
Title_________________________
Signature Pages to
Owens & Minor, Inc. First Amendment
LYONS PHYSICIAN SUPPLY COMPANY
an Ohio corporation
By____________________________
Title_________________________
A. KUHLMAN & COMPANY
a Michigan corporation
By____________________________
Title_________________________
STUART MEDICAL, INC.
a Pennsylvania corporation
By____________________________
Title_________________________
BANKS:
NATIONSBANK, N.A. (CAROLINAS),
individually in its capacity as a
Bank and in its capacity as Agent and
Administrative Agent (formerly known as
NationsBank of North Carolina, N.A.)
By_____________________________
Robert Y. Bennett,
Senior Vice President
CHEMICAL BANK,
individually in its capacity as a
Bank and in its capacity as a Co-Agent
By
Title
CRESTAR BANK,
individually in its capacity as a
Bank and in its capacity as a Co-Agent
By
Title
Signature Pages to
Owens & Minor, Inc. First Amendment
BANK OF AMERICA NT & SA
By
Title
THE BANK OF NOVA SCOTIA
By
Title
FIRST UNION NATIONAL BANK OF VIRGINIA
By
Title
PNC BANK, NATIONAL ASSOCIATION
By
Title
BANK OF MONTREAL
By
Title
THE BANK OF NEW YORK
By
Title
MELLON BANK, N.A.
By
Title
NATWEST BANK N.A. (formerly known as
National Westminster Bank USA)
By
Title
Signature Pages to
Owens & Minor, Inc. First Amendment
NBD BANK
By
Title
THE SANWA BANK LTD.
By
Title
SHAWMUT BANK CONNECTICUT N.A.
By
Title
SIGNET BANK/VIRGINIA
By
Title
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By
Title