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EXHIBIT 10(uu)
FIRST AMENDMENT TO LOAN AGREEMENT
WEBSTER BANK
a Connecticut banking association
with a place of business at
80 Elm Street New
Haven, Connecticut 06510
(Hereinafter referred to as the "Bank")
NOVAMETRIX MEDICAL SYSTEMS INC.
a Delaware corporation
with a place of business at
5 Technology Drive, P.O. Box 690
Wallingford, Connecticut 06492
("Novametrix")
NTC TECHNOLOGY, INC.
a Delaware corporation
with a place of business at
5 Technology Drive, P.O. Box 690
Wallingford, Connecticut 06492
("NTC")
CHILDREN'S MEDICAL VENTURES, INC.
541 Main Street
South Weymouth, Massachusetts 02190
("CMV"; Novametrix, NTC and CMV being,
individually and collectively "Borrower")
This First Amendment to Loan Agreement (the "Amendment") is entered into as of
April 28, 2000 and amends a certain Loan Agreement entered into as of June 30,
1999, by and between Bank and Borrower(the "Agreement").
(Terms not otherwise defined herein shall have the respective meaning ascribed
to them in the Agreement)
RECITALS
Bank is the holder of a certain Term Promissory Note in the original principal
amount of $4,800,000.00, dated as of June 30, 1999, from the Borrower to the
Bank (hereinafter referred to as
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the "Term Note and certain other Loan Documents, including the Agreement; and
Borrower and Bank have agreed to modify the terms of the Agreement by, inter
alia, replacing certain provisions contained therein with those contained in
this Agreement, as more particularly hereinafter set forth.
In consideration of Bank's continued extension of credit and the agreements
contained herein, the parties agree as follows:
This Amendment amends the Agreement.
This Amendment applies to the Loan and all Loan Documents.
This Amendment is subject to that certain Intercreditor Agreement by and between
the Bank and First Union National Bank, a national banking association with a
place of business at 300 Main Street, Stamford, CT 06904 ("First Union"). The
parties acknowledge and agree that Borrower has previously entered into a Loan
Agreement and related loan documents (the "First Union Loan Documents"),
including executing and delivering to First Union a certain Term Promissory Note
in the original principal amount of $4,800,000.00, dated as of June 30, 1999,
from the Borrower to First Union(hereinafter referred to as the "First Union
Term Note"), a certain 1999 Substitute Promissory Note in the original principal
amount of up to $6,000,000.00, as amended, from the Borrower to First Union (the
"Line of Credit"), a certain 1998 Term Loan Promissory Note in the original
principal amount of $3,000,000, from the Borrower to First Union, as modified by
a certain Allonge No. 1 to 1998 Term Loan Promissory Note from Borrower to First
Union (as modified, hereinafter referred to as the "1998 Term Note") (the First
Union Term Note, the Line of Credit and the 1998 Term Note are hereinafter
collectively referred to as the "First Union Notes").
Relying upon the covenants, agreements, representations and warranties contained
in this Amendment and in the Agreement, the Bank is willing to modify the terms
as set forth in the Agreement, as more particularly set forth herein, and the
Bank and Borrower agree as follows:
ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most
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recent Commercial Loan invoice sent to Borrower with respect to the Obligations
under the Term Note is correct.
FINANCIAL COVENANTS. The FUNDED DEBT TO EBITDA RATIO and the FIXED CHARGE
COVERAGE RATIO both as set forth in the Financial Covenants section of the
Agreement shall be deleted and the following inserted in their place:
FUNDED DEBT TO EBITDA RATIO. Beginning April 30, 2000 and for the
following three fiscal quarters, Borrower shall maintain a ratio of
Funded Debt to EBITDA of not more than 2.25 to 1.00. Beginning April 30,
2001 and for the following three fiscal quarters, Borrower shall
maintain a ratio of Funded Debt to EBITDA of not more than 1.50 to 1.00.
At all times thereafter, Borrower shall maintain said ratio of not more
than 1.00 to 1.00. This covenant shall be tested on a rolling four
quarter basis. "Funded Debt" shall mean, as applied to any person or
entity, the sum of all indebtedness for borrowed money including,
without limitation, capital lease obligations, subordinated debt
(including debt subordinated to the Bank), and unreimbursed drawings
under letters of credit, or any other monetary obligation evidenced by a
note, bond, debenture or other agreement of that person or entity.
"EBITDA" shall mean earnings before interest, taxes, depreciation and
amortization.
FIXED CHARGE COVERAGE RATIO. Beginning April 30, 2000 and for the
following three fiscal quarters, Borrower shall maintain a Fixed Charge
Coverage Ratio of not less than 1.50 to 1.00. Beginning April 30, 2001
and for all fiscal quarters thereafter, Borrower shall maintain a Fixed
Charge Coverage Ratio of not less than 1.75 to 1.00. This covenant shall
be tested on a rolling four quarter basis. "Fixed Charge Coverage" shall
mean the sum of net income plus taxes, depreciation, amortization and
interest expense less capital expenditures not financed divided by the
sum of interest expense and scheduled amounts repaid on long term debt
and capital lease obligations during the prior four (4) fiscal quarters.
PREPAYMENT. The Bank hereby waives, in connection with the period ending April
30, 2000 only, Borrower's obligation pursuant
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to the Prepayment section of the Agreement to pay an amount equal to 35% of
Excess Cash Flow. Such obligation shall, however, be in full force and effect
for all subsequent periods.
ACKNOWLEDGMENT. The Bank hereby acknowledges the closing of a transaction
between Novametrix and GE Marquette Medical Systems, Inc. ("Marquette") as more
particularly set forth in that certain Unit Purchase and Master Agreement dated
as of March 16, 2000 between Novametrix and Marquette.
LOAN AGREEMENT. All references in the Loan Documents to the Agreement shall be
understood to mean the Agreement, as amended by this Amendment.
ACKNOWLEDGMENTS AND REPRESENTATIONS. Borrower acknowledges and represents that
the Agreement and other Loan Documents, as amended hereby and the First Union
Loan Documents, are in full force and effect without any defense, counterclaim,
right or claim of set-off; that, after giving effect to this Amendment, no
default or event that with the passage of time or giving of notice would
constitute a default under the Loan Documents or the First Union Loan Documents
has occurred, all representations and warranties contained in the Loan Documents
and the First Union Loan Documents are true and correct as of this date, all
necessary action to authorize the execution and delivery of this Amendment has
been taken; and this Amendment is a modification of an existing obligation and
is not a novation.
COLLATERAL. Borrower acknowledges and confirms that there have been no changes
in the ownership of any collateral pledged to secure the Obligations (the
"Collateral") since the Collateral was originally pledged; Borrower acknowledges
and confirms that the Bank has, subject only to the Intercreditor Agreement,
existing, valid first priority security interests and liens in the Collateral;
and that such security interests and liens shall secure Borrower's Obligations
to Bank, including any modification of the Note or Loan Agreement, if any, and
all future modifications, extensions, renewals and/or replacements of the Loan
Documents.
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CONDITIONS PRECEDENT. In addition to the Conditions Precedent identified in the
Agreement, the obligations of Bank pursuant to the Loan Documents or this
Amendment are subject to the following conditions precedent: ADDITIONAL
DOCUMENTS. Receipt by Bank of such additional supporting documents as Bank or
its counsel may reasonably request. STOCK PURCHASE DOCUMENTS. Receipt and review
to Bank's reasonable satisfaction of the documents executed in connection with
the sale of Novametrix stock to GE Marquette. PREPAYMENT. Borrower shall have
prepaid $1,000,000.00 of principal on the Term Note and the First Union Term
Note. CONSENT AND AMENDMENT. The Borrower shall have obtained the consent of
First Union to the modifications to the Loan and the Loan Documents contemplated
hereby; First Union shall have executed an amendment to the Intercreditor
Agreement reflecting the foregoing. CERTIFICATE OF GOOD STANDING. Bank shall
have received from Borrower a certificate from the Secretary of State of the
state of Borrower's incorporation or organization, as applicable, as to the good
standing of Borrower. CERTIFICATE OF INCUMBENCY AND AUTHORIZATION. Bank shall
have received from Borrower a certificate of an appropriate officer of Borrower
as to the incumbency and signatures of the officers of Borrower executing the
Loan Documents and as to the adoption of resolutions authorizing the amendments
to the Loan Documents including, without limitation, the increase to the amount
of the Line of Credit Note. OPINION OF COUNSEL. Bank shall have received a
written opinion of the counsel of Borrower acceptable to Bank that includes
confirmation of the following: (a) The Borrower is duly organized and validly
existing under the laws of the jurisdictions where Borrower is organized and
have full power and authority to undertake the activities contemplated by the
Loan; There have been no changes, since June 30, 1999, to the Charter Documents
or Operating Agreements of Borrower. (b) The Loan Documents, as modified by
documents executed in connection with this Amendment, create a perfected lien on
and security interest in the Collateral (as defined in the Loan Documents). (c)
The accuracy, as of the date hereof, of the representations set forth in the
Agreement in the Representations Subparagraphs entitled "Authorization;
Non-Contravention"; "Compliance with Laws" as to the transaction contemplated by
this Amendment and the documents pertaining thereto; and "Organization and
Authority." (d) This Amendment and other Loan Documents executed in connection
herewith have been duly executed and delivered by Borrower and constitute the
legal, valid and binding obligations
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of Borrower, enforceable in accordance with their terms. (e) No registration
with, consent of, approval of, or other action by, any federal, state or other
governmental authority or regulatory body to the execution and delivery of this
Agreement, the borrowing under this Agreement or other Loan Documents, is
required by law, or, if so required, such registration has been made, and
consent or approval given or such other appropriate action taken. (f) The Loan
and its terms do not violate any laws including, without limitation, any usury
laws of the jurisdictions where Borrower and any Collateral are located; such
other matters and opinions as the Bank reasonably requests.
JOINT AND SEVERAL OBLIGATIONS. The obligations of the Borrower hereunder and
under the Loan Documents shall be joint and several.
MISCELLANEOUS. This Amendment shall be construed in accordance with and governed
by the laws of the State of Connecticut without reference to conflicts of laws
principles. This Amendment and the other Loan Documents constitute the sole
agreement of the parties with respect to the subject matter thereof and
supersede all oral negotiations and prior writings with respect to the subject
matter thereof. No amendment of this Amendment, no other amendment to the
Agreement, and no waiver of any one or more of the provisions hereof or thereof
shall be effective unless set forth in writing and signed by the parties hereto.
The illegality, unenforceability or inconsistency of any provision of this
Amendment shall not in any way affect or impair the legality, enforceability or
consistency of the remaining provisions of this Amendment, the Agreement, as
modified hereby, or the other Loan Documents. The Agreement, as modified by this
Amendment, and the other Loan Documents are intended to be consistent. However,
in the event of any inconsistencies among the Agreement, as modified by this
Amendment, and any of the Loan Documents, the terms of the Note, and then the
Agreement, as modified by this Amendment, shall control. This Amendment may be
executed in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all such
counterparts shall together constitute one and the same agreement. The terms
"Loan
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Documents" and "Obligations" shall have the meanings of such terms as defined in
the Agreement. Additional terms used in this Amendment which are capitalized and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Loan Documents. Without limiting the generality of the foregoing, the term
"Loan Documents" does not include any swap agreements (as defined in 11 U.S.C.
Section 101); the term "Obligations" shall include, without limitation, all
obligations under any swap agreements as defined in 11 U.S.C. Section 101
between Borrower and Bank whenever executed.
CONNECTICUT PREJUDGMENT REMEDY WAIVER. EACH BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS AMENDMENT ARE COMMERCIAL TRANSACTIONS AND
HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON
PREJUDGMENT REMEDIES UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES OR
OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.
WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT THEY HAVE IRREVOCABLY
WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE.
PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this Agreement
and the Loan Documents were executed in the State of Connecticut and delivered
to Bank in the State of Connecticut.
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IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
NOVAMETRIX MEDICAL SYSTEMS INC.
By: /s/ William J. Lacourciere
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Name: William J. Lacourciere
Title: President and Chief Executive Officer
NTC TECHNOLOGY, INC.
By: /s/ Thomas M. Haythe
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Name: Thomas M. Haythe
Title: President
CHILDREN'S MEDICAL VENTURES, INC.
By: /s/ Joseph A. Vincent
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Name: Joseph A. Vincent
Title: Vice President
WEBSTER BANK
By: /s/ Stephen L. Festa
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Name: Stephen L. Festa
Title: Vice President
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