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Exhibit 10.2
AGREEMENT, NOTICE, AMENDMENT and WAIVER dated as of October
27, 2000 (this "Amendment"), in respect of and to the Credit Agreement
dated as of November 12, 1999 (the "Credit Agreement"), among MAXXIM
MEDICAL, INC. ("Holdings"), MAXXIM MEDICAL GROUP, INC. (the
"Borrower"), the LENDERS party thereto (the "Lenders"), THE CHASE
MANHATTAN BANK, as Administrative Agent, Collateral Agent and Issuing
Bank, BANKERS TRUST COMPANY, as Co-Syndication Agent, XXXXXXX XXXXX
CAPITAL CORPORATION, as Co-Syndication Agent, CANADIAN IMPERIAL BANK OF
COMMERCE, as Co-Documentation Agent, and CREDIT SUISSE FIRST BOSTON, as
Co-Documentation Agent.
A. Pursuant to the Credit Agreement, the Lenders and the Issuing Bank
have extended credit to the Borrower, and have agreed to extend credit to the
Borrower, in each case pursuant to the terms and subject to the conditions set
forth therein.
B. The Borrower has requested that the Required Lenders agree to the
terms set forth herein and agree to amend and waive certain provisions of the
Credit Agreement as set forth herein. The Borrower also wishes to give notice of
a reduction in the Revolving Commitments pursuant to Section 2.08 of the Credit
Agreement.
C. The Required Lenders are willing so to agree, and to amend and
waive such provisions of the Credit Agreement, pursuant to the terms and subject
to the conditions set forth herein.
D. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AGREEMENTS. The Borrower hereby agrees to (a) repay, on
the date hereof, all Swingline Loans that are outstanding on the date hereof,
such that the Revolving Exposures at 5:00 p.m., New York City time, on the date
hereof consist solely of LC Exposures in an aggregate amount not to exceed
$3,000,000 (it being represented and warranted by Holdings and the Borrower that
(i) the Swingline Loans outstanding on the date hereof, prior to such
prepayment, shall not exceed $8,500,000 and (ii) there are no Revolving Loans
outstanding on the date hereof), (b) make a voluntary prepayment, on the date
hereof, of Term Loans pursuant to Section 2.11(a) of the Credit Agreement in an
aggregate principal amount equal to (x) $48,000,000 minus (y) the aggregate
principal amount of Revolving Loans repaid pursuant to clause (a) of this
Section 1 and (c) pay, on the date hereof, the amortization payments, in an
aggregate amount of $10,500,000, that would otherwise be due pursuant to
Sections 2.10(a), (b) and (c) of the Credit Agreement on October 31, 2000, in
lieu of making such payments on October 31, 2000, and the Required Lenders
hereby agree to such acceleration of such payment date (the repayments,
prepayments and payments required pursuant to this Section 1 collectively being
referred to as the "Prepayments").
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SECTION 2. Notice of Revolving Commitment Reduction Pursuant to Section
2.08(d). The Borrower hereby gives notice to the Administrative Agent, and the
Administrative Agent hereby gives notice to the Lenders, in each case pursuant
to Section 2.08(d) of the Credit Agreement, that effective at 5:00 p.m., New
York City time, on the date hereof the Revolving Commitments are reduced by
$20,000,000 to $30,000,000 (the "Revolving Commitment Reduction") pursuant to
Section 2.08(b) of the Credit Agreement. The parties hereto hereby agree to
waive the requirement in Section 2.08(d) of the Credit Agreement that three
Business Days notice of the Revolving Commitment Reduction be given to the
Administrative Agent.
SECTION 3. Amendments to Section 1.01. (a) The definition of the term
"Applicable Rate" in Section 1.01 of the Credit Agreement is hereby amended by
amending and restating the proviso in the first paragraph thereof to read in its
entirety as follows:
provided that, from the date hereof until the Business Day on which the
Borrower delivers to the Administrative Agent financial statements
under Section 5.01(a) or (b), and the related certificate under Section
5.01(d), showing that (i) the Total Adjusted Leverage Ratio (calculated
in accordance with Section 6.13) as of the then most recently completed
fiscal quarter is less than 4.50 to 1.00 and (ii) the Senior Adjusted
Leverage Ratio (calculated in accordance with Section 6.14) as of the
then most recently completed fiscal quarter is less than 2.95 to 1.00,
the "Applicable Rate" for each of the Tranche B Loans, Tranche C Loans,
Tranche A Loans and Revolving Loans shall be equal to the sum of (i)
the "Applicable Rate" set forth in or determined pursuant to clause
(a), (b) or (c) of this definition, as applicable, and (ii) 0.50%.
(b) The definition of the term "Consolidated EBITDA" in Section 1.01 of
the Credit Agreement is hereby amended and restated to read in its entirety as
follows:
"Consolidated EBITDA" means, for any Person for any period,
Consolidated EBIT of such Person, adjusted by adding thereto, without
duplication, the sum of (a) all depreciation expense, amortization
expense and other non-cash charges that were deducted in determining
Consolidated EBIT for such Person for such period and (b) if such
Person is the Borrower, in respect of the fiscal quarters ending on or
about January 31, 2001, April 30, 2001, July 31, 2001, and October 31,
2001, all out-of-pocket expenses incurred in such fiscal quarter
(including expenses incurred in connection with the obligations of the
Borrower and the Subsidiaries under the Worker Adjustment and
Retraining Notification Act of 1988) in connection with facility
closures and other rationalizations at the Borrower's and the
Subsidiaries' facilities (collectively, the "Rationalizations") after
the date hereof, provided that (i) the Lenders (A) have been advised of
the Borrower's plans with respect to the Rationalizations in advance of
their implementation, (B) have received, in respect of each such fiscal
quarter, a detailed breakdown of the expenses incurred in that fiscal
quarter in connection with the implementation of Rationalizations and
(C) have received, in respect of each such fiscal quarter, an "Agreed
Upon Procedure Letter" from either Xxxxxx Xxxxxxxx LLP or another
independent public accounting firm of recognized national
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standing to the effect that all such expenses were actually incurred by
the Borrower and the Subsidiaries in that fiscal quarter in connection
with the implementation of Rationalizations and (ii) the amount added
to such Consolidated EBIT of the Borrower in respect of such
out-of-pocket expenses in all such fiscal quarters combined shall not
exceed $10,300,000.
For the purposes of Sections 6.12, 6.13 and 6.14 only,
Consolidated EBITDA of the Borrower for the Test Periods ending on or
about January 31, 2001, April 30, 2001, July 31, 2001, and October 31,
2001, shall be determined by (a) in the case of the Test Period ending
on or about January 31, 2001, multiplying (i) Consolidated EBITDA for
the fiscal quarter commencing on October 30, 2000, and ending on or
about January 31, 2001, by (ii) 4, and adding to the product of such
multiplication the January Test Period Cost Savings Addback (such term,
and each other capitalized term used in this paragraph but not
otherwise defined herein, as defined in the immediately following
paragraph), (b) in the case of the Test Period ending on or about April
30, 2001, multiplying (i) Consolidated EBITDA for the two fiscal
quarter period commencing on October 30, 2000, and ending on or about
April 30, 2001 (with Consolidated EBITDA for the fiscal quarter
commencing on October 30, 2000, and ending on or about January 31,
2001, deemed for this purpose to be equal to the sum of (A)
Consolidated EBITDA for that period (calculated in accordance with the
immediately preceding paragraph) and (B) the January Quarter Expected
Cost Savings), by (ii) 2, and adding to the product of such
multiplication the April Test Period Cost Savings Addback, (c) in the
case of the Test Period ending on or about July 31, 2001, multiplying
(i) Consolidated EBITDA for the three fiscal quarter period commencing
on October 30, 2000, and ending on or about July 31, 2001 (with
Consolidated EBITDA for the two fiscal quarter period commencing on
October 30, 2000, and ending on or about April 30, 2001, deemed for
this purpose to be equal to the sum of (A) Consolidated EBITDA for that
period (calculated in accordance with the immediately preceding
paragraph), (B) the January Quarter Expected Cost Savings and (C)the
April Quarter Expected Cost Savings), by (ii) 4/3, and adding to the
product of such multiplication the July Test Period Cost Savings
Addback, and (d) in the case of the Test Period ending on or about
October 31, 2001, calculating Consolidated EBITDA for the four fiscal
quarter period commencing on October 30, 2000, and ending on or about
October 31, 2001 (with Consolidated EBITDA for the three fiscal quarter
period commencing on October 30, 2000, and ending on or about July 31,
2001, deemed for this purpose to be equal to the sum of (i)
Consolidated EBITDA for that period (calculated in accordance with the
immediately preceding paragraph), (ii) the January Quarter Expected
Cost Savings, (iii) the April Quarter Expected Cost Savings and (iv)
the July Quarter Expected Cost Savings and (iv) the July Quarter
Expected Cost Savings), and adding thereto the October Test Period Cost
Savings Addback, provided that, notwithstanding any other provision of
this paragraph or the following paragraph, (1) the sum of (A) the
January Test Period Cost Savings Addback, (B) the April Test Period
Cost Savings Addback, (C) the July Test Period Cost Savings Addback and
(D) the October Test Period Cost Savings Addback shall not exceed
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$5,000,000 and (2) no amounts shall be added to Consolidated EBITDA of
the Borrower in respect of the January Test Period Cost Savings
Addback, the April Test Period Cost Savings Addback, the July Test
Period Cost Savings Addback or the October Test Period Cost Savings
Addback, as applicable, unless the Lenders have received, in respect of
the last fiscal quarter of each previously completed Test Period, (A) a
detailed breakdown of the Expected Recurring Cost Savings for that
fiscal quarter and (B) and "Agreed Upon Procedure Letter" from either
Xxxxxx Xxxxxxxx LLP or another independent public accounting firm of
recognized national standing to the effect that such Expected Recurring
Cost Savings represent reasonable estimates of the incremental and
recurring quarterly cost savings expected to be realized in each
subsequent fiscal quarter as a direct result of the implementation of
Rationalizations in that fiscal quarter.
For the purposes of determining Consolidated EBITDA of the
Borrower as provided in the immediately preceding paragraph, (a) the
term "EXPECTED RECURRING COST SAVINGS" means, in respect of a fiscal
quarter (the "Current Fiscal Quarter"), the incremental and recurring
quarterly cost savings that the Borrower reasonably expects to realize
in each subsequent fiscal quarter that are in excess of the cost
savings realized in the Current Fiscal Quarter, in each case as a
direct result of the Rationalizations implemented in the Current Fiscal
Quarter, (b) the term "JANUARY TEST PERIOD COST SAVINGS ADDBACK" shall
mean the lesser of (A) $5,000,000 and (B)(i) the Expected Recurring
Cost Savings from the implementation of Rationalizations in the fiscal
quarter ending on or about January 31, 2001 (the "January Quarter
Expected Cost Savings"), multiplied by (ii) 4, (c) the term "APRIL TEST
PERIOD COST SAVINGS ADDBACK" shall mean the lesser of (A) $3,750,000
and (B)(i) the Expected Recurring Cost Savings from the implementation
of Rationalizations in the fiscal quarter ending on or about April 30,
2001 (the "April Quarter Expected Cost Savings"), multiplied by (ii) 4,
(d) the term "JULY TEST PERIOD COST SAVINGS ADDBACK" shall mean the
lesser of (A) $2,500,000 and (B)(i) the Expected Recurring Cost Savings
from the implementation of Rationalizations in the fiscal quarter
ending on or about July 31, 2001 (the "July Quarter Expected Cost
Savings"), multiplied by (ii) 4, and (c) the term "OCTOBER TEST PERIOD
COST SAVINGS ADDBACK" shall mean the lesser of (A) $1,250,000 and
(B)(i) the Expected Recurring Cost Savings from the implementation of
Rationalizations in the fiscal quarter ending on or about October 31,
2001, multiplied by (ii) 4.
For the purposes of determining (a) the Applicable Rate for
the Tranche A Term Loans, the Revolving Loans and the commitment fees
payable hereunder, (b) compliance with the covenants contained in
Sections 6.12, 6.13, and 6.14 for the purposes of the proviso to
Section 6.04(i) only and (c) the maximum management fees permitted
pursuant to Section 6.09(g), Consolidated EBITDA of the Borrower for
the Test Periods ending on or about January 31, 2001, April 30, 2001,
July 31, 2001, and October 31, 2001, shall be equal to the sum of (i)
Consolidated EBIT of the Borrower for the applicable Test Period and
(ii) all depreciation expenses, amortization expenses and other
non-cash
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charges that were deducted in determining Consolidated EBIT of the
Borrower for that Test Period.
SECTION 4. AMENDMENT TO SECTION 6.04(i) (PERMITTED ACQUISITIONS
BASKET). Section 6.04(i) of the Credit Agreement is hereby amended by inserting
the following new text at the end of such Section 6.04(i) immediately before the
";":
PROVIDED that, from the date hereof until the Business Day on which the
Borrower delivers to the Administrative Agent financial statements
under Section 5.10(a) or (b), and the related certificate under Section
5.01(d), showing that the Borrower and the Subsidiaries are in
compliance with the covenants contained in Sections 6.12, 6.13 and 6.14
(in each case determined using the definition of Consolidated EBITDA
set forth in the last paragraph of the definition of that term) as of
the then most recently completed fiscal quarter, the Borrower and the
Subsidiaries shall not make investments constituting Permitted
Acquisitions in excess of an aggregate amount of $10,000,000
(determined on the basis set forth in this paragraph (i))
SECTION 5. WAIVERS OF SECTIONS 6.12, 6.13 AND 6.14. (a) The Required
Lenders hereby waive any Default arising from the failure of the Borrower to
comply with the requirement of Section 6.12 of the Credit Agreement that the
Borrower not permit the Interest Coverage Ratio to be less than 1.55 to 1.00
for the Test Period ending on October 29, 2000.
(b) The Required Lenders hereby waive any Default arising from the
failure of the Borrower to comply with the requirement of Section 6.13 of the
Credit Agreement that the Borrower not permit the Total Adjusted Leverage Ratio
to be more than 6.20 to 1.00 as tested, and only as tested, at October 29, 2000.
(c) The Required Lenders hereby waive any Default arising from the
failure of the Borrower to comply with the requirement of Section 6.14 of the
Credit Agreement that the Borrower not permit the Senior Adjusted Leverage
Ratio to be more than 4.10 to 1.00 as tested, and only as tested, at
October 29, 2000.
(d) The Borrower, Holdings and the Required Lenders hereby agree that
the waivers provided for by Sections 1(a)(ii), (b)(ii), (c)(ii) and (d) of the
Amendment and Waiver to the Credit Agreement dated as of July 28, 2000 (the
"July Waiver"), shall, notwithstanding the provisions of Section 1(d) of the
July Waiver, terminate and expire at 11:59 p.m., New York City time, on October
29, 2000.
(e) The Required Lenders hereby waive the requirement of Section 2(b)
of the July Waiver.
SECTION 6. AMENDMENT AND WAIVER FEE. In consideration of the
agreements of the Required Lenders contained in this Amendment, the Borrower
agrees to pay to the Administrative Agent, for the account of each Lender that
delivers an executed counterpart of this Amendment by 5:00 p.m., New York City
time, on October 24, 2000, a one time amendment and waiver fee (the "Amendment
Fee") in an amount equal to 0.40% of the sum of such Lender's Revolving
Commitment and the aggregate principal amount of such Lender's Term Loans, in
each case on such date but on a pro
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forma basis to give effect to the Prepayments and the Revolving Commitment
Reduction, provided that the Amendment Fee shall not be payable unless and until
this Amendment becomes effective as provided in Section 8 below.
SECTION 7. REPRESENTATIONS AND WARRANTIES. Each of Holdings and the
Borrower represents and warrants to the Administrative Agent, to the Issuing
Bank and to each of the Lenders that:
(a) This Amendment has been duly authorized, executed and
delivered by Holdings and the Borrower and constitutes their legal,
valid and binding obligation, enforceable in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of
whether such enforce ability is considered in a proceeding at law or in
equity).
(b) The representations and warranties of each Loan Party set
forth in the Loan Documents are true and correct in all material
respects on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date, in
which case such representations and warranties, shall, to such extent,
be true and correct in all material respects as of such earlier date.
(c) On the date hereof and immediately after giving effect to
this Amendment, no Default has occurred and is continuing.
SECTION 8. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective as of the date first above written when the Administrative Agent shall
have received (a) counterparts of this Amendment that, when taken together, bear
the signatures of (i) the Borrower, (ii) Holdings and (iii) the Required
Lenders, (b) the Prepayments and (c) the Amendment Fees.
SECTION 9. CREDIT AGREEMENT. Except as specifically modified hereby,
the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof as in existence on the date hereof. After the date
hereof, any reference to the Credit Agreement shall mean the Credit Agreement as
modified hereby.
SECTION 10. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one agreement. Delivery of an executed
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually signed counterpart of this Agreement.
SECTION 12. EXPENSES. The Borrower agrees to reimburse the
Administrative Agent for its out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Xxxxx, counsel for the Administrative Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first written above.
MAXXIM MEDICAL, INC.
by
/s/ Xxxx Xxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice Chairman and Chief Financial
Officer
MAXXIM MEDICAL GROUP, INC.,
by
/s/ Xxxx Xxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice Chairman and Chief Financial
Officer
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent, Collateral Agent and
Issuing Bank,
by
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
BANKERS TRUST COMPANY, individually and
as Co-Syndication Agent,
by
/s/ Xxxx Xx Xxxxx
--------------------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
XXXXXXX XXXXX CAPITAL CORPORATION,
individually and as Co-Syndication Agent,
by
/s/ Xxxx Xxx
--------------------------------------------
Name: Xxxx Xxx
Title: Vice President
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CANADIAN IMPERIAL BANK OF COMMERCE,
individually and as Co-Documentation Agent,
by
/s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Director
CREDIT SUISSE FIRST BOSTON, individually
and as Co-Documentation Agent
by
/s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
by
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
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SIGNATURE PAGE TO
AGREEMENT, NOTICE,
AMENDMENT AND WAIVER
DATED AS OF OCTOBER 27, 2000
To Approve the Agreement, Notice,
Amendment and Waiver:
BNP PARIBAS,
by
/s/ X.X. Xxxxxx
-----------------------
Name: X.X. Xxxxxx
Title: Director
THE BANK OF NEW YORK,
by
/s/ Xxxxxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Assistant Vice President
BANK ONE, N.A.,
by
/s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
BAY VIEW FINANCIAL CORPORATION,
by
/s/ Xxxx X. Spring
-------------------------------------
Name: Xxxx X. Spring
Title: Senior Vice President
BHF (USA) CAPITAL CORPORATION,
by
/s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
by
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Associate Portfolio Management
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CREDIT LYONNAIS,
by
/s/ Xxxxxxx X. Heidsiech
-------------------------------------------
Name: Xxxxxxx X. Heidsiech
Title: Senior Vice President
FIRST SOURCE FINANCIAL LLP,
by First Source Financial, Inc., its
Agent/Manager
by
/s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
FIRST UNION NATIONAL BANK,
by
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
FOOTHILL CAPITAL CORPORATION,
by
/s/ M.E. Xxxxxxx
------------------------------------------
Name: M.E. Xxxxxxx
Title: Senior Vice President
FRANKLIN FLOATING RATE TRUST,
by
/s/ Xxxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
FUJI BANK, LTD.,
by
/s/ Nobouki Koike
------------------------------------------
Name: Nobouki Koike
Title: Vice President and Senior Team
Leader
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GE CAPITAL,
by
/s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
Title: Duly Authorized Signatory
IKB DEUTSCHE INDUSTRIEBANK AG,
LUXEMBOURG BRANCH,
by
/s/ Xxxxxxx Ziwley
-------------------------------------------
Name: Xxxxxxx Ziwley
Title: Director
by
/s/ Xxx Bechorquet
-------------------------------------------
Name: Xxx Bechorquet
Title: Manager
MOUNTAIN CAPITAL CLO II LTD.,
by
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
MOUNTAIN CLO TRUST II,
by
/s/ X. Xxxxx
-------------------------------------------
Name: N. Noike
Title: Authorized Signatory
SCOTIABANC INC,
by
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
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SENIOR DEBT PORTFOLIO,
by Boston Management and Research as
Investment Advisor,
/s/ Payson X. Xxxxxxxxx
-------------------------------------------
Name: Payson X. Xxxxxxxxx
Title: Vice President
XXXXX XXX & FARNHAM INCORPORATED, as
Agent for Keyport Life Insurance Company,
by
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and Portfolio
Manager
XXXXX FARGO,
by
/s/ Xxxx Xxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
