EXHIBIT 10Y
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SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Second Amendment to Revolving Credit Agreement (the or this
"Second Amendment") is made as of this 30 day of April, 1998 by and between
HAEMONETICS CORPORATION (the "Borrower"), a Massachusetts corporation, and
MELLON BANK, N.A., a national banking association (the "Agent").
NOW, THEREFORE, for the promises herein contained and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I. Background
As of June 25, 1997, the Borrower and the Banks entered into a
revolving loan arrangement of up to Forty Million Dollars ($40,000,000) (the
"Original Loan"). The Original Loan was evidenced by three promissory
notes: a $20,000.000 note dated June 25, 1997 made by the Borrower to the
order of Mellon Bank, N.A., a $10,000,000 note dated June 25, 1997 made by
the Borrower to the order of BankBoston, N.A. and a $10,000,000 note dated
June 25, 1997 made by the Borrower to the order of The Sanwa Bank, Limited
(collectively, the "Notes"). The Borrower and the Banks entered into a
revolving credit agreement dated as of June 25, 1997 (the "Original Credit
Agreement").
BankBoston, N.A. and The Sanwa Bank, Limited have withdrawn from the
bank group and each of their commitments of Ten Million Dollars
$10,000,000.00 have been eliminated. The total Commitment (as defined in
the Original Loan Agreement) is, on the date hereof, Twenty Million Dollars
($20,000,000.00), which is held by Mellon Bank, N.A. ("Mellon"). The
Borrower has no credit available hereunder in excess of Twenty Million
Dollars ($20,000,000.00).
The Borrower and the Agent entered into a First Amendment to Revolving
Credit Agreement (the "First Amendment") dated as of December 26, 1997, to
provide for certain pricing options and to exclude certain non-cash charges
from the covenant calculations.
The Borrower and the Agent have agreed to enter into this Second
Amendment, inter alia, to provide for certain limited waivers, revisions to
and additions of certain financial covenants.
Capitalized terms used in this Second Amendment and not defined herein
shall have the meaning given such terms in the Original Loan Agreement, as
amended by the First Amendment. The Original Loan Agreement, as amended by
the First Amendment, as amended by the Second Amendment, as may be further
amended, supplemented, modified or recast from time to time, is referred to
as the "Loan Agreement."
II. Amendment to Article I. Section 1.01, "Certain Definitions" is hereby
amended as follows:
A. The following definitions are hereby added:
1. "Consolidated EBIT" shall mean Consolidated Net Income
plus Consolidated Interest Expense plus tax expenses minus
the benefit of any tax losses used in the calculation of
Consolidated Net Income of the Borrower and its
subsidiaries during the period of determination on a
consolidated basis, but excluding in any event: (i) any
restructuring charge taken by the Borrower in its fiscal
quarter ended December 27, 1997 and (ii) any restructuring
charges taken by the Borrower up to the amount of
$27,300,000.00 in its fiscal quarter ended March 28, 1998
relating to the Borrower's disposition of its Blood Bank
Management Services.
2. "Consolidated Interest Expense" shall mean any interest
expense of the Borrower and its subsidiaries during the
period of determination determined on a consolidated basis
in accordance with GAAP.
3. "Consolidated EBITDA" shall mean for any period
Consolidated EBIT plus amortization plus depreciation as
determined on a consolidated basis in accordance with GAAP.
4. "Consolidated Net Worth" shall mean at any time the
stockholders' equity of the Borrower and its Consolidated
Subsidiaries, determined and consolidated in accordance
with GAAP except that there shall be excluded therefrom
the amount, whether positive or negative, of foreign
currency translation adjustments to stockholders' equity
of the Borrower and its Subsidiaries as determined in
accordance with GAAP.
III. Amendment to Article V. Article V, "Affirmative Covenants" is hereby
amended as follows:
A. Section 5.1(j) is hereby added, which states as follows:
"On or about June 30 of each year the Borrower shall
deliver to Agent a plan which contains projections for the
then current fiscal year of the Borrower's income
statement, balance sheet and cash flow statements,
including any non-recurring events then anticipated and
such other information as the Agent may request, all in
reasonable detail as requested by the Agent.
IV. Amendment to Article VI. Article VI, "Negative Covenants" is hereby
amended as follows:
A. Section 6.01 Financial Maintenance Covenants.
Subsection (a) is hereby amended by deleting the words therein
contained and inserting the following in lieu thereof:
"Commencing with the fiscal quarter ending April 3, 1999,
the Borrower shall maintain Consolidated Net Worth which
is at all times equal to $200,000,000.00 increased
quarterly on a cumulative basis by an amount equal to
fifty percent (50%) of the Borrower's positive net income
(not to be reduced for losses), as determined in
accordance with GAAP, for each succeeding fiscal quarter.
B. Section 6.01 Financial Maintenance Covenants is hereby further
amended by deleting the words contained in subsection (b) and
hereby inserting the following in lieu thereof:
"Commencing with the fiscal quarter ending March 28, 1998
and for each fiscal quarter thereafter, the ratio of the
Consolidated EBIT to Consolidated Interest Expense shall
not be less than 2.0 to 1.0 for any four consecutive
fiscal quarter period ending on the date of any
determination."
C. Section 6.01, Financial Maintenance Covenants is hereby further
amended by deleting subsection (c) and inserting the following
in lieu thereof:
"Commencing with the fiscal quarter ending March 28, 1998
and for each fiscal quarter thereafter, the ratio of (x)
Consolidated Total Indebtedness as of the last day of such
fiscal quarter to (y) the sum of EBITDA for the period of
the four (4) consecutive quarters of the Borrower then
ending shall not be more than the following: 3.0:1
D. The following Section 6.11 is hereby added:
"(a) The Borrower will not, except as hereinafter provided:
(i) Declare or pay any dividends, either in cash
or property, on any shares of its capital
stock of any class (except dividends or other
distributions payable solely in shares of
common stock of the Borrower);
(ii) Directly or indirectly, or through any
Subsidiary or through any Affiliate of the
Borrower, purchase, redeem or retire any
shares of its capital stock of any class or
any warrants, rights or options to purchase or
acquire any shares of its capital stock; or
(iii) Make any other payment or distribution, either
directly or indirectly or through any
Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends,
purchases, redemptions or retirements of capital
stock and warrants, rights or options and all such
other payments or distributions being herein
collectively called "Restricted Payments"), if after
giving effect thereto the sum of (1) the aggregate
amount of Restricted Payments made during the period
from and after March 29, 1997 to and including the
date of the making of the Restricted Payment in
question plus (2) the aggregate amount of all
Restricted Investments (as defined in that certain
Note Purchase Agreement by and between the Borrower
and Allstate Life Insurance Company, Employers
Insurance Company of Wausau, State Farm Life
Insurance Company and Nationwide Mutual Fire
Insurance Company dated as of October 15, 1997) made
by the Borrower or any Subsidiary during said period
would exceed the sum of:
(i) 50% of Consolidated Net Income (or if such
Consolidated Net Income is a deficit figure,
then minus 100% of such deficit) for such
period determined on a cumulative basis for
said entire period; plus
(ii) an amount equal to the aggregate net cash
proceeds received by the Borrower from the
sale on or after the date of this Agreement of
shares of its common stock or other securities
convertible into common stock of the Borrower.
(b) The Borrower will not declare any dividend which
constitutes a Restricted Payment payable more than
60 days after the date of declaration thereof.
(c) For the purposes of this Section 6.11, the amount of
any Restricted Payment declared, paid or distributed
in property shall be deemed to be the greater of the
book value or fair market value (as determined in
good faith by the Board of Directors of the
Borrower) of such property at the time of the making
of the Restricted Payment in question.
(d) The Borrower will not authorize or make a Restricted
Payment if after giving effect to the proposed
Restricted Payment, a Default or Event of Default
would exist.
Notwithstanding anything to the contrary contained in this
Section 6.11, during the period commencing on March 28, 1998 and
ending on April 3, 1999, the Borrower shall not declare or pay
any Restricted Payments (it being expressly agreed that
dividends or other distributions payable solely in shares of
common stock of the Borrower or rights to acquire common stock
of the Borrower shall be permitted)."
V. Ratification and Consent
A. The loan documents shall otherwise remain unaltered, ratified,
confirmed and in full force and effect. The Borrower hereby also ratifies
and confirms that the amount of the Commitment is Twenty Million Dollars
($20,000,000.00), which is held by Mellon on the date hereof.
B. The Borrower represents and warrants as follows: There are no
defenses, offsets or counterclaims against obligations to the Banks
evidenced by the Notes or the other loan documents, and to the extent there
are any defenses, offsets or counterclaims, the same are hereby waived. All
the representations and warranties contained in the Loan Agreement are true,
correct and accurate in all material respects as of the date hereof.
IN WITNESS WHEREOF, the parties hereto have set their hand and seal as
of the date first above written.
Dated as of April 30, 1998.
HAEMONETICS CORPORATION
By: /s/ Xxxxxx X. Xxxx
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Its
MELLON BANK
By: /s/ R. Xxxx Xxxxxxxx
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Its
