Exhibit 10.6
EXECUTION COPY
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of October 31, 2002, is by and among Noveon International, Inc. (formerly
known as PMD Group Holdings Inc.) ("Holdings"), Noveon, Inc. (formerly
known as PMD Group Inc.) (the "Borrower"), the financial institutions
signatory hereto in their capacity as Lenders (as defined below) under the
Credit Agreement (as defined below), Deutsche Bank Trust Company Americas
(formerly named Bankers Trust Company) as administrative agent for the
Lenders (the "Administrative Agent"), Credit Suisse First Boston, as
syndication agent for the Lenders (the "Syndication Agent") and together
with Deutsche Bank Trust Company Americas each a joint lead arranger and
joint book manager.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Borrower, Holdings, certain financial institutions (the
"Lenders"), Administrative Agent and Syndication Agent are parties to that
certain Credit Agreement dated as of February 28, 2001 (as amended,
restated, supplemented or otherwise modified and in effect from time to
time, the "Credit Agreement"), pursuant to which the Lenders have provided
to Borrower credit facilities and other financial accommodations; and
WHEREAS, Borrower has requested that Administrative Agent and Lenders
amend the Credit Agreement in certain respects as set forth herein and
Lenders and Administrative Agent are agreeable to the same, subject to the
terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, and other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Terms capitalized herein and not otherwise defined
herein are used with the meanings ascribed to such terms in the Credit
Agreement.
2. Amendment to Credit Agreement. The Credit Agreement is, as of the
First Amendment Effective Date (as defined below), hereby amended as
follows:
(a) Section 1.1 of the Credit Agreement is amended by inserting (in
alphabetical order) the following defined terms:
"Discount Note Prepayment" means the repayment by Holdings of $45
million of the outstanding accrued and unpaid interest and principal on the
Holdings Discount Note in a transaction in which the prepayment is treated
as a "Special Prepayment" as defined in the Holdings Discount Note, as
amended, and pursuant to which the principal amount of the Holdings
Discount Note is reduced in the manner specified in Section 8 of the
Holdings Discount Note.
"Discount Note Cash Prepayment Amount" means $45 million.
"First Amendment" means that certain First Amendment to Credit
Agreement dated as of October __, 2002 by and among Holdings,
Borrower, Lenders, Administrative Agent and Syndication Agent.
"First Amendment Effective Date" as defined in Section 5 of the
First Amendment.
"First Amendment Voluntary Prepayment" means the voluntary
prepayment by the Borrower of Term Loans in a minimum amount of $45
million out of cash on hand on the First Amendment Effective Date.
(b) Section 1.1 of the Credit Agreement is further amended by deleting
the references to "December 31, 2002" in the definitions of "Excess Cash
Flow" and "Excess Cash Payment Date" and replacing such references with
references to "December 31, 2003".
(c) Section 1.1 of the Credit Agreement is further amended by adding
the following new proviso immediately at the end of the definition of
"Leverage Ratio":
"provided, further, that for purposes of calculating the Leverage
Ratio for the Fiscal Quarter ended September 30, 2002, Consolidated Debt
less Cash and Cash Equivalents shall be calculated on a pro forma basis
giving pro forma effect to the Restricted Payment by the Borrower to
Holdings of the Discount Note Prepayment Amount as if such Restricted
Payment had been made during such Fiscal Quarter."
(d) Section 4.3(a) of the Credit Agreement is amended by amending
clause (v) contained therein to insert the language "other than a voluntary
prepayment consisting of the First Amendment Voluntary Prepayment" therein
immediately after the phrase "each voluntary prepayment of Term Loans".
(e) Section 4.3(a) of the Credit Agreement is further amended by
deleting the "." at the end of clause (v) thereof and replacing it with the
following new language:
"; and (vi) subject to Section 4.5(c), the First Amendment
Voluntary Prepayment shall be applied in the appropriate currency first to
the Scheduled Term A Dollar Repayments, Scheduled Term A Euro Repayments,
Scheduled Term B Dollar Repayments, Scheduled Term B Euro Repayments in
each case due December 31, 2002 and in Fiscal Year 2003 in direct order of
maturity) and, thereafter, subject to Section 4.5(c) shall be applied in
the appropriate currency and in proportional amounts equal to the Term A
Dollar Percentage, Term A Euro Percentage, Term B Dollar Percentage, Term B
Euro Percentage (in each case, after giving effect to the prepayments made
to the Scheduled Term A Dollar Repayments, Scheduled Term A Euro
Repayments, Scheduled Term B Dollar Repayments, Scheduled Term B Euro
Repayments due December 31, 2002 and in Fiscal Year 2003 as specified
above), as the case may be, of such remaining prepayment, and, within each
Term Loan, shall be applied to reduce the remaining Scheduled Term A
Repayments and Scheduled Term B Repayments on a pro rata basis (based upon
the then remaining principal amount of such Scheduled Term A Repayments and
Scheduled Term B Repayments, respectively)."
(f) Section 4.4(d) of the Credit Agreement is amended by inserting a
new sentence at the end of such Section to read as follows:
"Notwithstanding anything else in this Section to the contrary,
in the event that the Leverage Ratio for the most recent Excess Cash Flow
Period is less than 2.75x, then no mandatory repayment of Excess Cash Flow
shall be required by this Section for such Excess Cash Flow Period."
(g) Section 8.5 of the Credit Agreement is amended by inserting a new
sentence at the end of such Section to read as follows:
"Notwithstanding anything else in this Section to the contrary,
immediately following payment of the First Amendment Voluntary Prepayment,
the Borrower may make a Restricted Payment to Holdings out of cash on hand
in the amount of the Discount Note Cash Prepayment Amount; provided that
Holdings shall immediately utilize such Restricted Payment to make the
Discount Note Prepayment."
3. Amendment Fee. In consideration of the execution of this Amendment
by Administrative Agent and the Required Lenders, Borrower hereby agree to
pay to each Lender which executes this Amendment on or prior to 5:00 p.m.
(central standard time) October 25, 2002 a fee (the "Amendment Fee") in an
amount equal to (a) such Lender's Domestic Revolving Commitment plus such
Lender's Multicurrency Revolving Commitment each as in effect on the First
Amendment Effective Date plus the aggregate outstanding Dollar Equivalent
principal amount of such Lender's Term Loans (after giving effect to the
First Amendment Voluntary Prepayment) multiplied by (b) 0.10%.
4. Representations and Warranties. In order to induce Administrative
Agent and the Lenders to enter into this Amendment, each of Borrower and
Holdings hereby represents and warrants to Administrative Agent and the
Lenders, in each case after giving effect to this Amendment, as follows:
(a) Each of the Borrower and Holdings has the right, power and
capacity and has been duly authorized and empowered by all requisite
corporate and shareholder action to enter into, execute, deliver and
perform this Amendment and all agreements, documents and instruments
executed and delivered pursuant to this Amendment.
(b) This Amendment constitutes each of the Borrower's and Holdings'
legal, valid and binding obligation, enforceable against it, except as
enforcement thereof may be subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity
or at law or otherwise).
(c) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all material
respects at and as of the First Amendment Effective Date as though made on
and as of the First Amendment Effective Date (except to the extent
specifically made with regard to a particular date, in which case such
representation and warranty is true and correct in all material respects as
of such earlier date).
(d) Each of the Borrower's and Holdings' execution, delivery and
performance of this Amendment do not and will not violate its Articles or
Certificate of Incorporation or By-laws, any law, rule, regulation, order,
writ, judgment, decree or award applicable to it or any contractual
provision (except as otherwise expressly waived hereby) to which it is a
party or to which it or any of its property is subject.
(e) No authorization or approval or other action by, and no notice to
or filing or registration with, any governmental authority or regulatory
body (other than those which have been obtained and are in force and
effect) is required in connection with the execution, delivery and
performance by Borrower, Holdings or any other Credit Party of this
Amendment and all agreements, documents and instruments executed and
delivered pursuant to this Amendment.
(f) No Event of Default or Unmatured Event of Default exists under the
Credit Agreement or would exist after giving effect to the amendments and
transactions contemplated by this Amendment.
5. Conditions to Effectiveness of Amendment. This Amendment shall
become effective on the date (the "First Amendment Effective Date") each of
the following conditions precedent is satisfied:
(a) Execution and Delivery of Amendment. Borrower, Holdings,
Administrative Agent and Required Lenders shall have executed and delivered
the Amendment.
(b) Execution and Delivery of Loan Documents. Administrative Agent
shall have received each of the following documents, all of which shall be
satisfactory in form and substance to Administrative Agent and its counsel:
(1) A certificate of a Responsible Officer of Holdings and the
Borrower in the form of Exhibit A attached hereto;
(2) A Reaffirmation of Guaranty executed by a Responsible Officer
of the Subsidiary Guarantors in the form of Exhibit B attached hereto;
(3) An opinion of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel to the Credit Parties, addressed to Agent and each of
the Lenders and dated the First Amendment Effective Date, which shall
be in form and substance reasonably satisfactory to the Administrative
Agent and shall cover such matters incident to the transactions
contemplated herein and in the other Loan Documents as the
Administrative Agent or the Required Lenders may reasonably request;
(4) A certificate, dated the First Amendment Effective Date,
signed by the secretary or any assistant secretary of each of Borrower
and Holdings, in the form of Exhibit 5.1(f) to the Credit Agreement
with appropriate insertions, as to the incumbency and signature of the
officers of each of Borrower and Holdings (in form and substance
satisfactory to Administrative Agent) and any certificate or other
document or instrument to be delivered pursuant hereto or thereto by
or on behalf of Borrower or Holdings, together with evidence of the
incumbency of such Secretary or Assistant Secretary, and certifying as
true and correct, attached copies of the Certificate of Incorporation
and By-Laws of Borrower and Holdings (or certifying that there has
been no change in such Certificate of Incorporation and By-Laws from
those delivered to the Lenders on the Effective Date) and the
resolutions of Borrower and Holdings referred to in such certificate
and all of the foregoing (including each such Certificate of
Incorporation and By-Laws) shall be satisfactory to Administrative
Agent or the Required Lenders;
(5) Good standing certificates for each of Borrower and Holdings
from their respective jurisdictions of incorporation.
(c) Payment of the First Amendment Voluntary Prepayment. Borrower
shall have paid in full to the Administrative Agent for the benefit of the
Lenders with Term Loans the First Amendment Voluntary Prepayment, which
First Amendment Voluntary Prepayment shall be applied in the manner
provided by Section 4.3(a) of the Credit Agreement as amended by this
Amendment.
(d) Payment of First Amendment Effective Date Amendment Fee. Borrower
shall have paid in full to Administrative Agent, for ratable distribution
to those Lenders that have signed this Amendment on or prior to October 25,
2002, an amount equal to the Amendment Fee.
(e) Representations and Warranties. The representations and warranties
of the Borrower, Holdings and the other Credit Parties contained in this
Amendment, the Credit Agreement and the other Loan Documents shall be true
and correct in all material respects as of the First Amendment Effective
Date, with the same effect as though made on such date, except to the
extent that any such representation or warranty relates to an earlier date,
in which case such representation or warranty shall be true and correct in
all material respects as of such earlier date.
(f) No Defaults. No Unmatured Event of Default or Event of Default
under the Credit Agreement shall have occurred and be continuing.
6. Miscellaneous. The parties hereto hereby further agree as follows:
(a) Costs, Expenses and Taxes. Borrower hereby agrees to pay all
reasonable fees, costs and expenses of Administrative Agent incurred in
connection with the negotiation, preparation and execution of this
Amendment and the transactions contemplated hereby, including, without
limitation, the reasonable fees and expenses of Winston & ▇▇▇▇▇▇, counsel
to the Administrative Agent.
(b) Counterparts. This Amendment may be executed in one or more
counterparts any of which may be a facsimile and each of which, when
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same
document with the same force and effect as if the signatures of all of the
parties were on a single counterpart, and it shall not be necessary in
making proof of this Amendment to produce more than one (1) such
counterpart.
(c) Headings. Headings used in this Amendment are for convenience of
reference only and shall not affect the construction of this Amendment.
(d) Integration. This Amendment and the Credit Agreement (as amended
hereby) constitute the entire agreement among the parties hereto with
respect to the subject matter hereof.
(e) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES).
(f) Binding Effect. This Amendment shall be binding upon and inure to
the benefit of and be enforceable by Holdings, Borrower, Administrative
Agent and Lenders and their respective successors and assigns. Except as
expressly set forth to the contrary herein, this Amendment shall not be
construed so as to confer any right or benefit upon any Person other than
Holdings, Borrower, Administrative Agent and the Lenders and their
respective successors and permitted assigns.
(g) Amendment; Waiver. The parties hereto agree and acknowledge that
nothing contained in this Amendment in any manner or respect limits or
terminates any of the provisions of the Credit Agreement or any of the
other Loan Documents other than as expressly set forth herein and further
agree and acknowledge that the Credit Agreement (as amended hereby) and
each of the other Loan Documents remain and continue in full force and
effect and are hereby ratified and confirmed. Except to the extent
expressly set forth herein, the execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any rights, power or remedy
of Lenders or Administrative Agent under the Credit Agreement or any other
Loan Document, nor constitute a waiver of any provision of the Credit
Agreement or any other Loan Document. No delay on the part of any Lender or
Administrative Agent in exercising any of their respective rights,
remedies, powers and privileges under the Credit Agreement or any of the
Loan Documents or partial or single exercise thereof, shall constitute a
waiver thereof. On and after the First Amendment Effective Date each
reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import, and each reference to the
Credit Agreement in the Loan Documents and all other documents delivered in
connection with the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby. Holdings and Borrower acknowledge and
agree that this Amendment constitutes a "Loan Document" for purposes of the
Credit Agreement, including, without limitation, Section 10.1 of the Credit
Agreement. None of the terms and conditions of this Amendment may be
changed, waived, modified or varied in any manner, whatsoever, except in
accordance with Section 12.1 of the Credit Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of
the date first written above.
NOVEON, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: V.P. & Treasurer
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NOVEON INTERNATIONAL, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: V.P. & Treasurer
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DEUTSCHE BANK TRUST COMPANY AMERICAS,
in its individual capacity and as
Administrative Agent
By:/s/ M. A. Orlando
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Director
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CREDIT SUISSE FIRST BOSTON, acting
through Cayman Islands Branch
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Director
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By:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Associate
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[Name of Lending Institution]
By:
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Name:
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Title:
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EXHIBIT A
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CERTIFICATE OF OFFICER
----------------------
I, the undersigned, the Insert Title of Noveon, Inc. (the "Borrower"),
and Insert Title of Noveon International, Inc. ("Holdings"), in accordance
with Section 5(b) of that certain First Amendment to Credit Agreement dated
as of October ___, 2002 (the "Agreement") among Holdings, the Borrower,
Deutsche Bank Trust Company Americas, as Administrative Agent, Credit
Suisse First Boston as Syndication Agent, and the financial institutions
signatory thereto as Lenders, do hereby certify on behalf of Borrower and
Holdings, the following:
1. The representations and warranties set forth in Section 4 of the
Agreement are true and correct in all material respects as of the
date hereof except to the extent such representations and
warranties are expressly made as of a specified date in which
event such representations and warranties were true and correct
in all material respects as of such specified date;
2. No Event of Default or Unmatured Event of Default (except as
otherwise expressly waived by the Agreement) has occurred and is
continuing after giving effect to the Agreement; and
3. The conditions of Section 5 of the Agreement have been fully
satisfied.
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings set forth in the Agreement.
[signature page follows]
IN WITNESS WHEREOF, the undersigned has duly executed and delivered on
behalf of Borrower and Holdings this Certificate of Officer on this ___ day
of October, 2002.
NOVEON, INC. NOVEON INTERNATIONAL, INC.
By: By:
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Name: Name:
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Title: Title:
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EXHIBIT B
REAFFIRMATION OF GUARANTEE
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Each of the undersigned acknowledges receipt of a copy of the First
Amendment to Credit Agreement (the "Agreement"; capitalized terms used
herein shall, unless otherwise defined herein, have the meanings provided
in the Agreement) dated as of October___, 2002, by and among Noveon, Inc.
(the "Borrower"), Noveon International, Inc. ("Holdings"), Deutsche Bank
Trust Company Americas, as Administrative Agent, Credit Suisse First Boston
as Syndication Agent, and the financial institutions signatory thereto as
Lenders, consents to such Agreement and each of the transactions referenced
in the Agreement and hereby reaffirms its obligations under the Subsidiary
Guaranty.
Dated as of October ___, 2002.
[INSERT SUBSIDIARY NAMES]
By:
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Name:
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Title:
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