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EXHIBIT 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (the "Amendment") is made on
this 11 day of January, 1999 to be effective as of December 30, 1998 by and
among Imagyn Medical Technologies California, Inc., Dacomed Corporation,
Allstate Medical Products, Inc., Xxxxx Medical Systems, Ltd., Microsurge, Inc.,
Imagyn Medical, Inc. (collectively, the "Borrowers"), Imagyn Medical
Technologies, Inc. (the "Guarantor"), BT Commercial Corporation, as Agent (in
such capacity, the "Agent"), and BT Commercial Corporation (in its capacity as
lender, "BTCC"), Kensington International Limited ("Kensington"), and
Springfield Associates, L.L.C. ("Springfield") (BTCC, Kensington and Springfield
are hereinafter referred to collectively as "Lenders").
W I T N E S S E T H:
WHEREAS, the Agent, the Lenders, the Borrowers and the Guarantor are
parties to that certain Amended and Restated Credit Agreement dated as of August
24, 1998, as amended from time to time (the "Credit Agreement); and
WHEREAS, the parties desire to amend the Credit Agreement, as more fully
set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the adequacy of which is
hereby acknowledged, and subject to the terms and conditions hereof, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all capitalized
terms shall have the meaning given to them in the Credit Agreement.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.
2.1 Section 1.1 of the Credit Agreement is hereby amended by
deleting the defined term "Expiration Date" in its entirety, and inserting the
following in its stead:
"EXPIRATION DATE means June 30, 1999."
2.2 ARTICLE 2 of the Credit Agreement is hereby amended by the
addition of the following new Section 2.1.1:
"2.1.1 Additional Revolving Loans. In the sole discretion of the
Revolving Lenders, Revolving Loans may be made available to the
Borrowers in an aggregate amount not to exceed $2,000,000 in
excess of the Revolving Line of Credit available hereunder from
time to time (the "Additional Revolving Loans"). The Additional
Revolving Loans shall in all respects be treated as Revolving
Loans
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hereunder and shall be subject to all of the terms and
conditions with respect to the manner of borrowing and the
payment of interest thereon. In determining any Revolving
Lender's Revolving Commitment hereunder, the amount of any
outstanding Additional Revolving Loans shall be included."
2.3 Section 4.7(b) of the Credit Agreement is hereby deleted in
its entirety and the following is inserted in its stead:
"(b) upon the occurrence of any Asset Disposition permitted
pursuant to the terms of Section 8.8(iv), the net proceeds
thereof shall be distributed to the Lenders in accordance with
the terms of the Intercreditor Agreement, as amended from time to
time. To the extent any of the Revolving Loans then outstanding
constitute LIBOR Rate Loans, Borrowers shall pay to Agent an
amount equal thereto, to be held in a cash collateral account for
the benefit of the Revolving Lenders and under the sole control
and dominion of Agent, and from which Agent shall apply such
funds to the LIBOR Rate Loans at the end of the applicable
Interest Period. Any such repayment under this subsection (b)
shall constitute a permanent reduction or termination of the
Revolving Line of Credit, but shall not constitute a permanent
reduction or termination of the amount available as Additional
Revolving Loans.
2.4 Section 8.9 of the Credit Agreement is hereby amended by
deleting subsection (iii) thereof in its entirety and inserting the following in
its stead:
"(iii) so long as no Default or Event of Default has occurred or
is occasioned thereby, declare and pay dividends to the
Guarantor in an amount necessary to allow the Guarantor to
pay its federal, state and local taxes, and for funds
necessary for general corporate overhead of the
Guarantor."
2.5 Section 11.11(c) of the Credit Agreement is hereby amended by
deleting the word "or" at the end of subsection (i) thereof, deleting the word
"and" at the end of subsection (ii) thereof, and inserting the word "or" in its
stead, and inserting the following new subsection (iii):
"(iii) amend or waive the provisions of Section 8.9 hereof; and"
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SECTION 3. ACCRUAL OF CERTAIN PAYMENTS.
3.1 Notwithstanding the provisions of Section 4.1(A) of the
Credit Agreement to the contrary, the Term Lenders agreed that the Term Loan
shall continue to accrue interest at a rate of 15% per annum which shall be
payable as provided in the Credit Agreement, and the additional interest which
is required to be paid from and after the occurrence of a Registration Default
shall accrue and be unpaid until the payment in full of the outstanding
principal of the Term Loan.
3.2 Notwithstanding the provisions of Section 4.5(B) of the
Credit Agreement to the contrary, the Term Lenders agree that the Term Extension
Payment shall be due and owing in full with the final payment of the principal
of the Term Loan.
SECTION 4. ASSET DISPOSITION PROCEEDS. The Borrowers agree to use their
best efforts to effect Asset Dispositions from and after the date hereof to and
including the Expiration Date which will generate net cash proceeds in an amount
not less than $18,000,000, which cash proceeds shall be applied in accordance
with the provisions of Section 4.7(b) of the Credit Agreement. To the extent
such cash proceeds exceed $18,000,000, the Lenders hereby agree that the
Borrowers shall be entitled to use such excess proceeds up to $1,000,000 in the
aggregate for working capital purposes. Thereafter, any additional net proceeds
of Asset Dispositions in excess of $19,000,000 shall continue to be applied in
accordance with Section 4.7(b) of the Credit Agreement.
SECTION 5. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon satisfaction of the following conditions precedent:
5.1 Agent shall have received copies of this Amendment duly
executed by the Borrowers, the Guarantor, and the Lenders.
5.2 Agent shall have received a duly executed counterpart of the
First Amendment to Intercreditor Agreement in the form attached hereto as
Exhibit A.
5.3 Agent shall have received such other documents, certificates
and assurances as it shall reasonably request.
SECTION 6. REAFFIRMATION OF BORROWERS. The Borrowers hereby represent
and warrant to Agent and Lenders that (i) the representations and warranties set
forth in Section 6 of the Credit Agreement are true and correct on and as of the
date hereof, except to the extent (a) that any such representations or
warranties relate to a specific date, or (b) of changes thereto as a result of
transactions for which Agent and Lenders have granted their consent; (ii) the
Borrowers are on the date hereof in compliance with all of the terms and
provisions set forth in
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the Credit Agreement as hereby amended; and (iii) upon execution hereof no
Default or Even of Default has occurred and is continuing or has not previously
been waived.
SECTION 7. FULL FORCE AND EFFECT. Except as herein amended, the Credit
Agreement and all other Credit Documents shall remain in full force and effect.
SECTION 8. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year specified above.
BORROWERS:
IMAGYN MEDICAL TECHNOLOGIES
CALIFORNIA, INC.
By: /s/ M.A. Montevideo
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Name: M.A. Montevideo
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Title: Chief Financial Officer
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DACOMED CORPORATION
By: /s/ M.A. Montevideo
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Name: M.A. Montevideo
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Title: Chief Financial Officer
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ALLSTATE MEDICAL PRODUCTS,
INC.
By: /s/ M.A. Montevideo
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Name: M.A. Montevideo
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Title: Chief Financial Officer
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XXXXX MEDICAL SYSTEMS, LTD.
By: /s/ M.A. Montevideo
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Name: M.A. Montevideo
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Title: Chief Financial Officer
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MICROSURGE, INC.
By: /s/ M.A. Montevideo
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Name: M.A. Montevideo
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Title: Chief Financial Officer
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GUARANTOR:
By its signature hereon, the
undersigned also hereby
restates and reaffirms its
Guaranty dated as of December
30, 1997 made in favor of
Agent for the benefit of the
Lenders, which the
undersigned delivered in
connection with the Existing
Credit Agreement, agrees that
such Guaranty continues in
full force and effect as the
valid and binding obligation
of the undersigned with
respect to the Obligations of
the Borrowers under the
Amended and Restated Credit
Agreement, as amended hereby,
and further represents and
warrants that the undersigned
has no claims or defenses to
the enforcement of the rights
and remedies of the Agent and
Lenders thereunder.
IMAGYN MEDICAL TECHNOLOGIES,
INC.
By: /s/ M.A. Montevideo
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Name: M.A. Montevideo
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Title: Chief Financial Officer
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AGENT:
BT COMMERCIAL CORPORATION, AS
AGENT
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Senior Vice President
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LENDERS:
BT COMMERCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Senior Vice President
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KENSINGTON INTERNATIONAL
LIMITED
By: Marley International, Inc.
Attorney-in-Fact
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: President
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SPRINGFIELD ASSOCIATES, L.L.C.
By: Xxxxxxx Associates, L.P.
Managing Member
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: General Partner
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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR
The undersigned hereby ratifies and reaffirms that certain Continuing
Limited Guaranty dated July 10, 1998 (the "Guaranty") made by the undersigned in
favor of the Agent for the benefit of the Lenders and each of terms and
provisions contained therein, and agrees that the Guaranty continues in full
force and effect following the execution and delivery of the foregoing
Amendment. The undersigned represents and warrants to Agent that the Guaranty
was on the date of the execution and delivery thereof, and continues to be, the
valid and binding obligation of the undersigned enforceable in accordance with
its terms and that the undersigned has not claims or defenses to the enforcement
of the rights and remedies of Agent under the Guaranty.
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Dated: January 13, 1999
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