EXHIBIT 2.9
FIRST AMENDMENT AND WAIVER TO CREDIT AGREEMENT
FIRST AMENDMENT AND WAIVER TO CREDIT AGREEMENT, dated as of March 31,2005
(this "AMENDMENT"), to the Credit Agreement referred to below between
ALBAHEALTH, LLC, a Delaware limited liability company ("BORROWER"), and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders.
W I T N E S S E T H
WHEREAS, Borrower and GE Capital, as Agent and as Lender, are parties to that
certain Credit Agreement, dated as of September 6, 2002, (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, Borrower has notified Agent that Borrower has failed to comply with
certain Financial Covenants set forth in SECTION 6.10 of the Credit Agreement
for the periods ended September 30,2004 and December 31,2004 and has requested a
waiver thereof; and
WHEREAS, Borrower has requested that certain provisions of the Credit Agreement
be amended in the manner, and on the terms and conditions provided for herein.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, Borrower, Agent, Requisite Lenders and Requisite Revolving Lenders
hereby agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement or Annex A thereto.
2. WAIVERS UNDER CREDIT AGREEMENT. Agent, Requisite Lenders and Requisite
Revolving Lenders hereby waive, as of the First Amendment Effective Date (as
hereinafter defined), any Default or Event of Default resulting solely from
Borrower's failure to comply with the minimum EBITDA requirements of paragraph
(e) of ANNEX G of the Credit Agreement for the 12-month periods ended September,
30,2004 and December 31, 2004; PROVIDED, that Borrower and its Subsidiaries on a
consolidated basis shall have at the end of the Fiscal Quarter ended December 3
1,2004 EBITDA for the 12-month period then ended of not less than $5,650,000.
3. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended as of
the First Amendment Effective Date as follows:
(a) AMENDMENT TO PARAGRAPH (B) OF ANNEX G OF THE CREDIT AGREEMENT.
Paragraph (b) of ANNEX G of the Credit Agreement is hereby amended as of the
First - Amendment Effective Date by deleting paragraph (b) of ANNEX G in its
entirety and inserting the following in lieu thereof:
"(b) Minimum Fixed Charge Coverage Ratio. Borrower and its Subsidiaries
shall have on a consolidated basis (i) at the end of each Fiscal Quarter
(other than the Fiscal Quarter ending March 31, 2005), a Fixed Charge
Coverage Ratio for the 12-month period then ended (or, with respect to the
Fiscal Quarters ending on or before June 30,2003, for the period commencing
on September 6, 2002, and ending on the last day of such Fiscal Quarter) of
not less than 1.15x, and (ii) at the end of the Fiscal Quarter ending March
31.2005, a Fixed Charge Coverage Ratio for the 12-month period then ended
of not less than 1.10x."
(b) AMENDMENT TO PARAGRAPH (B) ANNEX G OF THE CREDIT AGREEMENT.
Paragraph (e) of Annex G of the Credit Agreement is hereby amended as of the
First Amendment Effective Date by deleting the following in paragraph (e) of
ANNEX G:
"March 3 1,2005 $7,500,000
June 30,2005 $7,500,000
September 30,2005 $7,750,000
December 31,2005 $7,750,000"
and inserting the following in lieu thereof:
"March 31,2005 $5,229,000
June 30,2005 $53 1 1,000
September 30, 2005 $5,535,000
December 31,2005 $6,000,000"
(c) AMENDMENT TO PARAGRAPH (D) ANNEX G OF THE CREDIT AGREEMENT.
Paragraph (d) of Annex G of the Credit Agreement is hereby amended as of the
First Amendment Effective Date by deleting "1.75x for the Fiscal Quarter ending
June 30, 2005", and inserting in lieu thereof "2.0x for the Fiscal Quarter
ending June 30,2005".
4. REMEDIES This Amendment shall constitute a Loan Document. The breach by
any Credit Party of any representation, warranty, covenant or agreement in this
Amendment (including without limitation in SECTION 2 hereof) shall constitute an
immediate Event of Default hereunder and under the other Loan Documents.
5. REPRESENTATIONS AND WARRANTIES. To induce Agent, Requisite Lenders and
Requisite Revolving Lenders to enter into this Amendment, Borrower makes the
following representations and warranties to Agent, Requisite Lenders and
Requisite Revolving Lenders:
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(a) The execution: delivery and performance of this Amendment and the
performance of the Credit Agreement as amended by this Amendment (the
"Amended Credit Agreement") by Borrower: (a) are within Borrower's
organizational power; (b) have been duly authorized by all necessary
or proper organizational and shareholder or membership action; (c) do
not contravene any provision of Borrower's charter or bylaws or
equivalent organizational or charter or other constituent documents;
(d) do not violate any law or regulation, or any order or decree of
any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by,
any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Borrower is a party or by which Borrower or any of
its property is hound; (F) do not result in the creation or imposition
of any Lien upon any of the property of Borrower other than those in
favor of Agent, on behalf of itself and the Lenders, pursuant to the
Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person.
(b) This Amendment has been duly executed and delivered by or on behalf of
Borrower.
(c) Each of this Amendment, the Amended Credit Agreement and each of the
other Loan Documents constitutes a legal, valid and binding obligation
of Borrower, enforceable against the Borrower in accordance with its
terms, except as enforceability &ay be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law).
(d) After giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing.
(e) No action, claim or proceeding is now pending or, to the knowledge of
Borrower, threatened against Borrower or any other Credit Party, at
law, in equity or otherwise, before any court, hoard, commission,
agency or instrumentality of any federal, state, or local government
or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, (i) which challenges Borrower or, to the extent
applicable, any other Credit Party's right, power, or competence to
enter into this Amendment or perform any of their respective
obligations under this Amendment, the Credit Agreement or any other
Loan Document, or the validity or enforceability of this Amendment,
the Credit Agreement or any other Loan Document or any action taken
under this Amendment, the Credit Agreement or any other Loan Document
or (ii) which, if determined adversely, is reasonably likely to have
or result in a Material Adverse Effect. To the knowledge of Borrower,
there does not exist a state of facts which is reasonably likely to
give rise to such proceedings.
(f) The representations and warranties of Borrower and the other Credit
Parties contained in the Amended Credit Agreement and the other Loan
Documents are true and correct on and as of the First Amendment
Effective Date with the same effect as if such representations and
warranties had been made on and as of such date, except that any such
representation or warranty which is expressly made only as of a
specified date need he true only as of such date.
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6. NO OTHER AMENDMENTS OR WAIVERS. Except as expressly provided herein, the
Credit Agreement and the other Loan Documents shall he unmodified and shall
continue to be in full force and effect in accordance with their terms. In
addition, except as specifically provided herein, this Amendment shall not be
deemed an amendment or waiver with respect to any term or condition of any Loan
Document and shall not be deemed to prejudice any right or rights which Agent,
for itself and Lenders, may now have or may have in the future under or in
connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.
7. CONTINUATION OF OBLIGATIONS AND LIENS. Borrower hereby acknowledges,
agrees and affirms (a) its obligations under the Credit Agreement and the other
Loan documents, including, without limitation, its guaranty obligations
thereunder, (b) that such guaranty shall apply to all Obligations, (c) the grant
of the security interest in all of its assets pursuant to the Loan Documents and
(d) that such liens and security interests created and granted are valid and
continuing and secures all the Obligations.
8. OUTSTANDING INDEBTEDNESS; WAIVER OF CLAIMS. Borrower hereby acknowledges
and agrees that as of March 3 1,2005 the aggregate outstanding principal amount
of the Revolving Credit Advances are $2,811,899.66 and the aggregate outstanding
principal amount of the Term Loan is $8,249,484.74, and that such principal
amounts are payable pursuant to the Credit Agreement without defense, offset,
withholding, counterclaim or deduction of any kind. Borrower hereby waives,
releases, remises and forever discharges Agent, Lenders and each other
Indemnified Person from any and all claims, suits, actions, investigations,
proceedings or demands, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or common law of any kind
or character, known or &own, which Borrower ever had, now has or might hereafter
have against Agent or any Lender which relates, directly or indirectly, to any
acts or omissions of Agent, Lenders or any other Indemnified Person on or prior
to the First Amendment Effective Date.
9. FEES AND EXPENSES. Borrower hereby:
(a) reconfirms its obligations pursuant to Section 11.3 of the Credit
Agreement pay and reimburse Agent for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel)
incurred in connection with the negotiation, preparation, execution
and delivery of this Amendment and all other documents and instruments
delivered in connection herewith; and
(b) agrees to pay to Agent, for the ratable benefit of the Lenders, an
amendment fee of 530,000 (the "Amendment Fee"), which fee shall be due
and payable on April 1,2005.
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10. EFFECTIVENESS. This Amendment shall become effective as of March 31,
2005 (the "FIRST AMENDMENT EFFECTIVE DATE") only upon satisfaction in full in
the judgment of Agent of each of the following conditions on or prior to April
1,2005:
(A) AMENDMENT. Agent shall have received four (4) original copies of this
Amendment duly executed and delivered by Agent, Requisite Lenders,
Requisite Revolving Lenders and Borrower and acknowledged and agreed
to by each of the pledgors to the Pledge Agreements.
(b) Payment of Fees and Expenses. Borrower shall have paid to Agent (i)
all costs, fees and expenses owing in connection with this Amendment
and the other Loan Documents and due to Agent, and (ii) the Amendment
Fee.
(c) Representations and Warranties. The representations and warranties of
or on behalf of the Credit Parties in this Amendment shall be true and
correct on and as of the First Amendment Effective Date.
11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
12. COUNTERPARTS. This Amendment may be executed by the parties hereto on
any number of separate counterparts and all of said counterparts taken together
shall he deemed to constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
BORROWER:
ALBAHEALTW, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: CFO
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Duly Authorized Signatory
The undersigned pledgors hereby (i) acknowledge this Amendment and (ii)
confirm and agree that their obligations under their respective pledges shall
continue without any diminution thereof and shall remain in full force and
effect on and after the effectiveness of this Amendment.
PLEDGORS:
ALBA-WALDENSIAN, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Secretary
ENCOMPASS GROUP, L.L.C.
By: /S/
----------------
Name: ▇. ▇▇▇▇▇▇▇
Title: CFO
GENERAL ELECTRIC CAPITAL
CORPORATION, as a pledgor
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Duly Authorized Signatory
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