LOAN MODIFICATION AGREEMENT NO. 1
Preamble: This Loan Modification Agreement No. 1 (this "Agreement"), dated
as of September 11, 2001 (the "Effective Date"), is made between IMMUCOR, INC.,
a Georgia corporation ("U.S. Borrower"), DOMINION BIOLOGICALS LIMITED, the
successor by amalgamation to 3000524 Nova Scotia Limited and itself a
corporation incorporated under the laws of Canada ("Canadian Borrower"), and
IMMUCOR MEDIZINISCHE DIAGNOSTIK GMBH, a corporation incorporated under the laws
of the Federal Republic of Germany ("German Borrower"; U.S. Borrower, Canadian
Borrower and German Borrower, individually and collectively, "Borrower"), as
borrowers, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as lender ("Lender") for the purpose of amending or otherwise
modifying the terms of that certain Loan Agreement, dated as of February 23,
2001, heretofore made between Lender and Borrower (which, as it has been, or
hereafter may be, modified or amended, is called herein the "Loan Agreement").
Now, therefore, in consideration of the mutual promises contained herein
and in the Loan Agreement, the receipt and sufficiency of which are hereby
acknowledged, Lender and Borrower, each intending to be legally bound, agree as
follows:
1. Definitions. Capitalized terms used herein, but not expressly defined
themselves herein, shall have the meanings given to such terms in the Loan
Agreement.
2. Loan Modifications. Lender and Borrower agree to modify the Loan Agreement as
follows:
2.1 Change in Interest Rate and Non-Usage Fee. Notwithstanding any provisions of
Sections 2.2.1 or 2.2.2 of the Loan Agreement to the contrary, commencing on the
Effective Date:
(i) all Borrowings shall be limited to, and made as (or converted to), Prime
Borrowings only;
(ii) the "Applicable Margin" shall be a rate per annum equal to (A) in respect
of Advances outstanding under each of the Lines of Credit, Term Loan A and
CAD Term Loan, one-half of one percent (0.50%), and (B) in respect of Term
Loan B, two percent (2.00%); and
(iii)the "Applicable Percentage" for the non-usage fee shall be fixed at
one-half of one percent (0.50%);
provided, however, that if the Funded Debt/EBITDA Ratio of the U.S. Borrower and
its Consolidated Subsidiaries (computed as of the last day of any Fiscal Quarter
ending subsequent to the Effective Date for the four (4) consecutive Fiscal
Quarters ending on such date), as reflected on Borrower's financial statements
for such Fiscal Quarter (and the three (3) preceding Fiscal Quarters) is ever
2.50:1 or less, then, so long as such situation, measured quarterly thereafter,
is continuing, the foregoing provisions of clauses (i), (ii) and (iii) above
shall be suspended and the existing provisions of Sections 2.2.1 and 2.2.2,
relative to selection and calculation of interest rates and of calculation of
non-usage fees, shall be reinstated.
2.2 Change in Borrowing Base Reporting. Notwithstanding any provision of Section
4.2.10 of the Loan Agreement to the contrary, commencing with the calendar week
ending September 24, 2001, and continuing at all times thereafter, the Borrowing
Base Certificate shall be delivered on a weekly basis, as soon as practicable
after the end of each calendar week, but not later than the second Business Day
of the succeeding calendar week, reflecting weekly updates of the information
specified in said Section 4.2.10 for the U.S. Borrower and its Subsidiaries, and
monthly updates of such information for the German Borrower and the Canadian
Borrower. In addition to the foregoing, Borrower shall provide Lender with (i) a
Borrowing Base Certificate for the calendar month ended July 31, 2001, as soon
as practicable hereafter, but not later than September 24, 2001, and (ii)
Borrowing Base Certificates for (A) the calendar month ended August 31, 2001 and
(B) the three-week period ended September 21, 2001, as soon as practicable
hereafter, but not later than September 28, 2001. In such regard, Lender waives
the Events of Default heretofore existing in respect of Borrower's failure to
deliver Borrowing Base Certificates for the calendar months ended July 31, 2001
and August 31, 2001 in a timely manner on the condition, however, that Borrower
will make the deliveries set forth herein by not later than the dates specified
hereinabove or else such Events of Default shall be reinstated.
2.3 Changes in Financial Covenants. Any Event of Default heretofore existing in
respect of Borrower's non-compliance with any of Sections 6.1 through 6.4 of the
Loan Agreement for the Fiscal Quarters ending February 28, 2001 and May 31, 2001
(but only for such Fiscal Quarters, and no other Fiscal Quarter, including,
particularly the Fiscal Quarter ending August 31, 2001) are hereby waived,
effective as of the Effective Date, and, in connection therewith, (i) compliance
with Sections 6.1, 6.3 and 6.4 of the Loan Agreement is suspended through the
Fiscal Quarter ending February 28, 2002, but shall be reinstated as of the
Fiscal Quarter ending May 31, 2002, (ii) Section 6.2 of the Loan Agreement shall
be amended and restated to read as set forth below:
6.2 Funded Debt/EBITDA Ratio. The U.S. Borrower and its Consolidated
Subsidiaries shall have for each Fiscal Quarter ending closest to each date set
forth below a Funded Debt/EBITDA Ratio of not more than that set forth below for
such period:
Maximum Funded
Fiscal Quarter Ending: Debt/EBITDA Ratio:
August 31, 2001 5.90:1.00
November 30, 2001 4.50:1.00
February 28, 2002 3.65:1.00
May 31, 2002 2.70:1.00
Each Fiscal Quarter ending 2.50:1.00
after May 31, 2002
Solely for purposes of this Section 6.2, (i) so long as any Debt of the U.S.
Borrower or any of its Consolidated Subsidiaries is, by its terms, expressly
subordinated to the obligations of such Credit Party to Lender, including,
without limitation, all Obligations, on terms and conditions satisfactory to
Lender in its sole discretion, and so long as Lender determines, in its sole
discretion, that such subordination is and continues to be in all respects valid
and enforceable against the holders of such obligations, such subordinated Debt
shall not be included as Funded Debt; provided, however, that the foregoing
shall not be deemed to be a consent by Lender to the incurrence by any Credit
Party of any Debt not otherwise permitted to be incurred pursuant to Section
5.2; and (ii) commencing with the Fiscal Quarter ending closest to August 31,
2001, and continuing through the Fiscal Quarter ending closest to February 28,
2002, EBITDA shall be computed on an "annualized" basis; that is, (A) EBITDA at
the end of the Fiscal Quarter ending closest to August 31, 2001 shall be equal
to EBITDA determined for such Fiscal Quarter multiplied by four (4), (B) EBITDA
at the end of the Fiscal Quarter ending closest to November 30, 2001 shall be
equal to EBITDA for the two (2) consecutive Fiscal Quarters ending with such
Fiscal Quarter end, multiplied by two (2), and (C) EBITDA at the end of the
Fiscal Quarter ending closest to February 28, 2002, shall be equal to EBITDA for
the three (3) consecutive Fiscal Quarters ending with such Fiscal Quarter end,
multiplied by four-thirds (4/3).
and (ii), there shall be added to Article 6 a new Section 6.5, to read as
follows:
6.5 Minimum EBITDA. The U.S. Borrower and its Consolidated Subsidiaries
shall have for each Fiscal Quarter ending closest to each date set forth below
and for the cumulative Fiscal Year to date a minimum EBITDA in the respective
amounts set forth below corresponding thereto:
Minimum Fiscal
Fiscal Quarter Minimum Year-to-Date
Ending Quarterly EBITDA EBITDA
August 31, 2001 $2,000,000 $2,000,000
November 30, 2001 $3,000,000 $5,000,000
February 28, 2002 $4,000,000 $9,000,000
May 31, 2002 $5,000,000 $14,000,000
it being understood and agreed, in connection herewith, for the Fiscal Quarters
ending November 30, 2001, February 28, 2002 and May 31, 2002, that if actual
quarterly EBITDA is less than the minimum quarterly EBITDA prescribed above for
such Fiscal Quarter, such shortfall shall not by itself constitute an Event of
Default unless either (i) actual EBITDA is less than eighty percent (80%) of
prescribed EBITDA for such Fiscal Quarter or (ii) Borrower is in non-compliance
with the minimum Fiscal Year-to-date EBITDA requirement prescribed for such
Fiscal Quarter.
2.4 Unsatisfied Post-Closing Conditions. Pursuant to Section 4.8 of the Loan
Agreement, Borrower was required to deliver, or cause to be delivered, to Lender
by not later than April 30, 2001, certain Loan Documents. As of April 30, 2001,
and continuing through the Effective Date, the Borrower has failed to deliver
those Loan Documents listed on Schedule "A" annexed hereto (the "Remaining
Post-Closing Conditions"), and its failure to do has constituted an Event of
Default since April 30, 2001 (herein, the "Document Delivery Default"). As an
accommodation to Borrower, Lender hereby waives the Document Delivery Default on
the condition, however (to which the Borrower acknowledges, confirms and
agrees), that, as soon as practicable hereafter, but not later than September
30, 2001, Borrower shall have fulfilled all Remaining Post-Closing Conditions;
otherwise, effective on October 1, 2001, the Document Delivery Default shall be
reinstated.
3. Imposition of Waiver Fee. In consideration of Lender's entry into this
Agreement and its performance hereunder, Lender shall have fully earned on the
Effective Date a non-refundable waiver fee equal in amount to Seven Hundred
Fifty Thousand Dollars ($750,000), the payment of which shall be made in twelve
(12), equal installments of Sixty-Two Thousand Five Hundred Dollars ($62,500)
each, due and payable on the last day of each calendar month, for twelve (12),
consecutive calendar months, commencing on September 30, 2001; provided,
however, that, notwithstanding the foregoing, the then unpaid amount of such fee
shall become due and payable, in full, (i) upon Borrower's receipt of the Junior
Capital Infusion (defined and described in Section 4 of this Agreement), (ii)
upon any Event of Default occurring subsequent to the Effective Date, at any
time during its continuation, at Lender's option (but automatically, if the
Event of Default is in respect of Sections 7.6 or 7.7 of the Loan Agreement) or
(iii) upon any termination of the Loan Agreement occurring in conjunction with
Borrower's prepayment in full of the Obligations.
4. Junior Capital Infusion. Lender has agreed to enter into this Agreement and
perform hereunder on the condition (which Borrower hereby acknowledges, confirms
and agrees) that, as soon as practicable hereafter, but not later in any event
than December 31, 2001 (the "Deadline Date"), the Borrower shall have received
cash in the minimum amount of Five Million Dollars ($5,000,000) (gross of
underwriting commissions and related expenses) in the form of (A) equity or (B)
Debt which by its express terms is subordinated to all Obligations of each
Credit Party to Lender on terms satisfactory to Lender, in its sole discretion
(such capital infusion, of either form, is herein called the "Junior Capital
Infusion"), the proceeds from which shall be applied, as and when received, in
the form received, to outstanding Obligations in such order and manner as
Lender, in its sole discretion, shall elect; and, if the required Junior Capital
Infusion is not made, received and applied as specified hereinabove by the
Deadline Date, then, the following additional terms shall apply:
(i) Lender shall have fully earned on the Deadline Date a nonrefundable
supplemental waiver fee, equal in amount to Four Hundred Fifty Thousand
Dollars ($450,000), separate and apart from the initial waiver fee
specified in Section 3 of this Agreement, the payment of which shall be
made in twelve (12), equal installments of Thirty-Seven Thousand Five
Hundred Dollars ($37,500) each, due and payable on the last day of each
calendar month for twelve (12) consecutive calendar months, commencing on
January 31, 2002; provided, however, that, notwithstanding the foregoing,
the then unpaid amount of such fee shall become due and payable, in full,
on the same basis, at the same time and on the same conditions as are
prescribed for the initial waiver fee in Section 3 of this Agreement.
(ii) Lender shall have fully earned on the Deadline Date the right to receive
directly or through Lender's designee, on such date, warrants ("Warrants"),
to acquire from the U.S. Borrower 750,000 shares of voting common stock
(or, in lieu thereof, in whole or in part, at Lender's election, "phantom"
stock warrants or capital appreciation rights representing the equivalent,
in rights and value, thereof), or whatever greater or lesser number of such
shares which, upon issuance of the Warrants, would provide Lender, on a
fully diluted basis, the same percentage amount of the U.S. Borrower's
voting common stock (or alternative equity rights) as Lender would have on
the Effective Date, if the Warrants were issued on such date, exercisable
at the then current market price of such stock upon the exercise of such
Warrants, with such Warrants to be (A) issued to Lender for a nominal
consideration only and (B) to be in a form and substance satisfactory to
Lender, in its sole, but commercially reasonable, discretion.
Notwithstanding the preceding sentence, the U.S. Borrower will have no
obligation to increase the number of warrants or number of shares of its
common stock (or alternative equity rights) issuable upon exercise of such
warrants as a result of (A) the issuance of its common stock or securities
convertible into its common stock that arise from employee stock options
issued in the ordinary course of business, prior to the issuance date of
the warrant, or (B) except as expressly provided in the Warrant, after the
Warrant has been issued. The Warrants shall not be exercisable until April
30, 2002, however, nor after five (5) years from their date of issuance,
and shall be subject to return to Borrower, without charge, should,
subsequent to the Deadline Date and prior to April 1, 2002, the Junior
Capital Infusion has been made, received and applied as specified
hereinabove, according to the following schedule:
------------------------------- ---------------------------------------------
If Junior Capital Infusion is Then, the Warrants to be returned to
made, received and applied by: Borrower shall equal the number of shares
specified below (or their equivalent if
more or less than 750,000 shares are
available by Warrants)
------------------------------- ---------------------------------------------
January 31, 2002 562,500
------------------------------- ---------------------------------------------
February 28, 2002 375,000
------------------------------- ---------------------------------------------
May 30, 2002 187,500
------------------------------- ---------------------------------------------
(iii)on the Deadline Date, the interest rate payable on Advances shall change
to (A) the Prime Rate plus two percent (2%) per annum, for each of the
Lines of Credit, Term Loan A and CAD Term Loan, and (B) the Prime Rate plus
four percent (4%) per annum, for Term Loan B.
(iv) subsequent to the Deadline Date, unless the Junior Capital Infusion is
made, received and applied as specified hereinabove by April 30, 2002,
then, all existing credit facilities shall terminate on February 28, 2003,
and all Obligations shall be due and payable in full on such date (subject
to earlier acceleration in accordance with the terms of the Loan Agreement
in regard thereto).
5. Weekly Forecasts. In furtherance of Section 4.2.11 of the Loan Agreement, as
soon as practicable hereafter, by not later than September 28, 2001, the U.S.
Borrower shall provide Lender with thirteen (13) week cash flow projections for
the U.S. Borrower and its Subsidiaries, which the U.S. Borrower shall update
(roll forward and reconcile) on a weekly basis thereafter by the second Business
Day of each calendar week for the preceding calendar week.
6. U.S. Virgin Islands Subsidiary. U.S. Borrower covenants and agrees to cause
the dissolution of Gamma Biologicals International, Inc. and to transfer all
assets of such entity, if any, to the U.S. Borrower. Upon such dissolution and
transfer, Gamma Biologicals International, Inc. shall no longer be a Credit
Party.
7. Inducing Representations. To induce Lender to enter into this Agreement,
Borrower hereby represents and warrants that: (i) Borrower is duly authorized to
enter into this Agreement, and this Agreement, upon its execution by Borrower
and Lender, will constitute Borrower's legal, valid and binding obligations
enforceable in accordance with its terms against Borrower; (ii) after giving
effect to this Agreement, no Event of Default exists; (iii) no present right of
setoff, counterclaim, recoupment claim, claim, cause or action or defense exists
in Borrower's favor in respect of its payment or performance of any Obligations
or arising from any action (or inaction) of Lender; and (iv) except as modified
by this Agreement, all terms of the Loan Agreement and each Loan Document are in
full force and effect as originally stated.
8. Miscellaneous. Except as otherwise expressly provided herein, all
modifications to the Loan Agreement set forth herein shall take effect on the
Effective Date. Each existing Loan Document (including, particularly, any Note)
shall be deemed modified hereby as necessary to conform its terms to the terms
of the Loan Agreement, as modified hereby. This Agreement constitutes a Loan
Document, and shall be governed and construed accordingly. This Agreement
constitutes the entire agreement between Lender and Borrower relative to the
subject matter hereof, and supersedes and replaces any prior understandings and
agreements, written or oral, in regard thereto. This Amendment shall be binding
on, and inure to the benefit of, the successors and assigns of Borrower and
Lender. Borrower shall reimburse Lender for all costs which Lender incurs,
including reasonable attorneys fees, in the preparation, negotiation, execution
and performance of this Agreement, and the recording of any Loan Documents in
connection herewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
WACHOVIA BANK,
NATIONAL ASSOCIATION
By:
Name:
Title:
[SIGNATURES CONTINUED ON FOLLOWING PAGE)
IMMUCOR, INC.
By:
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
[SIGNATURES CONTINUED ON FOLLOWING PAGE)
DOMINION BIOLOGICALS LIMITED
By:
Name: Xxxxxx X. Xxxxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE)
IMMUCOR MEDIZINISCHE DIAGNOSTIK GMBH
By:
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
WACHOVIA/IMMUCOR--UNSATISFIED POST-CLOSING CONDITIONS
1. Execution, delivery and registration of a Pledge Agreement relative to the
stock of Immucor Portugal Lda.
2. Execution and delivery of a Pledge Agreement relative to the stock of Immucor
Belgium S.A.
3. Execution and delivery of a Pledge Agreement relative to the stock of Immucor
France EURL.
4. Confirmation from Spanish counsel that all actions necessary to perfect
Wachovia's lien in the stock if Immucor S.L. pursuant to the previously executed
Pledge Agreement have been taken and return of fully-executed Pledge Agreement.
5. Return of fully executed and notarized Pledge Agreement relative to the stock
of Immucor Italia s.r.l. from Italian counsel.
6. Delivery of an executed Landlord's Agreement relative to Immucor's
headquarters in Norcross, Georgia.
September 25, 2001
Xx. Xxxxxx Xxxxxx, President, CEO
Xx. Xxxxxx X. Xxxxxx, Chief Financial Officer
Immucor, Inc.
0000 Xxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, XX. 30091-5625
Re: Loan Modification Agreement No. 1 ( "LMA1" )
Dear Sirs:
Section 4 ( ii ) of LMA1 refers to May 30, 2002 as the date by which the
Junior Capital Infusion must be made, received, and applied in order for 187,500
in warrants to be returned to Immucor. The May 30, 2002 date should be amended
to read March 31, 2002.
In order to reflect the parties' actual intent, please indicate your
acknowledgement of this change by signing below.
Sincerely,
Xxxx Xxxxx
Senior Vice President/GE
Acknowledged by: Immucor, Inc.
By:
Xxxxxx X. Xxxxxx
CFO
Immucor, Inc.
