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EXHIBIT 10(tt)
FIRST AMENDMENT TO
1999 AMENDED AND RESTATED LOAN AGREEMENT
First Union National Bank
300 Main Street
Stamford, Connecticut 06904
(Hereinafter referred to as the "Bank")
Novametrix Medical Systems Inc.
5 Technology Drive, P.O. Box 690
Wallingford, Connecticut 06492
("Novametrix")
NTC Technology, Inc.
c/o Novametrix Medical Systems Inc.
5 Technology Drive, P.O. Box 690
Wallingford, Connecticut 06492
("NTC")
Children's Medical Ventures, Inc.
541 Main Street
South Weymouth, Massachusetts 02190
("CMV"; Novametrix, NTC and CMV being,
individually and collectively "Borrower")
This First Amendment to 1999 Amended and Restated Loan Agreement (the
"Amendment") is entered into as of April 28, 2000, by and between Bank and
Borrower, each of which are corporations organized under the laws of Delaware.
The Amendment amends that certain 1999 Amended and Restated Loan Agreement,
entered into as of June 30, 1999, by and between Bank and Borrower (said
agreement being hereinafter referred to as the "Agreement").
RECITALS
Bank is the holder of, inter alia: (i) a certain 1999 Substitute Promissory Note
that certain First Allonge to 1999 Substitute Promissory Note by and between the
Borrower and Bank,
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dated as of even date herewith, in the original principal amount of up to
$8,000,000.00, as amended (hereinafter referred to as the "Line of Credit
Note"); (ii) a certain 1999 Term Promissory Note in the original principal
amount of $4,800,000.00, dated as of June 30, 1999, from the Borrower to the
Bank (hereinafter referred to as the "1999 Term Note"); (iii) a certain 1998
Term Promissory Note executed and delivered by Novametrix and NTC, dated
December 11, 1998, in the original principal amount of $3,000,000.00, as
modified by Allonge No. 1 to 1998 Term Promissory Note, dated as of June 30,
1999, executed by Borrower and the Bank (as modified, hereinafter referred to
as the "1998 Term Note"; the Line of Credit Note, the 1999 Term Note and the
1998 Term Note being sometimes collectively referred to as the "Notes"); and
certain other Loan Documents, including the Agreement; and
Borrower and Bank have agreed to modify the terms of the Agreement by, inter
alia, replacing certain provisions contained therein with those contained in
this Agreement, as more particularly hereinafter set forth.
In consideration of Bank's continued extension of credit and the agreements
contained herein, the parties agree as follows:
This Amendment amends the Agreement.
This Amendment applies to the Loan and all Loan Documents.
This Amendment and the Loans contemplated and covered herein are subject to that
certain Intercreditor Agreement by and between the Bank and Webster Bank, a
Connecticut banking association with a place of business at 80 Elm Street, New
Haven, CT 06510 ("Webster"). The parties acknowledge and agree that Borrower has
previously entered into a Loan Agreement and related loan documents (the
"Webster Loan Documents"), including executing and delivering to Webster a
certain Term Promissory Note in the original principal amount of $4,800,000.00,
dated as of June 30, 1999 (the "Webster Note").
Relying upon the covenants, agreements, representations and warranties contained
in this Amendment and in the Agreement, Bank is willing to modify the terms on
which it will extend credit to Borrower as set forth in the Agreement, as more
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particularly set forth herein, and Bank and Borrower agree as follows:
ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most recent Commercial
Loan Invoice sent to Borrower with respect to the Obligations under the Notes is
correct.
FINANCIAL COVENANTS. (a) The FUNDED DEBT TO EBITDA RATIO provision set forth in
the Financial Covenants section of the Agreement shall be deleted and the
following inserted in its place:
FUNDED DEBT TO EBITDA RATIO. Beginning April 30, 2000 and for the
following three fiscal quarters, Borrower shall maintain a ratio of
Funded Debt to EBITDA of not more than 2.25 to 1.00. Beginning April 30,
2001 and for the following three fiscal quarters, Borrower shall
maintain a ratio of Funded Debt to EBITDA of not more than 1.50 to 1.00.
At all times thereafter, Borrower shall maintain said ratio of not more
than 1.00 to 1.00. This covenant shall be tested on a rolling four
quarter basis. "Funded Debt" shall mean, as applied to any person or
entity, the sum of all indebtedness for borrowed money including,
without limitation, capital lease obligations, subordinated debt
(including debt subordinated to the Bank), and unreimbursed drawings
under letters of credit, or any other monetary obligation evidenced by a
note, bond, debenture or other agreement of that person or entity.
"EBITDA" shall mean earnings before interest, taxes, depreciation and
amortization.
(b) The FIXED CHARGE COVERAGE RATIO provision set forth in the Financial
Covenants section of the Agreement shall be deleted and the following inserted
in its place:
FIXED CHARGE COVERAGE RATIO. Beginning April 30, 2000 and for the
following three fiscal quarters, Borrower shall maintain a Fixed Charge
Coverage Ratio of not less than 1.50 to 1.00. Beginning April 30, 2001
and for all fiscal quarters thereafter, Borrower shall maintain a Fixed
Charge Coverage Ratio of not less than 1.75 to 1.00. This covenant shall
be tested on a rolling four quarter basis. "Fixed Charge Coverage" shall
mean the sum of net income plus taxes,
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depreciation, amortization, and interest expense less capital
expenditures not financed divided by the sum of interest expense and
scheduled amounts repaid on long term debt and capital lease
obligations during the prior four fiscal q quarters.
PREPAYMENT. The Bank hereby waives, in connection with the period ending April
30, 2000 only, Borrower's obligation pursuant to the Prepayment section of the
Agreement to pay an amount equal to 35% of Excess Cash Flow. Such obligation
shall, however, be in full force and effect for all subsequent periods.
LINE OF CREDIT NOTE. All references in the Loan Documents to the Line of Credit
Note shall be understood to mean the Line of Credit Note, as amended by that
certain First Allonge to 1999 Substitute Promissory Note by and between the
Borrower and Bank, dated as of even date herewith, in the original principal
amount of up to $8,000,000.00.
ACKNOWLEDGMENT. The Bank hereby acknowledges the closing of a transaction by and
between Novametrix and GE Marquette Medical Systems, Inc. ("Marquette") as more
particularly set forth in that certain Unit Purchase and Master Agreement dated
as of March 16, 2000 by and between Novametrix and Marquette (the "UPMA").
LOAN AGREEMENT. All references in the Loan Documents to the Agreement shall be
understood to mean the Agreement, as amended by this Amendment.
ACKNOWLEDGMENTS AND REPRESENTATIONS. Borrower acknowledges and represents that
the Agreement and other Loan Documents, as amended hereby, and the Webster Loan
Documents, are in full force and effect without any defense, counterclaim, right
or claim of set-off; that, after giving effect to this Amendment, no default or
event that with the passage of time or giving of notice would constitute a
default under the Loan Documents or the Webster Loan Documents has occurred, all
representations and warranties contained in the Loan Documents and in the
Webster Loan Documents are true and correct as of this date, all necessary
action to authorize the execution and delivery of this Amendment has
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been taken; and this Amendment is a modification of an existing obligation and
is not a novation.
COLLATERAL. Borrower acknowledges and confirms that there have been no changes
in the ownership of any collateral pledged to secure the Obligations (the
"Collateral") since the Collateral was originally pledged; Borrower acknowledges
and confirms that the Bank has, subject only to the Intercreditor Agreement,
existing, valid first priority security interests and liens in the Collateral;
and that such security interests and liens shall secure Borrower's Obligations
to Bank, including any modification of the Note or Loan Agreement, if any, and
all future modifications, extensions, renewals and/or replacements of the Loan
Documents.
CONDITIONS PRECEDENT. In addition to the Conditions Precedent identified in the
Agreement, the obligations of Bank to make any advances pursuant to the Loan
Documents or this Amendment (including, without limitation, under the Line of
Credit Note) are subject to the following conditions precedent: ADDITIONAL
DOCUMENTS. Receipt by Bank of such additional supporting documents as Bank or
its counsel may reasonably request. STOCK PURCHASE DOCUMENTS. Receipt and review
to Bank's reasonable satisfaction of the documents executed in connection with
the transaction contemplated by the UPMA. PAYMENT OF COMMITMENT FEE. Borrower
shall have paid to the Bank a one time commitment fee of $1,250.00 for the
amendments to the Loan as contemplated herein (including, without limitation, to
the Line of Credit Note). PREPAYMENT. Borrower shall have prepaid $1,000,000.00
of principal on each of the 1999 Term Note and the Webster Note. CONSENT AND
AMENDMENT. The Borrower shall have obtained the consent of Webster Bank to the
modifications to the Loan and the Loan Documents contemplated hereby and
Webster Bank's agreement to the inclusion of the increased amount under the
Line of Credit Note as a Loan (and not an Other Loan, as each of these terms is
defined in the Intercreditor Agreement) for purposes of the Intercreditor
Agreement; Webster Bank shall have executed an amendment to the Intercreditor
Agreement
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reflecting the foregoing. CERTIFICATE OF GOOD STANDING. Bank shall
have received from Borrower a certificate from the Secretary of State of the
state of Borrower's incorporation or organization, as applicable, as to the
good standing of Borrower. CERTIFICATE OF INCUMBENCY AND AUTHORIZATION. Bank
shall have received from Borrower a certificate of an appropriate officer of
Borrower as to the incumbency and signatures of the officers of Borrower
executing the Loan Documents and as to the adoption of resolutions authorizing
the amendments to the Loan Documents including, without limitation, the
increase to the amount of the Line of Credit Note. OPINION OF COUNSEL. Bank
shall have received a written opinion of the counsel of Borrower acceptable to
Bank that includes confirmation of the following: (a) The Borrower is duly
organized and validly existing under the laws of the jurisdictions where
Borrower is organized and has full power and authority to undertake the
activities contemplated by the Loan; There have been no changes, since June 30,
1999, to the Charter Documents or Operating Agreements of Borrower. (b) The
Loan Documents, as modified by documents executed in connection with this
Amendment, create a perfected lien on and security interest in the Collateral
(as defined in the Loan Documents). (c) The accuracy, as of the date hereof, of
the representations set forth in the Agreement in the Representations
Subparagraphs entitled "Authorization; Non-Contravention"; "Compliance with
Laws" as to the transaction contemplated by this Amendment and the documents
pertaining thereto; and "Organization and Authority." (d) This Amendment and
other Loan Documents executed in connection herewith have been duly executed
and delivered by Borrower and constitute the legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms. (e) No
registration with, consent of, approval of, or other action by, any federal,
state or other governmental authority or regulatory body to the execution and
delivery of this Agreement, the borrowing under this Agreement or other Loan
Documents, is required by law, or, if so required, such registration has been
made, and consent or approval given or such other appropriate action taken. (f)
The Loan and its terms do not violate any laws including, without limitation,
any usury laws of the jurisdictions where Borrower and any
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Collateral are located; such other matters and opinions as the Bank reasonably
requests.
JOINT AND SEVERAL OBLIGATIONS. The obligations of the Borrower hereunder and
under the Loan Documents shall be joint and several.
MISCELLANEOUS. This Amendment shall be construed in accordance with and governed
by the laws of the State of Connecticut without reference to conflicts of laws
principles. This Amendment and the other Loan Documents constitute the sole
agreement of the parties with respect to the subject matter thereof and
supersede all oral negotiations and prior writings with respect to the subject
matter thereof. No amendment of this Amendment, no other amendment to the
Agreement, and no waiver of any one or more of the provisions hereof or thereof
shall be effective unless set forth in writing and signed by the parties hereto.
The illegality, unenforceability or inconsistency of any provision of this
Amendment shall not in any way affect or impair the legality, enforceability or
consistency of the remaining provisions of this Amendment, the Agreement, as
modified hereby, or the other Loan Documents. The Agreement, as modified by this
Amendment, and the other Loan Documents are intended to be consistent. However,
in the event of any inconsistencies among the Agreement, as modified by this
Amendment, and any of the Loan Documents, the terms of the Notes, and then the
Agreement, as modified by this Amendment, shall control. This Amendment may be
executed in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all such
counterparts shall together constitute one and the same agreement. The terms
"Loan Documents" and "Obligations" shall have the meanings of such terms as
defined in the Agreement. Additional terms used in this Amendment which are
capitalized and not otherwise defined herein shall have the meanings ascribed
to such terms in the Loan Documents. Without limiting the generality of the
foregoing, the term "Loan Documents" does not include any swap
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agreements (as defined in 11 U.S.C. Section 101); the term "Obligations" shall
include, without limitation, all obligations under any swap agreements as
defined in 11 U.S.C. Section 101 between Borrower and Bank whenever executed.
CONNECTICUT PREJUDGMENT REMEDY WAIVER. EACH BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS AMENDMENT ARE COMMERCIAL TRANSACTIONS AND
HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON
PREJUDGMENT REMEDIES UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES OR
OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.
WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT THEY HAVE IRREVOCABLY
WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE.
PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this Agreement
and the Loan Documents were executed in the State of Connecticut and delivered
to Bank in the State of Connecticut.
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IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
NOVAMETRIX MEDICAL SYSTEMS INC.
By: /s/ William J. Lacourciere
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name: William J. Lacourciere
title: President and Chief Executive Officer
NTC TECHNOLOGY, INC.
By: /s/ Thomas M. Haythe
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name: Thomas M. Haythe
title: President
CHILDREN'S MEDICAL VENTURES, INC.
By: /s/ Joseph A. Vincent
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name: Joseph A. Vincent
title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ John H. Frost
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name: John H. Frost
title: Vice President
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