AMENDMENT NO. 5 TO CREDIT AGREEMENT
AMENDMENT NO. 5 TO CREDIT AGREEMENT (this “Amendment”), dated as of November 8, 2017, is entered into among BIO-REFERENCE LABORATORIES, INC., a New Jersey corporation (“Company”), the Subsidiary Borrowers party hereto (“Subsidiary Borrowers,” and together with Company, each a “Borrower” and, collectively, the “Borrowers”), the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as the administrative agent for the Lenders (the “Administrative Agent”).
W I T N E S S E T H :
WHEREAS, the Borrowers, the other Loan Parties party thereto, the Lenders party thereto, and the Administrative Agent have executed and delivered that certain Credit Agreement dated as of November 5, 2015, as amended by Amendment No. 1 to Credit Agreement dated as of February 29, 2016, as amended by Amendment No. 2 to Credit Agreement dated as of September 26, 2016, as amended by Amendment No. 3 to Credit Agreement dated as of March 17, 2017, and as amended by Amendment No. 4 to Credit Agreement dated as of August 7, 2017 (as further amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”); and
WHEREAS, the Borrowers have requested that the Lenders and the Administrative Agent make certain amendments to the Credit Agreement, and the Lenders party hereto, constituting all Lenders under the Credit Agreement, have agreed to such amendments, subject to the terms and conditions hereof.
NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, each of the Borrowers, the other Loan Parties, the Lenders and the Administrative Agent hereby covenant and agree as follows:
SECTION 1. Definitions. Unless otherwise specifically defined herein, each term used herein (and in the recitals above) which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. As of the date hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like “thereunder,” “thereof” and words of like import), shall mean and be a reference to the Credit Agreement, as amended hereby.
SECTION 2. Amendments to Credit Agreement. Effective as of the Amendment No. 5 Effective Date (as defined below), the Credit Agreement is hereby amended as follows:
(a) Amendments to Section 1.01.
(i) Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions in appropriate alphabetical order:
“Amendment No. 5 Effective Date” means November 8, 2017.
“Modified Availability” means, at any time, an amount equal to (a) the lesser of (i) the Aggregate Revolving Commitment and (ii) the Borrowing Base plus (b) Qualified Cash minus (c) the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings), all as determined by the Administrative Agent in its Permitted Discretion in accordance with this Agreement.
“Qualified Cash” means cash of any Loan Party on deposit in a Deposit Account (as defined in the Security Agreement) subject to a Deposit Account Control Agreement (as defined in the Security Agreement) but not to exceed $13,125,000 in the aggregate.
(ii) Section 1.01 of the Credit Agreement is amended by replacing the definitions of “Increased Reporting Period” and “Specified Post Closing Dividends” with the following:
“Increased Reporting Period” means any period (a) commencing on the date when Modified Availability is less than the greater of (i) $35,000,000 and (ii) 20% of the Aggregate Revolving Commitment, in each case for a period of five (5) consecutive Business Days, or an Event of Default occurs and is continuing, and (b) ending on the date when Modified Availability shall have been equal to or greater than the greater of (i) $35,000,000 and (ii) 20% of the Aggregate Revolving Commitment for a period of ten (10) consecutive days and no Event of Default is in existence.
“Specified Post Closing Dividends” means the following:
(a) a one-time cash dividend by the Company to Parent so long as (i) such dividend is made within fifteen (15) calendar days after the Effective Date, (ii) immediately before and after giving effect to such dividend no Default shall exist, (iii) after giving effect to such dividend the Company is Solvent, (iv) after giving effect to such dividend, Availability shall not be less than the greater of (A) $50,000,000 and (B) 25% of the Aggregate Revolving Commitment, and (v) prior to such dividend, the Borrower Representative shall have delivered to the Administrative Agent an officer’s certificate from a Financial Officer of the Borrower Representative, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the foregoing conditions are satisfied (such dividend, the “Initial Post Closing Dividend”); and
(b) other cash dividends by the Company to Parent (through Intermediate Holdco if Intermediate Holdco is in existence) made after the date that is fifteen (15) calendar days after the Effective Date so long as (i) immediately before and after giving effect to such dividend no Default shall exist, (ii) after giving effect to such dividend Availability shall not be less than the greater of (A) $26,250,000 and (B) 15% of the Aggregate Revolving Commitment, (iii) after giving pro forma effect to such dividend, the Company shall have a Fixed Charge Coverage
Ratio of not less than 1.15 to 1.00 as of the last day of the most recent fiscal quarter or year, as applicable, for which financial statements and a Compliance Certificate have been delivered to the Administrative Agent pursuant to Sections 5.01(a) or (b) and (d), and (iv) prior to such dividend, the Borrower Representative shall have delivered to the Administrative Agent an officer’s certificate from a Financial Officer of the Borrower Representative, containing calculations with respect to clause (iii) and otherwise in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the foregoing conditions are satisfied.
(b) Section 5.01(f) of the Credit Agreement is amended and restated so that it reads, in its entirety, as follows:
(f) on or before each Borrowing Base Reporting Date, as of the period then ended, a Borrowing Base Certificate and supporting information in connection therewith, together with any additional reports with respect to the Borrowing Base as the Administrative Agent may reasonably request; provided, however, that during any Increased Reporting Period (i) if the Borrower does not have the information to calculate the actual amount of Additions, Deductions and Collateral Ineligibles (as such terms are used in the Borrowing Base Certificate) with respect to the gross Accounts set forth in a weekly Borrowing Base, the Borrower may submit a Borrowing Base Certificate utilizing amounts for such items which shall be based upon percentages of Additions, Deductions and Collateral Ineligibles (determined in relation to the gross Accounts) in each case reflected on the most recently delivered monthly Borrowing Base Certificate (whether delivered with respect to a period prior to such Increased Reporting Period or pursuant to clause (ii) below); provided further, that once the Borrower has determined the actual amounts of Additions, Deductions and Collateral Ineligibles (as such terms are used in the Borrowing Base Certificate) with respect to the gross Accounts, it shall update the most recently delivered Borrowing Base Certificate within five (5) Business Days thereof and (ii) for each fiscal month, the Borrower shall also be required to deliver a Borrowing Base Certificate within twenty (20) Business Days after the end of such fiscal month, which Borrowing Base Certificate shall use actual amounts of Additions, Deductions and Collateral Ineligibles;
(c) Exhibit B hereto (Borrowing Base Certificate) hereby replaces existing Exhibit B to the Credit Agreement in its entirety.
SECTION 3. Conditions Precedent. This Amendment shall become effective on the date (such date, the “Amendment No. 5 Effective Date”) the following conditions precedent shall have been satisfied:
(a) receipt by the Administrative Agent of signatures to this Amendment from the parties listed on the signature pages hereto;
(b) the Administrative Agent shall have received from the Borrowers (or the Administrative Agent shall be satisfied with arrangements made for the payment thereof) all other costs, fees, and expenses owed by the Borrowers to the Administrative Agent in connection with
this Amendment, including, without limitation, reasonable attorneys’ fees and expenses, in accordance with Section 9.03 of the Credit Agreement; and
(c) the Administrative Agent shall have received from the Borrowers each of the original notes evidencing the Special Intercompany Loans.
SECTION 4. Miscellaneous.
(a) Representations and Warranties. To induce the Administrative Agent and Lenders to enter into this Amendment, the Borrowers hereby represent and warrant to the Administrative Agent and the Lenders that all representations and warranties of the Borrowers contained in Article III of the Credit Agreement or any other Loan Document are true and correct in all material respects with the same effect as though made on and as of the Amendment No. 5 Effective Date (except with respect to representations and warranties made as of an expressed date, which representations and warranties are true and correct in all material respects as of such date).
(b) No Offset. To induce the Administrative Agent and Lenders to enter into this Amendment, the Borrowers hereby acknowledge and agree that, as of the date hereof, and after giving effect to the terms hereof, there exists no right of offset, defense, counterclaim, claim, or objection in favor of the Borrowers or arising out of or with respect to any of the loans or other obligations of the Borrowers owed by the Borrowers under the Credit Agreement or any other Loan Document.
(c) Loan Document. The parties hereto hereby acknowledge and agree that this Amendment is a Loan Document.
(d) Effect of Amendment. Except as set forth expressly hereinabove and in Section 4(m) below, all terms of the Credit Agreement and the other Loan Documents shall be and remain in full force and effect, and shall constitute the legal, valid, binding, and enforceable obligations of the Borrowers, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(e) No Novation or Mutual Departure. The Borrowers expressly acknowledge and agree that (i) this Amendment does not constitute or establish, a novation with respect to the Credit Agreement or any of the other Loan Documents, or a mutual departure from the strict terms, provisions, and conditions thereof, other than with respect to the amendments set forth in Section 2 above and the limited waiver set forth in Section 4(m) below, and (ii) nothing in this Amendment shall affect or limit the Administrative Agent’s or any Lender’s right to (x) demand payment of the Obligations under, or demand strict performance of the terms, provisions and conditions of, the Credit Agreement and the other Loan Documents (in each case, as amended hereby and subject to
the limited waiver set forth in Section 4(m) below), as applicable, (y) exercise any and all rights, powers, and remedies under the Credit Agreement or the other Loan Documents (in each case, as amended hereby and subject to the limited waiver set forth in Section 4(m) below) or at law or in equity, or (z) do any and all of the foregoing, immediately at any time during the occurrence of an Event of Default and in each case, in accordance with the terms and provisions of the Credit Agreement and the other Loan Documents.
(f) Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. This Amendment may be executed by each party on separate copies, which copies, when combined so as to include the signatures of all parties, shall constitute a single counterpart of this Amendment.
(g) Fax or Other Transmission. Delivery by one or more parties hereto of an executed counterpart of this Amendment via facsimile, telecopy, or other electronic method of transmission pursuant to which the signature of such party can be seen (including, without limitation, Adobe Corporation’s Portable Document Format) shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by facsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability, or binding effect of this Amendment.
(h) Recitals Incorporated Herein. The preamble and the recitals to this Amendment are hereby incorporated herein by this reference.
(i) Section References. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.
(j) Governing Law. This Amendment shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the State of New York, but giving effect to federal laws applicable to national banks.
(k) Severability. Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.
(l) Reaffirmation of Loan Parties. Each Loan Party (i) consents to the execution and delivery of this Amendment, (ii) reaffirms all of its obligations and covenants under the Loan
Documents (including, without limitation, the Collateral Documents and the Loan Guaranty) to which it is a party, and (iii) agrees that, except to the extent amended hereby, none of its respective obligations and covenants under the Loan Documents shall be reduced or limited by the execution and delivery of this Amendment.
(m) Waiver by Lenders of Certain Items. Subject to the satisfaction of the conditions precedent set forth in Section 3 above, the Lenders hereby waive any Default or Event of Default that has occurred and is continuing as of the date hereof solely as a result of the Loan Parties’ failure on or prior to the date hereof to (i) deliver a Borrowing Base Certificate to the Administrative Agent on a timely basis during any Increased Reporting Report and (ii) deliver the original notes evidencing the Special Intercompany Loans to the Administrative Agent as required by the Loan Documents. This waiver is an accommodation, and the Loan Parties acknowledge and agree that the Lenders shall require strict compliance with the Credit Agreement, as amended by this Amendment, hereafter.
[SIGNATURES ON FOLLOWING PAGES.]
IN WITNESS WHEREOF, the Borrowers, the other Loan Parties, the Administrative Agent and the Lenders have caused this Amendment to be duly executed by their respective duly authorized officers as of the day and year first above written.
BIO-REFERENCE LABORATORIES, INC.
FLORIDA CLINICAL LABORATORY, INC.
MERIDIAN CLINICAL LABORATORY
/s/ Adam Logal
Director, Vice President
OTHER LOAN PARTIES:
BRLI-GENPATH DIAGNOSTICS, INC.
GENEDX MENA LLC
/s/ Adam Logal
Director, Vice President
Approved for Signature
OPKO Legal Department
November 8, 2017
[BRLI – Amendment No. 5 to Credit Agreement]
[BRLI – Amendment No. 5 to Credit Agreement]
JPMORGAN CHASE BANK, N.A.,
Individually as a Lender and as Administrative
Agent, Issuing Bank and Swingline Lender
/s/ Eric A. Anderson
Eric A. Anderson
[BRLI – Amendment No. 5 to Credit Agreement]
BORROWING BASE CERTIFICATE
[PLEASE SEE ATTACHED]