DELAWARE | 001-36443 | 27-2977810 | ||
(State of Incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description |
10.1 | Eighth Amendment dated October 29, 2015 to Credit Agreement dated October 29, 2012, by and among K2M Holdings, Inc., as the guarantor, K2M, Inc. and K2M UK Limited, as borrowers, and Silicon Valley Bank and Comerica Bank as lenders. |
K2M GROUP HOLDINGS, INC. | |||
Date: | November 3, 2015 | By: | /s/ Gregory S. Cole |
Name: Title: | Gregory S. Cole Chief Financial Officer |
1. | Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows: |
a. | The cover page of the Credit Agreement is hereby amended by deleting the number “$40,000,000” therefrom and substituting in its stead the number “$55,000,000”. |
b. | The recitals of the Credit Agreement are hereby amended by amending and restating the second recital thereof in its entirety as follows: |
c. | Section 1.1 of the Credit Agreement is hereby amended as follows: |
i. | By amending and restating the definition of “Applicable Margin” in its entirety as follows: |
ii. | By amending and restating the definition of “Borrowing Base” in its entirety as follows: |
iii. | By amending the definition of “Eligible Accounts” by deleting the phrase “ninety (90) days” from clause (l)(i) thereof and substituting in its stead the phrase “one hundred twenty (120) days”. |
iv. | By amending and restating the definition of “Fee Letter” in its entirety as follows: |
v. | By amending the definition of “Revolving Commitment” by amending and restating the second sentence thereof in its entirety as follows: |
vi. | By amending the definition of “Unintentional Overadvance” by adding the phrase “, a reduction of funds of the Borrower and its Subsidiaries on deposit with one or more of the Lenders or their Affiliates” immediately prior to the phrase “or misrepresentation by the Loan Parties” therein. |
vii. | By amending and restating the definition of “Revolving Termination Date” in its entirety as follows: |
viii. | By adding the following new definitions thereto in appropriate alphabetical order: |
d. | Section 2.4(d) of the Credit Agreement is hereby amended and restated in its entirety as follows: |
e. | Section 2.8(a) of the Credit Agreement is hereby amended by amending and restating the first sentence thereof in its entirety as follows: |
f. | Section 2.10 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
g. | Section 2.15(a) of the Credit Agreement is hereby amended by amending and restating the first sentence thereof in its entirety as follows: |
h. | Section 4.23 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
i. | Section 6.10 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
j. | The Exhibits to the Credit Agreement are hereby amended by deleting Exhibit G (Transaction Report) thereto and substituting in its stead the Exhibit G attached hereto as Exhibit A. |
k. | The Schedules to the Credit Agreement are hereby amended by deleting Schedule 1.1A (Commitments and Aggregate Exposure Percentages) thereto and substituting in its stead the Schedule 1.1A attached hereto as Exhibit B. |
2. | Conditions Precedent to Effectiveness. This Amendment shall not be effective until each of the following conditions precedent has been fulfilled to the satisfaction of the Administrative Agent: |
a. | This Amendment shall have been duly executed and delivered by the respective parties hereto. The Administrative Agent shall have received a fully executed copy hereof. |
b. | The Administrative Agent shall have received an updated Perfection Certificate dated as of the Eighth Amendment Effective Date. |
c. | The Agent shall have received evidence acceptable to it that all action on the part of the Loan Parties necessary for the valid execution, delivery and performance by the Loan Parties of this Amendment shall have been duly and effectively taken. |
d. | All necessary consents and approvals to this Amendment shall have been obtained. |
e. | Prior to and immediately after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing. |
f. | Prior to and immediately after giving effect to this Amendment, (i) each of the representations and warranties of the Loan Parties contained in the Credit Agreement, any other Loan Document or in any document or instrument delivered pursuant to or in connection with the Loan Documents or this Amendment, are true and correct on and as of the effective date of this Amendment (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date), and (ii) no Default or Event of Default exists on the date hereof. |
g. | The Lenders and the Administrative Agent shall have received payment from the Borrower of all costs and expenses required to be paid pursuant to Section 4 of this Amendment. |
h. | The Lenders and the Administrative Agent shall have received payment from the Borrower of all fees required to be paid pursuant to the Fee Letter. |
i. | The Administrative Agent shall have received a Transaction Report reflecting the Borrowing Base as of the Eighth Amendment Effective Date (after giving effect to this Amendment). |
j. | The Administrative Agent shall have received executed legal opinions of Simpson, Thacher & Bartlett LLP, counsel to the Loan Parties, each addressed to the Administrative Agent and the Lenders, each in form and substance reasonably satisfactory to the Administrative Agent. Such legal opinions shall cover such matters incident to the transactions contemplated by this Amendment as the Administrative Agent may reasonably require. |
k. | The Administrative Agent shall have received such other documents, instruments and agreements as it may reasonably request, each in form and substance reasonably satisfactory to the Administrative Agent. |
3. | Post-Eighth Amendment Effective Date Covenants. The Loan Parties hereby covenant and agree as follows: |
a. | On or before November 3, 2015 (or such later date as the Administrative Agent may agree in its sole discretion), the Loan Parties shall deliver to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, updated schedules to the Credit Agreement, the Guarantee and Collateral Agreement and the other Security Documents, in each case reflecting disclosures required to be set forth thereon to render the related representations and warranties true and correct as of the Eighth Amendment Effective Date. Upon the Administrative Agent’s written notification to the Borrower of its acceptance of such updated schedules, each representation and warranty set forth in the Loan Documents (including, without limitation, those set forth in Sections 4.1, 4.8, 4.13, 4.15, 4.19, 4.27, 7.2, 7.3 and 7.8 of the Credit Agreement) that are specified “as of the Fourth Amendment Effective Date”, “as of the date hereof” or any other specific date shall be deemed to refer to such representations and warranties as of the Eighth Amendment Effective Date (rather than as of such earlier date). |
b. | The Loan Parties shall deliver to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, (i) on or before November 9, 2015 (or such later date as the Administrative Agent may agree in its sole discretion), insurance certificates, and (ii) on or before November 23, 2015 (or such later date as the Administrative Agent may agree in its sole discretion), endorsements, in each case for currently effective policies, which certificates and endorsements satisfy the requirements of Section 6.6 of the Credit Agreement and Section 5.2(b) of the Guarantee and Collateral Agreement. |
c. | On or before November 13, 2015 (or such later date as the Administrative Agent may agree in its sole discretion), the Loan Parties shall deliver to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, such amendments to the Intellectual Property Security Agreements as the Administrative Agent may reasonably require to evidence the Lien in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, of record with the USPTO, the USCRO and any similar recording office in the United Kingdom, on all Intellectual Property described therein. |
d. | The Loan Parties shall use commercially reasonable efforts to deliver to the Administrative Agent, on or before November 30, 2015 (or such later date as the Administrative Agent may agree in its sole discretion) and in form and substance satisfactory to the Administrative Agent, a collateral access agreement with respect to the Borrower’s assets located at 835 101st Avenue SE, Olympia, Washington 98501, executed and delivered by OrthoSolutions NW, LLC (as bailee). |
4. | Costs and Expenses. The Borrower shall pay to the Administrative Agent all reasonable costs, out-of-pocket expenses, and fees and charges of every kind incurred by the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto or thereto (which costs include, without limitation, the reasonable fees, charges and disbursements of counsel for the Administrative Agent). |
5. | Ratification of Loan Documents; Further Assurances. |
a. | The Loan Parties hereby ratify, confirm and reaffirm each of the terms and conditions of the Loan Documents to which each is a party. The Loan Parties further acknowledge and agree that (i) except as specifically modified in this Amendment, all terms and conditions of the Loan Documents shall remain in full force and effect, and (ii) this Amendment constitutes a Loan Document. |
b. | The Loan Parties hereby ratify, confirm and reaffirm that all security interests and liens granted pursuant to the Loan Documents secure and shall continue to secure the payment and performance of all of the Obligations pursuant to the Loan Documents, whether now existing or hereafter arising. |
c. | The Loan Parties shall cooperate with the Administrative Agent and shall execute and deliver to the Administrative Agent such further instruments and documents as the Administrative Agent shall reasonably request to carry out to its satisfaction the transactions contemplated by this Amendment and the other Loan Documents. |
6. | Representations and Warranties. The Loan Parties hereby represent, warrant, and covenant to the Administrative Agent and the Lenders as follows: |
a. | The Loan Parties hereby represent and warrant as of the date hereof that (i) each of the representations and warranties of the Loan Parties contained in the Credit Agreement, any other Loan Document or in any document or instrument delivered pursuant to or in connection with the Loan Documents or this Amendment, are true and correct on and as of the effective date of this Amendment (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date), and (ii) no Default or Event of Default exists on the date hereof. |
b. | This Amendment is, and each other Loan Document to which it is or will be a party, when executed and delivered by each Loan Party that is a party thereto, will be the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and equitable principals (whether enforcement is sought by proceedings in equity or at law). |
c. | The execution and delivery by each Loan Party of this Amendment and the performance by each Loan Party of its obligations under the Credit Agreement, as amended by this Amendment, and under the other Loan Documents (i) have been duly authorized by all necessary corporate action on the part of such Loan Party, (ii) will not violate any provisions of the certificate of incorporation or bylaws such Loan Party and (iii) will not constitute a violation by such Loan Party of any applicable material Requirement of Law. |
d. | Each Loan Party acknowledges that the Administrative Agent and the Lenders have acted in good faith and has conducted in a commercially reasonable manner its relationships with each Loan Party in connection with this Amendment and in connection with the other Loan Documents. Each Loan Party understands and acknowledges that the Administrative Agent and the Lenders are entering into this Amendment in reliance upon, and in partial consideration for, the above representations, warranties, and acknowledgements, and agrees that such reliance is reasonable and appropriate. |
7. | No Defenses. The Loan Parties hereby acknowledge and agree that the Loan Parties have no offsets, defenses, claims, or counterclaims against the Administrative Agent or the Lenders or any of their respective, officers, directors, employees, attorneys, representatives, successors or assigns, with respect to the Obligations, or otherwise, and that if any Loan Party now has, or ever did have, any offsets, defenses, claims, or counterclaims against the Administrative Agent or the Lenders or any of their respective, officers, directors, employees, attorneys, representatives, successors or assigns, whether known |
8. | Continuing Validity. The Loan Parties understand and agree that in modifying the existing Obligations, the Administrative Agent and the Lenders are relying upon the Loan Parties representations, warranties, and agreements, as set forth in the Loan Documents. Except as expressly modified pursuant to this Amendment, the terms of the Loan Documents remain unchanged and in full force and effect. The Administrative Agent’s and the Lenders’ agreement to modifications to the existing Obligations pursuant to this Amendment in no way shall obligate the Administrative Agent or the Lenders to make any future modifications to the Obligations. It is the intention of the Administrative Agent, the Lenders, the Borrower and Holdings to retain all makers of the Loan Documents as liable parties, unless the party is expressly released by the Administrative Agent in writing. No maker will be released by virtue of this Amendment. |
9. | Governing Law/Submission To Jurisdiction; Waivers. Sections 10.13 and 10.14 of the Credit Agreement are hereby incorporated by reference in their entirety and shall apply to the terms of this Amendment. |
10. | Counterparts. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile or other electronic mail transmission shall be effective as delivery of a manually executed counterpart hereof (save in the case of UK Borrower where delivery of an executed copy of this Amendment by facsimile or other electronic mail transmission shall be effective as delivery of a manually executed version of this Amendment). A set of the copies of this Amendment signed by all the parties shall be lodged with the Borrower and the Administrative Agent. |
11. | Binding Effect. The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective representatives, permitted successors and assigns. |
12. | Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. |
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