8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): September 2, 2008

Natus Medical Incorporated

(Exact name of registrant as specified in its charter)

000-33001

(Commission File Number)

Delaware	77-0154833
(State or other jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

1501 Industrial Road

San Carlos, CA 94070

(Address of principal executive offices)

650-802-0400

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On September 2, 2008, the Company executed the Second Amendment (the “Amendment”) to its Amended and Restated Credit Agreement with Wells Fargo Bank, National Association (Wells Fargo”). The Amendment corrects the leverage ratio in tier 1 of the applicable rate schedule and provides for Wells Fargo’s consent to the Company’s acquisition of NeuroCom International Inc. as a permitted investment. The credit facility contains covenants, including covenants relating to liquidity and other financial measurements, and provides for events of default, including failure to pay any interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the copies of the Second Amendment to Amended and Restated Credit Agreement attached hereto as Exhibit 10.1.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits. The following exhibits are filed herewith:

Exhibit No.	Description
10.1	Second Amendment to Amended and Restated Credit Agreement dated as of September 2, 2008 between Natus Medical Incorporated and Wells Fargo Bank, National Association.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NATUS MEDICAL INCORPORATED
	(Registrant)
Dated: September 4, 2008	By:	/s/ Steven J. Murphy
		Vice President Finance and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
10.1	Second Amendment to Amended and Restated Credit Agreement dated as of September 2, 2008 between Natus Medical Incorporated and Wells Fargo Bank, National Association.

EX-10.1

EXHIBIT 10.1

SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of September 2, 2008, between NATUS MEDICAL INCORPORATED, a Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

RECITALS

WHEREAS Borrower is currently indebted to Bank pursuant to the terms and conditions of the Amended and Restated Credit Agreement, dated as of November 28, 2007 (as amended, modified or supplemented prior to the date hereof, the “Credit Agreement”), between Borrower and Bank; and

WHEREAS Borrower has informed Bank that it desires to make an investment and it desires to receive Bank’s consent to make such investment; and

WHEREAS Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect such changes;

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree that the Credit Agreement shall be amended as follows; provided that nothing contained herein shall terminate any security interests, guaranties, subordinations or other documents in favor of Bank, all of which shall remain in full force and effect unless expressly amended hereby:

Section 1. Definitions. Each capitalized term used but not otherwise defined herein has the meaning assigned to it in the Credit Agreement.

Section 2. Amendments to Credit Agreement. Subject to Section 3 hereof, the Credit Agreement is hereby amended as follows:

(a) The definition of “Applicable Rate” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“Applicable Rate” means, from time to time, with respect to any Base Rate Loan, or LIBOR Loan, or with respect to the Unused Commitment Fees payable pursuant to Section 2.7(a), as the case may be, the applicable rate per annum set forth below (expressed in basis points) under the caption “LIBOR Spread,” “Base Rate Spread” or “Unused Commitment Fee Rate,” as the case may be, based upon, subject to Section 2.6(d), the Leverage Ratio as set forth in the most recent

Compliance Certificate received by Bank pursuant to Section 5.1(b)(vii) or Section 6.3(d), as applicable:

Tier	Leverage Ratio	LIBOR Spread	Base Rate Spread	Unused Commitment Fee Rate
1	Greater than or equal to 1.00	200.00	0.00	30.00
2	Less than 1.00 but greater than or equal to 0.50	175.00	0.00	20.00
3	Less than 0.50	150.00	0.00	12.50

(b) The definition of “Permitted Investments” in Section 1.1 of the Credit Agreement is hereby amended to add immediately after the last sentence of paragraph (j) thereof the following:

“; and

(k) An Eighteen Million Dollar ($18,000,000.00) investment by Borrower in the stock of NeuroCom International, Inc., an Oregon corporation, pursuant to documentation, copies of which were provided to Bank on or before the Second Amendment Closing Date.”

(c) The following definition is hereby added to Section 1.1 of the Credit Agreement in a manner that maintains alphabetical order:

“Second Amendment Closing Date” means September 2, 2008.

Section 3. Conditions Precedent. This Amendment, including, without limitation the amendments to the Credit Agreement contained herein, shall become effective as of the date first set forth above (the “Effective Date”) upon satisfaction of all of the conditions set forth in this Section 3 to the satisfaction of Bank; provided that, in the event such conditions are not so satisfied, then this Amendment shall be of no further force and effect:

(a) Bank shall have received each of the following, duly executed and delivered by each of the applicable parties thereto:

(i) this Amendment together with the Consent and Reaffirmation attached hereto; and

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(ii) such other documents as Bank may require under any other Section of this Amendment; and

(b) No Event of Default or event which, with the giving of notice, the lapse of time or both would constitute an Event of Default, shall have occurred and be continuing.

Section 4. Interpretation. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. This Amendment and the Credit Agreement shall be read together, as one document. The Recitals hereto, including the terms defined therein, are incorporated herein by this reference and acknowledged by Borrower to be true, correct and complete.

Section 5. Representations, Warranties and Covenants. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein (as amended hereby) as of the date of this Amendment. Borrower further certifies that as of the date of this Amendment there exists no Event of Default, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute an Event of Default.

Section 6. Further Assurances. Borrower will make, execute, endorse, acknowledge, and deliver any agreements, documents, or instruments, and take any and all other actions, as may from time to time be reasonably requested by Bank to perfect and maintain the validity and priority of the liens and security interests granted to Bank pursuant to the Credit Agreement and the other Loan Documents and to effect, confirm, or further assure or protect and preserve the interests, rights, and remedies of Bank under the Credit Agreement (as amended hereby) and the other Loan Documents.

Section 7. Counterparts. This Amendment may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes. Delivery of an executed counterpart of a signature page of this Amendment by telefacsimile transmission shall be as effective as delivery of a manually executed counterpart hereof.

Section 8. Governing Law. This Amendment shall be governed by and construed in accordance with the internal laws of the State of California.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above.

NATUS MEDICAL INCORPORATED, a Delaware corporation		WELLS FARGO BANK, NATIONAL ASSOCIATION
By:		By:
Name:	Steven J. Murphy	Name:	Alicia Kachmarik
Title:	Vice President Finance and Chief Financial Officer	Title:	Assistant Vice President

CONSENT AND REAFFIRMATION

The undersigned, a subsidiary of Natus Medical Incorporated (“Borrower”) who has executed a Continuing Guaranty in favor of Wells Fargo Bank, National Association (“Bank”), hereby: (i) consents to the foregoing Second Amendment to Amended and Restated Credit Agreement and Waiver; (ii) reaffirms its obligations under such Continuing Guaranty; (iii) reaffirms the waivers of each and every one of the defenses to such obligations as set forth in such Continuing Guaranty; and (iv) reaffirms that its obligations under such Continuing Guaranty are separate and distinct from the obligations of any other party under the Credit Agreement (as modified by the Second Amendment to Amended and Restated Credit Agreement and Waiver) and the other Loan Documents.

Dated as of September 2, 2008

GUARANTOR:

NATUS ACQUISITION CORPORATION
By:
Name:	Steven J. Murphy
Title:	Chief Financial Officer

CONSENT AND REAFFIRMATION