exv10w1



 




EXHIBIT
10.1



FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT




     This FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT (this “First Amendment”) is
dated as of October 29, 2007, by and among American Medical Systems, Inc., a Delaware corporation
(“Borrower”), each of the other Credit Parties which is a signatory hereto and CIT
Healthcare LLC, as Administrative Agent (in such capacity, together with its permitted successors
in such capacity, “Administrative Agent”).



BACKGROUND




     A. Borrower, Guarantors and Administrative Agent are parties to that certain Credit and
Guaranty Agreement dated as of July 20, 2006 (the “Original Credit Agreement;” and as
amended by this First Amendment the “Credit Agreement”), by and among Borrower, American
Medical Systems Holdings, Inc., a Delaware corporation (“Holdings”), as a Guarantor,
certain direct and indirect subsidiaries of Holdings (other than Borrower), as Guarantors, the
Lenders from time to time party thereto, CIT Capital Securities LLC, as Co-Lead Arranger and as
Sole Bookrunner, KeyBank National Association, as Co-Lead Arranger and as Syndication Agent, CIT
Healthcare LLC, as Administrative Agent and General Electric Capital Corporation, as Documentation
Agent, pursuant to which Lenders have made loans and advances to Borrower for the account of
Borrower, as described in the Original Credit Agreement, and as security therefor, each Credit
Party has granted to Collateral Agent and Lenders a lien on all of its assets.



     B. Borrower has requested that Administrative Agent and Lenders amend the Original Credit
Agreement to amend and restate certain of the financial tests and covenants provided in Section 6.8
thereof.



     C. Administrative Agent, on its behalf and on behalf of the Lenders (at the direction and
consent of the Lenders), is willing to amend the Original Credit Agreement, provided that Credit
Parties enter into this First Amendment upon the terms and conditions set forth herein.



     D. Terms used herein but not defined herein shall have the meanings assigned to them in the
Original Credit Agreement.



AGREEMENT




     NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:



SECTION 1




AMENDMENT TO CREDIT AGREEMENT




     Upon and subject to fulfillment of the conditions precedent under Section 3 of this First
Amendment, the following provisions of the Credit Agreement shall be amended as set forth below.



 









 





     1.1 Section 6.8 of the Original Credit Agreement is hereby amended by amending and restating
subsections (a) and (b) thereof to read as follows:



     “(a) Interest Coverage Ratio. Borrower shall not permit the Interest
Coverage Ratio as of the day nearest to the period ending in the table below,
beginning with the period ending September 30, 2006, to be less than the correlative
ratio indicated:



	 	 	 	 	 
	Fiscal Quarter Ended	 	 	 
	Nearest to the Period	 	Interest Coverage	 
	Ending Below	 	Ratio	 
	September 30, 2006
	 	 	2.50 to 1.00	 
	December 31, 2006
	 	 	2.50 to 1.00	 
	March 31, 2007
	 	 	2.75 to 1.00	 
	June 30, 2007
	 	 	3.00 to 1.00	 
	September 30, 2007
	 	 	3.25 to 1.00	 
	December 31, 2007
	 	 	3.25 to 1.00	 
	March 31, 2008
	 	 	3.25 to 1.00	 
	June 30, 2008
	 	 	3.50 to 1.00	 
	September 30, 2008
	 	 	3.50 to 1.00	 
	December 31, 2008
	 	 	3.75 to 1.00	 
	March 31, 2009
	 	 	3.75 to 1.00	 
	June 30, 2009
	 	 	3.75 to 1.00	 
	September 30, 2009
	 	 	4.00 to 1.00	 
	December 31, 2009
	 	 	4.00 to 1.00	 
	March 31, 2010
	 	 	4.00 to 1.00	 
	June 30, 2010
	 	 	4.00 to 1.00	 
	September 30, 2010
	 	 	4.00 to 1.00	 
	December 31, 2010
	 	 	4.00 to 1.00	 
	March 31, 2011
	 	 	4.00 to 1.00	 
	June 30, 2011
	 	 	4.00 to 1.00	 
	September 30, 2011
	 	 	4.00 to 1.00	 
	December 31, 2011
	 	 	4.00 to 1.00	 
	March 31, 2012
	 	 	4.00 to 1.00	 






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	Fiscal Quarter Ended	 	 	 
	Nearest to the Period	 	Interest Coverage	 
	Ending Below	 	Ratio	 
	June 30, 2012
	 	 	4.00 to 1.00	 







(b) Total Leverage Ratio. Borrower shall not permit the Total Leverage
Ratio as of the day nearest to the period ending in the table below and at all times
during such period, beginning with the period ending September 30, 2006, to exceed
the correlative ratio indicated:



	 	 	 	 	 
	Fiscal Quarter Ended	 	 	 
	Nearest to the Period	 	Total Leverage	 
	Ending Below	 	Ratio	 
	September 30, 2006
	 	 	7.25 to 1.00	 
	December 31, 2006
	 	 	6.95 to 1.00	 
	March 31, 2007
	 	 	6.50 to 1.00	 
	June 30, 2007
	 	 	6.00 to 1.00	 
	September 30, 2007
	 	 	5.50 to 1.00	 
	December 31, 2007
	 	 	5.50 to 1.00	 
	March 31, 2008
	 	 	5.25 to 1.00	 
	June 30, 2008
	 	 	5.00 to 1.00	 
	September 30, 2008
	 	 	4.75 to 1.00	 
	December 31, 2008
	 	 	4.50 to 1.00	 
	March 31, 2009
	 	 	4.25 to 1.00	 
	June 30, 2009
	 	 	4.00 to 1.00	 
	September 30, 2009
	 	 	3.75 to 1.00	 
	December 31, 2009
	 	 	3.50 to 1.00	 
	March 31, 2010
	 	 	3.25 to 1.00	 
	June 30, 2010
	 	 	3.00 to 1.00	 
	September 30, 2010
	 	 	3.00 to 1.00	 
	December 31, 2010
	 	 	3.00 to 1.00	 
	March 31, 2011
	 	 	3.00 to 1.00	 
	June 30, 2011
	 	 	3.00 to 1.00	 
	September 30, 2011
	 	 	3.00 to 1.00	 






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	Fiscal Quarter Ended	 	 	 
	Nearest to the Period	 	Total Leverage	 
	Ending Below	 	Ratio	 
	December 31, 2011
	 	 	3.00 to 1.00	 
	March 31, 2012
	 	 	3.00 to 1.00	 
	June 30, 2012
	 	 	3.00 to 1.00”	 






     1.2 Section 6.8 of the Original Credit Agreement is hereby amended by amending and restating
subsections (d) and (e) thereof to read as follows:




“(d) Fixed Charge Coverage Ratio. Borrower shall not permit the Fixed
Charge Coverage Ratio as of the day nearest to the period ending in the table below,
beginning with the period ending September 30, 2006, to be less than the correlative
ratio indicated:



	 	 	 	 	 
	Fiscal Quarter Ended	 	 	 
	Nearest to the Period	 	Fixed Charge	 
	Ending Below	 	Coverage Ratio	 
	September 30, 2006
	 	 	1.05 to 1.00	 
	December 31, 2006
	 	 	1.05 to 1.00	 
	March 31, 2007
	 	 	1.05 to 1.00	 
	June 30, 2007
	 	 	1.15 to 1.00	 
	September 30, 2007
	 	 	1.15 to 1.00	 
	December 31, 2007
	 	 	1.25 to 1.00	 
	March 31, 2008
	 	 	1.25 to 1.00	 
	June 30, 2008
	 	 	1.25 to 1.00	 
	September 30, 2008
	 	 	1.40 to 1.00	 
	December 31, 2008
	 	 	1.40 to 1.00	 
	March 31, 2009
	 	 	1.50 to 1.00	 
	June 30, 2009
	 	 	1.50 to 1.00	 
	September 30, 2009
	 	 	1.50 to 1.00	 
	December 31, 2009
	 	 	1.50 to 1.00	 
	March 31, 2010
	 	 	1.50 to 1.00	 
	June 30, 2010
	 	 	1.50 to 1.00	 
	September 30, 2010
	 	 	1.50 to 1.00	 






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	Fiscal Quarter Ended	 	 	 
	Nearest to the Period	 	Fixed Charge	 
	Ending Below	 	Coverage Ratio	 
	December 31, 2010
	 	 	1.50 to 1.00	 
	March 31, 2011
	 	 	1.50 to 1.00	 
	June 30, 2011
	 	 	1.50 to 1.00	 
	September 30, 2011
	 	 	1.50 to 1.00	 
	December 31, 2011
	 	 	1.50 to 1.00	 
	March 31, 2012
	 	 	1.50 to 1.00	 
	June 30, 2012
	 	 	1.50 to 1.00	 







(e) Maximum Consolidated Capital Expenditures. Borrower shall not, and
shall not permit Holdings or any of its Subsidiaries to, make or incur Consolidated
Capital Expenditures, in any Fiscal Year indicated below, in excess of the
corresponding amount set forth below opposite such Fiscal Year:



	 	 	 	 	 
	Fiscal	 	Consolidated Capital	 
	Year	 	Expenditures	 
	2006
	 	$	35,000,000	 
	2007
	 	$	16,500,000	 
	2008
	 	$	15,000,000	 
	2009
	 	$	17,500,000	 
	2010
	 	$	20,000,000	 
	2011
	 	$	22,500,000	 
	2012
	 	$	30,000,000”	 






SECTION 2




REPRESENTATIONS, WARRANTIES, NO ADVERSE CLAIMS




     To induce Administrative Agent and Lenders to amend the Original Credit Agreement, each Credit
Party represents and warrants to Administrative Agent, on its behalf and on behalf of the Lenders,
and agrees, that:



     2.1 Compliance with Credit Documents; No Defaults or Event of Default. On the date
hereof each of the Credit Parties is in compliance with the terms and provisions set forth in each
of the Credit Documents (as modified by this First Amendment), and no Default or Event of Default
has occurred and is continuing.



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     2.2 Representations and Warranties. On the date hereof, the representations and
warranties of each Credit Party set forth in the Credit Agreement (as modified by this First
Amendment) are true and correct with the same effect as though such representations and warranties
had been made on the date hereof, except to the extent that such representations and warranties and
covenants expressly relate to an earlier date, in which case they shall be true and correct as of
such earlier date.



     2.3 Corporate Authority of Credit Parties. Each Credit Party has full power and
authority to enter into this First Amendment and to incur and perform the obligations provided for
under this First Amendment and the Credit Agreement, all of which have been duly authorized by all
proper and necessary corporate action. No consent or approval of stockholders or of any public
authority or regulatory body is required as a condition to the validity or enforceability of this
First Amendment.



     2.4 First Amendment as Binding Agreement. This First Amendment constitutes the valid
and legally binding obligation of each of the Credit Parties, fully enforceable against each such
Credit Party, in accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or
by equitable principles relating to enforceability.



     2.5 No Conflicting Agreements. The execution and performance by each Credit Pary of
this First Amendment will not (i) violate any provision of law, any order of any court or other
agency of government, or the Organizational Documents of any Credit Party, or (ii) violate any
indenture, contract, agreement or other instrument to which any Credit Party is a party, or by
which its property is bound, or be in conflict with, result in a breach of or constitute (with due
notice and/or lapse of time) a default under, any such indenture, contract, agreement or other
instrument or result in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of any Credit Party.



     2.6 No Changes to Organizational Documents. There have been no changes in the
Organizational Documents of any of the Credit Parties since the execution and delivery of the
Original Credit Agreement.



     2.7 No Material Adverse Effect. Since December 31, 2006, no event or circumstance
shall have occurred which has had or could reasonably be expected to have a Material Adverse
Effect.



     2.8 No Adverse Claim. Each Credit Party warrants, acknowledges and agrees that no
events have been taken place and no circumstances exist at the date hereof which would give any
Credit Party a basis to assert a claim against Administrative Agent or Lenders, or a defense,
offset or counterclaim to any claim of the Administrative Agent or Lenders with respect to the
Obligations, and each Credit Party hereby releases any such claims.



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SECTION 3




CONDITIONS PRECEDENT




     The agreement by Administrative Agent and Lenders to amend the Original Credit Agreement is
subject to satisfaction of all of the following conditions precedent:



     3.1 The Credit Parties shall have executed and delivered to Administrative Agent a fully
executed copy of this First Amendment.



     3.2 The Credit Parties shall have delivered to Administrative Agent certified copies of all
documents evidencing any necessary corporate action, consents of third parties and government
approvals, if any, with respect to this First Amendment, and any other documents reasonably
requested by Administrative Agent including, without limitation, resolutions or consents of the
board of directors of the Credit Parties authorizing the execution, delivery and performance of
this First Amendment.



SECTION 4




GENERAL PROVISIONS




     4.1 Except as amended by this First Amendment, the terms and provisions of the Original Credit
Agreement and each of the other Credit Documents shall remain in full force and effect and are
hereby affirmed, confirmed and ratified in all respects. Each Credit Party ratifies, confirms and
affirms without condition, all liens and security interests granted to the Administrative Agent and
Lenders pursuant to the Credit Documents (as amended by this First Amendment), and such liens and
security interests shall continue to secure the Obligations, including but not limited to, all
Loans made by the Lenders to Borrower under the Credit Agreement.



     4.2 This First Amendment shall be construed in accordance with and governed by the laws of the
State of New York without regard to conflict of laws principles thereof, and the obligations of
Borrower under this First Amendment is and shall arise absolutely and unconditionally upon the
execution and delivery of this First Amendment.



     4.3 This First Amendment shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and receipt by Borrower and Administrative Agent of written or
telephonic notification of such execution and authorization of delivery thereof.



     4.4 Each of the Credit Parties agrees to pay all out-of-pocket expenses incurred by
Administrative Agent and Lenders in connection with the preparation, negotiation and consummation
of this First Amendment, and all other documents related thereto, including without limitation, the
reasonable fees and expense of counsel to the Administrative Agent, and any filing fees required in
connection with the filing of any documents necessary to consummate the provisions of this First
Amendment.



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     4.5 On or after the effective date hereof, each reference in the Credit Agreement or any of
the Original Credit Documents to this “Agreement” or works of like import, shall unless the context
otherwise requires, be deemed to refer to the Original Credit Agreement as amended hereby.



[SIGNATURE PAGES FOLLOW]




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     IN WITNESS WHEREOF, each Credit Party and Administrative Agent, on its behalf and on behalf of
the Lenders, have caused this First Amendment to be duly executed by their duly authorized
officers, all as of the date and year first above written.



	 	 	 	 	 
	 	BORROWER:







AMERICAN MEDICAL SYSTEMS, INC.

 	 
	 	By:  	/s/  Mark Heggestad
 	 
	 	 	Name:  	Mark Heggestad  	 
	 	 	Title:  	Executive Vice President and Chief

Financial Officer 	 
	 



	 	 	 	 	 
	 	GUARANTORS:


AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

AMS SALES CORPORATION

AMS RESEARCH CORPORATION

THERMATRX INC.

OVION, INC.

SOLARANT MEDICAL, INC.

LASERSCOPE

LASERSCOPE INTERNATIONAL, INC.

INNOVAQUARTZ INCORPORATED

 	 
	 	By:  	/s/  Mark Heggestad
 	 
	 	 	Name:  	Mark Heggestad 	 
	 	 	Title:  	Executive Vice President and Chief

Financial Officer 	 
	 




 









 





	 	 	 	 	 
	 	CIT HEALTHCARE LLC, as Administrative Agent

 	 
	 	By:  	/s/  Michael D. Monte
 	 
	 	 	Name:  	Michael D. Monte 	 
	 	 	Title:  	Managing Director