EXHIBIT 10(a)


 


SECOND AMENDMENT



TO



CREDIT AGREEMENT


 


THIS SECOND AMENDMENT, dated as of
June 1, 2004 (this “Second Amendment”), is by and among CANTEL MEDICAL CORP., a Delaware
corporation (the “Borrower”), the Lenders and Fleet National Bank (“Fleet”),
as the Initial Issuing Bank, the Swing Line Bank and the Administrative Agent
for itself and the Lenders (in such capacity, together with its successors in
such capacity, the “Administrative Agent”).


 


PRELIMINARY STATEMENTS


 


(A)                              The
Borrower, the Lenders, Fleet National Bank, as the Initial Issuing Bank, the
Swing Line Bank, and the Administrative Agent and PNC Bank, National
Association, as Documentation Agent, are parties to that certain Credit
Agreement, dated as of September 7, 2001, and as amended by the First
Amendment thereto, dated as of August 1, 2003 (as so amended and as it may
hereafter be further amended, restated or otherwise modified, the “Credit
Agreement”).


 


(B)                                The
Borrower wishes to acquire all of the issued and outstanding capital stock of
Saf-T-Pak Inc., a corporation organized under the laws of Alberta, Canada (“Saf-T-Pak”)
for a purchase price of $8,500,000 (plus a contingent purchase price of up to
$3,000,000) based on Saf-T-Pak’s achievement of specified EBITDA targets)
substantially in accordance with the terms and conditions set forth in the
Letter of Intent attached hereto as Exhibit A (the “Saf-T-Pak
Acquisition”).  The payment of the
$8,500,000 purchase price (plus the contingent purchase price) would exceed the
$5,000,000 aggregate cash consideration payable and Debt assumed in respect of
all Permitted Acquisitions as set forth in clause (b)(ii) of the definition of
“Permitted Acquisitions” by $3,500,000 (plus the amount of the contingent
purchase price).  Notwithstanding this
restriction, the Borrower has requested that the Agent and the Lenders consent
to the Saf-T-Pak Acquisition and permit it to pay the full $8,500,000 cash
consideration to permit Borrower to consummate the Saf-T-Pak Acquisition.


 


(C)                                The
Borrower is desirous of increasing from $20,000,000 to $35,000,000 the
permitted aggregate notional amount of hedging agreements used by Carsen to
mitigate currency fluctuations between the U.S. Dollar and the Canadian Dollar.


 


(D)                               The
Borrower has requested that the Lenders amend the Credit Agreement as more
fully set forth below.


 


(E)                                 The
Administrative Agent and the Lenders are willing to consent to the Saf-T-Pak
Acquisition, to increase the aggregate notional amount of hedging agreements to
be used by Carsen and to amend the Credit Agreement on the terms and conditions
set forth herein.


 


(F)                                 The
terms defined in the Credit Agreement and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.


 

















 


NOW, THEREFORE, in consideration of the premises
and of the mutual covenants and agreements contained herein, the parties hereto
hereby agree as follows:


 


ARTICLE 1.  Consent to Saf-T-Pak
Acquisition.


 


Section 1.1.                                Saf-T-Pak
Acquisition.  Notwithstanding the
$5,000,000 basket representing the aggregate cash consideration and Debt
assumed in respect of all Permitted Acquisitions as set forth in clause (b)(ii)
of the definition of “Permitted Acquisitions”, the Administrative Agent and the
Lenders hereby consent to the Saf-T-Pak Acquisition and permit the Borrower to
pay the full $8,500,000 cash consideration (and any contingent purchase price)
to consummate the Saf-T-Pak Acquisition.


 


Section 1.2.                                The
consent set forth in Section 1.1 of this Second Amendment is subject to
the satisfaction of each of the conditions precedent set forth in
Section 5 of this Second Amendment and shall be limited precisely as
written and shall not be deemed to (a) be a waiver, amendment or modification
of any term or condition of the Credit Agreement or any other Loan Document,
except as set forth in this Article 1 (subject to the terms and conditions
set forth herein), or (b) prejudice any right, power or remedy which the
Administrative Agent or any Lender Party now has or may have in the future
under or in connection with the Credit Agreement or any other Loan Document.


 


ARTICLE 2.  Amendments to Credit
Agreement.


 


This Second Amendment
shall be deemed to be an amendment to the Credit Agreement, and shall not be
construed in any way as a replacement therefor.  All of the terms and provisions of this Second Amendment,
including, without limitation, the representations and warranties set forth
herein, are hereby incorporated by reference into the Credit Agreement as if
such terms and provisions were set forth in full therein.  Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in the Credit
Agreement.  The Credit Agreement is
hereby amended in the following respects:


 


Section 2.1.                                Section 1.1,
Certain Defined Terms, of the Credit Agreement is amended by inserting
the following definitions in proper alphabetical order:


 


“Saf-T-Pak Acquisition”
has the meaning specified in recital (B) of the Preliminary Statements of this
Second Amendment.


 


“Second
Amendment” means the Second Amendment dated as of June 1, 2004 by and
among Borrower, the Lenders and Fleet.


 


“Second
Amendment Closing Date” shall mean the date on which all of the conditions
in Article 5 of the Second Amendment have been meet.


 


Section 2.2.                                Section 2.14,
Use of Proceeds, of the Credit Agreement is amended to (i) delete the
word “and” after the words “existing indebtedness” in clause (b), (ii) rename
existing clause (d) as (e), (iii) insert the word “and” in place of the “,”
after the words “BEAL Acquisition” in clause (c) and (iv) insert new clause (d)
which shall read as follows:


 


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“ (d)                        to
finance, in part, the Saf-T-Pak Acquisition, to pay fees and expenses incurred
in connection with the Saf-T-Pak Acquisition,”


 


Section 2.3.                                Section 6.16,
Speculative Transactions, of the Credit Agreement is hereby amended as
follows:


 


(a)                                  Subsection 6.16 “(b)” is amended by
deleting the number “$20,000,000” and replacing it with the number
“$35,000,000”; and


 


(b)                                 Subsection 6.16 “(b)” is further
amended by deleting the word “twelve (12)” 
and replacing it with the word “twenty-four (24)”.


 


ARTICLE 3.  Confirmations and
References.


 


Section 3.1.                                Continuing
Effect.  The Credit Agreement and
the other Loan Documents delivered in connection therewith are, and shall
continue to be, in full force and effect, and are hereby ratified and confirmed
in all respects, except that, on and after the date hereof, (a) all references
in the Loan Documents (i) to the “Credit Agreement,” “thereto,” “thereof,”
“thereunder” or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended hereby and (ii) to the “Loan Documents”
shall be deemed to include this Second Amendment; and (b) all references in the
Credit Agreement to “this Agreement,” “hereto,” “hereof,” “hereunder” or words
of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended hereby.


 


Section 3.2.                                InterCreditor
Agreement.  The Intercreditor
Agreement shall remain in full force and effect, and is hereby ratified and
confirmed in all respects.


 


Section 3.3.                                Confirmation
of Liens.  The Liens granted
pursuant to the Collateral Documents secure, without limitation, the
Obligations of the Borrower and its Subsidiaries to the Lenders and the
Administrative Agent under the Credit Agreement as amended by this Second
Amendment.  The term “Obligations” as
used in the Collateral Documents (or any other term used therein to refer to
the liabilities and obligations of the Borrower and its Subsidiaries to the
Lenders and the Administrative Agent), include, without limitation, Obligations
to the Lenders and the Administrative Agent under the Credit Agreement as
amended by this Second Amendment.


 


ARTICLE 4.  Representations and
Warranties.


 


Each of the
Borrower and each other Loan Party hereby represents and warrants to the
Lenders and the Administrative Agent that:


 


Section 4.1.                                Existing
Representations. As of the date hereof and after giving effect to this
Second Amendment, each and every one of the representations and warranties set
forth in the Loan Documents shall, after giving effect to the Saf-T-Pak
Acquisition, be true, accurate and complete in all respects and with the same
effect as though made on the date hereof, and each shall hereby be incorporated
herein in full by reference as if restated herein in its entirety, except for
any representation or warranty limited by its terms to a specific date and
except for changes


 


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contemplated by this
Second Amendment or in the ordinary course of business which are not prohibited
by the Credit Agreement (as amended hereby) and which shall not, either singly
or in the aggregate, result in a Material Adverse Change.


 


Section 4.2.                                No
Default.  As of the date hereof,
there exists no Default or Event of Default under the Credit Agreement, as
amended hereby, and no event which, with the giving of notice or lapse of time,
or both, would constitute a Default or Event of Default.


 


Section 4.3.                                Power,
Authority, Consents.  The Borrower
and each of its Subsidiaries has the power to execute, deliver and perform the
Credit Agreement, as amended by this Second Amendment and to consummate each of
the transactions consented to in Section 1 hereof.  The Borrower and each of its Subsidiaries
has taken all necessary action to authorize the execution, delivery and
performance of this Second Amendment and the consummation of each of the
transactions consented to in Section 1 hereof.  No consent or approval of any Person other than those that have
been obtained is required in connection with the execution, delivery or
performance by the Borrower or any of its Subsidiaries of this Second Amendment
or the consummation of any of the transactions consented to in Section 1 hereof.


 


Section 4.4.                                No
Violation of Law or Agreements. The execution, delivery and performance by
the Borrower and each of its Subsidiaries of this Second Amendment and the
consummation of each of the 
transactions consented to in Section 1 hereof, will not violate any
provision of law presently in effect and will not conflict with or result in a
breach of any order, writ, injunction, ordinance, resolution, decree, or other
similar document or instrument presently in effect of any court or governmental
authority, bureau or agency, domestic or foreign, or the certificate of
incorporation or by-laws of the Borrower or such Subsidiary, or create (with or
without the giving of notice or lapse of time, or both) a default under or
breach of any agreement, bond, note or indenture presently in effect to which
the Borrower or any Subsidiary is a party, or by which any of them is bound or
any of their properties or assets is affected, or result in the imposition of
any Lien of any nature whatsoever upon any of the properties or assets owned by
or used in connection with the business of the Borrower or any of its
Subsidiaries, except for the Liens created and granted pursuant to the
Collateral Documents as acknowledged and confirmed herein.


 


Section 4.5.                                Binding
Effect.  This Second Amendment has
been duly executed and delivered by each of the Borrower and Saf-T-Pak and
constitutes the valid and legally binding obligation of each of the Borrower
and Saf-T-Pak, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now
or hereafter in effect, relating to or affecting the enforcement of creditors’
rights generally, and except that the remedy of specific performance and other
equitable remedies are subject to judicial discretion.


 


ARTICLE 5.  Conditions to Amendment.


 


The effectiveness
of the amendments contained in Article 1 shall be subject to the
fulfillment of the following conditions precedent:


 


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Section 5.1.                                Amendment.  Each of the Borrower and Saf-T-Pak and each
of the Lenders shall have executed and delivered to the Administrative Agent
this Second Amendment.


 


Section 5.2.                                No
Default.  There shall exist no Event
of Default or Default under the Credit Agreement.


 


Section 5.3.                                Representations
and Warranties.  The representations
and warranties contained in Article 4 hereof shall be true and correct in
all material respects on the date hereof as if made on the date hereof.


 


Section 5.4.                                Resolutions.  Each of the Borrower and Saf-T-Pak shall
have delivered certified copies of resolutions of its respective Board of
Directors approving the Saf-T-Pak Acquisition, this Agreement, and each other
Loan Document and any document relating to the Saf-T-Pak Acquisition to which
it is or is to be a party, and of all documents evidencing other necessary
corporate action and governmental and other third party approvals and consents,
if any, with respect to the Saf-T-Pak Acquisition, this Agreement, and each
other Loan Document and document relating to the Saf-T-Pak Acquisition.


 


Section 5.5.                                Charter
Documents.  Saf-T-Pak  shall have delivered a copy of its charter
document certified by the appropriate governmental entity of the jurisdiction
of its incorporation, together with a certificate (if available from a
governmental entity in such jurisdiction) dated within twenty (20) Business
Days prior to the date hereof, listing the charter of Saf-T-Pak and each
amendment thereto on file in its office and certifying that such amendments are
the only amendments to Saf-T-Pak ‘s charter on file in its office.


 


Section 5.6.                                Good
Standing Certificates.  Each of the
Borrower and Saf-T-Pak shall have delivered a copy of a certificate of the
Secretary of State of each state, or as applicable, a certificate of status,
compliance or like certificate issued by the appropriate governmental entity of
the jurisdiction of each jurisdiction in which it owns any material assets or
carries on any material business, and dated reasonably near the date hereof,
stating that each of the Borrower and Saf-T-Pak, as the case may be, is duly
qualified and in good standing as a foreign corporation in such state or
jurisdiction, as the case may be, and has filed all annual reports required to
be filed to the date of such certificate.


 


Section 5.7.                                Certificates.  Each of the Borrower and Saf-T-Pak shall
have delivered a certificate signed on behalf of the Borrower or Saf-T-Pak, as
the case may be, by a Responsible Officer and the Secretary or an Assistant
Secretary of the Borrower or Saf-T-Pak, as the case may be, dated the date
hereof (the statements made in such certificate shall be true on and as of the
date hereof), certifying as to (1) the absence of any amendments to the charter
of the Borrower or Saf-T-Pak, as the case may be, since the date of the
Secretary of State certificate or the certificate of status or compliance
referred to above, and in the case of Saf-T-Pak, the charter of Saf-T-Pak
attached to such certificate, (2) the bylaws of each of the Borrower and
Saf-T-Pak attached to such certificate, (3) the due incorporation and good
standing of each of the Borrower and Saf-T-Pak, as the case may be, as a
corporation organized under the laws of the jurisdiction of its incorporation,
and the absence of any proceeding for the dissolution or liquidation of the
each of the Borrower and Saf-T-Pak, as the case may be, (4) the truth of
the representations and warranties contained in the Loan Documents as though
made on and as of the date hereof, except


 


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for any representation or
warranty limited by its terms to a specific date and except for changes in the
ordinary course of business that are not prohibited by the Credit Agreement,
(5) the absence of any event occurring and continuing, or resulting from
the transactions contemplated by this Second Amendment, that constitutes a
Default or an Event of Default and (6) the 
certification of the names and true signatures of the officers of the
Borrower and Saf-T-Pak, as the case may be, authorized to sign this Second
Amendment and each other Loan Document to which they are or are to be parties
and the other documents to be delivered hereunder and thereunder.


 


Section 5.8.                                Solvency
Certificate.  The Borrower shall have
delivered a certificate, in form and substance reasonably satisfactory to the
Administrative Agent, attesting to the Solvency of the Borrower immediately
before and immediately after giving effect to the transactions contemplated by
the Saf-T-Pak Acquisition and the Second Amendment, from its President or a
Vice President. With respect to the Solvency of the Borrower, the
Administrative Agent shall have received such appraisals or other analyses from
independent experts of the Borrower as it may request, and such appraisals and
analyses shall be in form and substance satisfactory to the Administrative
Agent.


 


Section 5.9.                                Note
Assignment Agreement Supplements and Intercompany Notes.  The Administrative Agent shall have received
a duly executed Note Assignment Agreement Supplement for Saf-T-Pak covering
(and together with) an Intercompany Note made by Saf-T-Pak payable to the
Borrower and duly endorsed to the Administrative Agent.


 


Section 5.10.                         Security
Agreement Supplement.  The Borrower
shall have delivered to the Administrative Agent a duly executed Security
Agreement Supplement amending Schedule 1 to the Security Agreement to
include the Pledged Shares of Saf-T-Pak.


 


Section 5.11.                         Lien
Searches.  The Administrative Agent
shall be in receipt of Uniform Commercial Code or Personal Property Security
Act tax and judgment lien searches, or the equivalent, for Saf-T-Pak and each
of its Subsidiaries in each jurisdiction in which Saf-T-Pak or any such
subsidiary is incorporated or qualified to do business.


 


Section 5.12.                         Release
of Liens.  The Administrative Agent
shall have received Documents evidencing the satisfaction, termination and
release of any liens or charges over the assets of Saf-T-Pak as set forth in
Schedule 5.12 attached hereto; and evidence that all other action that the
Administrative Agent may deem necessary or desirable in order to perfect and
protect the first and only priority liens and security interests created under
the Security Agreement has been taken.


 


Section 5.13.                         Legal
Opinion.  The Borrower shall have
delivered a satisfactory opinion of Dornbush Mensch Mandelstam & Schaeffer,
LLP, counsel to the Borrower, to the extent requested by the Administrative
Agent, as to the transactions contemplated hereby.


 


Section 5.14.                         Fees
and Expenses. As provided in Section 11.4 of the Credit Agreement,
Borrower shall have paid (i) all fees, costs and expenses incurred by the
Administrative Agent in connection with the preparation, execution and delivery
of  this Second Amendment (including,
without limitation, all attorneys’ fees) and (ii) all outstanding fees, costs
and expenses due and


 


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payable in connection
with the administration, modification and amendment of the Loan Documents
(including, without limitation, all attorneys’ fees).


 


Section 5.15.                         Saf-T-Pak
Acquisition Conditions and Deliveries.


 


(a)                                  The Saf-T-Pak Acquisition shall be
consummated on or before June 1, 2004 pursuant to the terms and conditions
of (i) the Stock Purchase Agreement, by and among the Borrower, Saf-T-Pak,
Arthur Rutledge, 847479 Alberta Ltd., Thomas G. Abbott, Jr., 348683 Alberta
Ltd. and Donald Neilsen and in accordance with applicable law and the
documentation for the financing of the Saf-T-Pak Acquisition and related transactions,
and otherwise on terms satisfactory to the Administrative Agent.  The conditions of the Saf-T-Pak Acquisition
shall have been satisfied without giving effect to waivers, amendments,
modifications or supplements except as approved in advance in writing by the
Administrative Agent and without amendments, modifications or supplements to
any related disclosure letter or schedule not approved in writing in
advance by the Administrative Agent. 
The documents and materials filed publicly by the Borrower in connection
with the Saf-T-Pak Acquisition shall have been furnished to the Administrative
Agent in form and substance reasonably satisfactory to the Administrative
Agent.  All required stockholder
approvals to effect the Saf-T-Pak Acquisition shall have been obtained.


 


(b)                                 The Borrower shall have taken all action
necessary to allow the Administrative Agent, for its benefit and the ratable
benefit of the Secured Parties, to obtain a valid and enforceable, first
priority, perfected security interest in 65% of the stock of Safe-T-Pak (the “STP
Stock Collateral”).


 


(c)                                  The Borrower shall have delivered to the
Administrative Agent stock certificates representing 65% of the STP Stock
Collateral, along with an undated stock power duly executed in blank for each such
stock certificate.


 


(d)                                 The Administrative Agent shall have
received a legal opinion by Prowse Chowne LLP, counsel to Saf-T-Pak, in
connection with the Saf-T-Pak Acquisition, in form and substance satisfactory
to the Administrative Agent.


 


(e)                                  The Borrower shall have delivered to the
Administrative Agent copies of agreements and instruments, with all exhibits
and disclosure schedules thereto, and all amendments thereto, evidencing the
Saf-T-Pak Acquisition, all of which shall be in form and substance satisfactory
to the Administrative Agent.


 


(f)                                    The Administrative Agent shall have
received such other approvals, opinions or documents as it may reasonably
request in connection with the Saf-T-Pak Acquisition all of which shall be in
form and substance satisfactory to the Administrative Agent.


 


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ARTICLE 6.  Miscellaneous.


 


Section 6.1.                                Continued
Effectiveness.  Except as
specifically amended herein, the Credit Agreement and each of the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms.


 


Section 6.2.                                Governing
Law. This Second Amendment shall be governed and construed in accordance
with the laws of the State of New York, without regard to its rules pertaining to
conflicts of laws other than General Obligations Law Section 5.1401.


 


Section 6.3.                                Severability.  The provisions of this Second Amendment are
severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision in this
Second Amendment in any jurisdiction.


 


Section 6.4.                                Post-Closing
Obligation.  Within 30 days after
the Second Amendment Closing Date, Saf-T-Pak shall deliver to the
Administrative Agent evidence of the insurance required by the terms of the
Security Agreement.


 


Section 6.5.                                Counterparts.  This Second Amendment may be signed in any
number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument. 
Delivery of an executed counterpart of this Second Amendment by
facsimile shall be as effective as delivery of an originally executed
counterpart.


 


Section 6.6.                                Binding
Effect; Assignment.  This Second
Amendment shall be binding upon and inure to the benefit of the Borrower and
its respective successors and to the benefit of the Administrative Agent and
the Lenders and their respective successors and assigns.  The rights and obligations of the Borrower
under this Second Amendment shall not be assigned or delegated without the
prior written consent of the Lenders, and any purported assignment or
delegation without such consent shall be void.


 


 


[Signature Pages
Follow]


 


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IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.


 


 


	
   

  	
  CANTEL
  MEDICAL CORP.,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James P.
  Reilly

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: James P. Reilly

  
	
   

  	
  Title: President &
  Chief Executive Officer

  



 


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  FLEET NATIONAL BANK,

  
	
   

  	
  a Bank
  of America Company

  as Administrative Agent,

  as
  Initial Issuing Bank,

  as
  Swing Line Bank and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard M.
  Williams

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Credit
  Products Officer

  	
   

  
					



 


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  PNC
  BANK, NATIONAL ASSOCIATION,

  as Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jeffery
  Blakemore

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Senior Vice
  President

  	
   

  
					



 


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  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kenneth E.
  LaChance

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Vice
  President

  	
   

  
					



 


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  SAF-T-PAK INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Art Rutledge

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Art Rutledge

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
					



 


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