Document:

exv10w01

 

Exhibit 10.01

AMENDMENT NUMBER TWO TO AMENDED AND RESTATED

CREDIT AGREEMENT

     This AMENDMENT NUMBER TWO TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated
as of June 27, 2007, is entered into among Matrixx Initiatives, Inc., a Delaware corporation
(“Parent”), Zicam, LLC, an Arizona limited liability company (“Zicam”) (Parent and Zicam are
sometimes individually referred to herein as a “Borrower” and collectively referred to herein as
“Borrowers”), on the one hand, and Comerica Bank, a Michigan banking corporation (“Bank”), on the
other hand, with reference to the following facts:

     A. Parent and Zicam, on the one hand, and Bank, on the other hand, previously
entered into that certain Amended and Restated Credit Agreement, dated as of September 27,
2005 (the “Original Agreement”) and that certain Amendment Number One to Amended and
Restated Credit Agreement and Waiver, dated as of March 9, 2006 (the “First Amendment”,
which together with the Original Agreement is collectively referred to hereinafter as the
“Agreement”), which Agreement provides for, among other things, a revolving loan in the
principal amount of up to Four Million Dollars ($4,000,000), which is being amended by this
Amendment to increase such revolving loan to Eight Million Dollars ($8,000,000); and

     B. The parties desire to further amend the Agreement in accordance with the terms
and conditions of this Amendment.

     NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as
follows:

     1. Incorporation
of Recitals. The foregoing recitals are true and accurate and are
hereby incorporated by this reference in their entirety as a material part of this Amendment.

     2. Defined
Terms. All initially capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Original Agreement.

     3. Amendments to Section 1.1.

          (a) The
following definitions set forth in Section 1.1 of the Original
Agreement are hereby amended in their entirely as follows:

     “Base Lending Rate” means the variable per annum rate equal to the Base Rate
minus the Base Lending Rate Margin.

     “Fees” means the Late Payment Fee, the Letter of Credit Fees, and the Unused
Revolving Commitment Fee.

     “Note” means the Replacement Secured Promissory Note, dated as of
June 27, 2007, executed by Borrowers, as Makers, to the order of
Bank, as Payee, in
the principal amount of Eight Million Dollars ($8,000,000).

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     “Revolving
Credit Commitment” means Eight Million Dollars
($8,000,000).

     “Revolving
Loans Maturity Date” means July 2, 2009.

          (b) The following new definition is hereby added to Section 1.1 of the
Original Agreement:

     “Unused Revolving Commitment Fee” has the meaning set forth in Section 4
of this Amendment.

     4. Amendment
to Section 2.14. Section 2.14 of the Original Agreement is hereby
amended and supplemented with a new subsection (c) as follows:

     (c) Borrowers shall pay to Bank on a quarterly basis an unused commitment
fee (the “Unused Revolving Commitment Fee”) in an amount equal to one quarter of one
percent (0.25%) per annum multiplied by the difference of the Revolving Credit
Commitment minus the sum of (i) the average daily outstanding Revolving Loans during
the prior quarter plus (ii) the average daily Letter of Credit Usage during the prior
quarter. The Unused Commitment Fee shall begin to accrue on the date hereof and shall
be due and payable, in arrears, on the first Business Day of each and every December,
March, June and September, and the Revolving Loans Maturity Date. The Unused
Commitment Fee shall be calculated on the basis of a year of three hundred sixty (360)
days for the actual days elapsed. No Unused Revolving Commitment Fee will be payable
for periods after the Revolving Loans Maturity Date, Notwithstanding the foregoing, no
Unused Revolving Commitment Fee shall accrue or be payable for any quarter during
which Borrowers shall have maintained, at all times during such quarter, a minimum
balance of $1,250,000 in a money market account at Bank (the “Money Market
Account”), which Money Market Account shall be opened by Borrowers concurrently
with Borrowers’ execution of this Amendment.

     5. Replacement of Schedule 5.9. Schedule 5.9 of the Original Agreement is hereby
amended in its entirety and replaced with the Schedule 5.9 attached to this Amendment and
incorporated hereby.

     6. New Subsidiary. Borrowers shall cause its Subsidiary, Matrixx Oral Care, LLC, a
Delaware limited liability company, to execute and deliver to Bank no later than July 16,
2007, a Guaranty and security agreement, in form and substance satisfactory to Bank.

     7. Representations and Warranties. In order to induce Bank to enter into this
Amendment, Borrowers hereby represent and warrant to Bank that:

          (a) No Event of Default or Unmatured Event of Default has occurred and is continuing;

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          (b) All of the representations and warranties set forth in the Agreement and
the Loan Documents are true, complete and accurate in all respects (except for representations
and warranties which are expressly stated to be true and correct as of the Closing Date); and

          (c) This Amendment has been duly executed and delivered by the Borrowers
and Guarantor, and after giving effect to this Amendment, the Agreement and the Loan
Documents continue to constitute the legal, valid and binding agreements and obligations of
the Borrowers and Guarantor enforceable in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency, and similar laws and equitable principles affecting
the enforcement of creditors’ rights generally.

     8. Conditions Precedent to Effectiveness of Amendment. The effectiveness of this
Amendment is subject to and contingent upon the fulfillment of each and every one of the
following conditions:

          (a) Bank shall have received this Amendment, duly executed by the
Borrowers, together with the Consent of Guarantor attached hereto duly executed by the
Guarantor;

          (b) Bank shall have received the Note (as defined in Section 3 above), duly
executed by Borrower;

          (c) Borrowers shall have paid to Bank a commitment fee in the amount of
$10,000.00, which shall be fully earned and nonrefundable;

          (d) Borrowers shall have opened the Money Market Account (as defined in
Section 4 above) at Bank;

          (e) No Event of Default, Unmatured Event of Default or Material Adverse
Effect shall have occurred and be continuing; and

          (f) All of the representations and warranties set forth herein, in the Loan
Documents and in the Agreement shall be true, complete and accurate in all respects as of the
date hereof (except for representations and warranties which are expressly stated to be true
and correct as of the Closing Date).

     9. Counterparts;
Telefacsimile Execution. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each of which, when
executed and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Amendment, Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of this
Amendment by telefacsimile shall also deliver a manually executed counterpart of this
Amendment but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.

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     10. Integration. The Agreement as amended by this Amendment constitutes the
entire agreement and understanding between the parties hereto with respect to the subject
matter hereof and thereof, and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof and thereof.

     11. Reaffirmation of the Agreement. The Agreement as amended hereby and the
other Loan Documents remain in full force and effect.

[remainder of page intentionally left blank; signatures to follow]

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     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of
the date first hereinabove written.

	 	 	 	 	 
	 	 	MATRIXX INITIATIVES, INC., a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William J. Hemelt
	 

	 	 	 	 
	 

	 	Name:
	 	WILLIAM J. HEMELT
	 

	 	Title:
	 	 EVP/CFO
	 
	 	 	 	 
	 	 	ZICAM, LLC, an Arizona limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William J. Hemelt
	 

	 	 	 	 
	 

	 	Name:
	 	WILLIAM J. HEMELT
	 

	 	Title:
	 	 MANAGER/CFO
	 
	 	 	 	 
	 	 	COMERICA BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Chris Barone
	 

	 	 	 	 
	 

	 	Name:
	 	Chris Barone
	 

	 	Title:
	 	 Commercial Banking Officer

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Schedule 5.9

To

Credit Agreement

Subsidiaries

     1. Zicam, LLC, owned 100% by Matrixx Initiatives, Inc.

     2. Matrixx Oral Care, LLC, owned 100% by Matrixx Initiatives, Inc.

 

 

CONSENT OF GUARANTORS

     The undersigned, as “Guarantor” under a Continuing Guaranty, dated as of November 22, 2005
(“Guaranty”), executed in favor of Comerica
Bank, a Michigan banking corporation (“Bank”), with
respect to the obligations of Matrixx Initiatives, Inc., a Delaware corporation, and Zicam,
LLC, an Arizona limited liability company (collectively,
“Borrowers”) owing to Bank,
hereby acknowledges receipt of a copy of the foregoing Amendment Number Two to Amended and Restated
Credit Agreement, dated as of June 27, 2007, among Borrower and Bank, consents to the terms
contained therein, and agrees that the Guaranty executed by the undersigned shall remain in full
force and effect.

     Although Bank has informed the undersigned of the matters set forth above and the undersigned
has acknowledged same, the undersigned understands and agrees that Bank has no duty under the
Agreement, the Guaranty, or any other agreement between us to so notify the undersigned or to seek
an acknowledgment, and nothing herein is intended to or shall create such a duty as to any
advances or transactions hereafter.

	 	 	 	 	 
	 	 	ZICAM SWAB PRODUCTS,
LLC, a 
Delaware limited liability company
	 
	 	 	 	 
	 

	 	By :
	 	/s/ William Hemelt
	 

	 	 	 	 
	 

	 	Name:
	 	William Hemelt
	 

	 	Title:
	 	 Managerexv10w02

 

Exhibit 10.02

REPLACEMENT SECURED PROMISSORY NOTE

			
	$8,000,000.00
	 	Phoenix, Arizona

June 27, 2007

     1. FOR VALUE RECEIVED, MATRIXX INITIATIVES, INC., a Delaware
corporation (“Matrixx”), and ZICAM, LLC, an Arizona limited liability company
(“Zicam”, together with Matrixx, the “Makers”), jointly and severally promise to
pay to the order of COMERICA BANK, a Michigan banking corporation (“Payee”), on or
before the Revolving Loans Maturity Date, the principal sum of EIGHT MILLION AND
NO/100 DOLLARS ($8,000,000.00), or such lesser sum as shall equal the aggregate
outstanding principal amount of the Revolving Loans made by Payee to Makers
pursuant to the Agreement (as defined below).

     2. Makers promise to make principal reduction payments on the outstanding
principal balance hereof in the amounts and on the dates specified in the
Agreement. Makers further promise to pay interest from the date of this Replacement Secured
Promissory Note (this “Note”), in like money, on the aggregate outstanding principal amount hereof
at the rates and on the dates provided in the Agreement. All computations of interest shall be
in accordance with the provisions of the Agreement.

     3. Makers hereby authorize Payee to record in its books and records the date
and amount of each Loan, and of each payment of principal made by Makers, and
Makers agree that all such notations shall, in the absence of manifest error, be conclusive as
to the matters so noted; provided, however, any failure by Payee to make such notation with respect to
any Loan or payment thereof shall not limit or otherwise affect Makers’ obligations under
the Agreement or this Note.

     4. Upon the occurrence and during the continuance of an Event of Default, in
addition to and not in substitution of any of Payee’s other rights and
remedies with respect to such Event of Default, the entire unpaid principal balance of the Loans shall
bear interest at the Base Lending Rate plus three hundred (300) basis points. In addition,
interest, Expenses, the Fees, and other amounts due hereunder not paid when due shall bear interest
at the Base Lending Rate plus three hundred (300) basis points until such overdue payment is paid
in full.

     5. If any payment due hereunder, whether for principal, interest, or
otherwise, is not paid on or before the tenth (10th) day after the date such payment is due, in
addition to and not in substitution of any of Payee’s other rights and remedies with respect to such
nonpayment, Makers shall pay to Payee, a late payment fee (“Late Payment Fee”) equal to
five percent (5%) of the amount of such overdue payment. The Late Payment Fee shall be due and
payable on the eleventh (11th) day after the due date of the overdue payment with
respect thereto.

     6. Makers shall make all payments hereunder in lawful money of the United
States of America and in immediately available funds to Payee at Payee’s office
located at Phelps Dodge Tower, 1 North Central Avenue, Suite 1000, Phoenix, Arizona 85004-4469,
Attention:

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William J.
Kirschner; or to such other address as Payee may from time to time specify by notice to
Makers in accordance with the terms of the Agreement.

     7. In no event shall the interest rate and other charges hereunder exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a court determines that Payee
has received interest and other charges hereunder in excess of the highest rate applicable hereto,
such excess shall be deemed received on account of, and shall automatically be applied to reduce,
the principal balance hereof, and the provisions hereof shall be deemed amended to provide for the
highest permissible rate. If there is no principal balance outstanding, Payee shall refund
to Makers such excess.

     8. Maker and Payee entered into that certain Amended and Restated Credit
Agreement dated as of September 27, 2005, and that certain Amendment Number One to
Amended and Restated Credit Agreement and Waiver dated as of March 9, 2006, which
concurrently herewith will be amended, supplemented, or otherwise modified by that certain
Amendment Number Two to Amended and Restated Credit Agreement dated as of even date
herewith (as may be at any time hereafter amended, supplemented, or otherwise modified or
restated, the “Agreement”), by and between Makers, as Borrowers, and Payee, and is governed
by the terms thereof. This Note is the “Note” issued pursuant to the Amendment Number Two to
Amended and Restated Credit Agreement. Initially capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Agreement. The Agreement, among other
things, contains provisions for acceleration of the maturity of this Note upon the happening
of certain stated events and also for prepayments on account of principal of this Note prior to
the maturity hereof upon the terms and conditions specified in the Agreement. This Note and the
Loans evidenced hereby may be assigned or otherwise transferred in whole or in part by Payee
pursuant to the terms of the Agreement.

     9. This Note is secured by the Liens granted to Payee under the Loan Documents.

     10. Makers hereby waive presentment for payment, notice of dishonor, protest and
notice of protest.

     11. (a) THE VALIDITY OF THIS NOTE, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ARIZONA, WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.

          (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE
SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
MARICOPA, STATE OF ARIZONA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT PAYEE’S OPTION, IN THE COURTS

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OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. MAKERS AND PAYEE WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NOW CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 11.

          (c) MAKERS AND PAYEE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. MAKERS AND PAYEE REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

     12. This Note replaces that certain Amended and Restated Secured Promissory Note, dated
September 27, 2005, in the amount of $4,000,000, made by Makers
to the order of Payee (the “Prior
Note”). Nothing herein contained shall be construed as a substitution or novation of the
obligations of Makers outstanding under the Prior Note, which obligations shall remain in full
force and effect, except to the extent that the terms thereof are modified hereby or by instruments
executed concurrently herewith. This Note and the Prior Note shall constitute a single ongoing
obligation.

[signatures on next page]

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     IN WITNESS WHEREOF, each Maker has duly executed this Note as of the date first
above written.

	 	 	 	 	 
	 	 	MATRIXX INITIATIVES, INC., a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William J. Hemelt
	 

	 	 	 	 
	 

	 	Name:
	 	WILLIAM J. HEMELT
	 

	 	Title:
	 	 CFO/EVP
	 
	 	 	 	 
	 	 	ZICAM, LLC, an Arizona limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William J. Hemelt
	 

	 	 	 	 
	 

	 	Name:
	 	WILLIAM J. HEMELT
	 

	 	Title:
	 	MANAGER/CFO
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

Replacement Secured Promissory Note

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