[REMAINDER OF PAGE INTENTIONALLY BLANK.

EX-10.44 2 dex1044.htm WAIVER OF CERTAIN PROVISIONS OF THE FIFTH AMENDMENT Waiver of Certain Provisions of the Fifth Amendment

Exhibit 10.44

Effective as of December 31, 2004

Bank of America, N.A.,

as Administrative Agent

231 South LaSalle Street

Mail Code: IL1-231-08-30

Chicago, IL 60604

Attn: Anne Zeschke


Re:		Request for Waiver of Certain Provisions of the Fifth Amended and Restated Loan Agreement.

HealthTronics, Inc., a Georgia corporation, successor in interest by merger (the “Merger”) to Prime Medical Services, Inc. (“Company”), certain Lenders (“Lenders”), and Bank of America, N.A., as Administrative Agent for those Lenders (“Administrative Agent”), have entered into that certain Fifth Amended and Restated Loan Agreement (as renewed, extended, restated, and amended from time to time, the “Loan Agreement”) dated as of July 26, 2002. Unless otherwise specified (A) capitalized terms used herein shall have the same meanings as set forth in the Loan Agreement and (B) references to “Sections” are to sections of the Loan Agreement. Company hereby requests a waiver of certain terms and provisions of the Loan Agreement, and Company, Lenders, and Administrative Agent have agreed to waive certain provisions of the Loan Agreement, each subject to the terms and conditions contained herein.

Section 1. Company Request.

A. For the fiscal quarter ending on December 31, 2004, Company failed to comply with Section 8.11(a) (Total Net Funded Debt to Adjusted EBITDA) and Section 8.11(c) (Debt Service Coverage Ratio) of the Loan Agreement (collectively, the “Subject Financial Covenants”).

B. Company has requested that Lenders waiver compliance with the Subject Financial Covenants for the fiscal quarter ending on December 31, 2004.

Section 2. Waivers to Loan Agreement. Lenders hereby waive compliance with the Subject Financial Covenants solely for the fiscal quarter ending on December 31, 2004.

Section 3. Representations. Company and each Guarantor hereby represent and warrant to Administrative Agent and Lenders that: (A) the representations and warranties contained in the Loan Agreement and the other Loan Documents are true and correct on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties speak to a specific date or the facts on which such representations and warranties are based have been changed by transactions contemplated by the Loan Documents, provided that with respect to Section 6.07, the representation regarding Defaults shall not include the Defaults waived pursuant to Paragraph 2 hereof; (B) after giving effect to this letter and the waiver granted herein, neither Company nor any

Waiver Letter

Effective as of December 31, 2004

Page 2

Guarantors is in default in the due performance of any covenant or agreement contained in the Loan Agreement or any other Loan Document; and (C) after giving effect to this letter and the waiver granted herein, no Default has occurred and is continuing.

Section 4. Confirmations. Each of Company and Guarantors ratifies and confirms that the Loan Agreement, the Guaranties, the Borrower Security Agreement, the Guarantor Security Agreements, the Pledge Agreements, and the other Loan Documents are and remain in full force and effect in accordance with their respective terms, as amended hereby. In addition, each of the Guarantors acknowledges, agrees, accepts and consents to the terms and provisions hereof and each other Loan Document as amended hereby. Except as expressly provided herein, this letter does not constitute a waiver or modification of any of the terms or provisions set forth in the Loan Agreement or any other Loan Document and shall not impair any right that Administrative Agent or Lenders may now or hereafter have under or in connection with the Loan Agreement or any other Loan Document.

Section 5. No Impairment. The waivers hereby granted by Administrative Agent and Required Lenders (A) does not impair Administrative Agent’s or any of Lenders’ rights to insist upon strict compliance with the Loan Agreement or the other Loan Documents, and (B) does not extend to any other Loan Document (as waived or amended hereby). The Loan Documents, as waived and amended hereby, continue to bind and inure to Administrative Agent, Lenders, Company, Guarantors, and their respective successors and permitted assigns.

Section 6. Conditions Precedent. The effectiveness of this letter and waiver agreement is subject to the conditions precedent that Administrative Agent shall have received all of the following, in form and substance satisfactory to Administrative Agent:

(A)

No Default. No Default (other than any Defaults waived pursuant to Paragraph 2 hereof) shall have occurred and be continuing under the Loan Agreement.

(B)

Representations and Warranties. All of the representations and warranties contained in Article VI of the Loan Agreement and in each of the other Loan Documents shall be true and correct on and as of the date hereof with the same force and effect as if such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties speak to a specific date or the facts on which such representations and warranties are based have been changed by transactions contemplated by the Loan Documents; provided that with respect to Section 6.07, the representation regarding Defaults shall not include the Defaults waived pursuant to Paragraph 2 hereof.

(C)

Fees and Expenses. Payment of all fees and expenses of counsel for Administrative Agent in connection with the preparation and negotiation of this waiver letter.

Section 7. Counterparts. This agreement, when countersigned by Company, Guarantors, Administrative Agent, and Required Lenders shall be a “Loan Document” as defined and referred to in the Loan Agreement and the other Loan Documents and may be signed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This agreement shall be governed by and construed in accordance with the laws of the State of Texas.

Effective as of December 31, 2004

Page 3

Section 8 Entire Agreement. THIS AGREEMENT, THE LOAN AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

[REMAINDER OF PAGE INTENTIONALLY BLANK.

SIGNATURE PAGES FOLLOW.]

If the foregoing is agreeable to you, please signify your acceptance of the terms and conditions set forth herein by placing your signature in the space provided below.


Very truly yours,

HEALTHTRONICS, INC., successor in interest by merger to Prime Medical Services, Inc. as Company

By:
Name:
Title: