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EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), is entered
into as of July 17, 1998, by and between JALATE, LTD. ("Borrower"), and XXXXX
FARGO HSBC TRADE BANK, N. A. ("Bank").
RECITALS
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WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of certain Credit Agreement dated as of January 21, 1998 (the
"Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Agreement and have agreed to amend the Agreement to
reflect said changes.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Agreement shall
be amended as follows:
I. Section 1.2, Credit Extension Limit, shall be amended by deleting "One
Million One Hundred Twenty-Seven Thousand Six Hundred Thirteen Dollars
($1,127,613)" as the "Overall Credit Limit", and by substituting, "Four Hundred
Forty-Two Thousand Nine Hundred Forty-Five Dollars ($442,945)", therefor.
II. Section 1.3, Repayment; Interest and Fees, shall be amended by deleting the
last sentence in this paragraph, and by substituting the following therefor:
"Any overdue payments of principal (and interest to the extent permitted by law)
shall bear interest at a per annum floating rate equal to the Prime Rate plus
10.0%."
III. EXHIBIT A, ADDENDUM TO CREDIT AGREEMENT, shall be amended by deleting the
section "FINANCIAL COVENANTS" in its entirety, without substitution.
IV. EXHIBIT B, SIGHT COMMERCIAL LETTERS OF CREDIT SUPPLEMENT, shall be deleted
in its entirety, without substitution.
V. EXHIBIT B, TERM LOAN SUPPLEMENT, shall be deleted in its entirety, and the
attached, EXHIBIT B, TERM LOAN SUPPLEMENT, substituted therefor.
Except as specifically provided herein, all terms and conditions of the
Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Agreement shall have the same meaning when used in this
Amendment. This Amendment and the Agreement shall be read together as one
document.
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Borrower hereby remakes all representations and warranties contained in the
Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of this Amendment there exists no Event of Default
as defined in the Agreement, nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute any such Event
of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
JALATE, LTD. XXXXX FARGO HSBC TRADE BANK, N.A.
By: /S/XXXXXX XXXXX By: /S/XXXX XXXXXXXXXX
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Xxxxxx Xxxxx Xxxx Xxxxxxxxxx
Title: CEO/President Title: Vice President
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EXHIBIT B
XXXXX FARGO HSBC TRADE BANK TERM LOAN SUPPLEMENT
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THIS SUPPLEMENT SUPERSEDES AND REPLACES ANY PRIOR TERM LOAN SUPPLEMENT AND IS AN
INTEGRAL PART OF THE CREDIT AGREEMENT DATED JANUARY 21, 1998, AS AMENDED,
BETWEEN XXXXX FARGO HSBC TRADE BANK AND THE FOLLOWING BORROWER:
NAME OF BORROWER: Jalate, Ltd.
FACILITY TERMINATION DATE: August 31, 1999
CREDIT LIMIT FOR THIS TERM LOAN FACILITY AND SUBLIMITS: Credit Limit: $442,945
Credit Sublimits
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- Supported by Accounts Receivable, Inventory or Other Collateral $442,945
FACILITY DESCRIPTION: Trade Bank will make a Term Loan or Term Loans to Borrower
for the purpose or purposes stated below. Subject to the credit sublimits
specified above, the Term Loan or Term Loans may be supported by (i) a standby
letter of credit in favor of Trade Bank, (ii) a guarantee or (iii) accounts
receivable, inventory or other collateral. A Term Loan cannot be used to repay
an outstanding Term Loan or Revolving Credit Loan that has matured or to repay
amounts due under any other Facilities provided to Borrower.
FACILITY PURPOSE: The Term Loan or Term Loans may only be used for the following
purpose(s): Term out existing debt.
FACILITY DOCUMENT: Term Note
SubFacility Documents:
- Supported by Accounts Receivable, Inventory or Other Collateral: See Exhibit
C - Collateral/Credit Support Document.
TERM: Term Loan will mature on August 31, 1999.
INTEREST RATE: Term Loan will bear interest at the following rate:
- Prime Rate: The Prime Rate plus 5.0% per annum.
Interest Payment Dates: Interest on the outstanding Term Loan will be paid at
least once each month on the last day of the month.
REPAYMENT: Outstanding principal balance of the Term Loan shall be repaid in
seven (7) equal monthly installments of $10,000 commencing July 31, 1998 and
continuing up to and including January 31, 1999; and six (6) equal monthly
installments of $60,000 commencing February 28, 1999 and continuing up to and
including July 31, 1999, with the entire remaining principal outstanding due and
payable in full on August 31, 1999.
PREPAYMENTS: Prepayments of the outstanding Term Loan or Term Loans are
permitted in any amounts.
COLLATERAL/CREDIT SUPPORT DOCUMENTS: See Exhibit C - Collateral/Credit Support
Document.
BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS SUPPLEMENT:/S/VB
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XXXXX FARGO HSBC TRADE BANK TERM NOTE
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$442,945 Los Angeles, California
July 17, 1998
FOR VALUE RECEIVED, the undersigned JALATE, LTD., a California corporation
("Borrower") promises to pay tot he order of XXXXX FARGO HSBC TRADE BANK,
NATIONAL ASSOCIATION ("Trade Bank") at its office at 000 Xxxxx Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxxxxx, XX 00000, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Four Hundred Forty-Two Thousand Nine
Hundred Forty-Five Dollars ($442,945), or so much thereof as may be advanced and
be outstanding, with interest thereon, to be computed on each advance from the
date of its disbursement at a rate per annum (computed on the basis of a 360-day
year, actual days elapsed) five percent (5.0%) above the Prime Rate in effect
from time to time. The "Prime Rate" is a base rate that XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Bank") from time to time establishes and which serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto. Each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within Bank.
Borrower may from time to time from the date of this Note up to and including
August 31, 1999, borrow and partially or wholly repay its outstanding
borrowings, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that amounts repaid may not be reborrowed; and provided further, that
the total borrowings under this Note shall not exceed the principal amount
stated above. The unpaid principal balance of this obligation at any time shall
be the total amounts advanced hereunder by the holder hereof less the amount of
principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon from time to time by the holder.
Advances hereunder, to the total amount of the principal sum stated above and up
to and including the date set forth in the preceding paragraph, may be made by
the holder at the oral or written request of (a) Xxxx Xxxxxxxxxxx or Xxxxxx
Xxxxx, any one acting alone, who are authorized to request advances and direct
the disposition of any advances until written notice of the revocation of such
authority is received by the holder at the office designated above, or (b) any
person, with respect to advances deposited to the credit of any account of any
Borrower with the holder, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of each Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by any Borrower.
Interest accrued on this Note shall be payable on the last day of each month,
commencing July 31, 1998.
Principal shall be payable in thirteen (13) installments as follows:
Installments Payment Amount Due Date
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1 through 7 $10,000 commencing 7/31/98
8 through 13 $60,000 commencing 2/28/99
with a final installment consisting of all remaining unpaid principal due and
payable in full on August 31, 1999.
This Note is made pursuant to and is subject to the terms and conditions of that
certain Amended and Restated Credit Agreement between Borrower and Trade Bank
dated as of January 21, 1998, as amended from time to time ("Credit Agreement").
Any default in the payment or performance of any obligation under this Note, or
any defined event of default under the Credit Agreement, shall constitute an
"Event of Default" under this Note.
Upon the occurrence of any Event of Default, the holder of this Note, at the
holder's option, may declare all sums of principal and interest outstanding
hereunder to be immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are expressly waived by each Borrower, and
the obligation, if any, of the holder to extend any further credit hereunder
shall immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), incurred
by the holder in connection with the enforcement of the holder's rights and/or
the collection of any amounts which become due to the holder under this Note,
and the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, and including
any of the foregoing incurred in connection with any bankruptcy proceeding
relating to any Borrower.
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Should more than one person or entity sign this Note as a Borrower, the
obligations of each such Borrower shall be joint and several.
This Note shall be governed by and construed in accordance with the laws of the
State of California, except to the extent Trade Bank has greater rights or
remedies under Federal law, whether as a national bank or otherwise, in which
case such choice of California law shall not be deemed to deprive Trade Bank of
any such rights and remedies as may be available under Federal law.
This Note supersedes and replaces that certain Term Note dated January 21, 1998.
"BORROWER"
JALATE, LTD.
By: /S/XXXXXX XXXXX
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Xxxxxx Xxxxx
Title: CEO/President
Borrower's Address:
0000 Xxxxxxxx
Xxxx xx Xxxxxxxx, XX. 00000
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ADDENDUM TO PROMISSORY NOTE
THIS ADDENDUM is attached to and made a part if that certain promissory
note executed by JALATE, LTD., a California corporation ("Borrower") and payable
to XXXXX FARGO HSBC TRADE BANK, NATIONAL ASSOCIATION, or order, dated as of July
17, 1998 in the principal amount of Four Hundred Forty-Two Thousand Nine Hundred
Forty-Five Dollars ($442,945)(the "Note").
The following arbitration provision is hereby incorporated into the Note:
ARBITRATION:
(a) Arbitration. Upon demand of any party, any Dispute shall be resolved by
binding arbitration (except as set forth in (e) below) in accordance with the
terms of this Note. A "Dispute" shall mean any action, dispute, claim or
controversy of any kind, whether in contract or tort, statutory or common law,
legal or equitable, now existing or hereafter arising under or in connection
with, or in any way pertaining to, this Note and each other document, contract
and instrument required hereby or now or hereafter delivered to Bank in
connection herewith (collectively, the "Documents"), or any past, present or
future extensions of credit and other activities, transactions or obligations of
any kind related directly or indirectly to any of the Documents, including
without limitation, any of the foregoing arising in connection with the exercise
of any self-help, ancillary or other remedies pursuant to any of the Documents.
Any party may by summary proceedings bring an action in court to compel
arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered by the
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Documents.
The arbitration shall be conducted at a location in California selected by the
AAA or other administrator. If there is any inconsistency between the terms
hereof and any such rules, the terms and procedures set forth herein shall
control. All statutes of limitation applicable to any Dispute shall apply to any
arbitration proceeding. All discovery activities shall be expressly limited to
matters directly relevant to the Dispute being arbitrated. Judgment upon any
award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. Section 91 or any similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive law
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (A) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (B) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under substantive law of the state of
California, and (C) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (1) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (2) whether the
conclusions of law are erroneous under the substantive law of the state of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of California.
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(f) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Documents or the subject matter of the Dispute shall
control. This Note may be amended or modified only in writing signed by
Borrower. If any provision of this Note shall be held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or any remaining provisions of this Note. This arbitration
provision shall survive termination, amendment or expiration of any of the
Documents or any relationship between the parties.
IN WITNESS WHEREOF, this Addendum has been executed as of the same date as
the Note.
"BORROWER"
JALATE, LTD.
By: /S/XXXXXX XXXXX
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Xxxxxx Xxxxx
Title: CEO/President
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