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EXHIBIT 10.25
THIRD AMENDMENT TO CREDIT DOCUMENTS
This Third Amendment to Credit Documents (this "Amendment") is entered
into as of October 27, 1995, by and among CIMCO, INC., a Delaware corporation
("Borrower"), XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank") and MEDICAL
MOLDING CORPORATION OF AMERICA, a California corporation ("MMC").
Recitals
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WHEREAS, Borrower and Bank are parties to that certain Credit
Agreement, dated as of February 1, 1995, as heretofore amended by that certain
First Amendment to Credit Agreement, dated as of June 9, 1995, and as further
heretofore amended pursuant to that certain Second Amendment to Credit
Agreement and Revolving Line of Credit Note, dated as of August 24, 1995, and
as may be further amended from time to time (the "Credit Agreement").
WHEREAS, pursuant to the terms of the Credit Agreement, Borrower has
executed a Revolving Line of Credit Note in favor of Bank, dated as of June 9,
1995 and in the original principal amount of $6,758,500 (as amended from time
to time, the "Revolving Note").
WHEREAS, pursuant to the terms of the Credit Agreement, Borrower has
executed a Promissory Note in favor of Bank, dated as of February 1, 1995 and
in the original principal amount of $7,500,000 (as amended from time to time,
the "Term Note").
WHEREAS, on or about August 24, 1995, Borrower executed in favor of
Bank that certain Promissory Note, dated as of August 24, 1995 and in the
original principal amount of $1,800,000 (as amended from time to time, the
"Bridge Note").
WHEREAS, on or about August 24, 1995, Borrower entered into a Pledge
Agreement in favor of Bank, dated as of August 24, 1995 (the "Pledge
Agreement").
WHEREAS, on or about October 14, 1994, MMC executed in favor of Bank a
Third Party Security Agreement: Rights to Payment and Inventory, dated as of
October 14, 1994 (as amended from time to time, the "MMC Rights to Payment
Security Agreement"). The MMC Rights to Payment Security Agreement was given to
secure obligations of Borrower to Bank.
WHEREAS, on or about October 14, 1994, MMC executed in favor of Bank a
Third Party Security Agreement: Equipment, dated as of October 14, 1994 (as
amended from time to time, the "MMC Equipment Security Agreement"). The MMC
Equipment Security Agreement was given to secure obligations of Borrower to
Bank.
WHEREAS, Borrower and Bank are parties to that certain Reimbursement
Agreement, dated as of September 1, 1993 (as amended from time to time, the
"Reimbursement Agreement"). Pursuant to the terms of the Reimbursement
Agreement, a
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letter of credit was issued by Bank for the account of Borrower in the stated
amount of $5,735,960.
WHEREAS, pursuant to the terms of the Reimbursement Agreement, Borrower
has executed in favor of Bank a Deed of Trust with Assignment of Rents, dated
as of September 1, 1993 and recorded in the Official Records of the Riverside
County, California Recorder on September 13, 1993 (the "California Deed of
Trust").
WHEREAS, Borrower and MMC have requested that Bank consent to certain
matters and modify or waive certain provisions of the foregoing credit
documents, including:
A. An agreement to extend of the maturity date of the
Revolving Note and the Bridge Note;
B. A waiver of certain financial covenants contained in the
Credit Agreement;
C. A consent to the sale of two parcels of real property owned
by Borrower and the release of the lien of the California Deed of
Trust on one such parcel;
D. A consent to the extension of credit and the incurrence of
a lease obligation by Borrower in conjunction with the foregoing sale
of real property; and
E. A consent to the sale by MMC of certain assets of MMC and
the release of the lien of Bank on such assets.
WHEREAS, Bank has agreed to certain of Borrower's requests in accordance
with the terms and subject to all conditions set forth in this Amendment.
NOW THEREFORE, the parties hereto agree as follows:
1. The second sentence of the first full paragraph on page 2 of the
Revolving Note is amended to read "The outstanding principal balance of this
Note shall be due and payable in full on December 28, 1995."
2. The "Maturity Date," as defined in the Bridge Note, is amended to
be December 28, 1995 instead of November 1, 1995.
3. Compliance with the financial covenants specified in Section 4.9 of
the Credit Agreement is hereby waived by Bank for the period from November 1,
1995 through December 28, 1995 only. For all points of time from and after
December 28, 1995, full compliance with such Section 4.9 shall be required as
though this waiver had not occurred.
4. The effectiveness of the modifications and waivers specified in
Sections 1, 2 and 3, above, is expressly conditioned upon the due execution of
this Amendment by Bank, Borrower, MMC, and Compounding Technology Inc., a
California corporation and the delivery to Bank by Borrower of a restructure
fee of $12,500. Borrower agrees to pay such a restructure fee to Bank upon the
execution of this Amendment by Bank, and such restructure fee is fully earned
at such time and is nonfundable.
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5. Borrower hereby requests the consent of Bank to the sale by
Borrower to Xxxx X. Xxxxxxx, an individual, of certain real property owned by
Borrower and located at 00000 Xxxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxx. Bank
hereby gives its consent to such sale subject to the satisfaction of each of
the following conditions:
a. There shall exist at the time the sale is completed no
Event of Default as defined in the Credit Agreement, nor any condition,
act or event which with the giving of notice or passage of time or both
would constitute any such Event of Default.
b. Bank shall be paid the net cash proceeds to Borrower of
such sale directly out of the closing escrow for the sale. Such net
cash proceeds shall in no event be less than $518,500 and shall be
applied in reduction of outstanding indebtedness of Borrower to Bank,
with first application to the outstanding principal balance of the Term
Note, in inverse order of payment maturity;
c. The sale shall in all events be completed, and the payment
described in Section 5(b) made, no later than November 15, 1995.
d. All contractual arrangements between Borrower and the buyer
pertaining to the sale of the property, including any lease-back by
Borrower of the property sold, shall be subject to the prior review and
reasonable approval of Bank.
e. Borrower shall receive, as partial compensation for the
sale, a promissory note (the "Xxxxxxx Note") from the buyer secured by
a first priority trust deed on the property sold. The Xxxxxxx Note
shall be in the principal amount of no less than $555,000 and shall (i)
provide for interest at the rate of no less than nine percent (9%) per
annum, (ii) provide that outstanding principal is all due and payable
on or before July 2, 1996 and (iii) be evidenced by credit
documentation subject to the prior review and reasonable approval of
Bank. The Xxxxxxx Note (and associated credit documents and a title
insurance policy reasonably acceptable to Bank) shall be delivered to
Bank directly out of the sale escrow at the time of the sale closing
and shall serve as additional Pledged Collateral pursuant to the terms
of the Pledge Agreement. The Xxxxxxx Note shall be accompanied by a
written confirmation by the obligor thereunder to Bank that such
obligor will make all principal payments under said Note directly to
Bank for application against obligations of Borrower in accordance with
terms of the Pledge Agreement. Borrower shall execute and deliver to
Bank an appropriate endorsement to the Xxxxxxx Note at the time of its
delivery.
6. Borrower hereby requests the consent of Bank to the sale by
Borrower to Xxxx Xxxxxxx, an individual, of certain real property owned by
Borrower consisting of approximately 4.9 acres in Corona, California and
further requests the release of Bank's lien on such property at the time of
such sale. bank hereby gives its consent to such sale, and agrees to reasonably
cooperate in releasing the lien of the California Deed of Trust on such
property, subject to the satisfaction of each of the following conditions:
a. There shall exist at the time the sale is completed no
Event of Default as defined in the Credit Agreement, nor any condition,
act or event which with the giving of notice or passage of time or
both would constitute any such Event of Default.
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b. Bank shall be paid the net cash proceeds to Borrower of
such sale directly out of the closing escrow for the sale. Such net
cash proceeds shall in no event be less than $292,500 and shall be
applied in reduction of outstanding indebtedness of Borrower to Bank,
with first application to the outstanding principal balance of the
Term Note, in inverse order of payment maturity.
c. The sale shall in all events be completed, and the payment
described in Section 6(b) made, no later than December 20, 1995.
d. All contractual arrangements between Borrower and the buyer
pertaining to the sale of the property shall be subject to the prior
review and reasonable approval of Bank.
e. Borrower shall receive, as partial compensation for the
sale, a promissory note (the "Xxxxxxx Note") from the buyer secured by
a first priority trust deed on the property sold. The Xxxxxxx Note
shall be in the principal amount of no less than $325,000 and shall (i)
provide for interest at the rate of no less than nine percent (9%) per
annum, (ii) provide that principal is payable in twelve (12) equal
monthly installments, beginning January 15, 1996 and (iii) be evidenced
by credit documentation subject to the prior review and reasonable
approval of Bank. The Xxxxxxx Note (and associated credit documents and
a title insurance policy reasonably acceptable to Bank) shall be
delivered to Bank directly out of the sale escrow at the time of the
sale closing and shall serve as additional Pledged Collateral pursuant
to the terms of the Pledge Agreement. The Xxxxxxx Note shall be
accompanied by a written confirmation by the obligor thereunder to Bank
that such obligor will make all principal payments under said Note
directly to Bank for application against obligations of Borrower in
accordance with terms of the Pledge Agreement. Borrower shall execute
and deliver to Bank an appropriate endorsement to the Xxxxxxx Note at
the time of its delivery.
7. Borrower and MMC hereby requests the consent of Bank (pursuant to
Section 6(b)(v) of the MMC Rights to Payment Security Agreement and Section
6(b)(vi) of the MMC Equipment Security Agreement) to the sale by MMC to Xxxxx
Xxxxx, Inc., a corporation, of certain personal property (along with the
assumption of certain liabilities) owned by MMC pertaining to its respiratory
care products line and further requests the release of Bank's lien on such
property at the time of such sale. Bank hereby gives its consent to such sale,
and agrees to reasonably cooperate in releasing its lien on such property,
subject to the satisfaction of each of the following conditions:
a. There shall exist at the time the sale is completed no
Event of Default as defined in the Credit Agreement, nor any condition,
act or event which with the giving of notice or passage of time or both
would constitute any such Event of Default.
b. Bank shall be paid the net cash proceeds to MMC of such
sale directly out of the closing escrow for the sale. Such net cash
proceeds shall in no event be less than $2,000,000 and shall be applied
in reduction of outstanding indebtedness of Borrower to Bank, with
first application to the outstanding principal balance of the Term
Note, in inverse order of payment maturity.
c. The sale shall in all events be completed, and the payment
described in Section 7(b) made, no later than November 29, 1995.
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d. The form and financial condition of the buyer and all
contractual arrangements between MMC and the buyer pertaining to the
sale of the property shall be subject to the prior review and
reasonable approval of Bank. In addition, Bank shall have approved in
its sole and absolute discretion the assets to be transferred to and the
liabilities to be assumed by the buyer in connection with the sale.
8. The Pledge Agreement is amended by adding a new Section 6.3
thereto, reading as follows:
"6.3 Distribution Rights Re Pledged Collateral.
Notwithstanding any provision hereof to the contrary (except as
expressly provided in Section 6.2), all collections, payments
and recoveries of any nature with respect to the Pledged
Collateral, whether before or after any Event of Default, shall
be paid directly to Secured Party for application against
indebtedness secured hereby in such order and manner as Secured
Party shall determine in its sole and absolute discretion. Any
and all collections or other amounts received by Grantor with
respect to Pledged Collateral, or with respect to any security
therefore, shall be received in trust for the benefit of Secured
Party, shall be segregated from other funds of Grantor, and
shall immediately be paid over to Secured Party for such
application in the same form as so received by Grantor (with
any necessary endorsements)."
9. Borrower acknowledges that all costs and expenses of Bank incurred
in connection with the negotiation and preparation of this Amendment, or in
connection with any document or transaction contemplated herein, are, without
limitation, obligations of Borrower pursuant to Section 7.3 of the Credit
Agreement.
10. Except as specifically provided herein, all terms and conditions of
the agreements referenced herein remain in full force and effect, without
waiver or modification.
11. Borrower hereby remakes all representations and warranties
contained in the credit documents identified herein and reaffirms all covenants
set forth therein. Borrower further certifies as of the date of this Amendment,
other than is heretofore disclosed in writing to Bank, there exists no Event of
Default as defined in the Credit
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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 date and year first written above.
Date: October 27, 1995
CIMCO, INC., a Delaware corporation
By: XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
President
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: ART BROKX
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Art Brokx, VP
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Printed Name and Title
MEDICAL MOLDING CORPORATION OF AMERICA,
a California corporation
By: XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
President
REAFFIRMATION OF SECURITY AGREEMENTS
By their execution hereof, Medical Molding Corporation of America, a
California corporation and Compounding Technology Inc., a California
corporation do hereby consent to all terms and provisions contained in all
transactions contemplated by the foregoing
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Amendment and hereby reaffirm that all security agreements and other
undertakings heretofore made by them in favor of Bank remain in full force and
effect.
Date: October 27, 0000
XXXXXXX XXXXXXX XXXXXXXXXXX XX XXXXXXX,
a California corporation
By: XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
President
COMPOUNDING TECHNOLOGY INC.,
a California corporation
By: XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
Chairman of the Board
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