EXHIBIT 10.77
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
between
ADAC LABORATORIES
and
ABN AMRO BANK N.V.
August 15, 1995
TABLE OF CONTENTS
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Page
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ARTICLE 1
DEFINITIONS
1.1 Definitions...................................................... 1
1.2 Accounting Terms................................................. 6
1.3 Interpretation................................................... 6
1.4 Other Terms...................................................... 6
1.5 Currency Equivalents Generally................................... 6
ARTICLE 2
CREDIT FACILITY
2.1 Loans............................................................ 7
2.2 Interest......................................................... 7
2.3 Notice of Borrowing.............................................. 7
2.4 Promissory Notes................................................. 8
2.5 Method of Payment of a Loan...................................... 8
2.6 Termination Date................................................. 8
2.7 Commitment Fee................................................... 8
2.8 Currency Equivalents............................................. 8
2.9 Default Interest Rate............................................ 9
ARTICLE 3
PREPAYMENTS
3.1 Voluntary Prepayments............................................ 9
3.2 Mandatory Prepayments............................................ 9
ARTICLE 4
LETTERS OF CREDIT
4.1 Issuance......................................................... 10
4.2 Procedure........................................................ 10
4.3 Conditions of Issuance........................................... 10
4.4 Reimbursement Obligation......................................... 10
4.5 Letters of Credit Outstanding on Termination Date................ 11
4.6 Indemnification; Nature of the Bank's Duties..................... 11
4.7 Letter of Credit Fees............................................ 12
4.8 Increased Costs.................................................. 12
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ARTICLE 5
COLLATERAL
5.1 The Collateral................................................... 12
5.2 Rights of the Bank With or Without Default....................... 13
5.3 Survival......................................................... 14
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Corporate Status................................................. 14
6.2 Corporate Power and Authority.................................... 14
6.3 Binding Effect................................................... 15
6.4 Financial Information............................................ 15
6.5 Litigation....................................................... 15
6.6 Not an Investment Company........................................ 15
6.7 Compliance with ERISA............................................ 15
6.8 Taxes............................................................ 15
6.9 Full Disclosure.................................................. 16
6.10 Fictitious Trade Styles.......................................... 16
6.11 Title to Assets; Permitted Liens; Location of
Collateral..................................................... 16
ARTICLE 7
COVENANTS
7.1 Preservation of Existence; Compliance with
Applicable Laws................................................ 17
7.2 Maintenance of Insurance......................................... 17
7.3 Maintenance and Location of Collateral and Other
Properties..................................................... 17
7.4 Payment of Obligations and Taxes................................. 18
7.5 Inspection Rights................................................ 18
7.6 Reporting Requirements........................................... 18
7.7 Payment of Dividends............................................. 19
7.8 Redemption or Repurchase of Stock................................ 20
7.9 Additional Indebtedness.......................................... 20
7.10 Loans............................................................ 20
7.11 Liens and Encumbrances........................................... 20
7.12 Transfer of Assets............................................... 21
7.13 Change in the Nature of Business................................. 21
7.14 Financial Condition.............................................. 21
7.15 Capital Expenditures............................................. 22
7.16 Notices.......................................................... 22
7.17 Environmental Compliance......................................... 22
7.18 Chief Executive Office........................................... 23
7.19 Use of Proceeds.................................................. 23
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ARTICLE 8
CONDITIONS PRECEDENT
8.1 All Loans and Letters of Credit.................................. 23
ARTICLE 9
DEFAULT
9.1 Events of Default................................................ 24
9.2 Remedies......................................................... 26
9.3 Letters of Credit................................................ 26
9.4 Notification of Account Debtors.................................. 26
9.5 Protection of Security Interest.................................. 27
9.6 Foreclosure...................................................... 27
9.7 Application of Proceeds.......................................... 28
ARTICLE 10
CHANGE IN CIRCUMSTANCES
10.1 Compensation for Funding Loss or Expense......................... 28
10.2 Illegality....................................................... 29
10.3 Taxes............................................................ 29
10.4 Reserve Requirements............................................. 30
10.5 Notice Certificates.............................................. 31
ARTICLE 11
MISCELLANEOUS
11.1 Waiver and Amendment............................................. 31
11.2 Notices.......................................................... 31
11.3 Execution in Counterparts........................................ 32
11.4 Binding Effect................................................... 32
11.5 Assignments and Participations................................... 32
11.6 Payment Instructions............................................. 33
11.7 Survival of Representations and Warranties....................... 33
11.8 Severability of Provisions....................................... 33
11.9 Headings......................................................... 33
11.10 Governing Law and Jurisdiction................................... 33
11.11 Judgment Currency................................................ 33
11.12 Costs and Expenses............................................... 34
11.13 Indemnity........................................................ 34
11.14 Entire Agreement................................................. 34
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ARTICLE 12
EFFECTIVE DATE OF THIS RESTATED CREDIT AGREEMENT
12.1 Effective Date................................................... 35
12.2 Effect........................................................... 35
EXHIBITS
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A Amended and Restated Note
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AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Restated Credit
Agreement"), dated as of August 15, 1995 is entered into by and between:
(1) ADAC LABORATORIES, a California corporation (the "Company"); and
(2) ABN AMRO BANK N.V., a Netherlands public company acting through
its San Francisco International Branch and/or Cayman Islands Branch (the
"Bank").
RECITALS
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A. Borrower and Bank are parties to a Credit Agreement dated as of August
6, 1993, as amended by a First Amendment to Credit Agreement dated as of August
5, 1994, a Second Amendment to Credit Agreement dated as of September 23, 1994
and a Third Amendment to Credit Agreement dated as of March 24, 1995 (as so
amended, the "Existing Credit Agreement"), pursuant to which the Bank has
provided to the Company certain credit facilities.
B. The Company now has requested the Bank to amend the Existing Credit
Agreement in certain additional respects. The Bank is willing to amend the
Existing Credit Agreement upon the terms and subject to the conditions set forth
herein. For convenience of reference, the Company and the Bank wish to restate
the Existing Credit Agreement as so amended in its entirety.
AGREEMENT
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NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants contained herein, the Company and the Bank hereby agree that the
Existing Credit Agreement shall be amended and restated to read in its entirety
as follows:
ARTICLE 1
DEFINITIONS
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1.1 Definitions. As used in this Agreement, the following terms shall
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have the meanings set forth below (such meanings to be equally applicable to
both the singular and plural of the terms defined):
"Account Debtor" shall mean the person obligated to the Company on an
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account.
"Agreement" shall mean this Restated Credit Agreement as amended,
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modified and supplemented from time to time and in effect at any given time
and, if the context so permits, also shall include the Existing Credit
Agreement as amended, modified and supplemented from time to time and in
effect at any given time prior to the Effective Date.
"Alternate Currency" shall mean Netherlands guilders, Deutsch marks,
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British pounds sterling, French francs, Swiss francs and any other currency
other than Dollars which the Bank shall, at any relevant time, have agreed
upon the Company's request to treat as an Alternate Currency under this
Agreement.
"Alternate Currency Loan" shall mean a Loan made to the Company
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hereunder denominated in an Alternate Currency.
"Bank" shall have the meaning given to that term in clause (2) of the
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introductory paragraph hereof.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act, Title 11 of
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the United States Code, as amended from time to time.
"Base Rate" shall mean the rate announced by the Bank from its office
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in Chicago as its base rate.
"Base Rate Loan" shall mean a Loan advanced to the Company under
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Article 2 at the Base Rate.
"Business Day" shall mean a day of the year on which commercial banks
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are not required or authorized by law to close in the State of California
and if the applicable Business Day relates to a LIBOR Loan, a day on which
dealings are conducted in the interbank eurodollar market.
"CHC" shall mean Community Health Computing Corporation, a Delaware
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corporation.
"Code" shall mean the United States Internal Revenue Code of 1986, as
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amended from time to time.
"Collateral" shall have the meaning given such term in Section 5.1
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hereof.
"Commitment" shall mean the commitment of the Bank to make Loans to
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the Company hereunder up to the Maximum Amount.
"Commitment Fee" shall have the meaning set forth in Section 2.7
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hereof.
"Company" shall have the meaning given to that term in clause (1) of
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the introductory paragraph hereof.
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"Credit Documents" shall mean this Agreement, the Note, the
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Intercreditor Agreement, the Guaranties and all instruments
and documents executed in connection with any thereof, including, without
limitation, any instruments or documents executed in connection with any
Letter of Credit.
"Currency" shall mean Dollars or any Alternate Currency in which the
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Bank has agreed upon the Company's request to make a Loan under this
Agreement.
"Debt" shall mean all liabilities of the Company as set forth on its
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balance sheet less Subordinated Debt.
"Default" shall mean any of the events specified in Section 9.1
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hereof, whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition has been satisfied.
"Dollar Loan" shall mean a Loan made to the Company hereunder
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denominated in Dollars.
"Dollars" and the sign "$" shall mean the lawful currency of the
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United States of America.
"Effective Date" shall have the meaning set forth in Section 12.1
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hereof.
"Effective Tangible Net Worth" shall mean the Company's stated net
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worth plus Subordinated Debt but less all intangible assets of the Company
(i.e., goodwill, trademarks, patents, copyrights, organization expense,
loans and advances to employees, affiliates or subsidiaries, investments in
subsidiaries and similar intangible items, provided however, that on a
consolidated basis, Effective Tangible Net Worth shall exclude from
intangible assets advances to affiliates and subsidiaries and investments
in subsidiaries).
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time, including, (unless the context
otherwise requires) any rules or regulations promulgated thereunder.
"Eurocurrency Liabilities" shall have the meaning set forth in
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Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Existing Credit Agreement" shall have the meaning set forth in
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Recital A hereof.
"Existing Note" shall have the meaning set forth in Section 12.2
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hereof.
"GAAP" shall mean generally accepted accounting principles applied on
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a consistent basis, set forth in the
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Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board and/or in such other statements by such other
entity as the Bank or the Company may reasonably approve, which are
applicable in the circumstances and as of the date in question, and the
requisite that such principles be applied on a consistent basis shall mean
that the accounting principles observed in a current period are comparable
in all material respects to those applied in a preceding period except for
the adoption within any permissible period of new accounting standards
required or permitted by the Financial Accounting Standards Board from time
to time.
"Guaranties" shall mean, collectively, all guaranties executed by the
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Company in connection with sales by the Company to the Bank of promissory
notes and other evidences of indebtedness held by the Company and all other
documents, instruments and agreements executed by the Company in connection
with such sales.
"Intercreditor Agreement" shall mean the Intercreditor Agreement among
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the Bank, Sanwa and the Company delivered to the Bank pursuant to Section
12.1 hereof and any successor agreement thereto satisfactory to the Bank,
as the same may be amended, modified or supplemented in accordance with its
terms.
"Interest Period" shall mean in the case of any LIBOR Loan (a)
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initially the period commencing on the date such LIBOR Loan is made and
ending one, two or three months thereafter as selected by the Company in
its irrevocable written notice given to the Bank pursuant to Section 2.3
hereof, and (b) thereafter a period commencing on the last day of the
immediately preceding Interest Period for such LIBOR Loan and ending one,
two or three months thereafter as selected by the Company; provided that
all of the foregoing provisions are subject to the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day; and
(ii) the Company may not select any Interest Period for a Loan
that extends beyond the Termination Date.
"Letter of Credit" means any standby letter of credit which is now or
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at any time hereafter issued by the Bank pursuant to this Agreement at the
request and for the account of the Company and which has not expired or
been revoked or terminated.
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"LIBOR" shall mean the rate generally offered to the Bank in the
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London interbank market for deposits of amount, Currency and fixed term
comparable to the amount, Currency and Interest Period of the Loan
requested by the Company.
"LIBOR Loan" shall mean a Loan advanced to the Company under Article 2
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at a rate computed by reference to LIBOR.
"Liquid Assets" shall mean all unrestricted cash and cash equivalents
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of the Company.
"Loan" shall mean a LIBOR Loan or a Base Rate Loan made by the Bank to
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the Company under this Agreement.
"Margin Stock" shall mean margin stock as defined in Regulation U of
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the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Maximum Amount" shall mean $20,000,000 (or an equivalent thereof in
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an Alternate Currency) which is the maximum aggregate amount which the Bank
will extend to the Company under this Agreement.
"Multiemployer Plan" shall have the meaning set forth in Section
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4001(a)(3) of ERISA.
"Note" shall mean the Restated Note as amended, modified and
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supplemented from time to time and in effect at any given time and, if the
context so permits, also shall include the Existing Note as amended,
modified and supplemented from time to time and in effect at any given time
prior to the Effective Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
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successor entity or entities performing similar functions.
"Permitted Liens" shall have the meaning set forth in Section 6.11
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hereof.
"Person" shall mean at any time an individual, a corporation, an
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association, a trust, a government, a political subdivision, a governmental
agency or instrumentality or any other entity or other organization.
"Plan" shall mean a defined benefit pension plan under ERISA for the
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unfunded liabilities of which, upon termination, the Company could be held
liable by the PBGC.
"Restated Credit Agreement" shall have the meaning set forth in the
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introductory paragraph hereof.
"Restated Note" shall have the meaning set forth in Section 12.1(b).
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"Sanwa" shall mean Sanwa Bank California, a California banking
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corporation.
"Secured Obligations" shall have the meaning set forth in Section 5.1
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hereof.
"Subordinated Debt" shall mean such liabilities of the Company which
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have been subordinated to those owed to the Bank in a manner acceptable to
the Bank.
"Termination Date" shall mean April 5, 1996.
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1.2 Accounting Terms. Unless otherwise specified in this Agreement, all
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accounting terms used in this Agreement shall be interpreted, all accounting
determinations under this Agreement shall be made, and all financial statements
required to be delivered under this Agreement shall be prepared in accordance
with GAAP.
1.3 Interpretation. The following rules shall apply to the construction
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of the Agreement unless the context requires otherwise: (a) the singular
includes the plural and the plural, the singular; (b) words importing any gender
include the other gender; (c) the references to statutes are to be construed as
including all statutory provisions consolidating, amending or replacing the
statute to which reference is made; (d) references to "writing" include
printing, photocopying, typing, lithography and other means of reproducing words
in a tangible visible form; (e) the words "including" "includes" and "include"
shall be deemed to be followed by the words "without limitation"; (f) references
to articles, sections (or subdivisions of sections), exhibits, annexes or
schedules are to those of this Agreement unless otherwise indicated; (g)
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments or modifications that are not prohibited by
the terms of this Agreement; (h) references to Persons include their respective
permitted successors and assigns, and (i) headings herein are solely for
convenience of reference and shall not constitute a part of this Agreement nor
shall they affect its meaning.
1.4 Other Terms. All terms used herein and not otherwise defined shall
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have the meanings, if any, given to such terms in the California Uniform
Commercial Code.
1.5 Currency Equivalents Generally. For all purposes of this Agreement
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other than Article 2, the equivalent in any Alternate Currency of an amount in
Dollars shall be determined at the rate of exchange quoted by the Bank in San
Francisco, on the date of determination, for the spot purchase in the relevant
foreign exchange market of such amount of Dollars with such Alternate Currency.
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ARTICLE 2
CREDIT FACILITY
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2.1 Loans. The Bank agrees, on the terms and conditions set forth in this
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Agreement to lend the Company pursuant to this Section 2.1 from time to time
amounts such that the aggregate principal amount of the Loans that are at any
one time outstanding shall not exceed, together with the aggregate undrawn
amount of all issued and outstanding Letters of Credit, the Maximum Amount.
Within the foregoing limits, the Company may borrow under this Section 2.1,
repay or, to the extent permitted by Article 3 prepay the Loans and reborrow
under this Section 2.1 at any time prior to the Termination Date. Unless
otherwise instructed in writing by the Company, the Bank shall wire the amount
of loans advanced hereunder to Sanwa Bank California, San Xxxx, for the account
of ADAC Laboratories, Acct. No. 1129-92463, Ref: Loan Proceeds.
2.2 Interest. Each Loan shall bear interest on its outstanding principal
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amount at a rate equal to the Company's choice at the time such Loan is made of
either:
(a) LIBOR plus one and one quarter percent (1.25%) per annum; or
(b) Base Rate.
Interest on Loans shall be computed on the number of days elapsed and a year of
360 days. Interest on Base Rate Loans shall be due and payable at the end of
each calendar month. Interest on LIBOR Loans shall be due and payable at the
end of each Interest Period. Each determination of an interest rate by the Bank
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company in the absence of manifest error. The Bank will, at the request of
the Company, deliver to the Company, a statement showing the quotations used by
the Bank in determining any interest rate.
2.3 Notice of Borrowing. Whenever the Company desires to obtain a Loan
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hereunder, the Company shall give the Bank (at the Bank's office as set forth in
Section 11.2 hereof) prior notice by 11:00 a.m. (California time) on the
Business Day on which a Base Rate Loan that is a Dollar Loan is to be made
hereunder and by 11:00 a.m. (California time) at least three (3) Business Days'
prior to the Business Day on which a LIBOR Loan or Alternate Currency Loan is to
be made hereunder. Each such notice shall specify (i) the principal amount of
the Loan, (ii) the date such Loan is to be made (which shall be a Business Day),
(iii) whether the Loan is to be a Base Rate Loan or a LIBOR Loan, (iv) the
Currency in which such Loan is to be made, and (v) if a LIBOR Loan the initial
Interest Period to be applicable thereto. The Bank shall notify the Company no
later than one Business Day before the date on which an Alternate Currency Loan
is to be made if such Alternate Currency is not available.
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2.4 Promissory Notes. The Company's obligation to pay the principal of
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and interest on the Loans made by the Bank shall be evidenced by a Note in the
form of Exhibit A. The Note shall (i) be in the stated principal amount equal
to the Maximum Amount, (ii) be payable in the principal amount of the Loans
evidenced on the schedule to such Note, (iii) mature on the Termination Date,
and (iv) bear interest as set forth in this Agreement. The Bank may endorse on
the grid annexed to the Note the date, amount and maturity of each Loan made to
the Company and the amount of each payment of principal made by the Company with
respect thereto. The Bank is irrevocably authorized by the Company to endorse
its Note and the Bank's record shall be conclusive absent manifest error;
provided, however, that the failure of the Bank to make, or an error in making,
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a notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under the Note to the Bank.
2.5 Method of Payment of a Loan. All payments made by the Company (in
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connection with a Loan) under this Agreement or a Note will be made as set forth
in Section 11.6 hereof, or at such other place in the United States of America
or elsewhere as the Bank may specify, in immediately available funds in the
Currency in which the Loan was made. The obligations of the Company under this
Article and under the Note are dischargeable only by payment in the requested
Currency, regardless of any law, rule, regulation or statute, whether now or
hereafter in existence or in effect in any jurisdiction, which affects or
purports to affect such obligations.
2.6 Termination Date. The credit facility established hereunder shall
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terminate on the Termination Date. The Company agrees to repay the principal
amount of all outstanding Loans, together with accrued and unpaid interest
thereon, on the Termination Date.
2.7 Commitment Fee. The Company agrees to pay to the Bank a commitment
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fee (the "Commitment Fee") for the period from August 6, 1993 to the Termination
Date computed (on the basis of days elapsed and a year of 360 days) at a rate
equal to 0.50% per annum on the unused amount of the Maximum Amount. The
Company shall pay the Bank the Commitment Fee quarterly in arrears; such payment
to be made in accordance with the Bank's instructions.
2.8 Currency Equivalents. For purposes of the provisions of this Article
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2, (i) the equivalent in Dollars of any Alternate Currency shall be determined
by using the quoted spot rate at which Bank's office in San Francisco offers to
exchange Dollars for such Alternate Currency three Business Days prior to the
date on which such equivalent is to be determined, and (ii) the equivalent in
any Alternate Currency of Dollars shall be determined by using the quoted spot
rate at which Bank's office in San Francisco offers to exchange such Alternate
Currency for Dollars three Business Days prior to the date on which such
equivalent is to be determined. The equivalent in Dollars of
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each Loan made in an Alternate Currency shall be recalculated hereunder on each
date that it shall be necessary to determine the unused portion of the
Commitment or the amount of any or all Loans outstanding on such date in
Dollars.
2.9 Default Interest Rate. If any amount of principal of or interest on
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any Loan or any other amount payable hereunder or under any other Credit
Document is not paid in full when due, (whether at stated maturity, by
acceleration, demand or otherwise), the Company agrees to pay interest on such
unpaid principal, interest or other amount from the date such amount becomes due
until the date such amount is paid in full, payable on demand, at a rate per
annum equal to 3% in excess of the Base Rate.
ARTICLE 3
PREPAYMENTS
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3.1 Voluntary Prepayments. The Company may prepay, without premium or
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penalty (except for losses and expenses under Section 11.1 hereof), all or any
portion of the Loans upon three Business Days' irrevocable notice to the Bank.
Prepayments under this Agreement shall be made in the Currency in which the
amounts prepaid are denominated at the time of prepayment together with accrued
interest thereon in the same Currency and any payment due under Section 10.1
hereof. The notice of prepayment shall specify the date of prepayment and the
aggregate amount of prepayment, which amount shall be (i) no less than $500,000
with respect to a Dollar Loan, (ii) no less than the equivalent of $500,000 in
the applicable Alternate Currency with respect to an Alternate Currency Loan, or
(iii) integral multiples of the numbers set forth in clauses (i) and (ii). If
any such notice is given, the amount of the prepayment specified in the notice
shall be due and payable on the date specified therein together with accrued
interest to such date on such amount and any payment due under Section 10.1
hereof.
3.2 Mandatory Prepayments. In the event that due to exchange rate
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fluctuations, the amount of outstanding Loans plus the aggregate undrawn amount
of all issued and outstanding Letters of Credit exceeds the Maximum Amount, the
Company shall repay to the Bank the sum by which such amount exceeds the Maximum
Amount.
ARTICLE 4
LETTERS OF CREDIT
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4.1 Issuance. Subject to the provisions of Section 4.3 and Article 8
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hereof, at any time prior to the Termination Date the Company may request that
the Bank issue one or more Letters of
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Credit as provided herein with an expiration date not later than the date that
is 360 days after the date of issuance.
4.2 Procedure. The Company shall deliver to the Bank, at least three
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(3) Business Days prior to the date on which the Letter of Credit is requested
to be issued, the Bank's standard letter of credit application and reimbursement
agreement, modified as necessary to reflect the terms of this Agreement, and
such other documents and materials as may be required pursuant to the terms
thereof, and each of such documents shall be in form and substance satisfactory
to the Bank; provided, however, that in the event of any conflict between the
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provisions of any such agreement or document and the provisions of this
Agreement, the provisions of this Agreement shall control.
4.3 Conditions of Issuance. In addition to the issuance of any
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Letter of Credit being subject to the satisfaction of the conditions precedent
set forth in Article 8 hereof, no Letter of Credit shall be issued hereunder if:
(a) As of the date of issuance of the proposed Letter of Credit, any
order, judgment or decree of any court, arbitrator or governmental
authority shall purport by its terms to enjoin or restrain the Bank from
issuing the Letter of Credit or any law, rule or regulation applicable to
the Bank or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the Bank shall
prohibit or request that the Bank refrain from the issuance of letters of
credit generally; or
(b) As of the date of issuance of the proposed Letter of Credit, the
maximum amount available for drawing under the proposed Letter of Credit
when added to the aggregate maximum amount available for drawing under all
previously issued and outstanding Letters of Credit plus the amount of all
outstanding Loans exceeds the Maximum Amount on the proposed date of
issuance (giving effect to any other Letters of Credit and any Loans
requested to be issued or made on such date).
The foregoing conditions and the provisions of Section 4.1 shall also apply to
any extension or renewal of or increase in the amount available for drawing
under a Letter of Credit.
4.4 Reimbursement Obligation. In the event that the Bank shall make
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any payment on or pursuant to any Letter of Credit or shall incur any
expense with respect to any Letter of Credit the amount of such payment or
expense shall be due and owing from the Company to the Bank on the date
that such payment is made or expense incurred, provided that if no Event of
Default has then occurred and is continuing, the amount of any such payment
that represents payment of a draw by the beneficiary under such Letter
of Credit shall be deemed to constitute a Base Rate Loan made as of
such date .
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4.5 Letters of Credit Outstanding on Termination Date. In the event that
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any Letter of Credit, whether or not then due and payable, shall for any reason
be outstanding on the Termination Date, the obligations of the Company with
respect to each such Letter of Credit shall be governed by the letter of credit
application and reimbursement agreement and other documentation executed
pursuant to Section 4.2 in connection with such Letter of Credit.
4.6 Indemnification; Nature of the Bank's Duties. The Company hereby
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agrees to protect, indemnify and save the Bank harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which the Bank may incur or be subject to
as a consequence, direct and indirect, of the issuance of any Letter of Credit,
including without limitation that resulting from the failure of the Bank to
honor a drawing under such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority, but excluding that resulting from the
gross negligence or willful misconduct of the Bank. As between the Company and
the Bank, the Company assumes all risks of the acts and omissions of, or misuse
of any Letter of Credit by the beneficiary of such Letter of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions of
any Letter of Credit application, the Bank shall not be responsible:
(a) For the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in
fact prove to be in any respect invalid, insufficient, inaccurate,
fraudulent or forged;
(b) For the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason;
(c) For failure of the beneficiary of a Letter of Credit to comply
fully with conditions required in order to draw upon such Letter of Credit;
(d) For errors, omissions, interruptions or delays in transmission or
delivery of any notices, demands, protests or other messages, by mail,
cable, telegraph, telex or otherwise;
(e) For errors in interpretation of technical terms;
(f) For any loss or delay in the transmission or otherwise of any
document required in order to make a
11
drawing under any Letter of Credit or of the proceeds thereof;
(g) For the misapplication by the beneficiary of the Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or
(h) For any consequences arising from causes beyond the control of the
Bank.
None of the above shall affect, impair or prevent the vesting of any of the
Bank's rights or powers hereunder or under any of the documentation described in
Section 4.2. No action taken or omitted by the Bank under or in connection with
the Letters of Credit or the related applications, agreements or certificates,
if taken or omitted in good faith, shall put the Bank under any resulting
liability to the Company.
4.7 Letter of Credit Fees. The Company shall pay to the Bank a fee with
---------------------
respect to each Letter of Credit in advance on the date of issuance of the
Letter of Credit equal to the greater of (a) 0.85% per annum of the face amount
of the Letter of Credit, or (b) $500. The Company shall pay to the Bank a fee
of $100 for each amendment to a Letter of Credit.
4.8 Increased Costs. The Company shall, upon the Bank's request, promptly
---------------
pay to and reimburse the Bank for all costs incurred and payments made by the
Bank by reason of any future assessment, reserve, deposit or similar requirement
or any surcharge, tax or fee imposed upon the Bank or as a result of the Bank's
compliance with any directive or requirement of any regulatory authority
pertaining or relating to any Letter of Credit. The Bank shall use reasonable
efforts to provide the Company, in advance, with an estimate of any such costs
which may potentially be incurred hereunder.
ARTICLE 5
COLLATERAL
----------
5.1 The Collateral. To secure payment and performance of all the
--------------
Company's obligations under this Agreement, including, without limitation, the
payment of the Loans, and all other liabilities, loans, guarantees, covenants
and duties owed by the Company to the Bank (including without limitation under
the Guaranties), whether or not evidenced by this or by any other agreement,
absolute or contingent, due or to become due, now existing or hereafter and
howsoever created (collectively, the "Secured Obligations"), the Company hereby
grants the Bank a security interest in and to all of the following property:
(a) All goods now owned or hereafter acquired by the Company or in
which the Company now has or may hereafter acquire any interest, including,
but not limited to, all
12
machinery, equipment, furniture, furnishings, fixtures, tools, supplies and
motor vehicles of every kind and description, and all additions,
accessions, improvements, replacements and substitutions thereto and
thereof;
(b) All inventory now owned or hereafter acquired by the Company,
including, but not limited to, all raw materials, work in process, finished
goods, merchandise, parts and supplies of every kind and description,
including inventory temporarily out of the Company's custody or possession,
together with all returns on accounts;
(c) All accounts, contract rights and general intangibles now owned or
hereafter created or acquired by the Company, including but not limited to,
all receivables, goodwill, trademarks, trade styles, trade names, patents,
patent applications, software, customer lists and business records;
(d) All documents, instruments and chattel paper now owned or
hereafter acquired by the Company; and
(e) All moneys, deposit accounts, certificates of deposit and
securities now owned or hereafter acquired by the Company.
The Bank's security interest in the Collateral shall be a continuing lien and
shall include the proceeds and products of the Collateral including, but not
limited to, the proceeds of any insurance thereon.
5.2 Rights of the Bank With or Without Default. The Company agrees that
------------------------------------------
the Bank may at any time and at its option, whether or not a Default or Event of
Default shall have occurred:
(a) Require the Company to deliver to the Bank, at such times
designated by the Bank, such records and schedules or copies thereof as the
Bank may reasonably require to protect its security interests hereunder.
Such records and schedules may show the status and condition of the
Collateral, where it is located and such contracts or other matters which
affect the Collateral;
(b) Send verification requests to any Account Debtor;
(c) Make inquiries of the Company's trade vendors; and
(d) Require the Company to promptly and duly execute and deliver any
and all such further instruments and documents and take such further action
as the Bank may reasonably deem desirable to obtain the full benefits of
this Agreement and of the rights and powers herein granted, including,
without limitation, (i) executing and delivering financing or continuation
statements with respect to the liens and security interests granted hereby
and
13
(ii) transferring Collateral to the Bank's possession (if a security
interest in such Collateral can be perfected only by possession).
5.3 Survival. The provisions of this Article 5 and Sections 6.10, 7.1,
--------
7.2, 7.3, 7.11 and 7.18 shall survive the termination of this Agreement and
shall continue in full force and effect until such time as all the Secured
Obligations are indefeasibly paid in full.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Bank to enter into this Agreement and to make the
Loans, the Company does hereby make the following representations, warranties
and agreements as of the Effective Date and thereafter on and as of the date
that any Loan is made or any Letter of Credit is issued:
6.1 Corporate Status. The Company is a duly organized and validly
----------------
existing corporation in good standing under the laws of the State of California.
The Company (i) has the power and authority to own its property and assets and
to transact the business in which it is engaged, (ii) is duly licensed,
qualified as a foreign corporation and in good standing in each jurisdiction
where it owns or leases real property and in which failure to be licensed, duly
qualified and in good standing would have a material adverse effect on the
financial condition or operations of the Company.
6.2 Corporate Power and Authority. The execution, delivery and
-----------------------------
performance by the Company of this Agreement and the other Credit Documents are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official or any consent or approval of
the Company's stockholders and do not contravene, or constitute a default under
any provision of applicable law or regulation or of any writ, order, judgment or
injunction presently in effect affecting the Company or of the articles of
incorporation or by-laws of the Company or of any agreement, indenture or
instrument evidencing debt of the Company or other material instrument to which
the Company is a party or by which it or its properties may be bound or affected
or result in the creation or imposition of any lien on the property or assets of
the Company (except for the liens created pursuant to Article 5 hereof).
6.3 Binding Effect. This Agreement constitutes a valid and binding
--------------
agreement of the Company and the other Credit Documents, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Company, in each case enforceable in accordance with their
respective terms, except as enforcement may be limited by bankruptcy,
insolvency,
14
or other laws affecting the enforcement of creditors' rights generally and
except as the remedy of specific performance or of injunctive relief is subject
to the discretion of the court hearing such proceedings.
6.4 Financial Information.
---------------------
(a) The consolidated balance sheet of the Company as of October 2,
1994 and the related consolidated statements of earnings, shareholder's
equity and changes in the financial position of the Company for the fiscal
year then ended, reported on by Coopers & Xxxxxxx, copies of which have
been furnished to the Bank, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial position of the
Company as of such date and its consolidated results of operations.
(b) Since October 2, 1994 there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Company taken as a whole.
6.5 Litigation. There is no action, suit or proceeding pending against,
----------
or to the knowledge of the Company threatened against or affecting, the Company
before any court or arbitrator or any governmental body, agency or official
which, if determined adversely to the Company, would have a material adverse
effect on the Company's financial condition or operations or which in any manner
draws into question the validity of this Agreement or the other Credit
Documents.
6.6 Not an Investment Company. The Company is not an "investment company"
-------------------------
within the meaning of the Investment Company Act of 1940, as amended.
6.7 Compliance with ERISA. The Company has fulfilled its obligations
---------------------
under the minimum funding standards of ERISA and the Code with respect to each
Plan, is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code and has not incurred any liability to the PBGC
in connection with any Plan.
6.8 Taxes. The Company has filed all Federal, state and local tax returns
-----
and reports required to be filed by it and has paid all taxes shown due on the
returns so filed as well as all other material taxes, assessments and
governmental charges which have become due other than taxes, assessments or
governmental charges which are being duly contested in good faith by appropriate
proceedings. The charges, accruals and reserves on the books of the Company in
respect of taxes or other governmental charges are adequate.
6.9 Full Disclosure. All information heretofore furnished by the Company
---------------
to the Bank for the purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated hereby or thereby is, and all
such
15
information hereafter furnished by the Company to the Bank will be, true,
accurate and complete in every material respect on the date as of which such
information is stated or certified and will not omit any material fact necessary
to make such information not misleading. The Company has disclosed to the Bank
in writing any and all facts which materially and adversely affect or may affect
(to the extent that the Company can now reasonably foresee) the business,
operations, prospects or condition (financial or otherwise) of the Company or
the ability of the Company to perform its obligations under this Agreement and
the other Credit Documents.
6.10 Fictitious Trade Styles. There are no fictitious trade styles used by
-----------------------
the Company in connection with its business operations. The Company does not
do, and has not done, business under any name other than ADAC Laboratories. The
Company shall notify the Bank not less than 30 days prior to effecting any
change in the matters described herein or prior to using any other name or
fictitious trade style at any future date, indicating the name or trade style
and state(s) of its use.
6.11 Title to Assets; Permitted Liens; Location of Collateral. The Company
--------------------------------------------------------
has good and marketable title to all of its assets (including, but not limited
to, the Collateral) and the same are not subject to any security interest,
encumbrance, lien or claim of any third person other than: (i) liens and
security interests securing indebtedness owed by the Company to the Bank; (ii)
liens for taxes, assessments or similar charges either not yet due or being duly
contested in good faith; (iii) liens of mechanics, materialmen, warehousemen or
other like liens arising in the ordinary course of business and securing
obligations which are not yet delinquent; (iv) liens and security interests
which, as of August 6, 1993, have been disclosed to and approved by the Bank in
writing; (v) purchase money liens or purchase money security interests upon or
in any property acquired or held by the Company in the ordinary course of
business to secure indebtedness outstanding on August 6, 1993 or permitted to be
incurred hereunder; (vi) liens on the Collateral securing the indebtedness of
the Company to Sanwa permitted pursuant to Section 7.10 hereof; and (vii) those
liens and security interests which in the aggregate constitute an immaterial and
insignificant monetary amount with respect to the net value of the Company's
assets (collectively "Permitted Liens"). As of the Effective Date, not less than
80% in value of the Collateral described in Sections 5.1(a) and (b) will be
located in the State of California.
ARTICLE 7
COVENANTS
---------
The Company covenants and agrees that so long as this Agreement or any
other Credit Document is in effect or any liabilities (whether direct or
indirect) of the Company to the
16
Bank under this Agreement remain outstanding or any amount payable under any
other Credit Document remains unpaid that the Company shall, unless the Bank
otherwise consents in writing:
7.1 Preservation of Existence; Compliance with Applicable Laws. Maintain
----------------------------------------------------------
and preserve its existence and all rights and privileges now enjoyed; not
liquidate, dissolve, merge or consolidate with or into or acquire any other
business organization (except for the purchase of CHC to the extent permitted by
Section 7.15); and conduct its business in accordance with all applicable laws,
rules and regulations except where such failure to so conduct its business would
not have a material adverse affect upon the Company's business as a whole or its
financial condition.
7.2 Maintenance of Insurance. Maintain insurance in such amounts and
------------------------
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower operates and maintain such other insurance and coverages as reasonably
may be required by the Bank. All such insurance shall be in form and amount and
with companies satisfactory to the Bank. With respect to insurance covering
properties in which the Bank maintains a security interest or lien, such
insurance shall name the Bank as loss payee pursuant to a loss payable
endorsement satisfactory to the Bank and shall not be altered or cancelled
except upon 10 days' prior written notice to the Bank. Upon the Bank's request,
the Company shall furnish the Bank with the original policy or binder of all
such insurance.
7.3 Maintenance and Location of Collateral and Other Properties. Except
-----------------------------------------------------------
for Permitted Liens, keep and maintain the Collateral free and clear of all
levies, liens, encumbrances and security interests (including, but not limited
to, any lien of attachment, judgment or execution) and defend the Collateral
against any such levy, lien, encumbrance or security interest; comply in all
material respects with all laws, statutes and regulations pertaining to the
Collateral and its use and operation; execute, file and record such statements,
notices and agreements, take such actions and obtain such certificates and other
documents as necessary to perfect, evidence and continue the Bank's security
interest in the Collateral and the first priority thereof (subject only to
Permitted Liens); maintain accurate and complete records of the Collateral which
show all sales, claims and allowances; and properly care for, house, store and
maintain the Collateral in good condition, free of misuse, abuse and
deterioration, other than normal wear and tear. The Company shall also maintain
and preserve all its properties in good working order and condition in
accordance with the general practice of other businesses of similar character
and size, ordinary wear and tear excepted.
7.4 Payment of Obligations and Taxes. Make timely payment of all
--------------------------------
assessments and taxes and all of its liabilities and obligations unless the same
are being contested in good faith and
17
by appropriate proceedings, and maintain, in accordance with GAAP, appropriate
reserves for the accrual of any of the same.
7.5 Inspection Rights. Keep proper books of record and account in which
-----------------
full, true and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities; and at any
reasonable time and from time to time permit the Bank or any representative
thereof to examine and make copies of the records and visit the properties of
the Borrower to discuss the business and operations of the Borrower with any
employee or representative thereof or its independent public accountants. If
the Company now or at any time hereafter maintains any records (including, but
not limited to, computer generated records and computer programs for the
generation of such records) in the possession of a third party, the Company
hereby agrees to notify such third party to permit the Bank free access to such
records at all reasonable times and to provide the Bank with copies of any
records it may request, all at the Company's expense, the amount of which shall
be payable immediately upon demand. The Bank will use reasonable efforts,
consistent with its normal business practices, to maintain the confidentiality
of any information so received.
7.6 Reporting Requirements. Deliver or cause to be delivered to the Bank
----------------------
in form and detail satisfactory to the Bank:
(a) As soon as available and in any event within 120 days after the
end of each of the Company's fiscal years, an audited consolidated and an
unaudited consolidating balance sheet of the Company as of the end of such
fiscal year and the related statements of earnings, shareholders equity and
cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the preceding fiscal year, all reported on in a manner
acceptable to the Securities and Exchange Commission and, with respect to
such consolidated statements, certified by independent public accountants
of nationally recognized standing acceptable to the Bank;
(b) As soon as available and in any event within 45 days after the end
of the first three fiscal quarters of each fiscal year of the Company, a
consolidated and consolidating balance sheet for the Company as of the end
of such quarter and the related consolidated statements of cash flows of
the Company for such quarter and for the portion of the Company's fiscal
year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Company's previous fiscal year;
(c) Simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
Company's chief financial officer or treasurer (i) stating whether there
exists on the
18
date of such certificate an Event of Default or an event
which, with notice or lapse of time or both would constitute an Event of
Default, and if any such event has occurred and is continuing, a statement
as to the nature thereof and the action which the Company proposes to take
with respect thereto, (ii) setting forth in reasonable detail the
calculations required to establish whether the Company was in compliance
with the requirements of Sections 7.7 through 7.10, 7.12, 7.14 and 7.15,
and (iii) stating whether on the date of such certificate at least 80% in
value of the Collateral described in Sections 5.1(a) and (b) hereof is
located in the State of California, and if not, stating in which states of
the United States or other countries such Collateral is located and the
percentage in value of such Collateral that is located in each such state
or country;
(d) Not later than 60 days after the end of each of the Company's
fiscal years, a copy of the Company's financial projections for the
succeeding fiscal year;
(e) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly or other reports which the Company shall
have filed with the Securities and Exchange Commission; and
(f) From time to time such additional information regarding the
business, financial condition and operations of the Company as the Bank may
reasonably request.
7.7 Payment of Dividends. Not declare or pay any dividends on any class
--------------------
of stock now or hereafter outstanding except dividends payable solely in the
Company's capital stock and except dividends up to the sum of 50% of the
preceding four fiscal quarters' net profit less any dividends previously paid
during the preceding four fiscal quarters plus any amounts realized from the
exercise of stock options or warrants in the preceding four fiscal quarters.
7.8 Redemption or Repurchase of Stock. Not redeem or repurchase any class
---------------------------------
of the Company's stock now or hereafter outstanding, except, when combined with
dividends paid pursuant to Section 7.7, up to the sum of 50% of the preceding
four fiscal quarters' net profit less any dividends previously paid during the
preceding four fiscal quarters or any previous repurchases plus any amounts
realized from the exercise of stock options or warrants in the preceding four
fiscal quarters.
7.9 Additional Indebtedness. Not, after August 6, 1993, create, incur or
-----------------------
assume, directly or indirectly, any liability or indebtedness other than (a)
indebtedness owed or to be owed to the Bank, (b) indebtedness to trade creditors
incurred in the ordinary course of the Company's business, (c) indebtedness for
loans made to the Company by Sanwa, provided that the aggregate principal amount
of such loans outstanding at all times equals the sum of the aggregate principal
amount of the Loans and the
19
aggregate face amount of the Letters of Credit then outstanding under this
Agreement, (d) recourse obligations of the Company in connection with any
Company arranged financings for its sales or sales by the Company of its
accounts receivable, provided that the aggregate amount of all such obligations
do not exceed $20,000,000 at any time, and (e) indebtedness of the Company under
capital leases arising from the sale and leaseback by the Company of its assets,
provided that the aggregate book value of the assets sold by the Company in
connection with all such transactions does not exceed $5,000,000 during the term
of this Agreement (all such permitted sale-leaseback transactions to be referred
to herein as "Permitted Sale-Leaseback Transactions").
-------------------------------------
7.10 Loans. Not make any loans or advances or extend credit to any third
-----
person, including, but not limited to, directors, officers, shareholders,
partners, employees, affiliated entities or subsidiaries of the Company, except
for (a) credit extended in the ordinary course of the Company's business as
presently conducted, provided that the aggregate amount of all such credit which
is unsecured does not exceed $500,000 in any one fiscal year and the aggregate
amount of such credit which is secured by the Company's stock does not exceed
$1,500,000 in any one fiscal year, and (b) a loan or loans to CHC, provided that
(i) the aggregate principal amount of all such loans does not exceed $12,100,000
and (ii) all such loans are fully secured by a security interest of first
priority in property of CHC; provided that the provisions of clause (b) shall
not apply from and after the date CHC has been merged into or otherwise has
become a division of the Company.
7.11 Liens and Encumbrances. Not create, assume or permit to exist any
----------------------
security interest, encumbrance, mortgage, deed of trust or other lien including,
but not limited to, a lien of attachment, judgment or execution, affecting any
of the Company's properties, or execute or allow to be filed any financing
statement or continuation thereof affecting any such properties,
except for Permitted Liens and as otherwise provided in this Agreement.
7.12 Transfer of Assets. Not sell, contract for sale, convey, assign,
------------------
lease, sublet or otherwise transfer any of its assets except for (a) the sale of
inventory in the ordinary course of business as presently conducted by the
Company and (b) other transfers of assets (including, without limitation, (i)
any sale of an asset which is to be the subject of a Permitted Sale-Leaseback
Transaction and (ii) any recourse or non-recourse sale of its accounts
receivable) in the ordinary course of business as presently conducted by the
Company, provided that (i) each such transfer is for full, fair and reasonable
consideration and (ii) the aggregate amount of all assets so transferred does
not exceed $3,200,000 for any fiscal year.
7.13 Change in the Nature of Business. Not make any material change in its
--------------------------------
financial structure or in the nature of its business as existing or conducted as
of August 6, 1993.
20
7.14 Financial Condition. Maintain at all times on a consolidated basis:
-------------------
(a) Debt to Net Worth Ratio. A Debt to Effective Tangible Net Worth
-----------------------
ratio of not more than 1.25 to 1.
(b) Current Ratio. A ratio of current assets to current liabilities
-------------
of not less than 1.40 to 1.
(c) Quick Ratio. A ratio of the sum of Liquid Assets plus accounts
-----------
receivable to current liabilities of not less than .90 to 1.
(d) Net Profit. A minimum net profit after tax for each fiscal
----------
quarter of at least $1.00.
(e) Consolidated Working Capital. A minimum working capital of not
----------------------------
less than $15,000,000.
(f) Net Worth. A minimum Effective Tangible Net Worth of not less
---------
than $48,000,000, plus 50% of the net profits for each fiscal quarter after
the second fiscal quarter of the Company that ends in calendar year 1994
and 100% of the net proceeds of any equity offerings after the end of such
fiscal quarter, minus up to $6,000,000 used to repurchase or redeem the
Company's stock prior to December 31, 1994.
(g) Unconsolidated Working Capital. Maintain at all times, on an
------------------------------
unconsolidated basis, a minimum working capital of not less than
$15,000,000.
(h) Unconsolidated Tangible Net Worth. Maintain at all times on an
---------------------------------
unconsolidated basis an Effective Tangible Net Worth of not less than
$44,000,000, plus 50% of the net profits for each fiscal quarter after the
second fiscal quarter of the Company that ends in calendar year 1994 and
100% of the net proceeds of any equity offerings after the end of such
fiscal quarter, minus up to $6,000,000 used to repurchase or redeem the
Company's stock prior to December 31, 1994.
7.15 Capital Expenditures. Not make any fixed capital expenditure or any
--------------------
commitment therefor, including, but not limited to, incurring liability for uses
which would be, in accordance with generally accepted accounting principles,
reported as capital leases, or purchase any real or personal property, in an
aggregate amount exceeding $3,000,000 in any one fiscal year; except that the
Company may purchase all of the outstanding stock of CHC provided that (a) the
aggregate cost to the Company of such purchase does not exceed $20,600,000 and
(b) at the time of such purchase and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing.
21
7.16 Notices. Give prompt written notice to the Bank of any and all (a)
-------
Defaults or Events of Default, together with a statement of the Company's chief
financial officer or treasurer setting forth the details of such Default or
Event of Default and the action which the Company proposes to take with respect
thereto, (b) litigation, arbitration or administrative proceedings to which the
Company is a party and in which the claim or liability exceeds $300,000, (c)
notices given or required to be given by the Company or any subsidiary or any
plan administrator to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan that is not a Multiemployer Plan which
might constitute grounds for termination of such Plan under Title IV of ERISA,
or with respect to any Multiemployer Plan, notices received as prescribed in
ERISA of any material withdrawal liability assessed against the Company or any
subsidiary, and (d) events which would result in a change in the location of
more than 20% in value of the Collateral described in Sections 5.1(a) and (b)
(other than intrastate changes in location), which notice shall be given not
less than 30 days prior to the occurrence of any such event.
7.17 Environmental Compliance. The Company shall:
------------------------
(a) Implement and comply in all material respects with all applicable
federal, state and local laws, ordinances, statutes and regulations with
respect to hazardous or toxic wastes, substances or related materials,
industrial hygiene or environmental conditions;
(b) Not own, use, generate, manufacture, store, handle, treat, release
or dispose of any hazardous or toxic wastes, substances or related
materials;
(c) Give prompt written notice of any discovery of or suit,
proceeding, claim, dispute, threat, inquiry or filing respecting hazardous
or toxic wastes, substances or related materials; and
(d) At all times indemnify and hold harmless Bank from and against any
and all liability arising out of the use, generation, manufacture, storage,
handling, treatment, disposal or presence of hazardous or toxic wastes,
substances or related materials.
7.18 Chief Executive Office. At all times maintain its chief executive
----------------------
office at a location within the State of California.
7.19 Use of Proceeds. Not use any of the proceeds of the Loans in
---------------
violation of any applicable law, regulation, order, decree or injunction of any
governmental authority, and no use of such proceeds for general corporate
purposes will include any use thereof, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate of purchasing or carrying any Margin
Stock.
22
ARTICLE 8
CONDITIONS PRECEDENT
--------------------
8.1 All Loans and Letters of Credit. The obligation of the Bank to make a
-------------------------------
Loan to the Company or to issue a Letter of Credit is subject to the
satisfaction of the following conditions: (a) receipt by the Bank of the notice
required in Section 2.3 for such Loan or the documents required by Section 4.2
for such Letter of Credit; (b) the fact that as of the making of such Loan or
issuance of such Letter of Credit and immediately thereafter: (i) no Event of
Default shall have occurred and be continuing nor shall any event have occurred
and be continuing which with the lapse of time or notice or both shall
constitute an Event of Default nor shall any such event or Event of Default
result from the making of such Loan or issuance of such Letter of Credit, (ii)
the representations and warranties of the Company in this Agreement continue to
be true and correct in all material respects, and (iii) there has been no
material adverse change in the business, financial position, results of
operations or, to the extent reasonably foreseeable, prospects of the Company;
and (c) the security interest in the Collateral has been duly authorized,
created and perfected with first priority and is in full force and effect,
subject to Permitted Liens.
ARTICLE 9
DEFAULT
-------
9.1 Events of Default. If one or more of the following events
-----------------
("Events of Default") shall have occurred and be continuing, they shall
constitute an Event of Default:
(a) The Company shall fail to pay when due any principal of any Loan
or any amounts owed with respect to a Letter of Credit or a Guaranty, or
shall fail to pay within five days of the due date thereof any interest,
fees or other amounts due hereunder or under any of the other Credit
Documents;
(b) The Company shall fail to observe or perform any covenant
contained in Sections 7.1, 7.3, 7.7 through 7.15 or 7.19;
(c) The Company shall fail to observe or perform any covenant
contained in this Agreement or any of the other Credit Documents (other
than those covered by clause (a) or (b) above) for twenty (20) days after
written notice thereof has been given to the Company by the Bank;
(d) Any representation, warranty, certification or statement made by
the Company in this Agreement or any of the other Credit Documents or in
any certificate, financial
23
statement or other document delivered pursuant to this Agreement or any of
the other Credit Documents shall prove to have been incorrect in any
material respect when made;
(e) The Company shall fail to make any payment in respect of any debt
for borrowed money (other than as evidenced by the Note) when due (or after
giving effect to any applicable grace period) whether such debt shall
become due by scheduled maturity, by required prepayment, by acceleration,
by demand or otherwise; or the Company shall fail to perform beyond any
period of grace with respect thereto any term, covenant or agreement on its
part to be performed under any agreement or instrument (other than this
Agreement) evidencing or securing or relating to such debt by the Company
when required to be performed, if the effect of such failure is to
accelerate, or to permit the holder of such debt to accelerate the maturity
thereof;
(f) The Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in any involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(g) An involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar laws now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of its
or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of sixty (60)
days; or an order for relief shall be entered against the Company under the
Bankruptcy Code;
(h) A judgment or order for the payment of money in excess of $300,000
shall be rendered against the Company and such judgment or order shall
continue unsatisfied and unstayed for a period of 20 days;
(i) The Company shall fail to pay when due any material amount which
is either uncontested or if contested the subject of a final non-appealable
decision and which it shall have become liable to pay to the PBGC or to a
Plan under Title IV or ERISA, or the PBGC shall institute proceeding under
Title VI of ERISA to terminate or to cause
24
a trustee to be appointed to administer any Plan or Plans which could give
rise to a material liability to the Company under Title IV of ERISA; or the
Company shall incur any material withdrawal liability with respect to any
Multiemployer Plan which is uncontested or, if contested, is the subject of
a final non-appealable decision and the Company fails to discharge, satisfy
or otherwise eliminate such liability with respect to any Multiemployer
Plan within the time required by the judgment;
(j) The Company shall voluntarily suspend the transaction of business
or allow to be suspended, terminated, revoked or expired any permit,
license or approval of any governmental body necessary to conduct the
Company's business as now conducted;
(k) There shall occur a sale or transfer to, (whether voluntary or
involuntary), or an agreement shall be entered into to do so with, any
Person or group of Persons (as such terms are defined pursuant to Federal
securities laws) who would own more than 40% of the issued and outstanding
capital stock of the Company and, as a result thereof, such Person or group
of Persons has the ability to direct or cause the direction of the
management and policies of the Company; or
(l) The Bank's security interest in the Collateral granted pursuant to
Article 5 hereof shall at any time fail to be a valid security interest
that has attached to all the Collateral in which the Company has rights.
9.2 Remedies. If an Event of Default shall occur: (a) any indebtedness
--------
of the Company under the Note, this Agreement or any other Credit Document, any
term thereof to the contrary notwithstanding, shall, at the Bank's option and
without notice, become immediately due and payable without presentment, demand,
protest or notice of dishonor, all of which are hereby expressly waived by the
Company; (b) the obligation, if any, of the Bank to permit further Loans or
issue further Letters of Credit hereunder shall immediately cease and terminate;
and (c) the Bank shall have all rights, powers and remedies available under the
Agreement and any document related thereto, including without limitation the
right to resort to any or all security and to exercise any or all of the rights
and remedies of a beneficiary or secured party pursuant to the California
Uniform Commercial Code or other applicable law. All rights, powers and
remedies of the Bank may be exercised at any time by the Bank and from time to
time after the occurrence of an Event of Default. All rights, powers and
remedies of the Bank contained herein or in any other Credit Document are
cumulative and not exclusive and shall be in addition to any other rights,
powers or remedies provided by law or equity.
9.3 Letters of Credit. If an Event of Default shall occur, the Bank may,
-----------------
at its sole and absolute discretion and in addition
25
to any other remedies available to it hereunder, require the Company to pay
immediately to the Bank, for prompt application against drawings under any
outstanding Letters of Credit, the outstanding principal amount of any such
Letters of Credit which have not expired. Any portion of the amount so paid to
the Bank which is not applied to satisfy draws under any such Letters of Credit
or any other obligations of the Company to the Bank shall be repaid to the
Company or such other Persons who may be entitled thereto without interest upon
expiration of all Letters of Credit and full satisfaction of all other
obligations owed by the Company to the Bank. The provisions of this Section 9.3
shall be in addition to any other obligations of the Company contained in any
other Credit Document to deposit cash with the Bank with respect to outstanding
Letters of Credit. All amounts paid to the Bank under this Section shall be
Collateral.
9.4 Notification of Account Debtors. If an Event of Default shall occur,
-------------------------------
the Bank may at its sole and absolute discretion and in addition to any other
remedies available to it hereunder:
(a) Notify any Account Debtor, any buyers or transferee of the
Collateral or any other Persons of the Bank's interest in the Collateral
and the proceeds thereof;
(b) Sign the Company's name (which authority the Company hereby
irrevocably and unconditionally grants the Bank) on any invoice or xxxx of
lading relating to accounts or other drafts against the Accounts Debtors,
notify post office authorities to change the address for delivery of mail
addressed to the Company to such address as the Bank may designate and take
possession of and open mail addressed to the Company and remove therefrom,
proceeds of an payment on the Collateral, and demand, receive and endorse
payment and give receipts, releases and satisfactions for and xxx for all
money payable to the Company;
(c) Require the Company to indicate on the face of all invoices (or
such other documentation as may be specified by the Bank relating to the
sale, delivery or shipment of goods giving rise to the account) that the
account has been assigned to the Bank and that all payments are to be made
directly to the Bank at such address as the Bank may designate; and
(d) Require the Company to direct all Account Debtors to forward all
remittances, payments and proceeds of the Collateral directly to the Bank
at such address as the Bank may designate. In connection therewith, the
Company hereby irrevocably constitutes and appoints the Bank as its
attorney-in-fact to endorse the Company's name on any notes, acceptances,
checks drafts, money orders or other evidence of payment that may come into
the Bank's possession.
26
9.5 Protection of Security Interest. If an Event of Default occurs, the
-------------------------------
Bank may, at its sole and absolute discretion and in addition to any other
remedies available to it hereunder, make such payments and do such acts as the
Bank, in its sole judgment, considers necessary and reasonable to protect its
security interest or lien in the Collateral. The Company hereby irrevocably
authorizes the Bank to pay, purchase, contest or compromise any encumbrance,
lien or claim which the Bank, in its sole judgment, deems to be prior or
superior to its security interest. Further, the Company hereby agrees to pay to
the Bank, upon demand therefor, all expenses and expenditures (including
attorneys' fees) incurred in connection with the foregoing.
9.6 Foreclosure. If an Event of Default occurs, the Bank may, at its sole
-----------
and absolute discretion and in addition to any other remedies available to it
hereunder, enforce any security interest or lien given or provided for under
this Agreement or under any security agreement, mortgage, deed of trust or other
document, in such manner and such order, as to all or any part of the properties
subject to such security interest or lien, as the Bank, in its sole judgment,
deems to be necessary or appropriate and the Company hereby waives any and all
rights, obligations or defenses now or hereafter established by law relating to
the foregoing. In the enforcement of its security interest or lien, the Bank is
authorized to enter upon the premises where any Collateral is located and take
possession of the Collateral or any part thereof, together with the Company's
records pertaining thereto, or the Bank may require the Company to assemble the
Collateral and records pertaining thereto and make such Collateral and records
available to the Bank at a place designated by the Bank. The Bank may sell the
Collateral or any portions thereof, together with all additions, accessions and
accessories thereto, giving only such notices and following only such procedures
as are required by law, at either a public or private sale, or both, with or
without having the Collateral present at the time of the sale, which sale shall
be on such terms and conditions and conducted in such manner as the Bank
determines in its sole judgment to be commercially reasonable. Any deficiency
which exists after the disposition or liquidation of the Collateral shall be a
continuing liability of the Company to the Bank and shall be immediately paid by
the Company to the Bank.
9.7 Application of Proceeds. All amounts received by the Bank as proceeds
-----------------------
from the disposition or liquidation of the Collateral shall be applied to the
Company's indebtedness to the Bank as follows: first, to the costs and expenses
of collection, enforcement, protection and preservation of the Bank's lien in
the Collateral including court costs and reasonable attorneys' fees, whether or
not suit is commenced by the Bank; next to those costs and expenses incurred by
the Bank in protecting, preserving, enforcing, collecting, liquidating, selling
or disposing of the Collateral; next, to the payment of accrued and unpaid
interest on all of the Loans; next, to the payment of the outstanding principal
balance of the Loans; and last, to the
27
payment of any other obligations owed by the Company to the Bank. Any excess
Collateral or excess proceeds existing after the disposition or liquidation of
the Collateral will be returned or paid by the Bank to the Company or such other
Persons who may be entitled thereto.
ARTICLE 10
CHANGE IN CIRCUMSTANCES
-----------------------
10.1 Compensation for Funding Loss or Expense. The Company shall pay to
----------------------------------------
the Bank, upon the request of the Bank, such amount or amounts as shall
compensate the Bank for any loss, cost or expense incurred by the Bank and
promptly reported to the Company as a result of any payment or prepayment of a
LIBOR Loan on a date other than the last day of an Interest Period. A
certificate of the Bank shall be conclusive, except in the case of manifest
error, as to the amount of such loss, cost or expenses due to the Bank in
accordance with this Section. If for any reason any such certificate is
delivered after the prepayment or payment by acceleration to which such
certificate relates, the Company promptly upon receipt of the certificate shall
pay to the Bank the amount set forth therein.
10.2 Illegality. If after August 6, 1993, the adoption of any applicable
----------
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank to make, maintain or
fund LIBOR Loans, the Bank shall forthwith give notice thereof to the Company
whereupon until the Bank notifies the Company that the circumstances giving rise
to such suspension no longer exist, the obligation of the Bank to make LIBOR
Loans shall be suspended and outstanding LIBOR Loans shall be converted to Base
Rate Loans.
10.3 Taxes.
-----
(a) All payments made under this Agreement, the Note and the other
Credit Documents shall be made free and clear of, and without set-off or
counterclaim for or on account of, any present or future taxes levies,
imposts, duties, deductions, withholdings, fees, liabilities and similar
charges (collectively, the "Taxes") imposed by any government or any
political subdivision or taxing authority thereof (other than taxes based
solely on the overall net income of the Bank); provided, however, that such
payments may be reduced by the amount of United States Federal income taxes
required to be withheld by the Company with respect to any payment of
interest to the extent that such withholding does not exceed such taxes
which would be required to be
28
withheld if such interest were paid on August 6, 1993. If the Company is
prevented by operation of law or otherwise from paying, causing to be paid,
or remitting that portion of interest represented by Taxes withheld or
deducted, then interest payable under this Agreement, the Note and the
other Credit Documents will be increased to such amount as is necessary to
yield and remit interest to the Bank at the applicable rate specified in
Article 2 after provision for payment of such Taxes (other than as provided
in the immediately preceding sentence). The Company will execute and
deliver to the Bank at its request such further instruments as may be
necessary or desirable to give full force and effect to such increase in
the rate of interest, including but not limited to, a new Note of the
Company to be issued in exchange for any Note theretofore issued. The
Company will also hold the Bank harmless and indemnify it for any stamp or
other taxes with respect to the preparation, execution, delivery,
performance or enforcement of this Agreement, the Note or the other Credit
Documents. If any of the Taxes required to be paid by the Company are not
paid by the Company and are paid by the Bank, the Company will, upon demand
of the Bank, reimburse the Bank for such payments, together with any
interest penalties and expenses in connection therewith, plus interest
thereon at a rate equal to 1% per annum over the cost to the Bank (as
determined by the Bank) of funds acquired by it to pay the same, from the
date such payment is made to the date of reimbursement by the Company. With
respect to any deduction or withholding pursuant to this Section, the
Company shall promptly (but in no event later than thirty (30) days
thereafter) furnish to the Bank upon its request such certificates,
receipts and other documents as may be required to establish any tax credit
to which the Bank may be entitled.
(b) In the event that any change in applicable law or regulation or in
the interpretation or administration thereof by any governmental authority
charged with the administration thereof subjects the Bank to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any kind whatsoever
with respect to this Agreement, the Note or the other Credit Documents, or
changes the basis of taxation of payments to the Bank of principal or
interest payable on the Note or the other Credit Documents (other than any
tax on the overall net income of the Bank) or imposes, modifies or deems
applicable any reserve requirement against assets held by or deposits in or
for the account of, or loans by, the Bank or imposes on the Bank, directly
or indirectly, any other conditions affecting this Agreement, the Note or
the other Credit Documents, and the result of any of the foregoing is to
increase the cost to the Bank of maintaining the Loans by an amount which
the Bank deems to be material in relation to the Loans, the Letters of
Credit or the Guaranties or interest thereon, then the Company shall pay
such additional costs to the Bank immediately upon its
29
demand; provided, however that the Company shall not be liable for
additional costs hereunder in the event that it immediately prepays all the
Loans and all other obligations in full, in accordance with Article 3 of
this Agreement.
10.4 Reserve Requirements. It is understood that the cost to the Bank in
--------------------
making or maintaining a LIBOR Loan may fluctuate as a result of the
applicability of or changes in reserve requirements imposed by the Board of
Governors of the Federal Reserve System of the United States, including but not
limited to reserve requirements under Regulation D of such Board of Governors in
connection with Eurocurrency Liabilities at the ratios provided for in
Regulation D from time to time. The Company agrees to compensate the Bank for
such costs of making or maintaining the LIBOR Loans made by it resulting from
such reserve requirements since it is understood by the parties hereto that the
rates of interest applicable to LIBOR Loans under this Agreement have been
determined on the hypothetical assumption that no such reserve requirements
exist or will exist and that such rates do not reflect costs imposed on the Bank
in connection with such reserve requirements. Both parties to this Agreement
acknowledge that as of the Effective Date, the reserve requirement is zero.
10.5 Notice Certificates. The Bank shall deliver to the Company from time
-------------------
to time one or more certificates setting forth the amounts due to the Bank under
this Article 10 and the method the Bank used to compute such amounts. Each such
certificate shall be conclusive in the absence of manifest error. The Company
shall pay to the Bank the amounts shown as due on each such certificate within
ten Business Days of its receipt of same (except as otherwise indicated for the
certificate sent under Section 10.1). No failure on the part of the Bank to
demand compensation under this Article 10 on any one occasion shall constitute a
waiver of its right to demand such compensation on any other occasion.
ARTICLE 11
MISCELLANEOUS
-------------
11.1 Waiver and Amendment. No delay, failure or discontinuance of the
--------------------
Bank in exercising any right, power or remedy under this Agreement or any other
Credit Document shall affect or operate as a waiver of such right, power or
remedy, nor shall any single or partial exercise of any such right, power or
remedy preclude, waive or otherwise affect any further or other exercise thereof
or the exercise of any other right, power or remedy. Any waiver, permit,
consent or approval of any kind by the Bank of any provisions or conditions of,
or any breach of or default under this Agreement or any other Credit Document
must be in writing and shall be effective only to the extent set forth in such
writing. No amendment or modification of this Agreement
30
shall be valid and binding unless agreed to in writing by both parties hereto.
11.2 Notices. All notices, requests and demands given to or made upon
-------
any party hereto shall be deemed to have been given or made when personally
delivered or two (2) days after any of the same are deposited in the U.S. mail,
first class and postage prepaid, or on the day when sent if transmitted via
facsimile with confirmation of receipt, and addressed as follows:
The Company: ADAC Laboratories
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Andre' Simone
Phone: 000-000-0000
FAX: 000-000-0000
The Bank: ABN AMRO Bank N.V.
San Francisco International Branch
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Phone: 000-000-0000
FAX: 000-000-0000
Telex: 278137
Answerback: ABNSF UR
or to such other address as any party hereto may designate by written notice to
all other parties.
11.3 Execution in Counterparts. This Agreement may be executed in any
-------------------------
number of counterparts and by each of the parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
11.4 Binding Effect. This Agreement shall become effective when it shall
--------------
have been executed by the Company and the Bank, and thereafter it shall be
binding upon and inure to the benefit of the Company and the Bank and their
respective successors and assigns.
11.5 Assignments and Participations.
------------------------------
(a) The Bank may assign to one or more banks or other entities a part
of its Commitment, Loans owing to the Bank and the Note and other Credit
Documents held by the Bank and to the extent of such assignment (unless
otherwise stated therein), the assignee or purchaser of such assignment
shall, to the fullest extent permitted by law, be deemed to be a party to
this Agreement and shall have the same rights, benefits and obligations
hereunder and under the Commitment, the Loans, and the Note and other
Credit Documents as it
31
would have if it were a party to this Agreement and the other Credit
Documents.
(b) The Bank may without the consent of the Company sell participation
to one or more banks or other entities of all or a portion of its rights
and obligations under this Agreement (including without limitation, all or
a portion of its Commitment, the Loans owing to it and the Note and other
Credit Documents) provided that (i) the Bank's obligations under this
Agreement shall remain unchanged, (ii) the Bank shall remain solely
responsible to the Company for the performance of such obligations and
(iii) the participating banks or other entities shall be entitled to the
benefits under Article 10 of the Agreement except that a participant shall
not be entitled to receive pursuant to Article 10 an amount larger than its
share of the amount to which the Bank would be entitled.
11.6 Payment Instructions. Unless the Bank otherwise instructs, all
--------------------
payments made to the Bank under this Agreement or any other Credit Document
shall be directed as follows:
Federal Reserve Bank of New York
For account of ABN AMRO Bank NV New York
Federal Routing No. 000000000
For further credit to: ABN San Francisco
A/C No. 6510-010-545-41
Ref: ADAC Laboratories Interest/principal payment
11.7 Survival of Representations and Warranties. All representations and
------------------------------------------
warranties made in this Agreement and any other Credit Document, and in any
certificates and other documents delivered pursuant to any thereof, shall
survive the execution and delivery of this Agreement and any such other Credit
Document, certificate or other document and shall continue in full force and
effect until payment in full of all liabilities on the part of the Company
arising under this Agreement and the other Credit Documents.
11.8 Severability of Provisions. Any provision of this Agreement that is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions in any other jurisdiction.
11.9 Headings. Section headings in this Agreement are included herein
--------
for convenience of reference only and shall not constitute a part of the
Agreement for any other purpose.
11.10 Governing Law and Jurisdiction. This Agreement shall be construed
------------------------------
in accordance with the laws of the State of California. The Company hereby
irrevocably submits to the jurisdiction of the courts of the State
of California in any action or proceeding arising out of or in connection
with this Agreement, the Loans and the other Credit Documents.
32
11.11 Judgment Currency. If, for the purpose of obtaining judgment in any
-----------------
court in any country, it becomes necessary to convert into any other currency
("the judgment currency") an amount due in Dollars, then the conversion shall be
made at the rate of exchange prevailing at the close of business on the Business
Day before the day on which the judgment is given. If there is a change in the
rate of exchange prevailing between the Business Day before the day on which the
judgment is given and the date of payment of the amount due, the Company will
pay such additional amounts (if any) as may be necessary to ensure that the
amount paid in the judgment currency when converted at the rate of exchange
prevailing on the date of payment will produce the amount then due under this
Agreement in Dollars and the Bank will apply any additional amounts (if any)
over the amount then due under this Agreement in Dollars that the Bank receives
as a result of such conversion to any other obligations owed by the
Company to the Bank and, if all obligations of the Company to the Bank are fully
satisfied, shall pay any excess to the Company or such other Persons who may be
entitled thereto. The term judgment "rate of exchange" means the spot rate at
which the Bank in accordance with its normal practice is able on the relevant
date to purchase Dollars with the judgment currency and includes any premium and
costs of exchange payable.
11.12 Costs and Expenses. The Company shall, whether or not the
------------------
transactions contemplated hereby shall be consummated, pay or reimburse the Bank
on demand for all costs and expenses incurred in connection with the preparation
and execution of, and any amendment, supplement, waiver or modification to, this
Agreement, any Credit Document and any other documents prepared in connection
herewith or therewith, the consummation of the transactions contemplated hereby
and thereby, or the enforcement or preservation of any rights under this
Agreement, any Credit Document, and any such other documents, including the
reasonable costs and expenses of counsel to the Bank with respect thereto.
11.13 Indemnity. The Company shall pay, indemnify, and hold the Bank and
---------
each of its officers, directors, employees, counsel, agents and attorneys-in-
fact (each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including fees and expenses of
counsel) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Credit Documents or the transactions contemplated herein, and with respect
to any investigation, litigation or proceeding related to this Agreement or the
Loans or the use of the proceeds thereof (whether or not any Indemnified Person
is a party thereto) (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Company shall have no obligation hereunder to
--------
any Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive the termination of this Agreement.
33
11.14 Entire Agreement. This Agreement, together with the other Credit
----------------
Documents, embodies the entire agreement and understanding between the Company
and the Bank and supersedes all prior or contemporaneous agreements and
understandings of such persons, verbal or written, relating to the subject
matter hereof and thereof except for any prior arrangements made with respect to
the payment by the Company of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the Bank.
ARTICLE 12
EFFECTIVE DATE OF THIS RESTATED CREDIT AGREEMENT
------------------------------------------------
12.1 Effective Date. This Restated Credit Agreement and the
--------------
amendments effected hereby shall become effective on the date the the conditions
set forth in this Section 12.1 are satisfied (the "Effective Date").
Effectiveness of this Restated Credit Agreement and the amendments effected
hereby are subject to receipt by the Bank of each of the following, each in form
and substance satisfactory to the Bank:
(a) This Restated Credit Agreement, duly executed by the Company;
(b) A Note in the form of Exhibit A hereto (the "Restated Note"), duly
executed by the Company;
(c) An Intercreditor Agreement in form and substance satisfactory to
the Bank, duly executed by Sanwa and the Company;
(d) A copy or copies of all credit agreements between the Company and
Sanwa currently in effect, together with all written amendments and
modifications thereto through the Effective Date;
(e) The Resolutions of the Board of Directors of the Company duly
certified by the Secretary or Assistant Secretary of the Company evidencing
approval of this Restated Credit Agreement, the other Credit Documents and
other matters contemplated herein in the case of the Company;
(f) An Incumbency Certificate executed by the Secretary or Assistant
Secretary of the Company certifying the names and true signatures of the
officers authorized to sign this Restated Credit Agreement, the other
Credit Documents, and the other certificates and documents herein
described; and
(g) Such other documents as the Bank may reasonably request.
34
12.2 Effect. On and after the Effective Date, this Restated Credit
------
Agreement and the Restated Note shall amend, restate in their entirety and
replace, without novation, the Existing Credit Agreement and the Amended and
Restated Note dated August 6, 1993 executed by the Company in favor of the Bank
(the "Existing Note"), respectively; provided, however, that:
-------- -------
(a) Such amendment, restatement and replacement shall be deemed to
have become effective on April 5, 1995; and
(b) The execution and delivery of this Restated Credit Agreement, the
Restated Note and the other Credit Documents shall not (i) operate as a
waiver of any right, power or remedy of the Bank under the Existing Credit
Agreement or the Existing Note except to the extent expressly waived in
this Restated Credit Agreement, the Restated Note or the other Credit
Documents, or (ii) extinguish or impair any obligations of the Company
under the Existing Credit Agreement or the Existing Note except to the
extent any such obligation is actually satisfied by the Company.
[The next page is the signature page]
35
IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to
be executed as of the day and year first above written.
ADAC LABORATORIES
By:___________________________
Name:______________________
Title:_____________________
ABN AMRO BANK N.V.
By:___________________________
Name:______________________
Title:_____________________
By:___________________________
Name:______________________
Title:_____________________
36
EXHIBIT A
---------
AMENDED AND RESTATED NOTE
-------------------------
August 15, 1995
$20,000,000
ADAC LABORATORIES, a California corporation (the "Company"), for value
received, hereby promises to pay to the order of ABN AMRO BANK N.V. SAN
FRANCISCO INTERNATIONAL BRANCH AND/OR CAYMAN ISLANDS BRANCH (the "Bank"), on the
Termination Date, the principal sum of twenty million dollars ($20,000,000) or,
if less (or more as a result of Currency fluctuations), the aggregate unpaid
principal amount of all Loans made by the Bank to the Company pursuant to the
Credit Agreement (as hereinafter defined) in the Currencies in which such Loans
were made.
This Note is the Note referred to in the Amended and Restated Credit
Agreement, dated as of August 15, 1995 (as amended from time to time, the
"Credit Agreement"), between the Company and the Bank. All capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Credit Agreement. Reference is made to the Credit Agreement for a more
complete statement of the terms and conditions under which the Loans evidenced
hereby are to be repaid.
The Company promises to pay interest on the unpaid principal amount of the
Loans at such interest rates, and at such times, as are specified in the Credit
Agreement. Both principal and interest are payable in the Currency in which the
Loans were made to the Bank, in immediately available funds, in accordance with
the provisions of the Credit Agreement.
This Note is subject to mandatory prepayment in certain circumstances and
to prepayment at the option of the Company, in each case as more fully described
in the Credit Agreement. Upon the occurrence of an Event of Default, the unpaid
principal balance of this Note may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA.
The Company promises to pay pursuant to Section 11.12 of the Credit
Agreement all fees, costs and expenses incurred in the collection and
enforcement of this Note. The Company and endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand and notice of
every kind (except such notices as may be required under the
A-1
Credit Agreement) and, to the fullest extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
This Note amends, restates and replaces the Amended and Restated Note dated
August 6, 1993 in the principal amount of $20,000,000 which was originally
issued by the Company to the Bank pursuant to the terms of the Existing Credit
Agreement.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year first above
written.
ADAC LABORATORIES
By _______________________
Its ___________________
A-2
LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST
--------------------------------------------
Interest Interest
Amount Method Period Amount Name of
of Loan (LIBOR (if of Amount of Unpaid Person
& or Base LIBOR Interest Principal Principal Making
Date Currency Rate) Loan) Paid Paid Balance Notation
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A-3
