FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement ("First Amendment") is
entered into as of October 10, 1997, by and between Spectrum
Medical Industries, Inc., a California corporation and Spectrum
Laboratories, Inc, a California corporation, (collectively
"Borrower") and City National Bank, a national banking association
("CNB").
RECITALS
A. Borrower and CNB are parties to that certain Credit
Agreement, dated as of February 28, 1997 ("Agreement").
B. Borrower and CNB desire to supplement and amend the
Agreement as hereinafter set forth.
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment
without definition shall have the meanings set forth in the Loan
Agreement.
2. AMENDMENTS. The Agreement is amended as follows:
2.1 Section 1. DEFINITIONS is amended as follows:
2.1.1 Delete the definition of "NOTE" in its entirety and add
the following new definition:
""Notes" means the Notes referenced in Section 2."
2.1.2 Delete the definition of "TERMINATION DATE" in its
entirety and replace it with:
""TERMINATION DATE" means May 1, 1998. Notwithstanding
the foregoing, CNB may, at its option, terminate this Agreement
pursuant to Section 7.3; the date of any such termination will
become the Termination Date as that term is used in this
Agreement."
2.2 Section 2. LOANS. is amended as follows:
2.2.1 Add the following new sections 2.1A, 2.1A.1, 2.1A.2,
2.1A.3, and 2.7 as follows:
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2.1A REVOLVING CREDIT LOANS. CNB agrees to make loans
("Revolving Credit Loans") to Borrower up to, but not including,
the Termination Date, at Borrower's request, up to the amount of
Five Hundred Thousand and No/100 dollars ($500,000.00)(the
"Revolving Credit Commitment"). The Revolving Credit Loans may be
repaid and reborrowed at any time up to the Termination Date;
provided, however, that the aggregate unpaid principal amount of
outstanding Revolving Credit Loans will at no time exceed the
Revolving Credit Commitment. Borrower will have a period of not
less than thirty (30) consecutive days during the twelve-month
period ending on the Termination Date during which time there will
be no outstanding Revolving Credit Loans. All Revolving Credit
Loans will be paid by Borrower to CNB on the Termination Date.
The Revolving Credit Loans will be evidenced by a promissory note
("Revolving Credit Note") in the form attached hereto as Exhibit
"B".
2.1A.1 INTEREST ON REVOLVING CREDIT LOANS. Each
Revolving Credit Loan will bear interest from disbursement until
due (whether at stated maturity, by acceleration or otherwise) at
a fluctuating rate equal to the Prime Rate plus one quarter
percent (0.25%) per annum. Interest will be payable monthly in
arrears on the first day of each month, starting on November 1,
1997, and on the date the Revolving Credit Loans are paid in full.
2.1A.2 REVOLVING COMMITMENT FEE. Borrower shall pay
CNB a non-refundable fee ("Revolving Commitment Fee") equal to one
quarter percent (1/4%) of the Revolving Credit Commitment at the
time the Revolving Credit Commitment is extended to Borrower.
2.1A.3 PROCEDURE FOR REVOLVING CREDIT LOANS. Each
Revolving Credit Loan may be made by CNB at the oral or written
request of anyone who is authorized in writing by Borrower to
request Revolving Credit Loans until written notice of the
revocation of such authority is received by CNB."
"2.7 CASH/SECURITIES COLLATERAL. Borrower agrees that the
aggregate principal amount of the Cash/Securities Collateral shall
at no time be less than One Million Sixty-Six Thousand and No/100
Dollars ($1,066,000.00)."
2.2.3 Section 2.1.3 ADDITIONAL TERM LOAN PAYMENT. is amended by
deleting the date "June 1, 1997" from both the first sentence and
the last sentence and replacing it with a new date of "December 1,
1997" in both the first sentence and in the last sentence.
2.3 Section 4. REPRESENTATION AND WARRANTIES. is amended as
follows:
At the end of Section 4.8 USE OF PROCEEDS. add the following
sentence: "Borrower will use the proceeds of the Revolving Credit
Loans for Borrower's general working capital needs."
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3. CONDITIONS PRECEDENT. This Amendment shall become effective
upon the fulfillment of all of the following conditions to CNB's
satisfaction:
3.1 CNB shall have received this Amendment duly executed by
Borrower;
3.2 CNB shall have received the Revolving Credit Note duly
executed by Borrower; and
3.3 CNB shall have received the non-refundable Revolving
Commitment Fee of $1,250.00.
4. EXISTING AGREEMENT. Except as expressly amended herein, the
Loan Agreement shall remain in full force and effect, and in all
other respects is affirmed.
5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and all such counterparts taken together shall be
deemed to constitute one and the same instruments.
6. GOVERNING LAW. This Amendment and the rights and obligations
of the parties hereto shall be construed in accordance with, and
governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Amendment as
of the day and year first above written.
SPECTRUM MEDICAL INDUSTRIES, INC.,
a California corporation
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx, Chairman
SPECTRUM LABORATORIES, INC.,
a California corporation
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx, Chairman
CITY NATIONAL BANK, a national banking association
By: /s/ Xxx X. Xxxxxxx
-------------------------
Xxx X. Xxxxxxx, Vice President
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GUARANTORS CONSENT
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx
Spectrum Molecular Separations, Inc.
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
Hydro-med Products, Inc.
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
SLI Acquisition Corp.
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx, Chairman
Title: Chairman and Chief Executive Officer
Spectrum Europe B.V.
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Xxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
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EXHIBIT B
REVOLVING CREDIT NOTE
$500,000.00 La Mirada, California
October 10, 1997
For Value Received, the undersigned, Spectrum Medical Industries,
Inc., a California corporation and Spectrum Laboratories, Inc., a
California corporation ("Borrower), promises to pay on the
Termination Date to the order of City National Bank, a national
banking association ("CNB"), at its Office located at 00000 Xxxx
Xxxxxxxxx Xxxx., Xx Xxxxxx, XX 00000-0000, the principal amount of
Five Hundred Thousand and no/100 Dollars ($500,000.00) or so much
thereof as may be advanced and be outstanding, with interest
thereon to be computed on each Revolving Credit Loan from the date
of its disbursement at a rate computed on the basis of a 360-day
year, actual days elapsed, at the rates, times and in accordance
with the terms of that certain Credit Agreement between Borrower
and CNB, dated as of February 28, 1997, as may be amended from
time to time (the "Credit Agreement"). Capitalized terms not
defined herein shall have the meanings given them in that certain
Credit Agreement.
All or any portion of the principal of this Revolving Credit
Note ("Note") may be borrowed, repaid and reborrowed from time to
time prior to the Termination Date, provided at the time of any
borrowing no default exists under this Note and no Event of
Default or Potential Event of Default exists under the terms and
conditions of the Credit Agreement and provided, further that the
total borrowings outstanding at any one time shall not exceed the
Revolving Credit Commitment. Each borrowing and repayment of a
Revolving Credit Loan shall be noted in the books and records of
CNB. The excess of borrowings over repayments as noted on such
books and records shall constitute presumptive evidence of the
principal balance due hereon from time to time and at any time.
If payment on this Note becomes due and payable on a non-
business day, the maturity thereof shall be extended to the next
business day and, with respect to payments of principal or
interest thereon shall be payable during such extension at the
then applicable rate. Upon the occurrence of one or more of the
Events of Default specified in the Credit Agreement, all amounts
remaining unpaid on this Note may become or be declared to be
immediately payable as provided in the Credit Agreement, without
presentment, demand or notice of dishonor, all of which are
expressly waived. Borrower agrees to pay all costs of collection
of this Note and reasonable attorneys' fees (including attorneys'
fees allocable to CNB's in-house counsel) in connection therewith
irrespective of whether suit is brought thereon.
This is the Revolving Credit Note referred to in the Credit
Agreement and is entitled to the benefits thereof.
Upon CNB's written notice to Borrower of the occurrence of an
Event of Default, the outstanding principal balance (and interest,
to the extent permitted by law) shall bear additional interest
from the date of such notice at the rate of Five Percent (5.0%)
per annum higher than the interest rate as determined and computed
above, and continuing thereafter until the Event of Default is
cured.
This Note shall be governed by the laws of the State of
California. If this Note is executed by more than one Borrower,
all obligations are joint and several.
"Borrower"
Spectrum Medical Industries, Inc.,
a California corporation
BY:
-------------------------------
Xxx X. Xxxxxxxx, Chmn./CEO
Spectrum Laboratories, Inc.,
a California corporation
By:
--------------------------------
Xxx X. Xxxxxxxx, Chmn./CEO
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REVOLVING CREDIT NOTE
$500,000.00 La Mirada, California
October 10, 1997
For Value Received, the undersigned, Spectrum Medical Industries,
Inc., a California corporation and Spectrum Laboratories, Inc., a
California corporation ("Borrower), promises to pay on the
Termination Date to the order of City National Bank, a national
banking association ("CNB"), at its Office located at 00000 Xxxx
Xxxxxxxxx Xxxx., Xx Xxxxxx, XX 00000-0000, the principal amount of
Five Hundred Thousand and no/100 Dollars ($500,000.00) or so much
thereof as may be advanced and be outstanding, with interest
thereon to be computed on each Revolving Credit Loan from the date
of its disbursement at a rate computed on the basis of a 360-day
year, actual days elapsed, at the rates, times and in accordance
with the terms of that certain Credit Agreement between Borrower
and CNB, dated as of February 28, 1997, as may be amended from
time to time (the "Credit Agreement"). Capitalized terms not
defined herein shall have the meanings given them in that certain
Credit Agreement.
All or any portion of the principal of this Revolving Credit
Note ("Note") may be borrowed, repaid and reborrowed from time to
time prior to the Termination Date, provided at the time of any
borrowing no default exists under this Note and no Event of
Default or Potential Event of Default exists under the terms and
conditions of the Credit Agreement and provided, further that the
total borrowings outstanding at any one time shall not exceed the
Revolving Credit Commitment. Each borrowing and repayment of a
Revolving Credit Loan shall be noted in the books and records of
CNB. The excess of borrowings over repayments as noted on such
books and records shall constitute presumptive evidence of the
principal balance due hereon from time to time and at any time.
If payment on this Note becomes due and payable on a non-
business day, the maturity thereof shall be extended to the next
business day and, with respect to payments of principal or
interest thereon shall be payable during such extension at the
then applicable rate. Upon the occurrence of one or more of the
Events of Default specified in the Credit Agreement, all amounts
remaining unpaid on this Note may become or be declared to be
immediately payable as provided in the Credit Agreement, without
presentment, demand or notice of dishonor, all of which are
expressly waived. Borrower agrees to pay all costs of collection
of this Note and reasonable attorneys' fees (including attorneys'
fees allocable to CNB's in-house counsel) in connection therewith
irrespective of whether suit is brought thereon.
This is the Revolving Credit Note referred to in the Credit
Agreement and is entitled to the benefits thereof.
Upon CNB's written notice to Borrower of the occurrence of an
Event of Default, the outstanding principal balance (and interest,
to the extent permitted by law) shall bear additional interest
from the date of such notice at the rate of Five Percent (5.0%)
per annum higher than the interest rate as determined and computed
above, and continuing thereafter until the Event of Default is
cured.
This Note shall be governed by the laws of the State of
California. If this Note is executed by more than one Borrower,
all obligations are joint and several.
"Borrower"
Spectrum Medical Industries, Inc.,
a California corporation
BY:/s/ Xxx X. Xxxxxxxx
-------------------------------
Xxx X. Xxxxxxxx, Chmn./CEO
Spectrum Laboratories, Inc.,
a California corporation
By:/s/ Xxx X. Xxxxxxxx
--------------------------------
Xxx X. Xxxxxxxx, Chmn./CEO
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