EXHIBIT 10.17.8
July 1, 2001
Cholestech Corporation
0000 Xxxxxxxxxx Xxxx.
Hayward, CA 94545
Gentlemen:
This letter amendment (this "Amendment") is to confirm the changes
agreed upon between XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank") and
Cholestech Corporation ("Borrower") to the terms and conditions of that certain
letter agreement between Bank and Borrower dated as of May 1, 2000, as amended
from time to time (the "Agreement"). For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree
that the Agreement shall be amended as follows to reflect said changes.
1. The Agreement is hereby amended by deleting "May 1, 2002" as the last
day on which Bank will make advances under the Line of Credit, and by
substituting for said date "July 1, 2003," with such change to be effective upon
the execution and delivery to Bank of a promissory note substantially in the
form of Exhibit A attached hereto (which promissory note shall replace and be
deemed the Line of Credit Note defined in and made pursuant to the Agreement)
and all other contracts, instruments and documents required by Bank to evidence
such change.
2. Paragraph VII.8 is hereby deleted in its entirety, and the following
substituted therefor:
"8. ARBITRATION:
(a) Arbitration. The parties hereto agree, upon demand
by any party, to submit to binding arbitration all claims,
disputes and controversies between or among them (and their
respective employees, officers, directors, attorneys, and other
agents), whether in tort, contract or otherwise arising out of
or relating to in any way (i) the loan and related loan and
security documents which are the subject of this Note and its
negotiation, execution, collateralization, administration,
repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii)
requests for additional credit.
(b) Governing Rules. Any arbitration proceeding will (i)
proceed in a location in California selected by the American
Arbitration Association ("AAA"); (ii) be governed by the Federal
Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any
of the documents between the parties; and (iii) be conducted by
the AAA, or such other
administrator as the parties shall mutually agree upon, in
accordance with the AAA's commercial dispute resolution
procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees
and costs in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex
commercial disputes (the commercial dispute resolution
procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the
"Rules"). If there is any inconsistency between the terms hereof
and the Rules, the terms and procedures set forth herein shall
control. Any party who fails or refuses to submit to arbitration
following a demand by any other party shall bear all costs and
expenses incurred by such other party in compelling arbitration
of any dispute. Nothing contained herein shall be deemed to be a
waiver by any party that is a bank of the protections afforded
to it under 12 U.S.C. Section 91 or any similar applicable state
law.
(c) No Waiver of Provisional Remedies, Self-Help and
Foreclosure. The arbitration requirement does not limit the
right of any party to (i) foreclose against real or personal
property collateral; (ii) exercise self-help remedies relating
to collateral or proceeds of collateral such as setoff or
repossession; or (iii) obtain provisional or ancillary remedies
such as replevin, injunctive relief, attachment or the
appointment of a receiver, before during or after the pendency
of any arbitration proceeding. This exclusion does not
constitute a waiver of the right or obligation of any party to
submit any dispute to arbitration or reference hereunder,
including those arising from the exercise of the actions
detailed in sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator Qualifications and Powers. Any
arbitration proceeding in which the amount in controversy is
$5,000,000.00 or less will be decided by a single arbitrator
selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the
amount in controversy exceeds $5,000,000.00 shall be decided by
majority vote of a panel of three arbitrators; provided however,
that all three arbitrators must actively participate in all
hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral
retired judge of the state or federal judiciary of California,
in either case with a minimum of ten years experience in the
substantive law applicable to the subject matter of the dispute
to be arbitrated. The arbitrator will determine whether or not
an issue is arbitratable and will give effect to the statutes of
limitation in determining any claim. In any arbitration
proceeding the arbitrator will decide (by documents only or with
a hearing at the arbitrator's discretion) any pre-hearing
motions which are similar to motions to dismiss for failure to
state a claim or motions for summary adjudication. The
arbitrator shall resolve all disputes in accordance with the
substantive law of California and may grant any remedy or relief
that a court of such state
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could order or grant within the scope hereof and such ancillary
relief as is necessary to make effective any award. The
arbitrator shall also have the power to award recovery of all
costs and fees, to impose sanctions and to take such other
action as the arbitrator deems necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure,
the California Rules of Civil Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction. The institution and
maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests
such action for judicial relief.
(e) Discovery. In any arbitration proceeding discovery
will be permitted in accordance with the Rules. All discovery
shall be expressly limited to matters directly relevant to the
dispute being arbitrated and must be completed no later than 20
days before the hearing date and within 180 days of the filing
of the dispute with the AAA. Any requests for an extension of
the discovery periods, or any discovery disputes, will be
subject to final determination by the arbitrator upon a showing
that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining
information is available.
(f) Class Proceedings and Consolidations. The resolution
of any dispute arising pursuant to the terms of this Note shall
be determined by a separate arbitration proceeding and such
dispute shall not be consolidated with other disputes or
included in any class proceeding.
(g) Payment Of Arbitration Costs And Fees. The
arbitrator shall award all costs and expenses of the arbitration
proceeding.
(h) Real Property Collateral; Judicial Reference.
Notwithstanding anything herein to the contrary, no dispute
shall be submitted to arbitration if the dispute concerns
indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the
mortgage, lien or security interest specifically elects in
writing to proceed with the arbitration, or (ii) all parties to
the arbitration waive any rights or benefits that might accrue
to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and
obligations of the parties, and all mortgages, liens and
security interests securing such indebtedness and obligations,
shall remain fully valid and enforceable. If any such dispute is
not submitted to arbitration, the dispute shall be referred to a
referee in
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accordance with California Code of Civil Procedure Section 638
et seq., and this general reference agreement is intended to be
specifically enforceable in accordance with said Section 638. A
referee with the qualifications required herein for arbitrators
shall be selected pursuant to the AAA's selection procedures.
Judgment upon the decision rendered by a referee shall be
entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644
and 645.
(i) Miscellaneous. To the maximum extent practicable,
the AAA, the arbitrators and the parties shall take all action
required to conclude any arbitration proceeding within 180 days
of the filing of the dispute with the AAA. No arbitrator or
other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of
information by a party required in the ordinary course of its
business or by applicable law or regulation. If more than one
agreement for arbitration by or between the parties potentially
applies to a dispute, the arbitration provision most directly
related to the documents between the parties or the subject
matter of the dispute shall control. This Note may be amended or
modified only in writing signed by each party hereto. If any
provision of this Note shall be held to be prohibited by or
invalid under applicable law such provision shall be ineffective
only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or any remaining
provisions of this Note. This arbitration provision shall
survive termination, amendment or expiration of any of the
documents or any relationship between the parties."
3. Except as specifically provided herein, all terms and conditions of
the Agreement remain in full force and effect, without waiver or modification.
All terms defined in the Agreement shall have the same meaning when used herein.
This Amendment and the Agreement shall be read together, as one document.
4. Borrower hereby remakes all representations and warranties contained
in the Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of Xxxxxxxx's acknowledgment set forth below there
exists no default or defined event of default under the Agreement or any
promissory note or other contract, instrument or document executed in connection
therewith, nor any condition, act or event which with the giving of notice or
the passage of time or both would constitute such a default or defined event of
default.
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Your acknowledgment of this Amendment shall constitute acceptance of the
foregoing terms and conditions.
Sincerely,
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Relationship Manager
Acknowledged and accepted as of September 10, 2001
Cholestech Corporation
By: /s/ Xxxxxxx X. Xxxxx
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Title: Chief Financial Officer
Exhibit A
XXXXX FARGO BANK REVOLVING LINE OF CREDIT NOTE
$8,000,000.00 OAKLAND, CALIFORNIA
JULY 1, 2001
FOR VALUE RECEIVED, the undersigned CHOLESTECH CORPORATION ("Borrower")
promises to pay to the order of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at EAST BAY RCBO, XXX XXXXXX XXXXX XXXXX 000, XXXXXXX, XX 00000,
or at such other place as the holder hereof may designate, in lawful money of
the United States of America and in immediately available funds, the principal
sum of $8,000,000.00, or so much thereof as may be advanced and be outstanding,
with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.
DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:
(a) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in California are authorized or required by law to
close.
(b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1, 2, 3 OR 6 MONTHS, as designated by Borrower, during which all
or a portion of the outstanding principal balance of this Note bears interest
determined in relation to LIBOR; provided however, that no Fixed Rate Term may
be selected for a principal amount less than $100,000.00; and provided further,
that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.
If any Fixed Rate Term would end on a day which is not a Business Day, then such
Fixed Rate Term shall be extended to the next succeeding Business Day.
(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage
equal to 100% less any LIBOR Reserve Percentage.
(i) "Base LIBOR" means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.
(d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates an serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuating rate per annum .50000% below the Prime Rate in effect from
time to time, or (ii) at a fixed rate per annum determined by Bank to be
1.75000% above LIBOR in effect on the first day of the applicable Fixed Rate
Term. When interest is determined in relation to the Prime Rate, each change in
the rate of interest hereunder shall become effective on the date each Prime
Rate change is announced within Bank. With respect to each LIBOR selection
option selected hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and Fixed Rate Term applicable thereto and any payments
made thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be
prima facie evidence of the accuracy of the information noted.
(b) Selection of Interest Rate Options. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Xxxxxxxx's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be
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deemed to have made a Prime Rate interest selection for such advance or the
principal amount to which such Fixed Rate Term applied.
(c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately
upon demand, in addition to any other amounts due or to become due hereunder,
any and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.
(d) Payment of Interest. Interest accrued on this Note shall be payable
on the LAST day of each MONTH, commencing SEPTEMBER 30, 2001.
(e) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and
payable in full on JULY 1, 2003.
(b) Advances. Advances hereunder, to the total amount of the principal
sum available hereunder, may be made by the holder at the oral or written
request of (i) XXXXXX XXXXXXXX OR XXXXXXX X. XXXXX, any one acting alone, who
are authorized to request advances and direct the disposition of any advances
until written notice of the revocation of such authority is received by the
holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any deposit account of any Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
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such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.
(c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.
PREPAYMENT:
(a) Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.
(b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of $100,000.00; provided however, that if the outstanding
principal balance of such portion of this Note is less than said amount, the
minimum prepayment amount shall be the entire outstanding principal balance
thereof. In consideration of Bank providing this prepayment option to Borrower,
or if any such portion of this Note shall become due and payable at any time
prior to the last day of the Fixed Rate Term applicable thereto by acceleration
or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:
(i) Determine the amount of interest which would have accrued
each month on the amount prepaid at the interest rate applicable to such amount
had it remained outstanding until the last day of the Fixed Rate Term applicable
thereto.
(ii) Subtract from the amount determined in (i) above the amount
of interest which would have accrued for the same month on the amount prepaid
for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater
than zero, discount that difference by LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual
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days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change in
announced within Bank.
EVENTS OF DEFAULT:
The occurrence of any of the following shall constitute an "Event of
Default" under this Note:
(a) The failure to pay any principal, interest, fees or other charges
when due hereunder or under any contract, instrument or document executed in
connection with this Note.
(b) The filing of a petition by or against any Borrower, any guarantor
of this Note or any general partner or joint venturer in any Borrower which is a
partnership or a joint venture (with each such guarantor, general partner and/or
joint venturer referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, as
amended or recodified from time to time, or under any similar or other law
relating to bankruptcy, insolvency, reorganization or other relief for debtors;
the appointment of a receiver, trustee, custodian or liquidator of or for any
part of the assets or property of any Borrower or Third Party Obligor; any
Borrower or Third Party Obligor becomes insolvent, makes a general assignment
for the benefit of creditors or is generally not paying its debts as they become
due; or any attachment or like levy on any property of any Borrower or Third
Party Obligor.
(c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.
(d) Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which any Borrower or Third Party Obligor has incurred any
obligation for borrowed money, any purchase obligation, or any other liability
of any kind to any person or entity, including the holder.
(e) Any financial statement provided by any Borrower or Third Party
Obligor to Bank proves to be incorrect, false or misleading in any material
respect.
(f) Any sale or transfer of all or a substantial or material part of the
assets of any Borrower or Third Party Obligor other than in the ordinary course
of its business.
(g) Any violation or breach of any provision of, or any defined event of
default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
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obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
(c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.
CHOLESTECH CORPORATION
By:
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Title:
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