EXHIBIT 10.0
Amendment to Loan Document between
the Company and Coast Business Credit
and
Secured Promissory Note between the
Company and Coast Business Credit
AMENDMENT TO LOAN DOCUMENTS
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This AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment")
dated as of this 11 day of June 1998, between Coast Business Credit(R), a
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division of Southern Pacific Bank ("Coast"), and Cardiac Control Systems, Inc.,
a Delaware corporation ("Borrower"), is made in reference to the following
facts:
A. Borrower previously entered into a Loan and Security Agreement
with Coast dated June 13, 1997 (as it may be amended, supplemented or modified
from time to time, the "Loan Agreement"). In addition, Borrower previously
executed certain related documents, instruments and agreements in connection
with the Loan Agreement (the "Loan Documents"), each dated as of even date
therewith, including but not limited to a Warrant ("Warrant One") to purchase
Thirty-seven Thousand Five Hundred (37,500) shares of common stock of Borrower.
B. Borrower has requested and received Loans from Coast in excess
of the amount to which Borrower is eligible under the Loan Agreement (the
"Overadvance").
C. Borrower has requested that Coast provide it with a term loan
in the amount of Two Hundred Fifty Thousand Dollars ($250,000) to satisfy the
Obligations resulting from the Overadvance and for ongoing working capital
needs.
D. Coast is willing to amend the Loan Agreement on the terms and
subject to the conditions set forth in this Amendment.
NOW THEREFORE, in consideration of the foregoing and the terms and
conditions hereof, the parties do hereby agree as follows, effective as of the
date set forth above:
1. Definitions. Terms used herein, unless otherwise defined herein, shall have
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the meanings set forth in the Loan Agreement.
2. Credit Line. Section 1 of the Schedule is hereby amended by deleting the
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text after the first colon up to subsection (1) and replacing it with the
following:
"Loans in an amount not to exceed the lesser of a total of
$3,500,000 at any one time outstanding (the "Maximum Dollar
Amount"), or the sum of (1), (2), (3), (4) and (5) below."
3. Bridge Loan. Section 1 of the Schedule is hereby amended by adding a
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subsection (5) as follows:
"Bridge Loan. Coast will advance a term loan ("Bridge Loan") to
Borrower in the aggregate amount of Two Hundred and Fifty Thousand
Dollars ($250,000) that shall be repayable on August 31, 1998 and
evidenced by a secured promissory note in form and substance
satisfactory to Coast, provided that the proceeds of the Bridge
Loan shall be applied to satisfy the Overadvance, as defined in the
Amendment dated June 11, 1998."
4. Interest Rate. Section 2 of the Schedule is hereby amended by deleting the
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first sentence of the text thereof and substituting the following therefor:
"A rate equal to the "Prime Rate" plus 2% per annum, other
than the Term Loan and CAPEX Subline which will accrue
interest at the Prime Rate plus 2.25% per annum and the
Bridge Loan which will accrue interest at the Prime Rate
plus 5% per annum, calculated on the basis of a 360-day year
for the actual number of days elapsed."
5. Warrant One. Concurrently herewith and as a condition to Coast's
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performance of its obligations under this Amendment, Borrower and Coast
hereby agree and acknowledge that Warrant One is hereby amended so that the
"Current Warrant Price" (as defined in Warrant One) shall be equal to Forty
Cents ($0.40) per share.
6. Warrant Two. As a condition to Coast's performance of its obligations
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under this Amendment, Borrower shall deliver a second warrant to Coast in
form and substance satisfactory to Coast granting Coast the option to
purchase Twenty-five Thousand (25,000) shares of common stock of Borrower
at a price of Forty Cents ($0.40) per share.
7. Accommodation Fee. In consideration of this Amendment and the financial
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accommodations made available to Borrower from Coast, and in addition to
all other fees and charges, Borrower shall pay to Coast on the date hereof
an accommodation fee of $10,000, which fee shall be fully earned as of the
date hereof.
8. No Waiver. Nothing herein shall be construed as a waiver of any Event of
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Default.
9. Reaffirmation. Except as modified by the terms herein, the Loan Agreement
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and the Loan Documents remain in full force and effect. If there is any
conflict between the terms and provisions of this Amendment and the terms
and provisions of the Loan Agreement the Loan Documents, the terms and
provisions of the is Amendment shall govern.
10. Counterparts. This Amendment may be executed in one or more counterparts,
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each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
11. Governing Law. This Amendment shall be governed by and construed according
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to the laws of the State of California.
12. Attorneys' Fees; Costs; Jury Trial Waiver. Borrower agrees to pay, on
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demand, all attorneys' fees and costs incurred in connection with the
negotiation, documentation and execution of this Amendment. If any legal
action or proceeding shall be commenced at any time by any party to this
Amendment in connection with its interpretation or enforcement, the
prevailing party or parties in such action or proceeding shall be entitled
to reimbursement of its reasonable attorneys' fees and costs in connection
therewith, in addition to all other relief to which the prevailing party or
parties may be entitled. Each of Coast and Borrower hereby waives its right
to a jury trial in any such action or proceeding.
"Borrower"
CARDIAC CONTROL SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxx
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Title: President & CEO
"Coast"
COAST BUSINESS CREDIT, a division of
Southern Pacific Bank, formerly known as COAST
BUSINESS CREDIT, a division of Southern Pacific
Thrift & Loan Association
By:
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Title:
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3
COAST
SECURED PROMISSORY NOTE
$250,000 Los Angeles, California
June 11, 1998
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to the order of
COAST BUSINESS CREDIT, a division of Southern Pacific Bank ("Coast"), at 00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, or at such other
address as the holder of this Note shall direct, the entire principal balance of
this Note, plus any and all accrued and unpaid interest, on the earlier of: (i)
August 31, 1998, or (ii) the date that the Loan and Security Agreement between
the Borrower and Coast dated June 13, 1997 as amended, replaced, supplemented or
modified from time to time (collectively, the "Loan Agreement") terminates by
its terms or is terminated by either party in accordance with its terms, plus
interest as hereinafter provided.
This Note shall bear interest on the unpaid principal balance hereof from time
to time outstanding at a rate equal to the "Prime Rate" (as hereinafter defined)
plus 5% per annum. Interest shall be calculated on the basis of a 360-day year
for the actual number of days elapsed. As used herein, the term "Prime Rate"
shall mean the actual "Reference Rate" or the substitute therefor of the Bank of
America NT & SA whether or not that rate is the lowest interest rate charged by
said bank. The interest rate applicable to this Note shall be adjusted monthly,
as of the first day of each month, and the interest rate charged during each
month shall be based on the highest Prime Rate in effect during said month. If
the Prime Rate is unavailable, "Prime Rate" shall mean the highest of the prime
rates published in the Wall Street Journal on the first business day of the
month, as the base rate of corporate loans at large U.S. money center banks.
Accrued interest shall be payable monthly, in addition to the principal payment
provided above, commencing on June 30, 1998, and continuing on the last day of
each succeeding month.
Principal of, and interest on, this Note shall be payable in lawful money of the
United States of America. If a payment hereunder becomes due and payable on a
Saturday, Sunday or legal holiday, the due date thereof shall be extended to the
next succeeding business day, and interest shall be payable thereon during such
extension.
In the event any payment of principal or interest on this Note is not paid in
full when due, or if any other default or event of default occurs under the Loan
Agreement or any other present or future instrument, document, or agreement
between Borrower and Coast, Coast may, as its option, at any time thereafter,
declare the entire unpaid principal balance of this Note plus all accrued
interest to be immediately due and payable, without notice or demand. Without
limiting the foregoing, and without limiting Coast's other rights and remedies,
in the event any installment of principal or interest is not paid in full on or
before the date due, Borrower agrees that it would be impracticable or extremely
difficult to fix the actual damages resulting therefrom to Coast, and therefore
the Borrower agrees immediately to pay to Coast an amount equal to 5% of the
installment (or portion thereof) not paid, as liquidated damages, to compensate
Coast for the internal administrative expenses in administering the default.
Without limiting the foregoing, and without limiting Coast's other rights and
remedies, in the event any installment of interest is not paid on or before the
date due, it shall thereafter bear like interest as the principal of this Note.
The acceptance of any installment of principal or interest by Coast after the
time when it becomes due, as herein specified, shall not be held to establish a
custom,
or to waive any rights of Coast to enforce payment when due of any further
installments or any other rights, nor shall any failure or delay to exercise any
rights be held to waive the same.
All payments hereunder are to be applied first to costs and fees referred to
hereunder, second to the payment of accrued interest and the remaining balance
to the payment of principal. Any principal prepayment hereunder shall be applied
against principal payments in the inverse order of maturity. Coast shall have
the continuing and exclusive right to apply or reverse and reapply any and all
payments hereunder in its sole discretion.
Borrower agrees to pay all costs and expenses (including without limitation
attorney's fees) incurred by Coast in connection with or related to this Note,
or its enforcement, whether or not suit be brought. Borrower hereby further
waives presentment, demand for payment, notice of dishonor, notice of
nonpayment, protest, notice of protest, and any and all other notices and
demands in connection with the delivery, acceptance, performance, default, or
enforcement of this Note, and Borrower hereby waives the benefits of any statute
of limitations with respect to any action to enforce, or otherwise related to
this Note.
This Note is secured by the Loan Agreement and all other present and future
security agreements and mortgages between Borrower and Coast. Nothing herein
shall be deemed to limit any of the terms or provisions of the Loan Agreement or
any other present or future document, instrument or agreement, between Borrower
and Coast, and all of Coast's rights and remedies hereunder and thereunder are
cumulative.
In the event any one or more of the provisions of this Note shall for any reason
be held to be invalid, illegal or unenforceable, the same shall not affect any
other provision of this Note and the remaining provisions of this Note shall
remain in full force and effect.
No waiver or modification of any of the terms or provisions of this Note shall
be valid or binding unless set forth in a writing signed by a duly authorized
officer of Coast, and then only to the extent therein specifically set forth. If
more than one person executes this Note, their obligations hereunder shall be
joint and several.
COAST AND BORROWER EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS NOTE;
OR (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN COAST AND
BORROWER; OR (iii) ANY CONDUCT, ACTS OR OMISSIONS OF COAST OR BORROWER OR ANY
OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS
AFFILIATED WITH COAST OR BORROWER.
This Note is payable in, and shall be governed by the internal laws of, the
State of California.
CARDIAC CONTROL SYSTEMS, INC.
By /s/ Xxxx X. Xxxxx
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President or Vice President
By /s/ W. A. Xxxxxx
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Secretary or Ass't Secretary
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