EXHIBIT 10.50
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"),
effective as of the 13th day of November, 2001, is by and among COLORADO
MEDTECH, INC. ("Medtech"), CIVCO MEDICAL INSTRUMENTS CO. INC. ("Civco"), and
BIOMED Y2K, INC. ("Biomed") (Medtech, Civco, and Biomed shall be collectively
referred to herein as "Borrower") and KEYBANK NATIONAL ASSOCIATION, a national
banking association (the "Lender").
RECITALS:
A. On December 21, 2000, Borrower and Lender entered into that certain
Credit Agreement (the "Credit Agreement") pursuant to which Lender agreed to
extend credit to Borrower, on a revolving basis, in an aggregate principal
amount at any time outstanding not in excess of $15,000,000 (the "Loan"), as
evidenced by that certain Promissory Note dated December 21, 2000 (the "Note"),
and secured by, among other items, a Security Agreement dated December 21, 2000,
as amended by First Amendment to Security Agreement dated February 28, 2001 (the
"Security Agreement") executed by Borrower and Lender. The Credit Agreement was
amended by that certain First Amendment to Credit Agreement dated April 30, 2001
(the "First Amendment") to approve the sale and release of CMED Catheter and
Disposables Technology, Inc. (an initial Borrower under the Loan) from its
obligations under the Loan.
B. Upon the terms and conditions set forth herein, Lender and Borrower
desire to, among other things, amend the Credit Agreement by documenting
Lender's approval of the release of Civco as a Borrower thereunder, releasing
Civco from the Note and Security Agreement, and filing a UCC-3 to release the
Civco assets from the UCC-1 Financing Statement filed by the Lender, all in
accordance with a certain Revised Order of Preliminary Injunction, Case No. SACV
00-1149, United States District Court, Central District of California in the
matter of Xxxxxx X. Xxxxx and Xxxxxxxx Xxxxx, as Plaintiffs and Colorado
Medtech, Inc. and Xxxx X. Xxxxxxxxx, as Defendants (the "Civil Action").
C. All references herein to the Loan Documents shall refer collectively
to the Credit Agreement, Note, Security Agreement, and any other instruments or
documents evidencing, securing or relating to the Loan, as amended by the First
Amendment and this Second Amendment.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto covenant and agree as follows:
1. LENDER'S APPROVAL OF RELEASE OF CIVCO. Lender hereby consents to the
release of Civco as a Borrower under Loan and as a party to the Loan Documents.
2. MODIFICATION OF DEFINITION OF "BORROWER". The term "Borrower" as
used in the Loan Documents is hereby modified to delete all references to Civco,
and accordingly is hereby amended to collectively refer to, on a joint and
several basis, Medtech and Biomed.
3. AMENDMENT TO THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended as follows:
(a) The definition of "Maximum Amount" as set forth in Section 1.1
of the Credit Agreement shall be deleted in its entirety and replaced with the
following:
"Maximum Amount" shall mean $5,000,000.
(b) The definition of "Maturity Date" as set forth in Section 1.1 of
the Credit Agreement shall be deleted in its entirety and replaced with the
following:
"Maturity Date" shall mean July 1, 2002.
(c) The definition of "Base Rate Margin" as set forth in Section 1.1
of the Credit Agreement shall be deleted in its entirety and replaced with the
following:
"Base Rate Margin" shall mean two hundred (200) basis points."
(d) The following definitions as set forth in Section 1.1 of the
Credit Agreement shall be deleted: "Adjusted Tangible Capital", "Amortization
Expense", "Capital Lease Obligations", "Current Assets", Current Liabilities",
Depreciation Expense", "EBIT", "EBITDA", "Funded Debt", "Intangible Assets",
"Interest Expense", "Interest Period", "LIBOR Rate", "LIBOR Rate Loan", "LIBOR
Rate Margin", "LIBOR Reserve Requirements", "Net Income", "Subordinated Debt",
"Tax Expense" and "Total Indebtedness".
(e) The definition of "Business Day" as set forth in Section 1.1 of
the Credit Agreement shall be deleted in its entirety and replaced with the
following:
"Business Day" shall mean a day (other than a Saturday or
Sunday) on which banks generally are open in Denver, Colorado for the
conduct of substantially all of their commercial lending activities."
(f) The definition of "Unused Fee Rate" as set forth in Section 1.1
of the Credit Agreement shall be deleted in its entirety and replaced with the
following:
"Unused Fee Rate" shall mean fifty (50) basis points."
(g) Section 2.1(ii) of the Credit Agreement shall be deleted in its
entirety and replaced with the following"
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"(ii) Each advance under the Revolving Credit Loan (each such
advance is referred to herein as a "Loan") shall constitute a Base
Rate Loan and shall be made on such Business Day and in such amount
(equal to $100,000.00 or any integral multiple thereof) as the
Borrower shall request by written notice given to the Lender no
later than 11:00 a.m. (Denver, Colorado time) on the date of
disbursement of the requested Base Rate Loan."
(h) Section 2.3(a)(i) and 2.3(b) of the Credit Agreement shall be
intentionally deleted in their entirety and Section 2.3(a)(ii) of the Credit
Agreement shall be deleted in its entirety and replaced with the following:
"(ii) With respect to any Base Rate Loan, at a rate per annum
equal to the sum of the Base Rate and the Base Rate Margin in effect
from time to time, which rate shall change when and as the Base Rate
changes in accordance with this Agreement."
(i) Section 2.4 of the Credit Agreement shall be deleted in its
entirety and replaced with the following:
"Interest Payments. The Borrower shall pay to the Lender
accrued interest on the unpaid principal balance of each Base Rate
Loan on the last date of each Calendar Quarter."
(j) Section 2.5 of the Credit Agreement shall be deleted in its
entirety and replaced with the following:
"Prepayment.
(a) The Borrower may prepay any Base Rate Loan in whole, or in
part, at any time or times.
(b) Without notice or demand, if the sum of the outstanding
principal balance of the Loans shall at any time exceed the
Borrowing Base, the Borrower shall immediately prepay the Loans to
the extent necessary to eliminate such excess. Any payment received
by the Lender under this Section 2.5(b) may be applied to the
Borrower Indebtedness, in such order and in such amounts as the
Lender, in its discretion, may from time to time determine."
(k) Section 2.10 of the Credit Agreement shall be deleted in its
entirety and replaced with the following:
"Additional Costs. If either (i) any change in any law or
regulation (or its interpretation), or (ii) the compliance with any
guideline or request from any central lender or other governmental
authority (whether or not
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having the force of law), affects or would affect the amount of
capital required or expected to be maintained by the Lender or any
corporation controlling the Lender and the Lender determines that
the amount of such capital is increased by or based upon the
existence of the Loan (or commitment to make the Loan) and other
extensions of credit (or commitments to extend credit) of similar
type, then, upon demand by the Lender, the Borrower shall pay to the
Lender from time to time as specified by the Lender additional
amounts sufficient to compensate the Lender in the light of such
circumstances, to the extent that the Lender reasonably determines
such increase in capital to be allocable to the existence of the
Lender's Loan (or commitment to make the Loan). A certificate of
the Lender submitted to the Borrower as to such amounts shall be
conclusive and binding for all purposes, absent manifest error. Upon
notice from the Borrower to the Lender within five (5) Business Days
after the Lender notifies the Borrower of any such additional costs
pursuant to this Section 2.10, the Borrower may either (A) prepay in
full the Loan if so affected, together with interest accrued thereon
to the date of such prepayment, or (B) convert the Loan if so
affected into a Loan of any other type not so affected upon not
less than four (4) Business Days' notice to the Lender."
(l) Section 2.11 of the Credit Agreement shall be intentionally
deleted in its entirety.
(m) The following shall be added as a new Section 5.5(d) to the
Affirmative Covenants:
"(d) any settlement or other negotiated agreement entered into
between Gen-Probe, Incorporated and Borrower in connection with a
dispute regarding a certain development and manufacturing project."
(n) The following sections of the Credit Agreement pertaining to the
financial covenants required of Borrower shall be deleted in their entirety and
shall no longer be applicable to Borrower: Section 6.9 - Current Ratio; Section
6.10 - Funded Debt to EBITDA Ratio; Section 6.11 - EBIT to Interest Expense
Ratio; Section 6.12 - Total Indebtedness to Adjusted Tangible Capital. In
addition, Lender hereby waives the EBIT to Interest Expense Ratio requirement
for the quarters ending March 31, 2001 and June 30, 2001.
(o) The following shall be added as new subsections (l) and (m) to
Article VII- Events of Default:
"(l) the Civil Action is not resolved satisfactorily to Lender
on or before January 31, 2002. For purposes hereof, such Civil
Action shall be deemed to have been resolved to the satisfaction of
Lender if a final non-appealable judgment has been rendered, a
settlement between the parties has been entered into, or such other
disposition of the Civil Action has occurred which would not have a
Material Adverse Effect; or
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(m) Borrower shall enter into a settlement agreement
or shall have a monetary judgment entered against it by a court of
competent jurisdiction for an amount, in either case, in which
Borrower's liability or its contribution to a settlement is in excess
of $2,000,000 in connection with a dispute or litigation between the
Borrower and Gen-Probe, Incorporated."
4. AMENDMENT TO NOTE. The Note is hereby amended as follows:
(a) The face amount of the Note shall be reduced from $15,000,000 to
$5,000,000.
(b) Paragraph 2 of the Note shall be deleted in its entirety and
replaced with the following:
"Interest and Payments. The outstanding principal balance of
this Note shall bear interest, from the date of each Advance made by
Lender until repaid in full, at a per annum rate of interest equal to
the Base Rate plus the Base Rate Margin, which interest shall be due
and payable, quarterly in arrears, as provided in the Credit Agreement.
Upon the Maturity Date or earlier upon termination of the Credit
Agreement, the entire outstanding principal balance of this Note,
together with all accrued but unpaid interest thereon and all other
sums due hereunder, shall be due and payable in full. The Borrower
shall have the right to prepay the outstanding principal balance of
this Note, together with all accrued but unpaid interest thereon and
all other sums due hereunder, in full or in part, as set forth in the
Credit Agreement. All payments of principal, interest and any other
sums on this Note due from the Borrower to Lender shall be made to
Lender in lawful money of the United States of America in the manner
set forth in the Credit Agreement."
5. RELEASE FROM SECURITY AGREEMENT. Lender hereby releases Civco from
any and all obligations as a Debtor under the Security Agreement, and agrees to
execute a UCC-3 terminating that certain UCC-1 Financing Statement, File No.
P170976, filed by Lender with the Iowa Secretary of State on March 8, 2001.
6. LOAN DOCUMENT AMENDMENTS. Each of the Loan Documents is hereby
amended to conform to the amendments to the Credit Agreement, the Note and the
Security Agreement set forth in Paragraphs 1, 2, 3 and 4 and 5 above.
7. CONDITIONS PRECEDENT. Notwithstanding anything to the contrary set
forth herein, this Second Amendment shall not be effective until the following
shall have occurred:
(a) Borrower shall have delivered to Lender an amendment fee payment
of $7,500.00.
8. DOCUMENT RATIFICATION. Subject to the amendments set forth in
Paragraphs 1, 2, 3, 4 and 5 above, all of the terms and conditions contained in
the Credit Agreement and the other Loan Documents, shall remain unmodified and
in full force and effect.
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9. RELEASE. Except as specifically set forth herein, the execution of
this Second Amendment by Lender does not and shall not constitute a waiver of
any rights or remedies to which Lender is entitled pursuant to the Loan
Documents, nor shall the same constitute a waiver of any default now existing or
which may occur in the future with respect to the Loan Documents. Borrower
hereby agrees that Lender has fully performed its obligations pursuant to the
Loan Documents through the date hereof.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER. Borrower
represents, warrants and covenants to Lender:
(a) No default or event of default under any of the Loan Documents
as modified herein, nor any event, that, with the giving of notice or the
passage of time or both, would be a default or an event of default under the
Loan Documents as modified herein has occurred and is continuing.
(b) There has been no material adverse change in the financial
condition of Borrower or any other person whose financial statement has been
delivered to Lender in connection with the Loan from the most recent financial
statement received by Lender.
(c) Each and all representations and warranties of Borrower in the
Loan Documents, are accurate on the date hereof, except that contained in
Section 3.6 of the Credit Agreement, as to which the date for purposes of this
Second Amendment shall be changed to June 30, 2001; and except that Schedule 3.9
to the Credit Agreement is replaced by Schedule 3.9 attached to this Second
Amendment.
(d) Borrower has no claims, counterclaims, defenses, or set-offs
with respect to the Loan or the Loan Documents as modified herein.
(e) The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower, enforceable against Borrower in accordance with
their terms.
(f) Borrower shall execute, deliver, and provide to Lender such
additional agreements, documents, and instruments as reasonably required by
Lender to effectuate the intent of this Second Amendment.
11. CONTROLLING LAW. The terms and provisions of this Second Amendment
shall be construed in accordance with and governed by the laws of the State of
Colorado.
12. BINDING EFFECT. This Second Amendment shall be binding upon and
inure to the benefit of the parties hereto, their successors and assigns.
13. CAPTIONS. The paragraph captions utilized herein are in no way
intended to interpret or limit the terms and conditions hereof, rather, they are
intended for purposes of convenience only.
14. COUNTERPARTS. This Second Amendment may be executed in any number
of counterparts, each of which shall be effective only upon delivery and
thereafter shall be deemed an original, and all of which shall be taken to be
one and the same instrument, for the
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same effect as if all parties hereto had signed the same signature page. Any
signature page of this Second Amendment may be detached from any counterpart of
this Second Amendment without impairing the legal effect of any signatures
thereon and may be attached to another counterpart of this Second Amendment
identical in form hereto but having attached to it one or more additional
signature pages.
15. DEFINED TERMS. Capitalized terms not defined herein shall have the
same meaning as set forth in the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the day and year first above written.
BORROWER:
COLORADO MEDTECH, INC., a Colorado
corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Its: President
-------------------------------
CIVCO MEDICAL INSTRUMENTS CO., INC.,
and Iowa corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Its: Vice President
-------------------------------
BIOMED Y2K, INC., a Colorado corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Its: President
-------------------------------
LENDER:
KEYBANK NATIONAL ASSOCIATION, a
national banking association
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
-------------------------------
Its: Vice President
-------------------------------
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