1
EXHIBIT 10.27
FOURTH AMENDMENT TO CREDIT DOCUMENTS
This Fourth Amendment to Credit Documents (the "Amendment") is entered
into as of December 22, 1995, by and between CIMCO, INC., a Delaware
corporation ("Borrower") and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Borrower and Bank are parties to that certain Credit
Agreement, dated as of February 1, 1995, as heretofore amended by that certain
First Amendment to Credit Agreement, dated as of June 9, 1995, and as further
heretofore amended pursuant to that certain Second Amendment to Credit
Agreement and Revolving Line of Credit Note, dated as of August 24, 1995, that
certain Third Amendment to Credit Documents, dated as of October 27, 1995 and
as may be further amended from time to time (the "Credit Agreement").
WHEREAS, pursuant to the terms of the Credit Agreement, Borrower has
executed a Revolving Line of Credit Note in favor of Bank, dated as of June 9,
1995 and in the original principal amount of $6,758,500 (as amended from time
to time, the "Revolving Note").
WHEREAS, pursuant to the terms of the Credit Agreement, Borrower has
executed a Promissory Note in favor of Bank, dated as of February 1, 1995 and
in the original principal amount of $7,500,000 (as amended from time to time,
the "Term Note").
WHEREAS, on or about August 24, 1995, Borrower executed in favor of
Bank that certain Promissory Note, dated as of August 24, 1995 and in the
original principal amount of $1,800,000 (as amended from time to time, the
"Bridge Note").
WHEREAS, Borrower and Bank are parties to that certain Reimbursement
Agreement, dated as of September 1, 1993 (as amended from time to time, the
"Reimbursement Agreement"). Pursuant to the terms of the Reimbursement
Agreement, a letter of credit was issued by Bank for the account of Borrower in
the stated amount of $5,735,960.
WHEREAS, various other credit and security documents have been
executed in favor of Bank with respect to the foregoing credits.
WHEREAS, Borrower has requested that Bank agree to certain amendments
to the foregoing credit documents and to certain other agreements contained
herein.
WHEREAS, Bank has agreed to certain of Borrower's requests in
accordance with the terms and subject to all conditions set forth in this
Amendment.
WHEREAS, Meas Leasing Company, a general partnership ("Mesa Leasing"),
has heretofore delivered to Bank a Promissory Note (the "Mesa Note"), dated as
of July 26, 1991 and in the original principal amount of $2,300,000.
NOW THEREFORE, the parties hereto agree as follows:
2
1. Amendment to Term Note. The second sentence of the second
paragraph of the Term Note is amended to read as follows:
"Principal shall be payable on the 1st day of each month in
installments of $156,250 each, commencing March 1, 1995 and
continuing up to and including April 1, 1996, with a final
installment consisting of all remaining unpaid principal due
and payable in full on April 30, 1996."
2. Amendments to Credit Agreement and Revolving Note.
a. The second sentence of the first full paragraph on
page 2 of the Revolving Note is amended to read:
"The outstanding principal balance of this Note shall be due
and payable in full on April 30, 1996."
b. As of the date of this Amendment, the principal
balance outstanding under the Revolving Note is $4,549,327.12 and the aggregate
stated amount of the letters of credit outstanding under the letter of credit
subfeature specified in Section 1.1(c) of the Credit Agreement is
$1,449,678.47. The parties hereby agree that from and after the date of this
Amendment the maximum principal borrowing availability under the "Line of
Credit" as specified in the second paragraph of Section 1.1 of the Credit
Agreement (not including outstanding letters of credit (which include a letter
of credit in the amount of $155,428.47 and a letter of credit in the amount of
$1,294,250.00) or advances resulting from draws thereunder) shall be
$4,549,327.12.
3. Amendments to Bridge Note.
a. The "Maturity Date" as defined in the Bridge Note, is
amended to be April 30, 1996 instead of December 28, 1995.
b. The parties hereby amend the Bridge Note to reflect a
face amount of $2,450,000 instead of $1,800,000. Borrower shall become
eligible for the advance of this additional principal amount of $650,000 upon
the effectiveness of this Amendment and the satisfaction of all conditions
precedent specified in Section 8 hereof.
4. Amendment to Credit Agreement. Compliance with the financial
covenants specified in Section 4.9 of the Credit Agreement is hereby waived by
Bank for the period from December 29, 1995 through April 30, 1996 only. For
all points of time from and after April 30, 1996, full compliance with such
Section 4.9 shall be required as though this wavier had not occurred.
5. Cash Collateral. Borrower agrees that on or before April 30,
1996, it will deposit with Bank, in cash, an amount equal to $5,335,974.14 (the
"Reserve Amount"), which is the present maximum credit exposure of Bank
pursuant to the Letter of Credit. The Reserve Amount will be held by Bank as
collateral security for all obligations of Borrower that may arise under the
Reimbursement Agreement and Borrower hereby grants a security interest to Bank
in such
2
3
funds to secure such obligations. Such collateral will be held in an
interest-bearing demand deposit account with Bank, and Borrower agrees to
execute and deliver to Bank such security and such other documentation as Bank
may reasonably require to further evidence such lien, provided however that the
obligation to deliver such funds by such date is unconditional and in no way
dependent upon the delivery of such additional documentation.
6. Restructure Fee. Borrower agrees to pay a restructure fee to
Bank in the amount of $25,000 upon the execution of this Amendment by Bank.
This restructure fee is fully earned at such time and is nonfundable.
7. Costs and Expenses. Borrower acknowledges that all costs and
expenses of Bank incurred in connection with the negotiation and preparation of
this Amendment, or in connection with any document or transaction contemplated
herein, are, without limitation, obligations of Borrower pursuant to Section
7.3 of the Credit Agreement. Borrower agrees to pay to Bank such costs and
expenses within five business days from the date of receipt of invoice.
8. Conditions Precedent. The effectiveness of this Amendment is
conditioned upon the satisfaction of each of the following conditions no later
than December 28, 1995, or their waiver in writing by Bank:
a. Borrower shall have paid to Bank the restructure fee
provided for in Section 6 of this Amendment;
b. Bank and Mesa Leasing shall have entered into an
amendment to the Mesa Note changing the final maturity date thereof to April
30, 1996;
c. Counsel to Borrower, Stradling, Yocca, Xxxxxxx &
Xxxxx, shall have delivered to Bank an opinion in form reasonably satisfactory
to Bank pertaining to this Amendment and the amendment to the Mesa Note; and
d. A definitive merger agreement shall have been entered
into between Borrower and Hanwest, Inc. in substantially the form of the
"Merger Agreement" defined in Bank's letter to Borrower of December 19, 1995,
and Borrower shall have delivered a certification thereto and satisfactory
evidence thereof to Bank.
9. Amendment of Other Loan Documents. Each of the credit and
security documents associated with a document modified herein is hereby amended
such that all references to such document contained therein shall be deemed to
be references to such document as amended by this Amendment.
10. Reservation of Rights. This Amendment is a "Loan Document" as
defined in the Credit Agreement. Breach of any covenant or agreement hereunder
shall constitute an Event of Default under the Credit Agreement.
11. Counterparts. This Amendment may be executed in counterparts
and any party may execute any counterpart, each of which shall be deemed to be
an original and all of which, taken together, shall be deemed to be one and the
same document. The execution hereof by any party shall not become effective
until this Amendment is executed by all parties hereto.
3
4
12. Except as specifically provided herein, all terms and
conditions of the agreements referenced herein remain in full force and effect,
without waiver or modification.
13. Borrower hereby remakes all representations and warranties
contained in the credit documents identified herein and reaffirms all covenants
set forth therein. Borrower further certifies as of the date of this
Amendment, other than is heretofore disclosed in writing to Bank, there exists
no Event of Default as defined in the Credit Agreement, nor any condition, act
or event which with the giving of notice or the passage of time or both would
constitute any such Event of Default.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed as of the date and year first written above.
CIMCO, INC., a Delaware corporation
By: XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx
President
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: ART BROKX
------------------------------
Art Brokx, Vice President
------------------------------
Printed Name and Title
4
5
REAFFIRMATION OF SECURITY AGREEMENTS
By their execution hereof, Medical Molding Corporation of America, a
California corporation and Compounding Technology Inc., a California
corporation do hereby consent to all terms and provisions contained in and all
transactions contemplated by the foregoing Amendment and hereby reaffirm that
all security agreements and other undertakings heretofore made by them in favor
of Bank remain in full force and effect.
Date: December 22, 0000
XXXXXXX XXXXXXX XXXXXXXXXXX XX XXXXXXX,
a California corporation
By: XXXXXXX X. XXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxx
Chairman
COMPOUNDING TECHNOLOGY INC.,
a California corporation
By: XXXXXXX X. XXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxx
Chairman
5
