<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Check One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----------
EXCHANGE ACT of 1934
For the quarterly period ended June 30, 1995
-----------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
-----------
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ________________________
Commission File Number 0-15308
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MDT CORPORATION
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 87-0287585
------------------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Stratford Hall, Suite 200, 1009 Slater Road
Morrisville, North Carolina 27560
------------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (919) 941-9745
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----------- -----------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $1.25 par value 6,769,431 Shares
------------------------------- ------------------------------------
Class Outstanding as of July 31, 1995
<PAGE>
MDT CORPORATION
INDEX
<TABLE>
<CAPTION>
Part I Financial Information Page
--------------------- ----
<C> <S> <C>
Item 1 - Financial Statements
Consolidated Balance Sheets - 1
June 30, 1995, and March 31, 1995
Consolidated Statements of Operations - 2
Three Months Ended June 30, 1995,
and 1994
Consolidated Statements of Cash Flows - 3
Three Months Ended June 30, 1995,
and 1994
Notes to Consolidated Financial Statements 4-6
Item 2 - Management's Discussion and 7-9
Analysis of Financial Condition
and Results of Operations
Part II Other Information
-----------------
Item 4 - Submission of Matters to a Vote
of Security Holders 10
Item 6 - Exhibits and Reports on Form 8-K 10
Signatures 11
----------
Exhibits
--------
10.1 Amendment to Bank Credit Agreement,
dated as of August 1, 1995
10.2 Addendum to Lease Agreement between MDT
and D.E. Gressette, dated July 6, 1995
11.0 Computation of Earnings Per Share -
Three Months Ended June 30, 1995, and 1994
27.0 Financial Data Schedule
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
MDT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1995 March 31, 1995
------------- --------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 1,421,000 $ 1,962,000
Accounts Receivable, Less Allowance for
Doubtful Accounts of $575,000 and $531,000 30,077,000 31,032,000
Inventories, at Cost 38,121,000 37,061,000
Prepaid Expenses 3,137,000 2,576,000
------------ ------------
Total Current Assets 72,756,000 72,631,000
Property, Plant and Equipment, at Cost,
Less Accumulated Depreciation and
Amortization of $20,760,000 and $20,075,000 27,773,000 28,132,000
Other Assets, at Cost, Less Accumulated
Amortization of $6,335,000 and $6,117,000 4,451,000 4,586,000
------------ ------------
Total Assets $104,980,000 $105,349,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Note Payable $ 26,500,000 $ 25,600,000
Current Installments of Long-Term Debt 3,371,000 3,617,000
Accounts Payable 11,157,000 11,432,000
Accrued Liabilities:
Compensation, Payroll Taxes and Benefits 1,034,000 1,002,000
Warranty, Litigation and Other 4,150,000 4,550,000
Deferred Income 1,807,000 1,922,000
Deferred Income Taxes 926,000 1,081,000
------------ ------------
Total Current Liabilities 48,945,000 49,204,000
Long-Term Debt, Less Current Installments 5,126,000 5,684,000
Accrued Postretirement Benefits 2,266,000 2,266,000
Deferred Income Taxes 2,734,000 2,734,000
------------ ------------
Total Liabilities 59,071,000 59,888,000
Stockholders' Equity:
Preferred Stock, Par Value $1.25 Per Share;
Authorized 1,600,000 Shares;
Issued and Outstanding, None - -
Common Stock, Par Value $1.25 Per Share;
Authorized 20,000,000 Shares;
Issued and Outstanding 6,769,431 Shares at
June 30, 1995, and 6,769,431 Shares at
March 31, 1995 8,462,000 8,462,000
Paid-In Capital 27,264,000 27,264,000
Retained Earnings 10,183,000 9,735,000
------------ ------------
Total Stockholders' Equity 45,909,000 45,461,000
------------ ------------
Total Liabilities and Stockholders' Equity $104,980,000 $105,349,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-1-
<PAGE>
MDT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30,
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Sales $30,899,000 $32,194,000
Cost of Sales 20,831,000 21,530,000
----------- -----------
Gross Profit 10,068,000 10,664,000
----------- -----------
Operating Expenses:
Marketing and Sales 5,515,000 6,440,000
Administration 2,397,000 2,243,000
Product Development 987,000 1,135,000
----------- -----------
8,899,000 9,818,000
----------- -----------
Reorganization Costs 229,000 430,000
Operating Income 940,000 416,000
Interest Expense 905,000 787,000
Other(Income) Expense (750,000) 40,000
----------- -----------
Income (Loss) Before Income Taxes 785,000 (411,000)
Income Taxes (Benefit) 337,000 (174,000)
----------- -----------
Net Income (Loss) $ 448,000 $ (237,000)
=========== ===========
Earnings (Loss) Per Share $ .07 $ (.04)
=========== ===========
Weighted Average Number of
Shares Outstanding 6,814,000 6,743,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
<PAGE>
MDT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 30,
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Net income (loss) $ 448,000 $ (237,000)
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Depreciation and amortization 1,008,000 1,037,000
Provision for losses on accounts receivable 65,000 82,000
Gain on sale of Bovie product line (712,000) -
Change in assets and liabilities net of effects
from sale of Bovie product line:
Decrease in accounts receivable 441,000 948,000
Increase in inventories (1,160,000) (991,000)
Increase in prepaid expenses (560,000) (1,083,000)
Increase in other assets - (37,000)
Decrease in accounts payable and
accrued liabilities (574,000) (656,000)
----------- -----------
Net cash used by operating activities (1,044,000) (937,000)
----------- -----------
Cash flows from investing activities:
Capital expenditures (594,000) (1,142,000)
Proceeds from sale of Bovie product line 1,000,000 -
----------- -----------
Net cash provided (used) by investing activities 406,000 (1,142,000)
----------- -----------
Cash flows from financing activities:
Net borrowings on short-term line of credit 900,000 3,000,000
Principal payments on long-term debt (803,000) (914,000)
---------- ----------
Net cash provided by financing activities 97,000 2,086,000
---------- ----------
Net increase (decrease) in cash (541,000) 7,000
Cash, beginning of period 1,962,000 855,000
---------- ----------
Cash, end of period $1,421,000 $ 862,000
========== ===========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 768,000 $ 584,000
Income Taxes 44,000 227,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The financial information included herein is unaudited except for the
balance sheet as of March 31, 1995. However, such information reflects all
adjustments which are, in the opinion of management, necessary for a fair
statement of financial position and results of operations for the interim
periods. Certain amounts presented in the consolidated financial statements of
prior periods have been reclassified to conform to the method of presentation
used in the first quarter financial statements. These reclassifications have no
effect on the consolidated financial position as previously reported.
The results of operations for the three-month period ending June 30,
1995, are not necessarily indicative of the results to be expected for the full
year.
NOTE 2: INVENTORIES
Inventory was valued using the LIFO method at June 30, 1995, and March
31, 1995.
The composition of inventories at June 30, 1995, and March 31, 1995, is as
follows:
<TABLE>
<CAPTION>
June 30, 1995 March 31, 1995
------------- --------------
<S> <C> <C>
Raw Materials $21,930,000 $22,641,000
Work-In Process 4,619,000 3,618,000
Finished Goods 11,572,000 10,802,000
----------- -----------
$38,121,000 $37,061,000
=========== ===========
</TABLE>
NOTE 3: NOTE PAYABLE
Prior to August 1, 1995, the Company had a secured revolving line of
credit with two commercial banks which provided for advances up to $30,000,000
at 1/4% above the banks' prime rate of interest (aggregate of 9 1/4% at June 30,
1995) with a LIBOR plus 2 1/4% interest rate option. On August 1, 1995, the
Company renewed the $30,000,000 revolving line of credit with the same
commercial banks. The new $30,000,000 secured revolving line of credit bears
interest at the banks' prime rate of interest, with a LIBOR plus 2 1/4% interest
rate option. The line is to be repaid in full, with all accrued interest, on
August 1, 1997, unless renewed. There is a commitment fee of 1/4% per annum on
the unused portion of the revolving line of credit, payable quarterly in arrears
and accruing from August 1, 1995. No compensating balances are required. The
revolving line of credit is secured by inventories, accounts receivable,
equipment and intangible assets.
-4-
<PAGE>
NOTE 4: LONG-TERM DEBT
Long-term debt at June 30, 1995, is summarized as follows:
<TABLE>
<S> <C>
Secured term-loan payable to two commercial banks
in monthly principal installments of $166,667,
due August 1, 1998, at the banks' prime rate plus
5/8% (9.625% at June 30, 1995). A separate interest
rate agreement caps the base rate at 8.9% with a floor
rate of 6% and expires August 1, 1998.................... $6,333,000
Secured equipment leases payable in monthly or quarterly
installments ranging from $250 to $36,000, including
interest at rates ranging from 10.46% to 14.08%, due
through January 31, 1999 ............................... 988,000
Subordinated note payable to an individual in quarterly
installments of $250,000, due December 31, 1995, with the
balance bearing interest at a rate generally equal
to the prime lending rate (9.0% at June 30, 1995)........ 750,000
Subordinated note payable to a company in quarterly
installments of $31,576, due September 30, 1996, with
the balance bearing interest at prime plus 2%
(11.0% at June 30, 1995)................................. 158,000
Secured mortgage loan payable to a commercial bank, due
December 1997, with balance bearing interest at an
adjustable rate (7.50% on June 30, 1995)............... 129,000
Pennsylvania Industrial Development Authority Loan payable
in monthly installments of $1,545 due in January 2006,
with the balance bearing interest at 7.0%.............. 139,000
----------
$8,497,000
Less current installments 3,371,000
----------
$5,126,000
==========
</TABLE>
On August 1, 1995, the Company replaced its existing secured term-loan
with two commercial banks with a new $12,000,000 five year secured term-loan,
with the same commercial banks payable in monthly principal installments of
$200,000 beginning September 1, 1995, at the banks' prime rate plus 1/4%. The
additional funds will be used to reduce borrowing under the Company's revolving
line of credit. The term-loan is due August 1, 2000.
-5-
<PAGE>
NOTE 5: SALE OF A PRODUCT LINE
On June 9, 1995, the Company's wholly owned subsidary, MDT Diagnostic
Company, sold certain inventories, fixed assets and intangible assets relating
to its line of electrosurgical products, including the right to use the
tradename "Bovie", to Maxxim Medical, Inc. for $2,600,000 cash, subject to
certain inventory and other related adjustments.
As of June 30, 1995, the Company had recognized a pre-tax gain of
$712,000 on the sale and had collected $1,000,000 of the sale price. The
remaining $1,600,000 of the sale price was deposited by Maxxim Medical, Inc. in
an escrow account and will be paid to the Company upon final transfer of assets
on August 31, 1995, subject to the aforementioned adjustments.
-6-
<PAGE>
Item 2
MDT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995 VS. 1994
Sales for the three months ended June 30, 1995, of $30,899,000 were
$1,295,000 lower than sales for the comparative quarter in 1994, a decline of
4.0%. Sales of parts, service and consumables by MDT Technionic and sales of
other items during the quarter ended June 30, 1995, were $12,790,000, or 15.0%
higher than for the comparative quarter in 1994. This increase was offset by
reductions in sales of sterility assurance systems by MDT Biologic and examining
and operatory equipment by MDT Diagnostic of $2,101,000, or 14.2%, and $860,000,
or 13.7%, respectively, over the comparative periods. The decrease in product
sales during the first quarter of fiscal year 1996 resulted in part from a
"bunching" of customer shipment dates into the second quarter and further
reflects continuing buyer uncertainty in the domestic healthcare markets related
to healthcare reform and industry consolidation and retrenchment.
The following table summarizes the sales contribution of each product
group for the quarters ended June 30, 1995, and 1994:
<TABLE>
<CAPTION>
(dollars in thousands) QUARTER ENDED JUNE 30,
---------------------------------------------------------------------
1995 1994
---------------------------------------------------------------------
<S> <C> <C>
MDT Biologic
Sterility Assurance Systems Group $12,684 $14,785
MDT Diagnostic
Examining and Operatory Equipment Group 5,425 6,285
MDT Technionic
Product Support Group 12,307 11,250
Other Items 483 (126)
------- -------
Total Sales $30,899 $32,194
======= =======
</TABLE>
Incoming orders of $32,844,000 for the quarter represent an increase
of $138,000, or .4%, compared to the first quarter a year earlier, reflecting
continued strong demand for parts, service and consumables, offset by weak
demand for equipment. The backlog of orders of $28,496,000 at June 30, 1995,
was reduced by $594,000 as a result of the sale of a product line in the recent
quarter and compared to backlog of $28,583,000 a year earlier.
Gross profit of $10,068,000 was $596,000, or 5.6%, lower in the
current quarter, while gross profit as a percentage of sales was 32.6% versus
33.1% in the comparative quarter a year earlier. Lower gross
-7-
<PAGE>
profit reflected lower sales volume coupled with competitive selling prices.
Operating expenses of $8,899,000 were $919,000, or 9.4%, lower in the
first quarter than were operating expenses in the comparative quarter a year
earlier. The reduction in operating expenses reflects the implementation of
cost reductions, offset in part by patent litigation costs of $239,000 before
taxes, or $.02 a share. Overall, operating expenses as a percentage of sales
decreased 1.7% to 28.8% in the first quarter of fiscal 1996 compared to 30.5% in
the first quarter of fiscal 1995 in spite of lower sales.
Reorganization costs, primarily reflecting relocation costs of
$229,000, recorded in the first quarter were $201,000 lower when compared to the
same period one year earlier. These costs were incurred in connection with the
Company's efforts to lower its break-even point in the face of current market
uncertainties while at the same time improve the effectiveness of its
operations, organization and structure. Announced measures are intended to
reduce costs in excess of $4,000,000 on an annualized basis from what they would
otherwise have been. Since the inception of the reorganization in fiscal year
1995, a total of $1,464,000 has been expensed. Reorganization costs remaining to
be incurred and expensed through the balance of fiscal year 1996 are expected to
approximate $450,000.
Operating income of $940,000 was $524,000, or 126.0%, higher in the
first quarter than was operating income for the comparative quarter in 1995,
reflecting the aforementioned cost reductions and reorganization efforts.
Interest expense increased by $118,000 between the comparative
quarters, reflecting higher interest rates on lower average borrowings.
Other income of $750,000 includes a pre-tax gain of $712,000, or $.06
per share, from the sale of the Bovie line of electrosurgery products to Maxxim
Medical, Inc. The sales price was $2,600,000 cash subject to certain inventory
and other related adjustments. The remaining $38,000 of other income represents
foreign exchange gains generated by accounts payable denominated in United
States dollars at the Company's Canadian distribution operation.
Net income of $448,000, or $.07 per share, in the first quarter ended
June 30, 1995, compared to a loss of $237,000, or $.04 per share, in the same
quarter a year earlier. The $.11 per share increase on lower revenues in the
current year is primarily attributed to the Company's efforts to reorganize into
three cost effective business units, thereby lowering operating expenses as a
percentage of net sales by 1.7%, lower reorganization costs in the current
quarter, a gain on the sale of the Bovie product line and the lack of the costs
associated with a strike in the Henrietta, New York, plant in the earlier
period. These favorable factors were partially offset by patent litigation
costs and volume related, unfavorable manufacturing costs incurred in the first
quarter of fiscal year 1996.
-8-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES AT JUNE 30, 1995
------------------------------------------------
During the first quarter, cash used by operating activities of
$1,044,000, capital expenditures of $594,000 and payments of long-term debt of
$803,000, offset by a $1,000,000 cash receipt from the sale of the Bovie product
line, taken together, resulted in borrowings of $900,000, under the Company's
revolving line of credit.
Effective August 1, 1995, the Company expanded and extended its Bank
Credit Agreement with Wells Fargo Bank and Chemical Bank. Wells Fargo will
continue to serve as Agent under the Agreement. The Company renewed for two
years a $30,000,000 revolving line of credit and established a new five year
amortizing term-loan of $12,000,000, replacing a term-loan with a balance of
$6,333,000 as of June 30, 1995. Interest on the revolving line was reduced 1/4%
to prime while interest on the term-loan was reduced 3/8% to prime plus 1/4%.
The Credit Agreement will continue to be secured by the assets of the Company,
other than land and buildings, and will contain covenants which are tied
generally to performance, as well as other customary and usual provisions.
On June 9, 1995, the Company's wholly owned subsidiary, MDT Diagnostic
Company, sold to Maxxim Medical, Inc. certain inventories, fixed assets and
intangible assets (including the trade name "Bovie") relating to the Bovie line
of electrosurgical products for the sum of $2,600,000 cash (subject to certain
inventory and related adjustments). MDT Diagnostic Company received a payment
of $1,000,000 upon closing of the transaction. Maxxim Medical, Inc. also
deposited $1,600,000 (representing the balance of the purchase price) into
escrow pending the final transfer of assets August 31, 1995.
Capital expenditures are anticipated to approximate $2,500,000 in
fiscal year 1996 principally for production machinery and equipment, tooling and
molds. Total committed capital expenditures were approximately $1,197,000 as of
June 30, 1995.
Management believes that net cash provided by operating activities in
conjunction with the Company's expanded and extended Bank Credit Agreement and
other credit resources will be sufficient to meet the operating cash needs of
the Company for the next twelve months.
-9-
<PAGE>
PART II - OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On July 19, 1995, the Company held its Annual Meeting of Stockholders.
At the meeting the Stockholders elected nine persons to the Board of Directors
and ratified the appointment of KPMG Peat Marwick LLP as the Company's
independent accountants. The voting results on these matters were as follows:
<TABLE>
<CAPTION>
Directors Votes For Votes Withheld
------------------------------- ------------- --------------
<S> <C> <C>
J. Miles Branagan 4,806,716 1,240,413
LaMoyne H. Fleming, D.D.S. 5,859,362 187,767
Charles A. French 5,866,065 181,064
John S. Gilbertson 5,865,565 181,564
Charles E. Johnson 5,865,987 181,142
Clark D. Jones 5,863,631 183,498
James B.D. Mark, M.D. 5,866,344 180,785
Katherine A. Schipper, Ph.D. 5,866,665 180,464
John C Shamy 5,814,629 232,500
</TABLE>
<TABLE>
<CAPTION>
Independant Broker
Accountants Votes For Votes Against Abstentions Non-Votes
------------------------------- --------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
KPMG Peat Marwick LLP 6,022,629 11,008 13,492 0
</TABLE>
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
A. Exhibits:
Exhibit
Number Description
------- -----------
10.1 Amendment to Bank Credit Agreement,
dated as of August 1, 1995
10.2 Addendum to Lease Agreement between
MDT and D.E. Gressette,
dated July 6, 1995
11.0 Computation of Earnings Per Share
Three Months Ended June 30, 1995, and 1994
27.0 Financial Data Schedule
B. Reports on Form 8-K - No reports on Form 8-K were
filed in the quarter ended June 30, 1995.
-10-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MDT Corporation
By: /s/ Thomas Hein
------------------------------------
Thomas Hein, Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Date: August 11, 1995
-----------------
-11-
<PAGE>
EXHIBIT 10.1
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into
as of August 1, 1995, by and among MDT CORPORATION, a Delaware corporation
("MDT"), MDT BIOLOGIC COMPANY, a Delaware corporation ("Biologic"), MDT
DIAGNOSTIC COMPANY, a Delaware corporation ("Diagnostic"), MDT CANADA LIMITED,
an Ontario Canada corporation ("Canada"), MDT TECHNIONIC COMPANY, a Delaware
corporation ("Technionic") (each individually, a "Company" and collectively, the
"Companies"), the financial institutions listed on the signature pages of the
below-referenced Credit Agreement under the heading "BANKS" (each a "Bank" and,
collectively, the "Banks") and WELLS FARGO BANK, NATIONAL ASSOCIATION as agent
for the Banks thereunder (in such capacity, the "Agent"), with reference to the
following facts:
A. The Companies (other than Technionic), the Banks, and the Agent
heretofore have entered into that certain Credit Agreement, dated as
of August 20, 1993 (as the same may be amended, restated, modified, or
supplemented from time to time, the "Credit Agreement");
B. The Companies have requested the Banks and the Agent to amend the
Credit Agreement to, among other things, add Technionic as an
additional co-borrower, increase the amount of the Term Facility
Commitment, reduce the interest rates, modify certain financial
covenants, and extend the Final Maturity Date and the Revolving
Maturity Date, and the requisite Banks and the Agent are willing to so
amend the Credit Agreement, in accordance with the terms hereof; and
C. All capitalized terms used herein and not defined herein shall have
the meanings ascribed to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
premises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the Companies, the
Banks, and the Agent hereby agree as follows:
1. Technionic Joinder. Technionic hereby joins in and agrees to be
------------------
bound by each and all of the provisions of the Credit Agreement, as amended by
this Amendment, as a Company thereunder, and each of the other parties to the
Credit Agreement hereby consent to such joinder by Technionic.
1
<PAGE>
2. Amendments to Credit Agreement.
------------------------------
a. The following defined terms hereby are added to Section 1.1
of the Credit Agreement in alphabetical order:
"August 1, 1995 Amendment" means that certain Amendment to Credit
------------------------
Agreement, dated as of August 1, 1995, by and among the Companies, the
Banks, and the Agent.
"Technionic" means MDT Technionic Company, a Delaware
----------
corporation.
b. The respective definitions of "Company" and "Companies"
contained in Section 1.1 of the Credit Agreement hereby are deleted in their
entirety and the following hereby is substituted in lieu thereof:
"Company" means, individually, any of MDT, Biologic, Diagnostic,
-------
Canada, and Technionic; and "Companies" means, collectively, MDT, Biologic,
---------
Diagnostic, Canada, and Technionic.
c. The definition of "Final Maturity Date" contained in Section
1.1 of the Credit Agreement hereby is deleted in its entirety and the following
hereby is substituted in lieu thereof:
"Final Maturity Date" means August 1, 2000.
-------------------
d. The definition of "Guaranties" contained in Section 1.1 of
the Credit Agreement hereby is deleted in its entirety and the following hereby
is substituted in lieu thereof:
"Guaranties" means (i) the guaranties of Biologic, Diagnostic,
----------
Canada, and Technionic, in the form of Exhibit G-1, each guaranteeing the
-----------
indebtedness of MDT under the Term Loans, (ii) the guaranties of MDT,
Biologic, Diagnostic, and Technionic, in the form of Exhibit G-2, each
-----------
guaranteeing the indebtedness of the others under the Revolving Credit, and
(iii) the guaranty of Canada, in the form of Exhibit G-3, guaranteeing the
-----------
indebtedness of MDT under the Revolving Credit.
e. The definition of "Revolving Credit Commitment" contained in
Section 1.1 of the Credit Agreement hereby is deleted in its entirety and the
following hereby is substituted in lieu thereof:
"Revolving Credit Commitment" means, at the time any
---------------------------
determination thereof is to be made, the total amount of the Banks'
2
<PAGE>
commitments under the Revolving Credit to extend credit to the Companies by
means of Revolving Loans, the total amount of which, subject to Section
-------
4.1, shall be the aggregate of the amounts set forth under the name of each
of the Banks as follows and, with respect to each Bank, shall be the amount
set forth under its name as follows:
<TABLE>
<CAPTION>
================================================================================
REVOLVING CREDIT Bank: Wells Fargo Bank, Bank: Chemical Bank
COMMITMENT OF: National Association
================================================================================
<S> <C> <C>
During the period Nineteen Million Five Ten Million Five
commencing on Hundred Thousand Dollars Hundred Thousand
August 1, 1995 and ($19,500,000) Dollars ($10,500,000)
ending on the Revolving
Credit Maturity Date:
================================================================================
</TABLE>
f. The definition of "Revolving Credit Maturity Date" contained
in Section 1.1 of the Credit Agreement hereby is deleted in its entirety and the
following hereby is substituted in lieu thereof:
"Revolving Credit Maturity Date" means August 1, 1997.
------------------------------
g. The definition of "Revolving Note" contained in Section 1.1
of the Credit Agreement hereby is deleted in its entirety and the following
hereby is substituted in lieu thereof:
"Revolving Note" means one of the promissory notes of the
--------------
Companies, jointly and severally, each payable to the order of a Bank,
substantially in the form of Exhibit R-1A and Exhibit R-1B, as the case may
------------ ------------
be.
h. The definition of "Term Facility Commitment" contained in
Section 1.1 of the Credit Agreement hereby is deleted in its entirety and the
following hereby is substituted in lieu thereof:
"Term Facility Commitment" means, at the time any determination
------------------------
thereof is to be made, the total amount of the Banks' commitments to extend
credit to MDT by means of the Term Loan, the total amount of which shall be
the aggregate of the amounts set forth under the name of each of the Banks
as follows and, with respect to each Bank, shall be the respective amount
set forth under its name as follows:
3
<PAGE>
<TABLE>
<CAPTION>
==============================================================================
TERM FACILITY Bank: Wells Fargo Bank, Bank: Chemical Bank
COMMITMENT OF: National Association
==============================================================================
<S> <C> <C>
During the period Seven Million Eight Four Million Two
commencing on Hundred Thousand Dollars Hundred Thousand
August 1, 1995 and ($7,800,000) Dollars ($4,200,000)
ending on the Final
Maturity Date:
==============================================================================
</TABLE>
i. The definition of "Term Loan Note" contained in Section 1.1
of the Credit Agreement hereby is deleted in its entirety and the following
hereby is substituted in lieu thereof:
"Term Loan Note" means one of the promissory notes issued by MDT,
--------------
each payable to the order of a Bank, substantially in the form of Exhibit
-------
T-1A and Exhibit T-1B, as the case may be.
---- ------------
j. Item (v) of Section 1.2 of the Credit Agreement hereby is
deleted in its entirety and the following hereby is substituted in lieu thereof:
(v) References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments,
restatements, supplements, renewals, extensions, and other modifications
thereto or thereof, but only to the extent such amendments, restatements,
supplements, renewals, extensions, and other modifications are not
prohibited by the terms of the Loan Documents.
k. Section 2.2 of the Credit Agreement hereby is deleted in its
entirety and the following hereby is substituted in lieu thereof:
SECTION 2.2 Term Facility Commitment. Subject to the terms and
------------------------
conditions hereof, each Bank severally agrees to make a Term Loan to MDT,
in a single Borrowing, on August 1, 1995, pro-rata in proportion of its
share of the Term Facility Commitment, in an aggregate amount not to exceed
$12,000,000. Any amount of the Term Loans repaid may not be reborrowed.
l. Section 2.6(a) of the Credit Agreement hereby is deleted in
its entirety and the following hereby is substituted in lieu thereof:
(a) Notes. As evidence of the Indebtedness of the Companies to
-----
each Bank resulting from the Revolving Loans made by such
4
<PAGE>
Bank under Section 2.1(a), the Companies, jointly and severally, on or
--------------
before August 1, 1995 and concurrently with the cancellation by each Bank
and return to the Companies of the applicable then existing Revolving Note,
shall execute and deliver for the account of each Bank a replacement
Revolving Note (in the form of Exhibit R-1A or Exhibit R-1B, as the case
------------ ------------
may be), dated as of August 1, 1995, setting forth such Bank's Revolving
Credit Commitment as the maximum principal amount thereof. As evidence of
the Indebtedness of MDT to each Bank resulting from the Term Loan made by
such Bank under Section 2.2, MDT on or before August 1, 1995 and
-----------
concurrently with the cancellation by each Bank and return to the Companies
of the applicable then existing Term Loan Note, shall execute and deliver
for the account of each Bank a replacement Term Loan Note, dated as of
August 1, 1995, setting forth such Bank's Term Facility Commitment as the
maximum principal amount thereof; provided, however, that MDT shall pay
-------- -------
each Bank the installment due August 1, 1995 under the applicable Term Loan
Note in effect immediately prior to executing and delivering to that Bank
the replacement Term Loan Note in the form of Exhibit T-1A or Exhibit T-1B,
------------ ------------
as the case may be.
m. Item (i) of Section 3.1(a) of the Credit Agreement hereby is
deleted in its entirety and the following hereby is substituted in lieu thereof:
(i) in respect of each Base Rate Portion thereof, at
a fluctuating rate per annum equal at all times to the Base Rate; and
n. Section 3.1(b) of the Credit Agreement hereby is deleted in
its entirety and the following hereby is substituted in lieu thereof:
(b) Interest Rate-Term Loans. MDT shall pay interest on the
------------------------
unpaid principal balance of each Term Loan from the date of such Term Loan
until the maturity thereof, at a fluctuating rate per annum equal at all
times to the Base Rate plus one-quarter of one percent (1/4%). It is
----
expressly understood and agreed that MDT shall not have the option to
convert all or any portion of the Term Loans to Loans that bear interest at
the LIBOR Rate.
o. Section 4.2(b) of the Credit Agreement hereby is deleted in
its entirety and the following hereby is substituted in lieu thereof:
(b) Term Loans. MDT shall repay to the Banks the aggregate
----------
principal amount of the Term Loans in sixty (60) equal consecutive monthly
installments, commencing September 1, 1995, with subsequent installments
payable on the first (1st) day of each calendar
5
<PAGE>
month thereafter (or, if such first day is not a Business Day, then on the
immediately succeeding Business Day), to and including the Final Maturity
Date; provided, however, that the last such installment shall be in an
-------- -------
amount necessary to repay in full the aggregate unpaid principal amount of
the Term Loans.
p. Section 8.1 of the Credit Agreement hereby is deleted in its
entirety and the following hereby is substituted in lieu thereof:
SECTION 8.1 Legal Status.
------------
Each Company (other than Technionic) is a corporation duly
organized and existing and in good standing under the laws of the state of
its incorporation as indicated in the opening paragraph of this Agreement,
Technionic is a corporation duly organized and existing and in good
standing under the laws of Delaware, and each Company is qualified or
licensed to do business, and is in good standing as a foreign corporation,
if applicable, in all jurisdictions in which such qualification or
licensing is required except where the failure to so qualify or to be so
licensed would not have a Material Adverse Effect.
q. Subsection (d) of Section 9.9 of the Credit Agreement hereby
is deleted in its entirety and the following hereby is substituted in lieu
thereof:
(d) Cash Flow Coverage Ratio not less than 1.5 to 1.0 on an
annual basis, determined as of the end of each fiscal year.
r. Subsection (f) of Section 9.9 of the Credit Agreement hereby
is deleted in its entirety and the following hereby is substituted in lieu
thereof:
(f) The Companies shall have a profit before taxes on a
consolidated, year-to-date basis, of (i) at least One Million Dollars
($1,000,000) as of the end of each fiscal second quarter, and (ii) at least
Two Million Five Hundred Thousand Dollars ($2,500,000) as of each fiscal
year end.
s. Section 10.1 of the Credit Agreement hereby is deleted in
its entirety and the following hereby is substituted in lieu thereof:
SECTION 10.1 Use of Funds.
------------
Use (a) the proceeds of any of the Revolving Loans except for
working capital needs and general corporate purposes of the Companies, (b)
the proceeds of the Term Loans except for the repayment
6
<PAGE>
of indebtedness of MDT existing as of the date immediately preceding the
First Amendment Date in the approximate amount of Six Million Three Hundred
Thirty Three Thousand Dollars ($6,333,000) and otherwise for working
capital needs and general corporate purposes of the Companies, and (c) the
Letters of Credit in a manner inconsistent with Section 2.1(b) or any
--------------
Letter of Credit Agreement.
t. Section 10.3 of the Credit Agreement hereby is deleted in
its entirety and the following hereby is substituted in lieu thereof:
SECTION 10.3 Other Indebtedness.
------------------
Create, incur, assume or permit to exist any indebtedness or
liabilities resulting from borrowings, loans or advances, whether secured
or unsecured, matured or unmatured, liquidated or unliquidated, joint or
several, except: (a) the Indebtedness; (b) any other liabilities of the
Companies existing as of the date on which the Companies execute and
deliver the August 1, 1995 Amendment and disclosed in the financial
statements furnished to the Agent pursuant to Section 9.3; (c) capital
-----------
lease liabilities existing as of the date on which the Companies execute
and deliver the August 1, 1995 Amendment; (d) indebtedness at any time
owing to any of the other Companies; (e) indebtedness in respect of trade
credit at any time owing or incurred to acquire goods, supplies or services
in the ordinary course of business; (f) indebtedness created at any time
pursuant to guaranties permitted under Section 10.5; (g) indebtedness
------------
created at any time pursuant to an issuance of Debt Securities so long as
the net cash proceeds thereof are paid to the Agent to the extent required
by and in accordance with Section 4.3(b); provided, however, that the
-------------- -------- -------
Companies, in the aggregate, may incur up to an additional $1,000,000 in
new operating or capital lease liabilities, indebtedness in connection with
capital expenditures permitted under Section 10.2, indebtedness in
------------
connection with mergers or acquisition permitted under Section 10.4, or
------------
other indebtedness in any fiscal year.
u. The words "and (c)" in the second sentence of Section 10.4
of the Credit Agreement hereby is deleted and replaced with "(c)" and the
following hereby is added to the end of such sentence immediately preceding the
period:
; and (d) MDT may form Technionic as a wholly-owned subsidiary and Biologic
may transfer to Technionic, subject to Agent's Liens thereon, all or
substantially all of Biologic's parts and consumables business and assets
and liabilities related thereto effective as of April 1, 1995.
7
<PAGE>
v. The notice address for any of the Companies set forth in
Section 14.9 of the Credit Agreement hereby is deleted and the following hereby
is substituted in lieu thereof:
c/o MDT CORPORATION
1009 Slater Road, Suite 200
Morrisville, NC 27560
Attention: Thomas Hein
Telefacsimile: (919) 941-9755
w. A new Section 8.12 hereby is added to the Credit Agreement
as follows:
SECTION 8.12 Chief Executive Offices of the Companies and
--------------------------------------------
Mailing Addresses of the Companies.
----------------------------------
The chief executive office of MDT is located at the address set
forth in Section 14.9. The chief executive office of each of Biologic and
------------
Technionic is 1777 East Henrietta Road, Henrietta, NY 14623-3077. The
chief executive office of Diagnostic is 7371 Spartan Boulevard East, North
Charleston, SC 29411-8444. The chief executive office of Canada is 2740
Matheson Boulevard East, Unit Two, Mississauga, Ontario, Canada L4W 4X3. A
mailing address for each of the Companies is the address set forth in
Section 14.9.
------------
3. Bovie Sale Proceeds Limited Waiver. Section 4.3(b) of the Credit
----------------------------------
Agreement to the contrary notwithstanding, the Companies shall not be required
to apply as a mandatory prepayment to the Term Loans the portion specified in
such section of the net cash proceeds from the sale by Diagnostic of the "Bovie"
product line of electrosurgical generators under that certain Agreement of
Purchase and Sale of Assets, dated as of June 4, 1995, among MDT, Diagnostic,
and Maxxim Medical, Inc. The Companies shall use the net cash proceeds from
such sale for working capital needs and general corporate purposes of the
Companies.
4. Conditions to Amendment. The satisfaction of each of the
-----------------------
following shall constitute conditions precedent (or, if indicated as such, as a
condition concurrent) to the effectiveness of this Amendment:
a. Each Bank shall have received the following documents, duly
executed, and each such document shall be in full force and effect:
(1) a Revolving Note, in the form of Exhibit R-1A or
------------
Exhibit R-1B, as the case may be;
------------
8
<PAGE>
(2) a Term Loan Note, in the form of Exhibit T-1A or
------------
Exhibit T-1B, as the case may be;
------------
(3) the Guaranties by Technionic;
(4) the Security Agreement by Technionic;
(5) such UCC-1 Financing Statements and UCC-2/-3 Amendments
and other documents as may be deemed necessary by the
Agent for the creation, perfection, and continued
perfection of all security interests granted pursuant
to the Security Agreements;
b. The Agent shall have received the Amendment to Other Loan
Documents, attached hereto as Exhibit A-1, duly executed by each guarantor under
-----------
the Guaranties;
c. The Agent shall have received the Reaffirmation and Consent
of Guarantor, attached hereto as Exhibit A-2, duly executed by CESCO;
-----------
d. The Agent shall have received a certificate from the
Secretary of each Company attesting to the incumbency and signatures of
authorized officers of that Company and to the resolutions of that Company's
Board of Directors authorizing its execution and delivery of this Amendment, the
Amendment to Other Loan Documents attached hereto as Exhibit A-1, and the other
-----------
Loan Documents to which it is a party and contemplated in this Amendment and the
performance of this Amendment, the Agreement as amended by this Amendment, such
reaffirmation and consent, and such other Loan Documents, and authorizing
specific officers of Borrower to execute and deliver the same;
e. The Agent shall have received a certificate from the
Secretary of CESCO attesting to the incumbency and signatures of authorized
officials of CESCO and to the resolutions of CESCO's Board of Directors
authorizing its execution and delivery of the reaffirmation and consent of
Guarantor attached hereto as Exhibit A-2, the other Loan Documents to which it
-----------
is a party and contemplated in this Amendment and the performance thereof, and
authorizing specific officers of CESCO to execute and deliver the same;
f. The representations and warranties in this Amendment, the
Credit Agreement as amended by this Amendment, and the other Loan Documents
shall be true and correct in all respects on and as of the date hereof, as
though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date);
9
<PAGE>
g. No Event of Default or event which with the giving of notice
or passage of time would constitute an Event of Default shall have occurred and
be continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein;
h. No injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any governmental authority against the Companies, the Banks, the Agent, or any
of their respective Affiliates; and
i. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance satisfactory to the
Agent and its counsel.
5. Representations and Warranties. Each of the Companies hereby
------------------------------
represents and warrants to the Banks and the Agent that: (a) the execution,
delivery, and performance of this Amendment and the Credit Agreement as amended
by this Amendment are within its corporate powers, have been duly authorized by
all necessary corporate action, and, except for such instances that could not
reasonably be expected to have a Material Adverse Effect, are not in
contravention of any law, rule, or regulation, or any order, judgment, decree,
writ, injunction, or award of any arbitrator, court, or governmental authority,
or of the terms of its charter or bylaws, or of any contract or undertaking to
which it is a party or by which any of its properties may be bound or affected;
and (b) this Amendment and the Credit Agreement as amended by this Amendment
constitute its legal, valid, and binding obligations, enforceable against it in
accordance with their respective terms, except as the enforceability hereof or
thereof may be affected by: (a) bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting the enforcement of creditors' rights
generally; or (b) the limitation of certain remedies by certain equitable
principles of general applicability.
6. Effect on Loan Documents. The Credit Agreement, as amended
------------------------
hereby, and the other Loan Documents shall be and remain in full force and
effect in accordance with their respective terms and hereby are ratified and
confirmed in all respects. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a waiver or as
an amendment of any right, power, or remedy of the Agent or the Banks, nor as a
consent to any further or other matter, under the Loan Documents.
7. Miscellaneous.
-------------
a. Upon the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "herein", "hereof" or
words of
10
<PAGE>
like import referring to the Credit Agreement shall mean and refer to the Credit
Agreement as amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in
the Loan Documents to the "Credit Agreement", "thereunder", "therein", "thereof"
or words of like import referring to the Credit Agreement shall mean and refer
to the Credit Agreement as amended by this Amendment.
c. Upon the effectiveness of this Amendment, each reference in
the Credit Agreement or the other Loan Documents to any of Exhibit R-1A, Exhibit
------------ -------
R-1B, Exhibit T-1A, or Exhibit T-1B attached to the Credit Agreement shall mean
---- ------------ ------------
and refer to Exhibit R-1A, Exhibit R-1B, Exhibit T-1A, or Exhibit T-1B, as the
------------ ------------ ------------ ------------
case may be, attached to this Amendment.
d. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
e. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart.
[Remainder of page intentionally left blank.]
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first written above.
MDT CORPORATION MDT DIAGNOSTIC COMPANY
By: /s/ Thomas Hein By: /s/ Thomas Hein
--------------------------------- ---------------------------------
Title: V.P. Finance and Treasurer Title: Treasurer
------------------------------ ------------------------------
MDT BIOLOGIC COMPANY MDT CANADA LIMITED
By: /s/ Thomas Hein By /s/ Thomas Hein
--------------------------------- ----------------------------------
Title: Treasurer Title: Treasurer
------------------------------ ------------------------------
MDT TECHNIONIC COMPANY
By /s/ Thomas Hein
----------------------------------
Title: Treasurer
------------------------------
S-1
<PAGE>
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as the Agent and a Bank
By: /s/ John R. Randall
---------------------------------
John R. Randall
Vice President
Address:
WELLS FARGO BANK,
NATIONAL ASSOCIATION
South Bay Regional Commercial
Banking Office
111 W. Ocean Boulevard, Suite 300
Long Beach, California 90802
Attn: John R. Randall
Telecopier: (310) 437-6698
S-2
<PAGE>
CHEMICAL BANK
By: /s/ Virginia Allen
---------------------------------
Title: Vice President
------------------------------
Address:
CHEMICAL BANK
300 Linden Oaks
2nd Floor
Rochester, New York 14625
Attn: Virginia Allen
Telecopier: (716) 586-6305
S-3
<PAGE>
EXHIBIT A-1
-----------
Amendment to Other Loan Documents
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment to Credit
Agreement, dated as of August 1, 1995 (the "Amendment").
Each of the undersigned hereby agrees that each reference in the Loan
Documents to the "Credit Agreement", "thereunder", "therein", "thereof" or words
of like import referring to the Credit Agreement shall mean and refer to the
Credit Agreement as amended by the Amendment.
Each of the undersigned party to a Security Agreement in the form of
Exhibit S-1 hereby agrees that the exceptions in Section 4(d) and Section
-----------
5(b)(vi), respectively, of such Security Agreement for sales or for sales or
other transfers, as the case may be, to one or more of the Companies (other than
itself, Canada, and Technionic) shall be replaced by an exception for sales or
for sales or other transfers, as the case may be, to the Companies (other than
itself and Canada).
Each of the undersigned party to a Guaranty in the form of Exhibit G-2
-----------
hereby agrees that the definition of "MDT Companies" and any reference to "MDT
Companies" in such Guaranty shall be deemed to include Technionic.
Each of the undersigned hereby (a) represents and warrants to the
Agent and the Banks that the execution, delivery, and performance of this
Amendment to Other Loan Documents are within its corporate powers, have been
duly authorized by all necessary corporate action, and, except for such
instances that could not reasonably be expected to have a Material Adverse
Effect, are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected; (b) consents to the amendment of the Credit Agreement
by the Amendment; (c) acknowledges and reaffirms its obligations owing to the
Agent and the Banks under its guaranty and any other Loan Documents to which it
is a party (as may be amended hereby); and (d) agrees that its guaranty and any
such other Loan Documents (as may be amended hereby) are and shall remain in
full force and effect. Although each of the undersigned has been informed of
the matters set forth herein and has acknowledged and agreed to same, it
understands that the Agent and the Banks have no obligation to inform it of such
matters in the future or to seek its acknowledgement or agreement to future
amendments, and nothing herein shall create such a duty. Each of the
undersigned also hereby agrees to execute and deliver all agreements, documents,
A-1-1
<PAGE>
and instruments, in form and substance satisfactory to the Agent, and take all
actions as the Agent may reasonably request from time to time, to fully
consummate the transactions contemplated under the Amendment and the Credit
Agreement, as amended by the Amendment.
MDT CORPORATION
By: /s/ Thomas Hein
---------------------------------
Printed Name: Thomas Hein
----------------------
Title: V.P. Finance and Treasurer
------------------------------
MDT BIOLOGIC COMPANY
By: /s/ Thomas Hein
---------------------------------
Printed Name: Thomas Hein
----------------------
Title: Treasurer
------------------------------
MDT DIAGNOSTIC COMPANY
By: /s/ Thomas Hein
---------------------------------
Printed Name: Thomas Hein
----------------------
Title: Treasurer
------------------------------
MDT CANADA LIMITED
By: /s/ Thomas Hein
---------------------------------
Printed Name: Thomas Hein
-----------------------
Title: Treasurer
------------------------------
A-1-2
<PAGE>
EXHIBIT A-2
-----------
Reaffirmation and Consent of Guarantor
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment to Credit
Agreement, dated as of August 1, 1995 (the "Amendment"). Each of the
undersigned hereby (a) represents and warrants to the Agent and the Banks that
the execution, delivery, and performance of this Reaffirmation and Consent of
Guarantors are within its corporate powers, have been duly authorized by all
necessary corporate action, and, except for such instances that could not
reasonably be expected to have a Material Adverse Effect, are not in
contravention of any law, rule, or regulation, or any order, judgment, decree,
writ, injunction, or award of any arbitrator, court, or governmental authority,
or of the terms of its charter or bylaws, or of any contract or undertaking to
which it is a party or by which any of its properties may be bound or affected;
(b) consents to the amendment of the Credit Agreement by the Amendment; (c)
acknowledges and reaffirms its obligations owing to the Agent and the Banks
under its guaranty and any other Loan Documents to which it is a party; and (d)
agrees that its guaranty and any such other Loan Documents are and shall remain
in full force and effect. Although each of the undersigned has been informed of
the matters set forth herein and has acknowledged and agreed to same, it
understands that the Agent and the Banks have no obligation to inform it of such
matters in the future or to seek its acknowledgement or agreement to future
amendments, and nothing herein shall create such a duty. Each of the
undersigned also hereby agrees to execute and deliver all agreements, documents,
and instruments, in form and substance satisfactory to the Agent, and take all
actions as the Agent may reasonably request from time to time, to fully
consummate the transactions contemplated under the Amendment and the Credit
Agreement, as amended by the Amendment.
CONSOLIDATED EQUIPMENT SUPPLY
CORPORATION
By: /s/ Thomas Hein
--------------------------------
Printed Name: Thomas Hein
----------------------
Title: Treasurer
------------------------------
A-2
<PAGE>
EXHIBIT G-1
-----------
Form of
Continuing Guaranty
(Term Loans)
TO: WELLS FARGO BANK, NATIONAL ASSOCIATION, AS AGENT
1. GUARANTY; DEFINITIONS. For valuable consideration, the undersigned
_______________________, a ________________ corporation ("Guarantor"),
unconditionally guarantees and promises to pay to WELLS FARGO BANK, NATIONAL
ASSOCIATION, acting in its capacity as agent ("Agent") on behalf of the banks
and other financial institutions ("Banks") that either now or in the future are
signatories to that certain Credit Agreement, dated as of August 20, 1993, as
amended by that certain Amendment to Credit Agreement, dated as of August 1,
1995 (as so amended and as otherwise amended from time to time, the "Credit
Agreement"), by and among MDT Corporation, MDT Biologic Company, MDT Diagnostic
Company, MDT Canada Limited, and MDT Technionic Company, on the one hand, and,
on the other hand, Agent and Banks, or order, on demand in lawful money of the
United States of America and in immediately available funds, any Indebtedness of
MDT CORPORATION, a Delaware corporation ("Borrower"), to Agent and Banks. The
term "Indebtedness" is used herein in its most comprehensive sense and refers to
any and all advances, debts, obligations and liabilities of Borrower heretofore,
now or hereafter made, incurred or created, whether voluntary or involuntary and
however arising under those certain Term Loans to Borrower pursuant to the
Credit Agreement, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether Borrower may be liable
individually or jointly, or whether recovery upon such Indebtedness may be or
hereafter become unenforceable.
2. MAXIMUM LIABILITY; SUCCESSIVE TRANSACTIONS; WRITTEN NOTICE OF
REVOCATION; OBLIGATION UNDER OTHER GUARANTIES. The liability of Guarantor shall
not exceed at any one time Ninety-Nine Percent (99%) of Guarantor's Net Worth.
For purposes of the preceding sentence, "Net Worth" means the amount, calculated
as of the date hereof, by which the sum of all of Guarantor's assets and
property is greater than the sum of all of Guarantor's debts, at fair
valuations, and after giving effect to the inclusion and exclusion of the
matters included and excluded in determining whether a debtor is insolvent
according to Section 548 of Title 11 of the United States Code and the
California Uniform Fraudulent Transfer Act, California Civil Code Section 3439
et seq. Notwithstanding the foregoing, Agent may permit the Indebtedness of
-- ---
Borrower to exceed Guarantor's liability. All rights, powers and remedies
hereunder shall apply to all past, present and future Indebtedness of Borrower
to Agent and Banks, including that arising under successive transactions which
are
G-1-1
<PAGE>
refinancings of Indebtedness irrespective of whether the amount of such
Indebtedness is increased or decreased, and notwithstanding the death,
incapacity, dissolution, liquidation or bankruptcy of Borrower or Guarantor or
any other event or proceeding affecting Borrower or Guarantor. Any notice of
revocation of this Guaranty must be sent to Agent by registered U.S. mail,
postage prepaid, addressed to its office at 111 W. Ocean Boulevard, Suite 300,
Long Beach, California 90802, or at such other address as Agent shall from time
to time designate. The obligations of Guarantor hereunder shall be in addition
to any obligations of Guarantor under any other guaranties of any liabilities or
obligations of Borrower or any other persons heretofore or hereafter given to
Agent or Banks unless said other guaranties are modified or revoked in writing;
and this Guaranty shall not, unless herein provided, affect or invalidate any
such other guaranties. The liability of Guarantor to Agent and Banks shall at
all times be deemed to be the aggregate liability of Guarantor under the terms
of this Guaranty and of any other guaranties heretofore or hereafter given by
Guarantor to Agent or any Bank and not expressly revoked, modified or
invalidated.
3. OBLIGATIONS INDEPENDENT; SEPARATE ACTIONS; WAIVER OF STATUTE OF
LIMITATIONS; REINSTATEMENT OF LIABILITY. The obligations hereunder are
independent of the obligations of Borrower, and a separate action or actions may
be brought and prosecuted against Guarantor whether action is brought against
Borrower or any other person, or whether Borrower or any other person is joined
in any such action or actions. Guarantor acknowledges that there are no
conditions precedent to the effectiveness of this Guaranty, and that this
Guaranty is in full force and effect and is binding on Guarantor as of the date
written below, regardless of whether Agent obtains collateral or any guaranties
from others or takes any other action contemplated by Guarantor. Guarantor
waives the benefit of any statute of limitations affecting Guarantor's liability
hereunder or the enforcement thereof, and Guarantor agrees that any payment of
any Indebtedness or other act which shall toll any statute of limitations
applicable thereto shall similarly operate to toll such statute of limitations
applicable to Guarantor's liability hereunder. The liability of Guarantor
hereunder shall be reinstated and revived and the rights of Agent and Banks
shall continue if and to the extent for any reason any amount at any time paid
on account of any Indebtedness guaranteed hereby is rescinded or must be
otherwise restored by Agent and Banks, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid. The determination as to whether any amount so paid must be rescinded
or restored shall be made by Agent in its sole discretion; provided however,
that if Agent chooses to contest any such matter at the request of Guarantor,
Guarantor agrees to indemnify and hold Agent and Banks harmless from and against
all costs and expenses, including reasonable attorneys' fees, expended or
incurred by Agent in connection therewith, including without limitation, in any
litigation with respect thereto.
4. AUTHORIZATIONS TO AGENT AND BANKS. Guarantor authorizes Agent and
Banks either before or after revocation hereof, without notice to or demand
G-1-2
<PAGE>
on Guarantor, and without affecting Guarantor's liability hereunder, from time
to time to: (a) alter, compromise, renew, extend, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
Indebtedness or any part thereof, including increase or decrease of the rate of
interest thereon; (b) take and hold security for the payment of this Guaranty or
the Indebtedness or any portion thereof, and exchange, enforce, waive and
release any such security; (c) apply such security and direct the order or
manner of sale thereof, including without limitation, a non-judicial sale
permitted by the terms of the controlling security agreement or deed of trust,
as Agent in its discretion may determine; (d) release or substitute any one or
more of the endorsers or any other guarantors of the Indebtedness, or any part
thereof, or any party thereto; and (e) apply payments received by Agent or any
Bank from Borrower to any Indebtedness of Borrower to Agent and Banks, in such
order as Agent shall determine in its sole discretion, whether or not any such
Indebtedness is covered by this Guaranty, and Guarantor hereby waives any
provision of law regarding application of payments which specifies otherwise.
Agent may without notice assign this Guaranty in whole or in part. Upon Agent's
request, Guarantor agrees to provide to Agent and Banks copies of Guarantor's
financial statements.
5. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Agent that: (a) this Guaranty is executed at Borrower's request; (b) Guarantor
shall not, without the prior written consent of Agent, sell, lease, assign,
encumber, hypothecate, transfer or otherwise dispose of all or a substantial or
material part of Guarantor's assets other than in the ordinary course of
business or as otherwise permitted under the Credit Agreement; (c) Agent and
Banks have made no representation to Guarantor as to the creditworthiness of
Borrower; and (d) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis financial and other information pertaining to
Borrower's financial condition. Guarantor agrees to keep adequately informed
from such means of any facts, events or circumstances which might in any way
affect Guarantor's risks hereunder, and Guarantor further agrees that Agent and
Banks shall have no obligation to disclose to Guarantor any information or
material about Borrower which is acquired by Agent or any Bank in any manner.
6. GUARANTOR'S WAIVERS. (a) Guarantor waives any right to require Agent
to: (i) proceed against any person, including Borrower; (ii) proceed against or
exhaust any security held from Borrower or any other person; (iii) give notice
of the terms, time and place of any public or private sale of personal property
security held from Borrower or any other person, or otherwise comply with the
provisions of Section 9504 of the California Uniform Commercial Code; (iv)
pursue any other remedy in Agent's power; or (v) make any presentments or
demands for performance, or give any notices of nonperformance, protests,
notices of protest or notices of dishonor in connection with any obligations or
evidences of indebtedness held by Agent or any Bank as security or which
constitute in whole or in part the Indebtedness guaranteed hereunder, or in
connection with the creation of new or additional Indebtedness.
G-1-3
<PAGE>
(b) Guarantor waives any defense based upon or arising by reason of: (i)
any disability or other defense of Borrower or any other person; (ii) the
cessation or limitation from any cause whatsoever, other than payment in full,
of the Indebtedness of Borrower or any other person; (iii) any lack of authority
of any officer, director, partner, agent or any other person acting or
purporting to act on behalf of Borrower if a corporation, partnership or other
type of entity, or any defect in the formation of such Borrower; (iv) the
application by Borrower of the proceeds of any Indebtedness for purposes other
than the purposes represented by Borrower to Agent or intended or understood by
Agent or Guarantor; (v) any act or omission by Agent or any Bank which directly
or indirectly results in or aids the discharge of Borrower or any Indebtedness
by operation of law or otherwise; or (vi) any modification of the Indebtedness,
in any form whatsoever, including any modification made after revocation hereof
to any Indebtedness incurred prior to such revocation, and including without
limitation the renewal, extension, acceleration or other change in time for
payment of the Indebtedness, or other change in the terms of the Indebtedness,
or any part thereof, including increase or decrease of the rate of interest
thereon. Until all Indebtedness shall have been paid in full, Guarantor shall
have no right of subrogation, and Guarantor waives any defense Guarantor may
have based upon any election of remedies by Agent which destroys Guarantor's
subrogation rights or Guarantor's right to proceed against Borrower for
reimbursement, including without limitation, any loss of rights Guarantor may
suffer by reason of any rights, powers or remedies of Borrower in connection
with any anti-deficiency laws or any other laws limiting, qualifying or
discharging Borrower's Indebtedness (including without limitation, Sections 726
and 580d of the California Code of Civil Procedure as from time to time
amended). Until all Indebtedness of Borrower to Agent and Banks shall have been
paid in full, Guarantor further waives any right to enforce any remedy which
Agent or any Bank now has or may hereafter have against Borrower or any other
person, and waives any benefit of, or any right to participate in, any security
whatsoever now or hereafter held by Agent.
7. GUARANTOR'S UNDERSTANDINGS WITH RESPECT TO WAIVERS. Guarantor warrants
and agrees that each of the waivers set forth above is made with Guarantor's
full knowledge of its significance and consequences, and that under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any of said waivers are determined to be contrary to any applicable law
or public policy, such waivers shall be effective only to the extent permitted
by law.
8. AGENT'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN POSSESSION OF
AGENT. In addition to all liens upon, and rights of setoff against the monies,
securities or other property of Guarantor given to Agent by law, Agent shall
have a lien upon and a right of setoff against all monies, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Agent, whether held in a general or special account or deposit or for
safekeeping or otherwise, and every such lien and right of setoff may be
exercised without demand upon or notice to Guarantor. No lien or right of
setoff shall be deemed to have been waived by any act or conduct on
G-1-4
<PAGE>
the part of Agent, or by any neglect to exercise such right of setoff or to
enforce such lien, or by any delay in so doing, and every right of setoff and
lien shall continue in full force and effect until such right of setoff or lien
is specifically waived or released by an instrument in writing executed by
Agent.
9. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Any Indebtedness of
Borrower now or hereafter held by Guarantor is hereby subordinated to the
Indebtedness of Borrower to Agent and Banks. Such Indebtedness of Borrower to
Guarantor is assigned to Agent as security for this Guaranty and the
Indebtedness and, if Agent requests, shall be collected and received by
Guarantor as trustee for Agent and paid over to Agent on account of the
Indebtedness of Borrower to Agent and Banks but without reducing or affecting in
any manner the liability of Guarantor under the other provisions of this
Guaranty. Any notes now or hereafter evidencing such Indebtedness of Borrower
to Guarantor shall be marked with a legend that the same are subject to this
Guaranty and, if Agent so requests, shall be delivered to Agent. Guarantor
will, and Agent is hereby authorized, in the name of Guarantor from time to time
to execute and file financing statements and continuation statements and execute
such other documents and take such other actions as Agent deems necessary or
appropriate to perfect, preserve and enforce its rights hereunder.
10. DISCLOSURE OF INFORMATION. Guarantor acknowledges that Agent and
Banks have the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, any Indebtedness of
Borrower to Agent and Banks and any obligations with respect thereto, including
this Guaranty, in accordance with Section 14.7 of the Credit Agreement. In
------------
connection therewith and subject to Section 14.15 of the Credit Agreement, Agent
-------------
and Banks may disclose all documents and information which Agent or any Bank now
has or hereafter acquires relating to Guarantor and this Guaranty, whether
furnished by Borrower, Guarantor or otherwise. Guarantor further agrees that
Agent and Banks may disclose such documents and information to Borrower.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Guarantor shall pay to Agent,
immediately upon demand and in accordance with the terms of the Credit
Agreement, 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 Agent's in-house counsel), incurred by Agent in
exercising any right, power, privilege or remedy conferred by this Guaranty or
in the enforcement thereof.
12. SUCCESSORS, ASSIGNS; GOVERNING LAW. This Guaranty shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and shall be governed by
and construed in accordance with the laws of the State of California.
G-1-5
<PAGE>
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as
of August 1, 1995.
[NAME]
By__________________________________
Title:
G-1-6
<PAGE>
EXHIBIT G-2
-----------
Form of
Continuing Guaranty
(Revolving Loans)
TO: WELLS FARGO BANK, NATIONAL ASSOCIATION, AS AGENT
1. GUARANTY; DEFINITIONS. For valuable consideration, the undersigned
________________________, a _____________ corporation ("Guarantor"),
unconditionally guarantees and promises to pay to WELLS FARGO BANK, NATIONAL
ASSOCIATION, acting in its capacity as agent ("Agent") on behalf of the banks
and other financial institutions ("Banks") that either now or in the future are
signatories to that certain Credit Agreement, dated as of August 20, 1993, as
amended by that certain Amendment to Credit Agreement, dated as of August 1,
1995 (as so amended or as otherwise amended from time to time, the "Credit
Agreement"), by and among MDT Corporation, MDT Biologic Company, MDT Diagnostic
Company, MDT Canada Limited and Guarantor (collectively, the "MDT Companies"),
on the one hand, and, on the other hand, Agent and Banks, or order, on demand in
lawful money of the United States of America and in immediately available funds,
any Indebtedness of the MDT Companies (other than Guarantor) (collectively,
"Borrower"), to Agent and Banks. The term "Indebtedness" is used herein in its
most comprehensive sense and refers to any and all advances, debts, obligations
and liabilities of Borrower heretofore, now or hereafter made, incurred or
created, whether voluntary or involuntary and however arising under those
certain Revolving Loans to Borrower pursuant to the Credit Agreement, whether
due or not due, absolute or contingent, liquidated or unliquidated, determined
or undetermined, and whether Borrower may be liable individually or jointly, or
whether recovery upon such Indebtedness may be or hereafter become
unenforceable.
2. MAXIMUM LIABILITY; SUCCESSIVE TRANSACTIONS; WRITTEN NOTICE OF
REVOCATION; OBLIGATION UNDER OTHER GUARANTIES. The liability of Guarantor shall
not exceed at any one time the sum of THIRTY MILLION DOLLARS ($30,000,000) for
principal, plus all interest thereon and costs and expenses pertaining to the
enforcement of this Guaranty or the collection of the Indebtedness of Borrower
to Agent and Banks. Notwithstanding the foregoing, Agent may permit the
Indebtedness of Borrower to exceed Guarantor's liability. All rights, powers
and remedies hereunder shall apply to all past, present and future Indebtedness
of Borrower to Agent and Banks, including that arising under successive
transactions which are refinancings of Indebtedness irrespective of whether the
amount of such Indebtedness is increased or decreased, and notwithstanding the
death, incapacity, dissolution, liquidation or bankruptcy of Borrower or
Guarantor or any other event or proceeding affecting Borrower or Guarantor. Any
notice of revocation of this Guaranty must be sent to
G-2-1
<PAGE>
Agent by registered U.S. mail, postage prepaid, addressed to its office at 111
W. Ocean Boulevard, Suite 300, Long Beach, California 90802, or at such other
address as Agent shall from time to time designate. The obligations of
Guarantor hereunder shall be in addition to any obligations of Guarantor under
any other guaranties of any liabilities or obligations of Borrower or any other
persons heretofore or hereafter given to Agent or Banks unless said other
guaranties are modified or revoked in writing; and this Guaranty shall not,
unless herein provided, affect or invalidate any such other guaranties. The
liability of Guarantor to Agent and Banks shall at all times be deemed to be the
aggregate liability of Guarantor under the terms of this Guaranty and of any
other guaranties heretofore or hereafter given by Guarantor to Agent or any Bank
and not expressly revoked, modified or invalidated.
3. OBLIGATIONS INDEPENDENT; SEPARATE ACTIONS; WAIVER OF STATUTE OF
LIMITATIONS; REINSTATEMENT OF LIABILITY. The obligations hereunder are
independent of the obligations of Borrower, and a separate action or actions may
be brought and prosecuted against Guarantor whether action is brought against
Borrower or any other person, or whether Borrower or any other person is joined
in any such action or actions. Guarantor acknowledges that there are no
conditions precedent to the effectiveness of this Guaranty, and that this
Guaranty is in full force and effect and is binding on Guarantor as of the date
written below, regardless of whether Agent obtains collateral or any guaranties
from others or takes any other action contemplated by Guarantor. Guarantor
waives the benefit of any statute of limitations affecting Guarantor's liability
hereunder or the enforcement thereof, and Guarantor agrees that any payment of
any Indebtedness or other act which shall toll any statute of limitations
applicable thereto shall similarly operate to toll such statute of limitations
applicable to Guarantor's liability hereunder. The liability of Guarantor
hereunder shall be reinstated and revived and the rights of Agent and Banks
shall continue if and to the extent for any reason any amount at any time paid
on account of any Indebtedness guaranteed hereby is rescinded or must be
otherwise restored by Agent and Banks, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid. The determination as to whether any amount so paid must be rescinded
or restored shall be made by Agent in its sole discretion; provided however,
that if Agent chooses to contest any such matter at the request of Guarantor,
Guarantor agrees to indemnify and hold Agent and Banks harmless from and against
all costs and expenses, including reasonable attorneys' fees, expended or
incurred by Agent in connection therewith, including without limitation, in any
litigation with respect thereto.
4. AUTHORIZATIONS TO AGENT AND BANKS. Guarantor authorizes Agent and
Banks either before or after revocation hereof, without notice to or demand on
Guarantor, and without affecting Guarantor's liability hereunder, from time to
time to: (a) alter, compromise, renew, extend, accelerate or otherwise change
the time for payment of, or otherwise change the terms of the Indebtedness or
any part thereof, including increase or decrease of the rate of interest
thereon; (b) take and hold security
G-2-2
<PAGE>
for the payment of this Guaranty or the Indebtedness or any portion thereof, and
exchange, enforce, waive and release any such security; (c) apply such security
and direct the order or manner of sale thereof, including without limitation, a
non-judicial sale permitted by the terms of the controlling security agreement
or deed of trust, as Agent in its discretion may determine; (d) release or
substitute any one or more of the endorsers or any other guarantors of the
Indebtedness, or any part thereof, or any party thereto; and (e) apply payments
received by Agent or any Bank from Borrower to any Indebtedness of Borrower to
Agent and Banks, in such order as Agent shall determine in its sole discretion,
whether or not any such Indebtedness is covered by this Guaranty, and Guarantor
hereby waives any provision of law regarding application of payments which
specifies otherwise. Agent may without notice assign this Guaranty in whole or
in part. Upon Agent's request, Guarantor agrees to provide to Agent and Banks
copies of Guarantor's financial statements.
5. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Agent that: (a) this Guaranty is executed at Borrower's request; (b) Guarantor
shall not, without the prior written consent of Agent, sell, lease, assign,
encumber, hypothecate, transfer or otherwise dispose of all or a substantial or
material part of Guarantor's assets other than in the ordinary course of
business or as otherwise permitted under the Credit Agreement; (c) Agent and
Banks have made no representation to Guarantor as to the creditworthiness of
Borrower; and (d) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis financial and other information pertaining to
Borrower's financial condition. Guarantor agrees to keep adequately informed
from such means of any facts, events or circumstances which might in any way
affect Guarantor's risks hereunder, and Guarantor further agrees that Agent and
Banks shall have no obligation to disclose to Guarantor any information or
material about Borrower which is acquired by Agent or any Bank in any manner.
6. GUARANTOR'S WAIVERS. (a) Guarantor waives any right to require Agent
to: (i) proceed against any person, including Borrower; (ii) proceed against or
exhaust any security held from Borrower or any other person; (iii) give notice
of the terms, time and place of any public or private sale of personal property
security held from Borrower or any other person, or otherwise comply with the
provisions of Section 9504 of the California Uniform Commercial Code; (iv)
pursue any other remedy in Agent's power; or (v) make any presentments or
demands for performance, or give any notices of nonperformance, protests,
notices of protest or notices of dishonor in connection with any obligations or
evidences of indebtedness held by Agent or any Bank as security or which
constitute in whole or in part the Indebtedness guaranteed hereunder, or in
connection with the creation of new or additional Indebtedness.
(b) Guarantor waives any defense based upon or arising by reason of: (i)
any disability or other defense of Borrower or any other person; (ii) the
cessation or limitation from any cause whatsoever, other than payment in full,
of the Indebtedness of
G-2-3
<PAGE>
Borrower or any other person; (iii) any lack of authority of any officer,
director, partner, agent or any other person acting or purporting to act on
behalf of Borrower if a corporation, partnership or other type of entity, or any
defect in the formation of such Borrower; (iv) the application by Borrower of
the proceeds of any Indebtedness for purposes other than the purposes
represented by Borrower to Agent or intended or understood by Agent or
Guarantor; (v) any act or omission by Agent or any Bank which directly or
indirectly results in or aids the discharge of Borrower or any Indebtedness by
operation of law or otherwise; or (vi) any modification of the Indebtedness, in
any form whatsoever, including any modification made after revocation hereof to
any Indebtedness incurred prior to such revocation, and including without
limitation the renewal, extension, acceleration or other change in time for
payment of the Indebtedness, or other change in the terms of the Indebtedness,
or any part thereof, including increase or decrease of the rate of interest
thereon. Until all Indebtedness shall have been paid in full, Guarantor shall
have no right of subrogation, and Guarantor waives any defense Guarantor may
have based upon any election of remedies by Agent which destroys Guarantor's
subrogation rights or Guarantor's right to proceed against Borrower for
reimbursement, including without limitation, any loss of rights Guarantor may
suffer by reason of any rights, powers or remedies of Borrower in connection
with any anti-deficiency laws or any other laws limiting, qualifying or
discharging Borrower's Indebtedness (including without limitation, Sections 726
and 580d of the California Code of Civil Procedure as from time to time
amended). Until all Indebtedness of Borrower to Agent and Banks shall have been
paid in full, Guarantor further waives any right to enforce any remedy which
Agent or any Bank now has or may hereafter have against Borrower or any other
person, and waives any benefit of, or any right to participate in, any security
whatsoever now or hereafter held by Agent.
7. GUARANTOR'S UNDERSTANDINGS WITH RESPECT TO WAIVERS. Guarantor warrants
and agrees that each of the waivers set forth above is made with Guarantor's
full knowledge of its significance and consequences, and that under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any of said waivers are determined to be contrary to any applicable law
or public policy, such waivers shall be effective only to the extent permitted
by law.
8. AGENT'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN POSSESSION OF
AGENT. In addition to all liens upon, and rights of setoff against the monies,
securities or other property of Guarantor given to Agent by law, Agent shall
have a lien upon and a right of setoff against all monies, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Agent, whether held in a general or special account or deposit or for
safekeeping or otherwise, and every such lien and right of setoff may be
exercised without demand upon or notice to Guarantor. No lien or right of
setoff shall be deemed to have been waived by any act or conduct on the part of
Agent, or by any neglect to exercise such right of setoff or to enforce such
lien, or by any delay in so doing, and every right of setoff and lien shall
continue in full
G-2-4
<PAGE>
force and effect until such right of setoff or lien is specifically waived or
released by an instrument in writing executed by Agent.
9. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Any Indebtedness of
Borrower now or hereafter held by Guarantor is hereby subordinated to the
Indebtedness of Borrower to Agent and Banks. Such Indebtedness of Borrower to
Guarantor is assigned to Agent as security for this Guaranty and the
Indebtedness, if Agent requests, shall be collected and received by Guarantor as
trustee for Agent and paid over to Agent on account of the Indebtedness of
Borrower to Agent and Banks but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty. Any notes
now or hereafter evidencing such Indebtedness of Borrower to Guarantor shall be
marked with a legend that the same are subject to this Guaranty and, if Agent so
requests, shall be delivered to Agent. Guarantor will, and Agent is hereby
authorized, in the name of Guarantor from time to time to execute and file
financing statements and continuation statements and execute such other
documents and take such other actions as Agent deems necessary or appropriate to
perfect, preserve and enforce its rights hereunder.
10. DISCLOSURE OF INFORMATION. Guarantor acknowledges that Agent and
Banks have the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, any Indebtedness of
Borrower to Agent and Banks and any obligations with respect thereto, including
this Guaranty, in accordance with Section 14.7 of the Credit Agreement. In
------------
connection therewith and subject to Section 14.15 of the Credit Agreement, Agent
-------------
and Banks may disclose all documents and information which Agent or any Bank now
has or hereafter acquires relating to Guarantor and this Guaranty, whether
furnished by Borrower, Guarantor or otherwise. Guarantor further agrees that
Agent and Banks may disclose such documents and information to Borrower.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Guarantor shall pay to Agent,
immediately upon demand and in accordance with the terms of the Credit
Agreement, 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 Agent's in-house counsel), incurred by Agent in
exercising any right, power, privilege or remedy conferred by this Guaranty or
in the enforcement thereof.
12. SUCCESSORS, ASSIGNS; GOVERNING LAW. This Guaranty shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and shall be governed by
and construed in accordance with the laws of the State of California.
G-2-5
<PAGE>
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as
of August 1, 1995.
[NAME]
By__________________________________
Title:
G-2-6
<PAGE>
EXHIBIT R-1A
------------
Form of
Amended and Restated Promissory Note
$19,500,000 August 1, 1995
FOR VALUE RECEIVED, the undersigned, MDT CORPORATION, MDT BIOLOGIC COMPANY,
MDT DIAGNOSTIC COMPANY, MDT CANADA LIMITED, and MDT TECHNIONIC COMPANY (each, a
"Company" and collectively, the "Companies") HEREBY UNCONDITIONALLY PROMISE TO
PAY to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (the "Bank") on the
Revolving Credit Maturity Date the principal sum of NINETEEN MILLION FIVE
HUNDRED THOUSAND DOLLARS ($19,500,000) or, if less, the aggregate outstanding
principal amount of the Revolving Loans made by the Bank to the Companies
pursuant to the Credit Agreement referred to below.
The Companies further promise to pay interest on the Revolving Loans
outstanding hereunder from time to time at the interest rates, and payable on
the dates, set forth in the Credit Agreement. The obligations of the Companies
hereunder are joint and several.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to WELLS FARGO BANK,
NATIONAL ASSOCIATION as Agent under the Credit Agreement (the "Agent"), at 420
Montgomery Street, San Francisco, California 94163.
The Bank shall record the date and amount of each Revolving Loan made, each
conversion to a different interest rate, each relevant Interest Period, the
amount of principal and interest due and payable from time to time hereunder,
each payment thereof and the resulting unpaid principal balance hereof, in the
Bank's internal records; provided, however, that the Bank's failure so to record
-------- -------
shall not limit or otherwise affect the obligations of the Companies hereunder
and under the Credit Agreement to repay the principal of and interest on the
Revolving Loans.
This promissory note amends and restates in full that certain Promissory
Note, dated August 20, 1993, made by the undersigned to the order of the Bank,
in the original principal amount of $21,000,000. This promissory note is one of
the Revolving Notes referred to in, and is subject to, that certain Credit
Agreement, dated as of August 20, 1993, as amended by that certain Amendment to
Credit Agreement, dated as of August 1, 1995 (as so amended, and as otherwise
may be amended, restated, supplemented,
R-1A-1
<PAGE>
renewed, extended, or modified, the "Credit Agreement") among the Companies,
certain financial institutions named therein as Banks (including the Bank) and
the Agent. Capitalized terms used herein shall have the respective meanings
assigned to them in the Credit Agreement.
The promissory note is secured by certain collateral more specifically
described in the Credit Agreement and the Loan Documents.
The Credit Agreement provides, among other things, for acceleration (which
in certain cases shall be automatic) of the maturity hereof upon the occurrence
of certain stated events, in each case without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived.
This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA.
MDT CORPORATION
By__________________________________
Title:
MDT BIOLOGIC COMPANY
By__________________________________
Title:
MDT DIAGNOSTIC COMPANY
By__________________________________
Title:
R-1A-2
<PAGE>
MDT CANADA LIMITED
By__________________________________
Title:
MDT TECHNIONIC COMPANY
By__________________________________
Title:
R-1A-3
<PAGE>
EXHIBIT R-1B
------------
Form of
Amended and Restated Promissory Note
$10,500,000 August 1, 1995
FOR VALUE RECEIVED, the undersigned, MDT CORPORATION, MDT BIOLOGIC COMPANY,
MDT DIAGNOSTIC COMPANY, MDT CANADA LIMITED, and MDT TECHNIONIC COMPANY (each, a
"Company" and collectively, the "Companies") HEREBY UNCONDITIONALLY PROMISE TO
PAY to the order of CHEMICAL BANK, (the "Bank") on the Revolving Credit Maturity
Date the principal sum of TEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($10,500,000) or, if less, the aggregate outstanding principal amount of the
Revolving Loans made by the Bank to the Companies pursuant to the Credit
Agreement referred to below.
The Companies further promise to pay interest on the Revolving Loans
outstanding hereunder from time to time at the interest rates, and payable on
the dates, set forth in the Credit Agreement. The obligations of the Companies
hereunder are joint and several.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to WELLS FARGO BANK,
NATIONAL ASSOCIATION as Agent under the Credit Agreement (the "Agent"), at 420
Montgomery Street, San Francisco, California 94163.
The Bank shall record the date and amount of each Revolving Loan made, each
conversion to a different interest rate, each relevant Interest Period, the
amount of principal and interest due and payable from time to time hereunder,
each payment thereof and the resulting unpaid principal balance hereof, in the
Bank's internal records; provided, however, that the Bank's failure so to record
-------- -------
shall not limit or otherwise affect the obligations of the Companies hereunder
and under the Credit Agreement to repay the principal of and interest on the
Revolving Loans.
This promissory note amends and restates in full that certain Promissory
Note, dated August 20, 1993, made by the undersigned to the order of the Bank,
in the original principal amount of $9,000,000. This promissory note is one of
the Revolving Notes referred to in, and is subject to, that certain Credit
Agreement, dated as of August 20, 1993, as amended by that certain Amendment to
Credit Agreement, dated as of August 1, 1995 (as so amended, and as otherwise
may be amended, restated, supplemented,
R-1B-1
<PAGE>
renewed, extended, or modified, the "Credit Agreement") among the Companies,
certain financial institutions named therein as Banks (including the Bank) and
the Agent. Capitalized terms used herein shall have the respective meanings
assigned to them in the Credit Agreement.
The promissory note is secured by certain collateral more specifically
described in the Credit Agreement and the Loan Documents.
The Credit Agreement provides, among other things, for acceleration (which
in certain cases shall be automatic) of the maturity hereof upon the occurrence
of certain stated events, in each case without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived.
This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA.
MDT CORPORATION
By__________________________________
Title:
MDT BIOLOGIC COMPANY
By__________________________________
Title:
MDT DIAGNOSTIC COMPANY
By__________________________________
Title:
R-1B-2
<PAGE>
MDT CANADA LIMITED
By__________________________________
Title:
MDT TECHNIONIC COMPANY
By__________________________________
Title:
R-1B-3
<PAGE>
EXHIBIT S-1
-----------
Form of
Security Agreement
1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned _______________________, a _________________ corporation ("Debtor"),
hereby grants and transfers to Secured Party (as defined below) a security
interest in all of Debtor's right, title and interest in and to the following
(collectively, the "Collateral"):
(a) all accounts, deposit accounts, accounts receivable, chattel paper,
instruments, documents and general intangibles (collectively, "Rights to
Payment"), now existing or at any time hereafter, and prior to the termination
hereof, arising (whether they arise from the sale, lease or other disposition of
inventory or from performance of contracts for services, manufacture,
construction, repair or otherwise or from any other source whatsoever),
including all securities, guaranties, warranties, indemnity agreements,
insurance policies and other agreements pertaining to the same or the property
described therein, and in all goods returned by Debtor's customers;
(b) all inventory, goods held for sale or lease or to be furnished under
contract of service, goods so leased or furnished, raw materials, component
parts, work in process or materials used or consumed in Debtor's business, now
or at anytime hereafter, and prior to the termination hereof, owned or acquired
by Debtor, wherever located, and all products thereof (collectively,
"Inventory"), whether in the possession of Debtor, warehousemen, bailees or any
other Person and whether located at Debtor's places of business or elsewhere;
(c) all furniture, tools, machinery and equipment of every kind, now or at
any time hereafter, and prior to the termination hereof, owned or acquired by
Debtor, and all improvements, replacements, accessions and additions thereto
(collectively, "Equipment"), wherever the same may be located;
together with whatever is receivable or received when any of the foregoing or
the proceeds thereof are sold, leased, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or involuntary, including
without limitation all rights to payment, including returned premiums, with
respect to any insurance relating to any of the foregoing and all rights to
payment with respect to any cause of action affecting or relating to any of the
foregoing (hereinafter called "Proceeds").
As used herein, the term "Secured Party" means Wells Fargo Bank, National
Association, a national banking association ("Wells Fargo"), acting in its
capacity as agent on behalf of the banks and other financial institutions (the
"Banks") that either now or in the
S-1-1
<PAGE>
future are signatories to that certain Credit Agreement, dated as of August 20,
1993, as amended by that certain Amendment to Credit Agreement, dated as of
August 1, 1995, by and among Debtor, MDT Corporation, MDT Biologic Company, MDT
Canada Limited and MDT Diagnostic Company, on the one hand, and, Secured Party
and the Banks, on the other hand (as amended from time to time, the "Credit
Agreement"). This Security Agreement is being executed and delivered by Debtor
pursuant to the Credit Agreement. In the event of any direct conflict between
the terms of the Credit Agreement and the terms hereof, the terms of the Credit
Agreement shall control and govern. All terms defined in the Credit Agreement
and not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement.
2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) the Indebtedness, and (b) all obligations of Debtor
under this Agreement (collectively, the "Secured Obligations").
3. TERMINATION. This Agreement will automatically terminate upon the
indefeasible payment and performance in full of the Indebtedness and all other
obligations of the Companies under the Loan Documents and the termination of the
Commitment.
4. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Secured Party that: (a) Debtor is the owner and has possession or control of
the Collateral and Proceeds; (b) Debtor has the right to grant a security
interest in the Collateral and Proceeds; (c) except as permitted under the
Credit Agreement, all Collateral and Proceeds are free from Liens, adverse
claims, setoffs, defaults, prepayments, defenses and conditions precedent of any
kind or character; (d) with respect to Collateral consisting of Equipment,
Debtor is not in the business of selling goods of the kind included within said
Collateral, and Debtor acknowledges that no sale of any Equipment, including
without limitation any Equipment which Debtor may deem to be surplus, has been
or shall be consented to or acquiesced in by Secured Party, except sales to the
Companies (other than Debtor and Canada) and except as otherwise permitted under
the Credit Agreement; (e) to the best of Debtor's knowledge, all Persons
appearing to be obligated on Rights to Payment and Proceeds have authority and
capacity to contract and are bound as they appear to be; (f) all property
subject to chattel paper has been legended or otherwise identified as being
subject to the security interest of Secured Party; (g) to the best of Debtor's
knowledge, all Rights to Payment and Proceeds comply with all applicable laws
concerning form, content and manner of preparation and execution, including
where applicable Federal Reserve Regulation Z and any State consumer credit laws
except where noncompliance would not have a Material Adverse Effect; (h) all
statements of Debtor herein are true and complete in all material respects; and
(i) no financing statement covering any of the Collateral or Proceeds, and
naming any secured party other than Secured Party, is on file in any public
office, except financing statements covering specific items of Equipment to the
extent
S-1-2
<PAGE>
permitted by the terms of the Credit Agreement and except financing statements
with respect to other Liens permitted under the Credit Agreement.
5. COVENANTS OF DEBTOR.
(a) Debtor Agrees in General: (i) to pay Indebtedness secured hereby
when due; (ii) to pay all expenses, including reasonable attorneys fees,
incurred by Secured Party in the perfection, preservation, realization,
enforcement and exercise of its rights, powers and remedies hereunder; (iii) to
permit Secured Party to exercise its powers; (iv) to execute and deliver such
documents as Secured Party deems reasonably necessary to create, perfect and
continue the security interests contemplated hereby; and (v) not to change its
chief place of business or the place where Debtor keeps its books and records
concerning the Collateral and Proceeds without giving Secured Party thirty (30)
days prior written notice of the address to which Debtor is moving same.
(b) Debtor Agrees with Regard to the Collateral and Proceeds: (i) to
insure Inventory and Equipment and, where applicable, Rights to Payment in
accordance with the terms of the Credit Agreement; (ii) not to use any Inventory
or Equipment for any unlawful purpose or in any way that would void any
insurance required to be carried in connection therewith; (iii) not to remove
Inventory or Equipment from Debtor's premises (except to any of the locations
listed on Schedule 1 attached hereto) without the prior written consent of
Secured Party and upon such terms and conditions as Secured Party may require,
except for deliveries of Inventory to buyers in the ordinary course of Debtor's
business and except any of the foregoing which consists of mobile goods as
defined in the California Uniform Commercial Code, in which case Debtor agrees
not to remove or permit the removal of the Inventory from its state of domicile
for a period in excess of thirty (30) calendar days; (iv) with respect to
Collateral consisting of Equipment, (A) to pay when due all license fees,
registration fees and other charges in connection therewith and to operate such
Equipment in accordance with all applicable statutes, rules and regulations
relating to the use and control thereof, except to the extent that the failure
so to pay or operate would not have a Material Adverse Effect, and (B) not to
rent, lease or charter any such Equipment; (v) not to permit any Lien on the
Collateral or Proceeds, including without limitation Liens arising from repairs
to or storage of Inventory or Equipment, except in favor of Secured Party and
except Liens permitted under the Credit Agreement; (vi) not to sell, hypothecate
or dispose of any of the Collateral or Proceeds, or any interest therein,
without the prior written consent of Secured Party, except sales of Inventory to
buyers in the ordinary course of Debtor's business, sales or other transfers of
Collateral and Proceeds to the Companies (other than Debtor and Canada), and
sales or other transfers of Collateral and Proceeds that are permitted under the
Credit Agreement; (vii) to furnish reports to Secured Party of all material
acquisitions, returns, sales and other dispositions of the Inventory in such
form and detail and at such times as Secured Party may reasonably require;
(viii) to permit Secured Party to inspect the Collateral at any reasonable time;
(ix) to keep, in accordance with generally accepted accounting principles,
complete and
S-1-3
<PAGE>
accurate records regarding all Collateral and Proceeds, and to permit Secured
Party to inspect the same at any reasonable time; (x) if requested by Secured
Party, after the occurrence and during the continuance of an Event of Default,
to receive and use reasonable and customary diligence to collect Rights to
Payment and Proceeds, in trust and as the property of Secured Party, and to
immediately endorse as appropriate and deliver such Rights to Payment and
Proceeds to Secured Party daily in the exact form in which they are received
together with a collection report in form satisfactory to Secured Party; (xi) if
requested by Secured Party, after the occurrence and during the continuance of
an Event of Default, not to commingle Rights to Payment, Proceeds or collections
thereunder with other property; (xii) to give only normal allowances and credits
and, if reasonably requested, to advise Secured Party thereof immediately in
writing if they affect any Rights to Payment or Proceeds; (xiii) on demand, to
execute such documents and do such things as Secured Party may reasonably
request for the purpose of perfecting, preserving and, after an Event of
Default, enforcing its security interest in any returned property; (xiv) from
time to time, when requested by Secured Party, to prepare and deliver a schedule
of all Collateral and Proceeds subject to this Agreement and to assign in
writing and deliver to Secured Party all accounts, contracts, leases and other
chattel paper, instruments, documents and other evidences thereof; (xv) in the
event Secured Party elects to receive payments of Rights to Payment or Proceeds
as permitted hereby, to pay all reasonable expenses incurred by Secured Party in
connection therewith, including reasonable expenses of accounting,
correspondence, collection efforts, reporting to account or contract debtors,
filing, recording, record keeping and expenses incidental thereto; and (xvi) to
do any other acts which may be reasonably necessary to maintain, preserve and
protect all Inventory and Equipment and to keep the same in good and salable
condition in accordance with the standards and practices adhered to generally by
users and manufacturers of like property, and to keep the Collateral and
Proceeds free and clear of all defenses, rights of offset and counterclaims
which could reasonably be expected to have a Material Adverse Effect.
6. POWERS OF SECURED PARTY. Debtor appoints Secured Party its true
attorney in fact to perform any of the following powers, which are coupled with
an interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by Secured Party's officers and employees, or any of
them, whether or not Debtor is in default; provided however, that
notwithstanding the foregoing, Secured Party shall be entitled to exercise the
powers set forth in (c), (e), (g), (i), (l), (m) and (n) of this Section 6
solely after the occurrence and during the continuance of an Event of Default:
(a) to perform any obligation of Debtor hereunder in Debtor's name or otherwise
(i) if the failure by Debtor so to perform could reasonably be expected to have
a Material Adverse Effect or (ii) at any time after the occurrence and during
the continuance of an Event of Default; (b) to give notice of Secured Party's
rights in the Collateral and Proceeds; (c) to enforce Secured Party's rights in
the Collateral and Proceeds and make extension agreements with respect thereto;
(d) to enter onto Debtor's premises in inspecting the Collateral; (e) to release
Persons liable on Rights to Payment and Proceeds and to give receipts and
acquittances and compromise disputes in
S-1-4
<PAGE>
connection therewith; (f) to release security; (g) to resort to security in any
order; (h) to prepare, execute, file, record or deliver notes, assignments,
schedules, designation statements, financing statements, continuation
statements, termination statements, statements of assignment, applications for
registration or like papers to perfect, preserve or release Secured Party's
interest in the Collateral and Proceeds; (i) to receive, open and read mail
addressed to Debtor; (j) to take cash, instruments for the payment of money and
other property which Secured Party is entitled to receive in accordance with the
provisions hereof; (k) to verify facts concerning the Collateral and Proceeds by
inquiry of obligors thereon, or otherwise, in its own name or a fictitious name;
(l) to endorse, collect, deliver and receive payment under instruments for the
payment of money; (m) to make withdrawals from and to close deposit accounts or
other accounts with any financial institution, wherever located, into which
Proceeds may have been deposited, and to apply funds so withdrawn to payment of
the Indebtedness; (n) to prepare, adjust, execute, deliver and receive payment
under insurance claims, and to collect and receive payment of and endorse any
instrument in payment of loss or returned premiums or any other insurance refund
or return, and to apply such amounts received by Secured Party, at Secured
Party's sole option, either toward repayment of the Indebtedness or replacement
of the Inventory; (o) to preserve or release the interest evidenced by chattel
paper to which Secured Party is entitled hereunder and to endorse and deliver
evidences of title incidental thereto; (p) to exercise, as otherwise permitted
pursuant to this Agreement, all rights, powers and remedies which Debtor would
have, but for this Agreement, with respect to all Collateral and Proceeds
subject hereto; and (q) to do all acts and things and execute all documents in
the name of Debtor or otherwise, deemed by Secured Party as reasonably
necessary, proper and convenient in connection with (i) the preservation or
perfection of its rights hereunder, or (ii) after the occurrence and during the
continuance of an Event of Default, the enforcement of its rights hereunder.
7. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, in accordance with the terms of the Credit Agreement, all
insurance premiums, taxes, charges, liens and assessments with respect to the
Collateral and Proceeds, and upon the failure of Debtor to do so, Secured Party
at its option may pay any of them. Any such payments made by Secured Party
shall be part of the Indebtedness, shall be due and payable immediately upon
demand, together with interest at the rate applicable to Base Rate Loans under
the Credit Agreement, and shall be secured by the Collateral and Proceeds,
subject to all terms and conditions of this Agreement.
8. EVENTS OF DEFAULT. The occurrence of any Event of Default under the
Credit Agreement shall constitute an "Event of Default" under this Agreement.
9. REMEDIES. Upon the occurrence and during the continuance of any Event
of Default, Secured Party shall have the right, to the extent provided under the
Credit Agreement, to declare immediately due and payable all or any Indebtedness
S-1-5
<PAGE>
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor under the Credit Agreement. Secured Party shall have
all other rights, powers, privileges and remedies granted to a secured party
under the California Uniform Commercial Code or otherwise provided by law,
including without limitation following the occurrence and during the continuance
of an Event of Default, the right to contact all Persons obligated to Debtor on
Rights to Payment or Proceeds and to instruct such Persons to deliver all Rights
to Payment and/or Proceeds directly to Secured Party. The rights, powers,
privileges and remedies of Secured Party are cumulative. No delay, failure or
discontinuance of Secured Party in exercising any right, power, privilege or
remedy hereunder shall affect or operate as a waiver of such right, power,
privilege or remedy; nor shall any single or partial exercise of any such right,
power, privilege or remedy preclude, waive or otherwise affect any other or
further exercise thereof or the exercise of any other right, power, privilege or
remedy. Any waiver, permit, consent or approval of any kind by Secured Party of
any default hereunder, or any such waiver of any provisions or conditions
hereof, must be in writing and shall be effective only to the extent set forth
in writing. While an Event of Default exists: (a) Debtor will deliver to
Secured Party from time to time, as requested by Secured Party, current lists of
Collateral and Proceeds; (b) Debtor will not dispose of Collateral or Proceeds
except on terms approved by Secured Party; (c) at Secured Party's request,
Debtor will assemble and deliver all Collateral and Proceeds, and books and
records pertaining thereto, to Secured Party at a reasonably convenient place
designated by Secured Party; and (d) Secured Party may, without notice to
Debtor, enter onto Debtor's premises and take possession of the Collateral.
With respect to any sale by Secured Party of any Inventory subject to this
Agreement, Debtor hereby expressly grants to Secured Party the right to sell,
subject to notice as required by applicable law, any such Inventory using any or
all of Debtor's trade names, trade name rights and/or proprietary labels or
marks. It is agreed that public or private sales, for cash or on credit, to a
wholesaler or retailer or investor, or user of property of the types subject to
this Agreement, or public auction, are all commercially reasonable since
differences in the sales prices generally realized in the different kinds of
sales are ordinarily offset by the differences in the costs and credit risks of
such sales.
10. REPLACEMENT OF AGENT; DISPOSITION OF COLLATERAL AND PROCEEDS. In
accordance with the provisions of the Credit Agreement relating to replacement
of Secured Party as the Agent, Secured Party may transfer the Collateral or
Proceeds to its successor Agent and shall be fully discharged thereafter from
all further liability and responsibility with respect to any of the foregoing so
transferred, and the successor Agent shall be vested with all rights and powers
of Secured Party hereunder with respect to any of the foregoing so transferred.
After the occurrence and during the continuance of an Event of Default, any
proceeds of any disposition of the Collateral or Proceeds, or any part thereof,
may be applied by Secured Party to the payment of expenses incurred by Secured
Party in connection with such disposition, including reasonable attorneys' fees,
and the balance of such proceeds may be applied by Secured
S-1-6
<PAGE>
Party toward the payment of the Indebtedness in such order of application as
Secured Party may from time to time elect.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Secured
Party, immediately upon demand and in accordance with the terms of the Credit
Agreement, 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 Secured Party's in-house counsel), incurred by
Secured Party in exercising any right, power, privilege or remedy conferred by
this Agreement or in the enforcement thereof, including any of the foregoing
incurred in connection with any bankruptcy proceeding relating to Debtor or the
valuation of the Collateral and/or Proceeds, including without limitation, the
seeking of relief from or modification of the automatic stay or the negotiation
and drafting of a cash collateral order.
12. MISCELLANEOUS. Presentment, protest, notice of protest, notice of
dishonor and notice of nonpayment are waived with respect to any Proceeds to
which Secured Party is entitled hereunder; any right to direct the application
of payments or security for Indebtedness of Debtor hereunder, or indebtedness of
customers of Debtor, and any right to require proceedings against others or to
require exhaustion of security are waived; and consent to extensions,
forbearances or alterations of the terms of Indebtedness, the release or
substitution of security, and the release of guarantors is given with respect to
Proceeds subject to this Agreement; provided however, that in each instance
Secured Party believes in good faith that the action in question is commercially
reasonable in that it does not unreasonably increase the risk of nonpayment of
the Indebtedness to which the action applies. Until all Indebtedness shall have
been indefeasibly paid in full, Debtor shall have no right of subrogation or
contribution. Debtor hereby waives any benefit of or any right to participate
in any of the Collateral or any other security whatsoever now or hereafter held
by Secured Party until the Indebtedness shall have been indefeasibly paid in
full.
13. NOTICES. All notices or demands of any kind which Secured Party may
be required or desires to serve upon Debtor under the terms of this Agreement
shall be served upon Debtor in accordance with the terms of Section 14.9 of the
Credit Agreement.
14. GOVERNING LAW; SUCCESSORS, ASSIGNS. This Agreement shall be governed
by and construed in accordance with the laws of the State of California, and
shall be binding on and inure to the benefit of the executors, administrators,
legal representatives, heirs, successors and assigns of the parties.
15. SEVERABILITY OF PROVISIONS. If any provision of this Agreement 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 Agreement.
S-1-7
<PAGE>
Debtor warrants that its Inventory and Equipment, except Inventory in
transit, is located at the business addresses listed on Schedule 1 attached
hereto and incorporated herein by this reference.
IN WITNESS WHEREOF, this Agreement has been duly executed as of
_________________.
____________________________
By: ________________________________
Title: _____________________________
S-1-8
<PAGE>
EXHIBIT T-1A
------------
Form of
Amended and Restated Promissory Note
$7,800,000 August 1, 1995
FOR VALUE RECEIVED, the undersigned, MDT CORPORATION ("MDT") HEREBY
UNCONDITIONALLY PROMISES TO PAY to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (the "Bank") the principal sum of SEVEN MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($7,800,000), in sixty (60) substantially equal consecutive
installments, commencing on September 1, 1995, with subsequent installments
payable on the first day of each calendar month thereafter (or, if such first
day is not a Business Day, then on the immediately succeeding Business Day), and
with the last such installment to be due and payable on the Final Maturity Date
and in the amount necessary to repay in full the unpaid principal balance
hereof.
MDT further promises to pay interest on the Term Loan outstanding hereunder
from time to time at the interest rates, and payable on the dates, set forth in
the Credit Agreement referred to below.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to WELLS FARGO BANK,
NATIONAL ASSOCIATION as Agent under the Credit Agreement (the "Agent"), at 420
Montgomery Street, San Francisco, California 94163.
The Bank shall record the date and amount of the Term Loan made, the amount
of principal and interest due and payable from time to time hereunder, each
payment thereof and the resulting unpaid principal balance hereof, in the Bank's
internal records; provided, however, that the Bank's failure so to record shall
-------- -------
not limit or otherwise affect the obligations of MDT hereunder and under the
Credit Agreement to repay the principal of and interest on the Term Loan.
This promissory note amends and restates in full that certain Promissory
Note, dated August 20, 1993, made by the undersigned to the order of the Bank,
in the original principal amount of $7,000,000. This promissory note is one of
the Term Loan Notes referred to in, and is subject to, that certain Credit
Agreement, dated as of August 20, 1993, as amended by that certain Amendment to
Credit Agreement, dated as of August 1, 1995 (as so amended, and as otherwise
may be amended, restated, supplemented, renewed, extended, or modified, the
"Credit Agreement") among MDT, MDT Biologic Company, MDT Diagnostic Company, MDT
Canada Limited, MDT Technionic
T-1A-1
<PAGE>
Company, certain financial institutions named therein as Banks (including the
Bank) and the Agent. Capitalized terms used herein shall have the respective
meanings assigned to them in the Credit Agreement.
The promissory note is secured by certain collateral more specifically
described in the Credit Agreement and the Loan Documents.
The Credit Agreement provides, among other things, for acceleration (which
in certain cases shall be automatic) of the maturity hereof upon the occurrence
of certain stated events, in each case without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived.
This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA.
MDT CORPORATION
By__________________________________
Title:
T-1A-2
<PAGE>
EXHIBIT T-1B
------------
Form of
Amended and Restated Promissory Note
$4,200,000 August 1, 1995
FOR VALUE RECEIVED, the undersigned, MDT CORPORATION ("MDT") HEREBY
UNCONDITIONALLY PROMISES TO PAY to the order of CHEMICAL BANK (the "Bank") the
principal sum of FOUR MILLION TWO HUNDRED THOUSAND DOLLARS ($4,200,000), in
sixty (60) substantially equal consecutive installments, commencing on September
1, 1995, with subsequent installments payable on the first day of each calendar
month thereafter (or, if such first day is not a Business Day, then on the
immediately succeeding Business Day), and with the last such installment to be
due and payable on the Final Maturity Date and in the amount necessary to repay
in full the unpaid principal balance hereof.
MDT further promises to pay interest on the Term Loan outstanding hereunder
from time to time at the interest rates, and payable on the dates, set forth in
the Credit Agreement referred to below.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to WELLS FARGO BANK,
NATIONAL ASSOCIATION as Agent under the Credit Agreement (the "Agent"), at 420
Montgomery Street, San Francisco, California 94163.
The Bank shall record the date and amount of the Term Loan made, the amount
of principal and interest due and payable from time to time hereunder, each
payment thereof and the resulting unpaid principal balance hereof, in the Bank's
internal records; provided, however, that the Bank's failure so to record shall
-------- -------
not limit or otherwise affect the obligations of MDT hereunder and under the
Credit Agreement to repay the principal of and interest on the Term Loan.
This promissory note amends and restates in full that certain Promissory
Note, dated August 20, 1993, made by the undersigned to the order of the Bank,
in the original principal amount of $3,000,000. This promissory note is one of
the Term Loan Notes referred to in, and is subject to, that certain Credit
Agreement, dated as of August 20, 1993, as amended by that certain Amendment to
Credit Agreement, dated as of August 1, 1995 (as so amended, and as otherwise
may be amended, restated, supplemented, renewed, extended, or modified, the
"Credit Agreement") among MDT, MDT Biologic Company, MDT Diagnostic Company, MDT
Canada Limited, MDT Technionic
T-1B-1
<PAGE>
Company, certain financial institutions named therein as Banks (including the
Bank) and the Agent. Capitalized terms used herein shall have the respective
meanings assigned to them in the Credit Agreement.
The promissory note is secured by certain collateral more specifically
described in the Credit Agreement and the Loan Documents.
The Credit Agreement provides, among other things, for acceleration (which
in certain cases shall be automatic) of the maturity hereof upon the occurrence
of certain stated events, in each case without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived.
This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA.
MDT CORPORATION
By__________________________________
Title:
T-1B-2
<PAGE>
EXHIBIT 10.2
ADDENDUM
Addendum to lease agreement between MDT, Inc. and D.E. Gressette dated
June 1, 1995 for the premises located at 7277 Peppermill Parkway, No.
Charleston, S.C. 29418.
CPI will not be charged and MDT, Inc. agrees to pay $18,000 for the
air conditioning unit at $667.00 per month.
The remainder of $5,994 due on the air conditioning unit, at the end
of the current lease, will be paid with the final month's lease payment, unless
MDT, Inc. decides to exercise its option and extend the lease, in that case,
MDT, Inc. will continue to pay $667.00 per month for the air conditioning unit
up to $18,000.
Signed and sealed this [6] day of [July], 1995.
--- ------
/s/ MICHAEL J. WILLIAMS /s/ RICHARD G. KINSEY
--------------------------- ---------------------------
Witness Richard G. Kinsey
/s/ ROZELLA CARRAWAY /s/ D.E. GRESSETTE
--------------------------- ---------------------------
Witness D.E. Gressette
<PAGE>
EXHIBIT 11.0
MDT CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED JUNE 30,
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Weighted average number of common
shares outstanding 6,769,000 6,743,000
Number of common equivalent shares
(determined using the Treasury
Stock Method) related to stock
options outstanding 45,000 -
---------- ----------
Weighted average number of common
and common equivalent shares
outstanding 6,814,000 6,743,000
========== ==========
Net Income (loss) $ 448,000 ($ 237,000)
Earnings (loss) per share $ .07 ($ .04)
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements included in the registrant's quarterly report on Form 10-Q
for the three months ended June 30, 1995, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
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