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EXHIBIT 4.2
APPROVED BY:
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ORC# INITIALS
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05493
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PRIMARY ORC #:
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REVOLVING BUSINESS CREDIT NOTE (LIBOR - BASED INTEREST RATE)
Due September 30, 2002 $7,500,000.00
No. Date: September 21, 2000
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PROMISE TO PAY. On or before September 30, 2002, for value received, American
Medical Technologies, Inc. (the "Borrower") promises to pay to BANK ONE,
MICHIGAN (the "Bank"), or order, at any office of the Bank in the State of
Michigan, the sum of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00), or such lesser sum as is indicated on Bank records, plus
interest as provided below.
DEFINITIONS.
As used in this note, the following terms have the following respective
meanings.
"APPLICABLE MARGIN" means with respect to any Floating Rate Loan 0% per
annum and with respect to any Eurodollar Loan 1.50% per annum.
"BUSINESS DAY" means a day other than a Saturday or Sunday, or other
day that commercial banks in Detroit, Michigan are authorized or
required to close under the laws of the State of Michigan and, with
respect to any Eurodollar Loan, on which dealings in United States
dollar deposits are carried out in the London interbank market.
"CREDIT AGREEMENT" is defined in the paragraph entitled "CREDIT
AGREEMENT" below.
"CREDIT FACILITY" is defined in the paragraph entitled "CREDIT
FACILITY" below.
"EURODOLLAR BASE RATE" means the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars
appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, provided that, (i) if
Reuters Screen FRBD is not available to the Bank for any reason, the
applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other
generally recognized financial information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period, and (ii)
if no such British Bankers' Association Interest Settlement Rate is
available to the Bank, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the
Bank to be the rate at which the Bank or one of its affiliate banks
offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the
approximate amount of the Eurodollar Loan and having a maturity equal
to such Interest Period.
"EURODOLLAR LOAN" means any Loan under the Credit Facility when and to
the extent that its interest rate is determined by reference to the
Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to any Eurodollar Loan and the
related Interest Period, the per annum rate that is equal to the sum
of:
(A) the Applicable Margin, plus
(B) the rate obtained by dividing (i) the Eurodollar Base Rate by (ii)
an amount equal to one minus the stated maximum rate (expressed as a
decimal) of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves)
specified on the first day of such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor agency) for
determining the maximum reserve requirement with respect to
eurocurrency funding required to be maintained by a Federal Reserve
System member bank;
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all as conclusively determined by the Bank, such sum to be rounded up,
if necessary, to the nearest one-hundredth of one percent (1/100 of
1%).
"FLOATING RATE" means the Prime Rate plus the Applicable Margin until
maturity whether by acceleration or otherwise. "Prime Rate" means a
rate per annum equal to the prime rate of interest announced from time
to time by the Bank or its parent (which is not necessarily the lowest
rate charged to any customer), changing when and as said prime rate
changes.
"FLOATING RATE LOAN" means any Loan under the Credit Facility when and
to the extent that its interest rate is determined by reference to the
Floating Rate.
"INTEREST PERIOD" means, with respect to any Eurodollar Loan, a period
of one, two, three or six months agreed upon by the Borrower and the
Bank, commencing on the Business Day the Loan is made. If the Interest
Period would end on a day which is not a Business Day, the Interest
Period shall end on the next succeeding Business Day unless that
Business Day would fall in the next calendar month, in which case the
Interest Period shall end on the immediately preceding Business Day.
"LOAN" and "LOANS" are defined in the paragraph entitled "CREDIT
FACILITY" below.
"LOAN DOCUMENTS" means this note, the Credit Agreement, and any other
documents executed in connection with the Credit Facility.
CREDIT FACILITY. The Bank has authorized a credit facility to the Borrower in a
principal amount not to exceed the face amount of this note. The credit facility
is in the form of loans (EACH, A "LOAN", AND, TOGETHER, THE "LOANS") made from
time to time by the Bank to the Borrower. This note evidences the Borrower's
obligation to repay those Loans. The Bank shall, in the ordinary course of
business, make notations in its records of the date, amount, interest rate and
Interest Period of each Loan, the amount of each payment on the Loans, and other
information. Such records shall, in the absence of manifest error, be conclusive
as to the outstanding principal balance of and interest rate or rates applicable
to the Loans. The aggregate principal amount of debt evidenced by this note
shall be the amount reflected from time to time in the records of the Bank but
shall not exceed the face amount of this note. Until maturity, the Borrower may
borrow, pay down, and reborrow under this note so long as the aggregate
principal amount outstanding at any one time does not exceed the face amount of
this note.
CREDIT AGREEMENT. This note evidences a debt under the terms of a Line of Credit
Agreement (the "Credit Agreement") between the Bank and the Borrower dated
concurrently, and any amendments.
INTEREST RATES. Each Loan under the Credit Facility may be outstanding as either
a Floating Rate Loan or a Eurodollar Loan. The Borrower shall pay interest to
the Bank on the outstanding and unpaid principal amount of each Floating Rate
Loan at the Floating Rate and each Eurodollar Loan at the Eurodollar Rate.
Interest shall be calculated on the basis of the actual number of days elapsed
in a year of 360 days. In no event shall the interest rate applicable to any
Loan exceed the maximum rate allowed by law. Any interest payment which would
for any reason be deemed unlawful under applicable law shall be applied to
principal.
NOTICE AND MANNER OF BORROWING. The Borrower shall give the Bank written notice
(effective upon receipt) of any Loan under the Credit Facility no later than
11:00 A.M. Detroit time, one (1) Business Day before each Floating Rate Loan and
three (3) Business Days before each Eurodollar Loan specifying: (A) the date of
the Loan, (B) the amount of the Loan, (C) the type of the Loan (Floating Rate
Loan or Eurodollar Loan), and (D) in the case of a Eurodollar Loan, the duration
of the applicable Interest Period. Each Eurodollar Loan shall be in a minimum
amount of $500,000.00. All notices under this paragraph are irrevocable. By the
Bank's close of business on the date of the Loan and upon fulfillment of the
conditions set forth in the Credit Agreement, the Bank shall make the Loan
available to the Borrower in immediately available funds by crediting the amount
of the Loan to the Borrower's account with the Bank.
CONVERSION AND RENEWALS. The Borrower may elect from time to time to convert one
type of Loan into another or to renew any Loan by giving the Bank written notice
no later than 11:00 A.M. Detroit time one (1) Business Day before conversion
into a Floating Rate Loan and three (3) Business Days before conversion into or
renewal of a Eurodollar Loan, specifying: (A) the renewal or conversion date,
(B) the amount of the Loan to be converted or renewed, (C) in the case of
conversion, the type of Loan to be converted into (Floating Rate Loan or
Eurodollar Loan), and (D) in the case of renewals of or conversion into a
Eurodollar Loan, the applicable Interest Period, provided that (i) the minimum
principal amount of each Eurodollar Loan outstanding after a renewal or
conversion shall be $500,000.00 and (ii) a Eurodollar Loan can only be converted
on the last day of the Interest Period for the Loan. All notices given under
this paragraph are irrevocable. If the Borrower fails to give the Bank the
notice specified above for the renewal or conversion of a Eurodollar Loan by
11:00 a.m. Detroit time three (3) Business Days before the end of the Interest
Period for that Loan, the Loan shall automatically be converted to a Floating
Rate Loan on the last day of the Interest Period for the Loan.
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INTEREST PAYMENTS. Interest on the Loans shall be paid as follows:
(A) For each Floating Rate Loan, on the 30th day of each month
beginning with the first full month following disbursement of the
Loan and at the maturity of the Loan;
(B) For each Eurodollar Loan, on the last day of the Interest Period
for the Loan and, if the Interest Period is longer than three
months, at three-month intervals beginning with the day three
months from the date the Loan is disbursed.
OVERDUE AMOUNTS. Any principal amount not paid when due (at maturity, by
acceleration, or otherwise) shall bear interest thereafter until paid in full,
payable on demand, at a per annum rate equal to:
(A) For each Floating Rate Loan a rate equal to the Floating Rate plus
three percent (3%).
(B) For each Eurodollar Loan, a rate equal to the Eurodollar Rate plus
three percent (3%) from the time of default in payment of
principal until the end of the then current Interest Period for
the Loan and after that at a rate equal to the Floating Rate plus
three percent (3%).
PREPAYMENT. The Borrower may prepay all or any part of any Floating Rate Loan at
any time without premium or penalty. The Borrower may prepay any Eurodollar Loan
only at the end of an Interest Period.
FUNDING LOSS INDEMNIFICATION. Upon the Bank's request, the Borrower shall pay
the Bank amounts sufficient (in the Bank's reasonable opinion) to compensate it
for any loss, cost, or expense incurred as a result of:
(A) Any payment of a Eurodollar Loan on a date other than the last day
of the Interest Period for the Loan, including, without
limitation, acceleration of the Loans by the Bank pursuant to this
note or the Loan Documents; or
(B) Any failure by the Borrower to borrow or renew a Eurodollar Loan
on the date specified in the relevant notice from the Borrower to
the Bank.
ADDITIONAL COSTS. If any applicable domestic or foreign law, treaty, government
rule or regulation now or later in effect (whether or not it now applies to the
Bank) or the interpretation or administration thereof by a governmental
authority charged with such interpretation or administration, or compliance by
the Bank with any guideline, request or directive of such an authority (whether
or not having the force of law), shall (A) affect the basis of taxation of
payments to the Bank of any amounts payable by the Borrower under this note or
the Loan Documents (other than taxes imposed on the overall net income of the
Bank by the jurisdiction or by any political subdivision or taxing authority of
the jurisdiction in which the Bank has its principal office), or (B) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
the Bank, or (C) impose any other condition with respect to this note or the
Loan Documents and the result of any of the foregoing is to increase the cost to
the Bank of maintaining any Eurodollar Loan or to reduce the amount of any sum
receivable by the Bank on such a Loan, or (D) affect the amount of capital
required or expected to be maintained by the Bank (or any corporation
controlling the Bank) and the Bank determines that the amount of such capital is
increased by or based upon the existence of the Bank's obligations under this
note or the Loan Documents and the increase has the effect of reducing the rate
of return on the Bank's (or its controlling corporation's) capital as a
consequence of the obligations under this note or the Loan Documents to a level
below that which the Bank (or its controlling corporation) could have achieved
but for such circumstances (taking into consideration its policies with respect
to capital adequacy) by an amount deemed by the Bank to be material, then the
Borrower shall pay to the Bank, from time to time, upon request by the Bank,
additional amounts sufficient to compensate the Bank for the increased cost or
reduced sum receivable. Whenever the Bank shall learn of circumstances described
in this section which are likely to result in additional costs to the Borrower,
the Bank shall give prompt written notice to Borrower of the basis for and the
estimated amount of any such anticipated additional costs. A statement as to the
amount of the increased cost or reduced sum receivable, prepared in good faith
and in reasonable detail by the Bank and submitted by the Bank to the Borrower,
shall be conclusive and binding for all purposes absent manifest error in
computation.
ILLEGALITY. If any applicable domestic or foreign law, treaty, rule or
regulation now or later in effect (whether or not it now applies to the Bank) or
the interpretation or administration thereof by a governmental authority charged
with such interpretation or administration, or compliance by the Bank with any
guideline, request or directive of such an authority (whether or not having the
force of law), shall make it unlawful or impossible for the Bank to maintain or
fund the Eurodollar Loans, then, upon notice to the Borrower by the Bank, the
outstanding principal amount of the Eurodollar Loans, together with accrued
interest and any other amounts payable to the Bank under this note or the Loan
Documents on account of the Eurodollar Loans shall be repaid (A) immediately
upon the Bank's demand if such change or compliance with such requests, in the
Bank's judgment, requires immediate repayment, or (B) at the expiration of the
last Interest Period to expire before the effective date of any such change or
request provided, however, that subject to the terms and conditions of this note
and the Loan Documents the Borrower shall be entitled to simultaneously replace
the entire outstanding balance of any Eurodollar Loan repaid in accordance with
this section with a Floating Rate Loan in the same amount.
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INABILITY TO DETERMINE INTEREST RATE. If the Bank determines that (A) quotations
of interest rates for the relevant deposits referred to in the definition of
Eurodollar Rate are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the interest rate on a
Eurodollar Loan as provided in this note, or (B) the relevant interest rates
referred to in the definition of Eurodollar Rate do not accurately cover the
cost to the Bank of making or maintaining Eurodollar Loans, then the Bank shall
forthwith give notice of such circumstances to the Borrower, whereupon (1) the
obligation of the Bank to make Eurodollar Loans shall be suspended until the
Bank notifies the Borrower that the circumstances giving rise to the suspension
no longer exists, and (2) the Borrower shall repay in full the then outstanding
principal amount of each Eurodollar Loan, together with accrued interest, on the
last day of the then current Interest Period applicable to the Loan, provided,
however, that, subject to the terms and conditions of this note and the Loan
Documents, the Borrower shall be entitled to simultaneously replace the entire
outstanding balance of any Eurodollar Loan repaid in accordance with this
section with a Floating Rate Loan in the same amount.
OBLIGATIONS DUE ON NON-BUSINESS DAY. Whenever any payment under this note
becomes due and payable on a day that is not a Business Day, if no event of
acceleration has occurred and is continuing, the maturity of the payment shall
be extended to the next succeeding Business Day, except, in the case of a
Eurodollar Loan, if the result of the extension would be to extend the payment
into another calendar month, the payment must be made on the immediately
preceding Business Day.
SECURITY. To secure the payment of this note and all other present or future
liabilities of the Borrower to the Bank, whether several, joint, or joint and
several, the Borrower pledges and grants to the Bank a continuing security
interest in the following described property and all of its additions,
substitutions, increments, proceeds and products, whether now owned or later
acquired ("Collateral"):
1. All securities and other property of the Borrower in the custody,
possession or control of the Bank (other than property held by the Bank
solely in a fiduciary capacity);
2. All property or securities declared or acknowledged to constitute
security for any past, present or future liability of the Borrower to
the Bank;
3. All balances of deposit accounts of the Borrower with the Bank;
4. The following additional property: all of the Borrower's present and
future accounts, chattel paper and general intangibles; all of the
Borrower's present and future inventory and equipment, wherever
located; all of the Borrower's patents, copyrights and trademarks.
BANK'S RIGHT TO SETOFF. The Bank shall have the right at any time to apply its
own debt or liability to the Borrower or to any other party liable on this note
in whole or partial payment of this note or other present or future liabilities,
without any requirement of mutual maturity.
REPRESENTATIONS BY BORROWER. Each Borrower represents: (a) that the execution
and delivery of this note and the performance of the obligations it imposes do
not violate any law, conflict with any agreement by which it is bound, or
require the consent or approval of any governmental authority or any third
party; (b) that this note is a valid and binding agreement, enforceable
according to its terms; and (c) that all balance sheets, profit and loss
statements, and other financial statements furnished to the Bank are accurate
and fairly reflect the financial condition of the organizations and persons to
which they apply on their effective dates, including contingent liabilities of
every type, which financial condition has not changed materially and adversely
since those dates. Each Borrower, other than a natural person, further
represents: (a) that it is duly organized, existing and in good standing
pursuant to the laws under which it is organized; and (b) that the execution and
delivery of this note and the performance of the obligations it imposes (i) are
within its powers and have been duly authorized by all necessary action of its
governing body; and (ii) do not contravene the terms of its articles of
incorporation or organization, its by laws, or any partnership, operating or
other agreement governing its affairs.
EVENTS OF DEFAULT/ACCELERATION. If any of the following events occurs, this note
shall be due immediately, without notice, at the Bank's option.
1. The Borrower or any guarantor of this note ("Guarantor") fails to pay
when due any amount payable under this note or under any agreement or
instrument evidencing debt to any creditor;
2. The Borrower or any Guarantor (a) fails to observe or perform any other
term of this note; (b) makes any materially incorrect or misleading
representation, warranty, or certificate to the Bank; (c) makes any
materially incorrect or misleading representation in any financial
statement or other information delivered to the Bank; or (d) defaults
under the terms of any agreement or instrument relating to any debt for
borrowed money (other than the debt evidenced by this note) such that
the creditor declares the debt due before its maturity;
3. There is a default under the terms of any loan agreement, mortgage,
security agreement, or any other document executed as part of the loan
evidenced by this note, or any guaranty of the loan evidenced by this
note becomes unenforceable in whole or in part, or any Guarantor fails
to promptly perform under its guaranty;
4. A "reportable event" (as defined in the Employee Retirement Income
Security Act of 1974 as amended) occurs that would permit the Pension
Benefit Guaranty Corporation to terminate any employee benefit plan of
the Borrower or any affiliate of the Borrower;
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5. The Borrower or any Guarantor becomes insolvent or unable to pay its
debts as they become due;
6. The Borrower or any Guarantor (a) makes an assignment for the benefit
of creditors; (b) consents to the appointment of a custodian, receiver,
or trustee for itself or for a substantial part of its assets; or (c)
commences any proceeding under any bankruptcy, reorganization,
liquidation, insolvency or similar laws of any jurisdiction;
7. A custodian, receiver, or trustee is appointed for the Borrower or any
Guarantor or for a substantial part of its assets without the consent
of the party against which the appointment is made and is not removed
within 60 days after such appointment;
8. Proceedings are commenced against the Borrower or any Guarantor under
any bankruptcy, reorganization, liquidation, or similar laws of any
jurisdiction, and such proceedings remain undismissed for 60 days after
commencement; or the Borrower or Guarantor consents to the commencement
of such proceedings;
9. Any judgment is entered against the Borrower or any Guarantor, or any
attachment, levy, or garnishment is issued against any property of the
Borrower or any Guarantor;
10. The Borrower or any Guarantor dies;
11. The Borrower or any Guarantor, without the Bank's written consent, (a)
is dissolved, (b) merges or consolidates with any third party, (c)
leases, sells or otherwise conveys a material part of its assets or
business outside the ordinary course of business, (d) leases, purchases
or otherwise acquires a material part of the assets of any other
corporation or business entity except in the ordinary course of
business, or (e) agrees to do any of the foregoing (notwithstanding the
foregoing, any subsidiary may merge or consolidate with any other
subsidiary, or with the Borrower so long as the Borrower is the
survivor);
12. There is a substantial change in the existing or prospective financial
condition of the Borrower or any Guarantor which the Bank in good faith
determines to be materially adverse;
13. The Bank in good faith deems itself insecure.
REMEDIES. If this note is not paid at maturity, whether by acceleration or
otherwise, the Bank shall have all of the rights and remedies provided by any
law or agreement. Any requirement of reasonable notice shall be met if the Bank
sends the notice to the Borrower at least seven (7) days prior to the date of
sale, disposition or other event giving rise to the required notice. The Bank is
authorized to cause all or any part of the Collateral to be transferred to or
registered in its name or in the name of any other person, firm or corporation,
with or without designation of the capacity of such nominee. The Borrower shall
be liable for any deficiency remaining after disposition of any Collateral. The
Borrower is liable to the Bank for all reasonable costs and expenses of every
kind incurred in the making or collection of this note, including, without
limitation, reasonable attorneys' fees and court costs. These costs and expenses
shall include, without limitation, any costs or expenses incurred by the Bank in
any bankruptcy, reorganization, insolvency or other similar proceeding.
WAIVER. Each endorser and any other party liable on this note severally waives
demand, presentment, notice of dishonor and protest, and consents to any
extension or postponement of time of its payment without limit as to the number
or period, to any substitution, exchange or release of all or part of the
Collateral, to the addition of any party, and to the release or discharge of, or
suspension of any rights and remedies against, any person who may be liable for
the payment of this note. No delay on the part of the Bank in the exercise of
any right or remedy shall operate as a waiver. No single or partial exercise by
the Bank of any right or remedy shall preclude any other future exercise of it
or the exercise of any other right or remedy. No waiver or indulgence by the
Bank of any default shall be effective unless in writing and signed by the Bank,
nor shall a waiver on one occasion be construed as a bar to or waiver of that
right on any future occasion.
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MISCELLANEOUS. The Borrower, if more than one, shall be jointly and severally
liable, and the term "Borrower" shall mean any one or more of them. This note
shall be binding on the Borrower and its successors, and shall inure to the
benefit of the Bank, its successors and assigns. Any reference to the Bank shall
include any holder of this note. This note is delivered in the State of Michigan
and governed by Michigan law. Section headings are for convenience of reference
only and shall not affect the interpretation of this note.
INFORMATION SHARING. The Bank may provide, without any limitation whatsoever,
any information or knowledge the Bank may have about the undersigned or any
matter relating to this note and any related documents to BANK ONE CORPORATION,
or any of its subsidiaries or affiliates or their successors, or to any one or
more purchasers or potential purchasers of this note or any related documents,
and the undersigned waives any right to privacy the undersigned may have with
respect to such matters. The Borrower agrees that the Bank may at any time sell,
assign or transfer one or more interests or participations in all or any part of
its rights or obligations in this note to one or more purchasers whether or not
related to the Bank.
CONTINUED VALIDITY. This note embodies the entire agreement and understanding
between the Bank and the Borrower and supersedes, amends, replaces and restates
all prior agreements and understandings relating to its subject matter,
including but not limited to the terms and conditions of the Revolving Business
Credit Note dated September 30, 1999, from the Borrower to the Bank.]
WAIVER OF JURY TRIAL. The Bank and the Borrower knowingly and voluntarily waive
any right either of them have to a trial by jury in any proceeding (whether
sounding in contract or tort) which is in any way connected with this or any
related agreement, or the relationship established under them. This provision
may only be modified in a written instrument executed by the Bank and the
Borrower.
ADDRESS: BORROWER
5555 Bear Lane American Medical Technologies, Inc.
Corpus Christi, Texas 78405
By: /s/ Ben J. Gallant
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Ben J. Gallant
Its: Chief Executive Officer
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