EXHIBIT 10.17.9
WELLS FARGO RESOLVING LINE OF CREDIT NOTE
4,000,000.00 Oakland, California
July 1, 2003
FOR VALUE RECEIVED, the undersigned CHOLESTECH CORPORATION ("Borrower") promises
to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its
office at EAST BAY RCBO, ONE KAISER PLAZA, SUITE #850, OAKLAND, CA 94612, or at
such other place as the holder hereof may designate, in lawful money of the
United States of America and in immediately available funds, the principal sum
of $4,000,000.00, or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.
1. DEFININTIONS:
As used herein, the following terms hall have the meanings set forth
after each, and any other term defined in this Note shall have the
meaning set forth at the place defined:
1.1 "Business Day" means any day except a Saturday, Sunday or any other day
on which commercial banks in California are authorized or required by
state law to close.
1.2 "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1,2,3 OR 6 MONTHS, designated by Borrower, during which
all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to LIBOR; provided however, that
no Fixed Rate Term may be selected for a principal amount less that
$100,000.00; and provided further, that no Fixed Rate Term shall extend
beyond the scheduled maturity date hereof. If any Fixed Rate Term would
end on a day which is not a Business Day, then such Fixed Rate Term
shall be extended to the next succeeding Business Day.
1.3 "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 if 1%) determined by dividing Base LIBOR by a
percentage equal to 100% less any LIBOR Reserve Percentage.
a) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of
calculating effective rates of interest for loans making reference
thereto, on the first day of the Fixed Rate Term for delivery of funds
on said date for a period of time approximately equal to the number of
days is such Fixed Rate Term applies. Borrower understands and agrees
that Bank may base its Inter-Bank Market Offered Rate upon such offers
or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate
offered for U.S. dollar deposits on the London Inter-Bank Market.
b) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for "Eurocurrency Liabilities" (as defined in Regulation
D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable Fixed
Rate Term.
1.4 "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with
the understanding that the Prime Rate is one of Bank's base rates and
serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced
by the recording thereof after its announcement in such internal
publications as Bank may designate.
PROMNOTE. CA (01/03)
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02677, #1646642865
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WELLS FARGO RESOLVING LINE OF CREDIT NOTE
2. INTEREST:
2.1 Interest. The outstanding balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either
(a) at a fluctuating rate per annum .50000% below the Prime Rate in
effect from time to time, or (b) at a fixed rate per annum determined
by Bank to be 1.75000% above LIBOR in effect on the first day of the
applicable Fixed Rate Term. When interest is determined in relation to
the Prime Rate, each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within
Bank. With respect to each LIBOR selection option selected hereunder,
Bank is hereby authorized to note the date, principal amount, interest
rate and Fixed Rate Term applicable thereto and any payments made
thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.
2.2 Selection of Interest Rate Options. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be
continued by Borrower at the end of the Fixed Rate Term applicable
thereto so that all or a portion thereof bears interest determined in
relation to the Prime Rate or to LIBOR for a new Fixed Rate Term
designated by Borrower. At any time any portion of this Note bears
interest determined in relation to the Prime Rate, Borrower may convert
all or a portion thereof so that is bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such
time as Borrower requests an advance hereunder or wishes to select a
LIBOR option for all or a portion of the outstanding principal balance
hereof, and at the end of each Fixed Rate Term, Borrower shall give
Bank notice specifying (a) the interest rate option selected by
Borrower; (b) the principal amount subject thereto; and (c) for each
LIBOR selection, the length of the applicable Fixed Rate Term. Any such
notice may be given by telephone (or such other electronic method as
Bank may permit) so long as, with respect to each LIBOR selection, (i)
if requested by Bank, Borrower provides to Bank written confirmation
thereof not later than 3 Business Days after such notice is given, and
(ii) such notice is given to Bank prior to 10:00 a.m. on the first day
of the Fixed Rate Term, or at a day later during any Business Day if
Bank, at it's sole option but without obligation to do so, accepts
Borrower's notice and quotes a fixed rate to Borrower. If Borrower does
not immediately accept a fixed rate when quoted by Bank, the quoted
rate shall expire and any subsequent LIBOR request from Borrower shall
be subject to a redetermination by Bank of the applicable fixed rate.
If no specific designation if interest is made at the time any advance
is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such
advance or the principal amount to which such Fixed Rate Term applied.
2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become hereunder,
any and all (a) withholdings, interest equalization taxes, stamp taxes
or other taxes (except income and franchise taxes) imposed by any
domestic or foreign governmental authority and related in any manner to
LIBOR, and (b) future, supplemental, emergency or other changes in the
LIBOR Reserve Percentage, assessment rates imposes by the Federal
Deposit Insurance Corporation, or similar requirements or costs imposed
by any domestic or foreign governmental authority or resulting from
compliance by Bank with any respect or directive (whether or not having
the force of law) from any central bank or other governmental authority
and related in any manner to LIBOR to the extent they are not included
in the calculation of LIBOR. In determining which of the foregoing are
attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.
2.4 Payment of Interest. Interest accrued on this Note shall be payable on
the 1st day of each MONTH, commencing AUGUST 1, 2003.
2.5 Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance
of this Note shall bear interest until pain in full at an increased
rate per annum (computed on the basis of a 360-day year, actual days
elapsed) equal to 4% above the rate of interest from time to time
applicable to this Note.
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WELLS FARGO RESOLVING LINE OF CREDIT NOTE
3. BORROWING AND REPAYMENT:
3.1 Borrowing and Repayment: Borrower may from time to time during the term
of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with
or governing this Note; provided however, that the total outstanding
borrowings under this Note shall not at any time exceed the principal
amount stated above. The unpaid principal balance of this obligation at
any time shall be the total amounts advanced hereunder by the holder
hereof less the amount of principal payments made hereon by or for any
balance of this Note shall be due and payable in full on SEPTEMBER 1,
2005.
3.2 Advances: Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the holder at the oral or written
consent of (a) WARREN PINCKERT OR WILLIAM W. BURKE, any one acting
alone, who are authorized to request advances and direct the
disposition of any advances until written notice of the revocation of
such authority is received by the holder at the office designated
above, or (b) any person, with respect to advances deposited to the
credit of any deposit account of any Borrower, which advances, when so
deposited, shall be conclusively presumed to have been made to or for
the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw
against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by
any Borrower.
3.3 Application of Payments: Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be
applied first, to the outstanding principal balance of this Note which
bears interest determined in relation to the Prime Rate, if any, and
second, to the outstanding principal balance of this Note which bears
interest determined in relation to LIBOR, with such payments applied to
the oldest Fixed Rate Term first.
4. PREPAYMENT:
4.1 Prime Rate: Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to the Prime Rate at any
time, in any amount and without penalty.
4.2 LIBOR: Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to the LIBOR at any time and in
the minimum amount of $100,000.00; provided however, that if the
outstanding principal balance of such portion of this Note is less than
said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank
providing this prepayment option to Borrower, or if any such portion of
this Note shall become due and payable at any time prior to the last
day of the Fixed Rate Term applicable thereto by acceleration or
otherwise, Borrower shall pay to Bank immediately upon demand a fee
which is the sum of the discounted money differences for each month
from the month of prepayment through the month in which such Fixed Rate
Term matures, calculated ass follows for each such month:
a) Determine the amount of interest which would have
accrued each month on the amount prepaid at the
interest rate applicable to such amount had it
remained outstanding until the last day of the Fixed
Rate Term applicable thereto.
b) Subtract from the amount determined in (a) above the
amount of interest which would have accrued for the
same month on the amount prepaid for the remaining
term of such Fixed Rate Term at LIBOR in effect on
the date of prepayment of new loans made for such
term and in a principal amount equal to the amount
prepaid.
c) If the result obtained in (b) for any month is
greater than zero, discount that difference by LIBOR
used in (b) above.
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WELLS FARGO RESOLVING LINE OF CREDIT NOTE
3.1 Borrowing and Repayment. Borrower may form time to time during the term
of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with
or governing this Note; provided however, that the total outstanding
borrowings under this Note shall not at any time exceed the principal
amount stated above. The unpaid principal balance of this obligation at
any time shall be the total amounts advanced hereunder by the holder
hereof les the amount of principal payments made hereon by or foe any
Borrower, which balance may be endorsed hereon from time to time by the
holder. The outstanding principal balance of this Note shall be due and
payable in full on SEPTEMBER 1, 2005.
3.2 Advances: Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the holder at the oral or written
request of (a) WARREN PINCKERT OR WILLIAM W. BURKE, any one acting
alone, who are authorized to request advances and direct the
disposition of any advances until written notice of the revocation of
such authority is received by the holder at the office designated
above, or (b) any person, with respect to advances deposited to the
credit of any deposit account of any Borrower, which advances, when so
deposited, shall be conclusively presumed to have been made to or for
the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw
against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by
any Borrower.
3.3 Application of Payments: Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be
applied first, to the outstanding principal balance of this Note which
bears interest determined in relation to the Prime Rate, if any, and
second, to the outstanding principal balance of this Note which bears
interest determined in relation to LIBOR, with such payments applied to
the oldest Fixed Rate Term first.
4. PREPAYMENT:
4.1 Prime Rate: Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to the Prime Rate at any
time, in any amount and without penalty.
4.2 LIBOR: Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to LIBOR at any time and in the
minimum amount of $100,000.00; provided however, that if the
outstanding principal balance of such portion of this Note is less than
said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank
providing this prepayment option to Borrower, of if any such portion of
this Note shall become due and payable at any time prior to the last
day of the Fixed Rate Term applicable thereto by acceleration or
otherwise, Borrower shall pay to Bank immediately upon demand a fee
which is the sum of the discounted monthly differences for each month
from the month of prepayment through the month in which such Fixed Rate
Term matures, calculated as follows for each such month:
a) Determine the amount of interest which would have
accrued each month on the amount prepaid at the
interest rate applicable to such amount had it
remained outstanding until the last day of the Fixed
Rate Term applicable thereto.
b) Subtract from the amount determined in (a) above the
amount of interest which would have accrued for the
same month on the amount prepaid for the remaining
term of such Fixed Rate Term at LIBOR in effect on
the date of prepayment of new loans made for such
term and in a principal amount equal to the amount
prepaid.
c) If the result obtained in (b) for any month is
greater than zero, discount that difference by LIBOR
used in (b) above.
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02677, #1646642865
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WELLS FARGO RESOLVING LINE OF CREDIT NOTE
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.
5. EVENTS OF DEFAULT:
The occurrence of any of the following shall constitute an "Event of
Default" under this Note:
5.1 The failure to pay any principal, interest, fees or other charges when
due hereunder or under any contract, instrument or document executed in
connection with this Note.
5.2 The filing of a petition by or against any Borrower, any guarantor of
this Note or any general partner or joint venturer in any Borrower
which is a partnership or a joint venture (with each such guarantor,
general partner and/or joint venturer referred to herein as a "Third
Party Obligor") under any provisions of the Bankruptcy Reform Act,
Title 11 of the United States Code, as amended or recodified from time
to time, or under any similar or other law relating to bankruptcy,
insolvency, reorganization or other relief for debtors; the appointment
of a receiver, trustee, custodian or liquidator of or for any part of
the assets or property of any Borrower or Third Party Obligor; any
Borrower of Third Party Obligor becomes insolvent, makes a general
assignment for the benefit of creditors of is generally not paying its
debts as they become due; or any attachment or like levy on any
property of any Borrower of Third Party Obligator.
5.3 The death or incapacity of any individual Borrower of Third Party
Obligor, or the dissolution or liquidation of any Borrower of Third
Party Obligor which is a corporation, partnership, joint venture or
other type of entity.
5.4 Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract,
instrument or document pursuant to which any Borrower of Third Party
Obligor has incurred any obligation for borrowed money, any purchase
obligation, or any other liability of any kind to any person or entity,
including the holder.
5.5 Any financial statement provided by any Borrower of Third Party Obligor
to Bank proves to be incorrect, false or misleading in any material
respect.
5.6 Any sale or transfer of all of a substantial or material part of the
assets of any Borrower of Third Party Obligor other than in the
ordinary course of its business.
5.7 Any violation or breach of any provision of, or any defined event of
default under, any addendum to this Note or any loan agreement,
guaranty, security agreement, deed of trust, mortgage or other document
executed in connection with or securing this Note.
6. MISCELLANEOUS:
6.1 Remedies: Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of principal
and interest outstanding hereunder to be immediately due and payable
without presentment, demand, notice of nonperformance, notice of
protest, protest of notice of dishonor, all of which are expressly
waived by each Borrower, and the obligation, if any, of the holder to
extend any further credit
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WELLS FARGO RESOLVING LINE OF CREDIT NOTE
hereunder shall immediately cease and terminate. Each Borrower shall
pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable
attorney's fees (to include outside counsel fees and all allocated
costs of the holder's in-house counsel), expended or incurred by the
holder in connection with the enforcement of the holder's rights and/or
the collection of any amounts which become due to the holder under this
Note, and the prosecution or defense of any action in any way related
to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to any Borrower or
any other person or entity.
6.2 Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower
shall be joint and several.
6.3 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.
Cholestech Corporation
By: /s/ William W. Burke
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William W. Burke, Chief Financial Officer
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