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EXHIBIT 10.19
REVOLVING LINE OF CREDIT AGREEMENT
This Revolving Line of Credit Agreement (the
"Agreement") is made and entered into in this 15th day of
February, 2008, by and between Boston Avenue Capital, LLC, an
Oklahoma limited liability company ("Lender"), and CompuMed,
Inc., a Delaware corporation ("Borrower").
In consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. LINE OF CREDIT.
Lender hereby establishes for a period extending to December 31,
2017 (the "Maturity Date") a revolving line of credit (the "Credit
Line") for Borrower in the principal amount of Four Million Dollars
($4,000,000.00) (the "Credit Limit"). In connection herewith,
Borrower shall execute and deliver to Lender a Promissory Note in
the amount of the Credit Limit in form and content of Exhibit A
attached hereto. All sums advanced on the Credit Line or pursuant
to the terms of this Agreement (each an "Advance") shall become
part of the principal of said Promissory Note.
2. ADVANCES. Any
request for an Advance may be made from time to time in writing (in
substantially the form attached hereto as Exhibit B) to the Lender
in such amounts as Borrower may choose; provided, however ,
(i) any requested Advance will not, when added to the outstanding
principal balance of all previous Advances, exceed the Credit
Limit; (ii) no Advances shall be made in the event Simon James,
Charles Gillman, and Mark Stolper or any individuals in replacement
of, or in addition to, Messrs. James, Gillman and Stolper who are
approved in writing by Lender (in Lender’s discretion without
any obligation to provide an explanation for the exercise of that
discretion) are the only members of the board of directors of
Borrower (a “Board Member Event”); (iii) no Advances
shall be made without the unanimous approval of the members of the
Board of Directors of the Borrower; (iv) no Advances shall be
made in the event of the discovery of a material liability not
disclosed in the Company’s From 10Q or 10K filings with the
Securities and Exchange Commission; and (v) no Advances shall be
made without the prior written consent of Lender (which Lender may
deny in its sole discretion without any obligation to provide an
explanation for its exercise of its discretion) if Borrower or any
of its officers, directors, employees, shareholders or affiliates
become a party to a legal cause of action (whether it be local,
state, federal, administrative or otherwise) related to the
Borrower and/or its affiliates. Borrower shall notify the Lender of
the cause of action within three (3) business days of its knowledge
of the cause of action, such notice to include reasonably
sufficient detail to explain the cause of action (a “Cause of
Action”). Requests for Advances may be made orally or in
writing by such officer of Borrower authorized by it to request
such Advances. Until such time as Lender may be notified otherwise,
Borrower hereby authorizes its president to request Advances.
Lender may refuse to make any requested Advance if an event of
default has occurred and is continuing hereunder either at the time
the request is given or the date the Advance is to be made, or if
an event has occurred or condition exists which, with the giving of
notice or passing of time or both, would constitute an event of
default hereunder as of such dates. The funds from the
Advances will be used by the Borrower for acquisitions and
operating expenses in connection with the operations of the
Borrower.
3. INTEREST. All
Advances made pursuant to this Agreement shall bear simple interest
from the date each Advance is made until the Advance is paid in
full at a rate per annum during each
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quarterly interest period equal to the rate per
annum of the London interbank offered rate (LIBOR) for
three-month deposits (as published in the Dow Jones Markets
Telerate Page or such other commercially accepted publication),
determined as of 11:00 a.m. London time on the second business
day prior to the start of such quarterly interest period (the
“Principal Interest”). All sums up to the
Credit Limit which have not been advanced shall bear interest
until such time as such funds are Advanced to Borrower at a rate
of one percent (1%) per annum compounded annually on the first
business day of each calendar year (the “Commitment
Interest”). Borrower may, at any time reduce the
total amount of the Letter of Credit (as hereafter provided) by
written notice to the Lender and the issuer thereof and no
Commitment Interest or other fee or charge shall be due or
payable by Borrower in respect of the amount by which the Letter
of Credit is so reduced.
4. REPAYMENT.
Borrower shall pay Principal Interest accrued as the first day of
each calendar quarter in arrears on the principal balance of
Advances outstanding during the prior quarter commencing on April
__, 2008 and continuing thereafter with such payments of Principal
Interest being due on the fifth business day of each July, October,
January and April thereafter. The entire unpaid principal balance,
together with any accrued interest and other unpaid charges or fees
hereunder, shall be due and payable on the Maturity Date. All
payments shall be made to Lender at such place as Lender may, from
time to time, designate. All payments received hereunder shall be
applied, first, to any costs or expenses incurred by Lender in
collecting such payment or to any other unpaid charges or expenses
due hereunder; second, to accrued interest; and third, to
principal. Borrower may prepay principal at any time without
penalty. Any Advances which are prepaid shall bear Commitment
Interest until the Maturity Date or until again Advanced
(“Readvanced Funds”), at which point the Readvanced
Funds shall bear Principal Interest from the date of Readvance
until paid in full.
5. REPRESENTATIONS
AND WARRANTIES. In order to induce Lender to enter into this
Agreement and to make the advances provided for herein, Borrower
represents and warrants to Lender as follows:
a. Borrower is a duly
organized, validly existing, and in good standing under the laws of
the State of Delaware with the power to own its assets and to
transact business in states where its business is conducted.
b. Borrower has the
authority and power to execute and deliver any document required
hereunder and to perform any condition or obligation imposed under
the terms of such documents.
c. The execution,
delivery and performance of this Agreement and each document
incident hereto will not violate any provision of any applicable
law, regulation, order, judgment, decree, article of incorporation,
by-law, indenture, contract, agreement, or other undertaking to
which Borrower is a party, or which purports to be binding on
Borrower or its assets and will not result in the creation or
imposition of a lien on any of its assets.
d. There is no
action, suit, investigation, or proceeding pending or, to the
knowledge of Borrower, threatened, against or affecting Borrower or
any of its assets which, if adversely determined, would have a
material adverse affect on the financial condition of Borrower or
the operation of its business.
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6. EVENTS OF
DEFAULT. An event of default will occur if any of the following
events occurs:
a.
Failure to pay any principal or interest
hereunder within ten (10) days after the same becomes due.
b.
Any representation or warranty made by Borrower
in this Agreement or in connection with any borrowing or request
for an Advance hereunder, or in any certificate, financial
statement, or other statement furnished by Borrower to Lender is
untrue in any material respect at the time when made.
c.
Default by Borrower in the observance or
performance of any other covenant or agreement contained in this
Agreement, other than a default constituting a separate and
distinct event of default under this Paragraph 6.
d.
Filing by Borrower of a voluntary petition in
bankruptcy seeking reorganization, arrangement or readjustment
of debts, or any other relief under the Bankruptcy Code as
amended or under any other insolvency act or law, state or
federal, now or hereafter existing.
e.
Filing of an involuntary petition against
Borrower in bankruptcy seeking reorganization, arrangement or
readjustment of debts, or any other relief under the Bankruptcy
Code as amended, or under any other insolvency act or law, state
or federal, now or hereafter existing, and the continuance
thereof for sixty (60) days undismissed, unbonded, or
undischarged.
7. REMEDIES. Upon the
occurrence of an event of default as defined above, Lender may
declare the entire unpaid principal balance, together with accrued
interest thereon, to be immediately due and payable without
presentment, demand, protest, or other notice of any kind. Upon an
event of default, including failure to pay on the Maturity Date,
Lender, at its option, may also, if permitted under applicable law,
increase the interest rate on Advanced funds and any interest due
thereon to a default rate e
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