EXHIBIT 10.4
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of October 17, 2003
MedAmicus, Inc., a Minnesota corporation (the "Borrower"), located at 15301
Highway 55 West, Plymouth, MN 55447 and M&I Marshall & Ilsley Bank, a Wisconsin
state banking corporation (the "Bank"), located at 651 Nicollet Mall,
Minneapolis, Minnesota 55402-1611, agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1.
DEFINITIONS.
AS USED IN THIS AGREEMENT THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS (SUCH MEANINGS TO BE EQUALLY
APPLICABLE TO SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED):
(A)
"AFFILIATE" MEANS ANY OF THE FOLLOWING
PERSONS:
(I)
ANY DIRECTOR, OFFICER OR EMPLOYEE OF THE
BORROWER;
(II)
ANY PERSON WHO, INDIVIDUALLY OR WITH HIS
IMMEDIATE FAMILY, BENEFICIALLY OWNS OR HOLDS 5% OR MORE OF VOTING EQUITY
INTEREST IN THE BORROWER; OR
(III)
ANY SUBSIDIARY AND ANY COMPANY IN WHICH ANY
PERSON DESCRIBED ABOVE OWNS A 5% OR GREATER EQUITY INTEREST.
(B)
"BIOMEC PURCHASE" MEANS THE PURCHASE BY
MEDACQUISITION, INC. ("MEDACQUISITION"), A WHOLLY-OWNED SUBSIDIARY OF THE
BORROWER, OF CERTAIN ASSETS OF BIOMEC CARDIOVASCULAR INC. AND BIOMEC, INC.
PURSUANT TO AN ASSET PURCHASE AGREEMENT DATED AS OF JULY 21, 2003, AS AMENDED.
(C)
"BORROWING BASE" MEANS AN AMOUNT EQUAL TO
THE SUM OF THE FOLLOWING:
(I)
80% OF THE VALUE OF ELIGIBLE ACCOUNTS
RECEIVABLE; AND
(II)
50% OF THE VALUE OF ELIGIBLE INVENTORY.
(D)
"BORROWING BASE CERTIFICATE" MEANS A
CERTIFICATE SIGNED BY THE CONTROLLER OF THE BORROWER THAT SHOWS AS OF THE DATE
OF DETERMINATION THE VALUE OF ELIGIBLE ACCOUNTS RECEIVABLE AND THE VALUE OF
ELIGIBLE INVENTORY AND IS DELIVERED TO THE BANK PURSUANT TO SECTION 5.1(A).
(E)
"BUSINESS DAY" MEANS ANY DAY OTHER THAN A
SATURDAY, SUNDAY OR A PUBLIC HOLIDAY OR THE EQUIVALENT UNDER THE LAWS OF THE
STATE OF MINNESOTA OR THE UNITED STATES OF AMERICA.
(F)
"DEBT" MEANS (I) INDEBTEDNESS FOR
BORROWED MONEY OR FOR THE DEFERRED PURCHASE PRICE OF PROPERTY OR SERVICES, (II)
OBLIGATIONS AS LESSEE UNDER LEASES THAT HAVE BEEN OR SHOULD BE, IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, RECORDED AS CAPITAL LEASES, (III)
OBLIGATIONS UNDER DIRECT OR INDIRECT GUARANTIES IN RESPECT OF, AND OBLIGATIONS
(CONTINGENT OR OTHERWISE) TO PURCHASE OR OTHERWISE ACQUIRE, OR OTHERWISE TO
ASSURE A CREDITOR AGAINST LOSS IN RESPECT OF, INDEBTEDNESS OR OBLIGATIONS OF
OTHERS OF THE KINDS REFERRED TO IN CLAUSE (I) OR (II) ABOVE, AND (IV)
LIABILITIES IN RESPECT OF UNFUNDED VESTED BENEFITS UNDER PLANS COVERED BY TITLE
IV OF ERISA.
(G)
"EBITDA" MEANS IN ANY PERIOD THE SUM OF THE
BORROWER'S AND MEDACQUISITION'S CONSOLIDATED NET INCOME DURING THAT PERIOD PLUS
INTEREST, DEPRECIATION, AMORTIZATION AND INCOME TAX EXPENSE DURING THAT PERIOD.
(H)
"EVENT OF DEFAULT" MEANS ONE OF THE EVENTS
SPECIFIED IN SECTION 6.1.
2
(I)
"EXCESS CASH FLOW" MEANS, FOR ANY
QUARTER, EBITDA DURING THAT QUARTER LESS (I) THE TOTAL AMOUNT OF PRINCIPAL AND
INTEREST PAID ON DEBT FOR BORROWED MONEY AND CAPITALIZED LEASES DURING THAT
QUARTER, LESS (II) $500,000, LESS (III) CAPITAL EXPENDITURES DURING THAT PERIOD
TO THE EXTENT SUCH EXPENDITURES ARE NOT FINANCED WITH A