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Exhibit: 10.30FT
AMENDMENT TO
FINANCING AGREEMENT
This Amendment to Financing Agreement, dated as of July 25, 1996
("Amendment"), is made by and between XYZ GROUP, INC., a/k/a XYZ DISTRIBUTORS, a
Wisconsin corporation (the "Borrower") and REPUBLIC ACCEPTANCE CORPORATION, a
Minnesota corporation ("Republic").
WHEREAS, the Borrower and Republic have entered into a Financing
Agreement dated as of August 1, 1995 (the "Agreement"); and
WHEREAS, the obligations and indebtedness of the Borrower to Republic
under the Agreement are secured, inter alia, by a Security Agreement dated as of
August 1, 1995 between the Borrower and Republic (the "Security Agreement"); and
WHEREAS, Republic and the Borrower desire to amend the Agreement in
order to amend certain of the provisions therein, upon the terms and conditions
set forth herein,
NOW THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree to be bound as follows:
Section 1. Capitalized Terms. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the
Agreement.
Section 2. Amendments.
2.01 Section I of the Agreement is hereby amended to read as
follows:
At our request, you in your sole discretion may
advance to us (a) up to seventy percent (70%) for the period
of August 1 through January 31 for each calendar year and up
to eighty percent (80%) for the period of February 1 through
July 31 for each calendar year (or any greater or lesser
percentage, at your absolute discretion) of the net amount of
accounts which are listed on current schedules provided by us
which are deemed eligible for advance by you ("Eligible
Accounts," which term shall exclude, without limitation, all
accounts derived from consignment sales), provided that the
maximum aggregate amount advanced against Eligible Accounts
and outstanding from time to time shall not exceed $7,000,000;
plus (b) up to forty-five percent (45%) for the period of
August 1 through January 31 for each calendar year and up to
fifty percent (50%) for the period of February 1 through July
31 for each calendar year (or any greater or lesser
percentage, at your absolute
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discretion) of inventory which is listed on a current schedule
provided by us which is deemed eligible for advance by you
("Eligible Inventory") consisting of "Stock Inventory" (as
such term is defined in the glossary attached hereto as
Exhibit A), provided that the maximum aggregate amount
advanced against Eligible Inventory consisting of Stock
Inventory and outstanding from time to time shall not exceed
$2,800,000; plus (c) up to twenty percent (20%) (or any
greater or lesser percentage, at your absolute discretion) of
Eligible Inventory consisting of "Returned Inventory" (as such
term is defined in the glossary attached hereto as Exhibit A,
provided that the maximum aggregate amount advanced against
Eligible Inventory consisting of Returned Inventory and
outstanding from time to time shall not exceed $150,000; plus
(d) up to twenty percent (20%) (or any greater or lesser
percentage, at your absolute discretion) of Eligible Inventory
or Eligible Accounts consisting of "On Account Collateral" (as
such term is defined in the glossary attached hereto as
Exhibit A), provided that the maximum aggregate amount
advanced against On Account Collateral and outstanding from
time to time shall not exceed $300,000; provided, however,
that notwithstanding the preceding clauses (b) through (d),
the maximum aggregate amount advanced against all Eligible
Inventory and outstanding from time to time shall not exceed
$2,800,000, and provided further, that notwithstanding the
preceding clauses (a) through (d), the maximum aggregate
amount advanced against all Eligible Accounts and all Eligible
Inventory and outstanding from time to time shall not exceed
$7,000,000. Loans for additional sums requested by us may be
made at your sole discretion based upon your valuation of
other collateral or other factors. All amounts advanced shall
be due on demand. Nothing set forth in this Financing
Agreement (this "Agreement"), the Security Agreement or any
other agreement between you and us shall in any way limit your
discretion to make or not make loans to us hereunder or your
right at any time to demand payment of our obligations to you
hereunder. In furtherance of and not in limitation of the
foregoing, we understand that you may from time to time impose
reserves against Eligible Accounts and/or Eligible Inventory,
which reserves will have the effect of reducing the percentage
rates set forth above.
2.02 Section II (A) of the Agreement is hereby amended to read
as follows:
We agree to pay interest on the net balance owed to
you at the close of each day computed on the basis of actual
days elapsed and a year of 360 days which is equal to the
reference rate of interest publicly announced from time to
time by First Bank National Association (the
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"Reference Rate") plus an additional amount (the "Increment")
of three and one-quarter percent (3.25%). If our audited
financial statements for our 1996 fiscal years show a net
profit after distributions permitted by Section VI (i) of this
Agreement, of more than $500,000, the foregoing interest rate
will be reduced to the Reference Rate plus an increment of two
and three-quarters percent (2.75%), effective on the first
calendar day of the month following your receipt of such
financial statements. If we are in material default or breach
of any provision of this Agreement or any other agreement
between us, we agree to pay interest on the net balance owed
to you at the close of each day computed on the basis of
actual days elapsed and a year of 360 days which is equal to
the Reference Rate plus an Increment which is double the
amount of the Increment which would otherwise then be in
effect. As used in this clause (a), the term "material"
conclusively includes without limitation, any default or
breach which exists for a period of more than ten days,
provided, however, that the ten-day period shall not imply
that a material default or breach shall not affect the demand,
uncommitted nature of our borrowings from you, and we
understand, acknowledge and agree that you may at any time
cease making such borrowings available to us and that you may
at any time demand payment in full of all of the liabilities,
obligations and indebtedness we owe you.
2.03 Section II (B) of the Agreement is hereby
amended to read as follows:
There will be a minimum interest charge net to you of
$15,000 per month (the "Minimum Charge") for the first
thirty-six (36) months from the date of the Agreement (August
1, 1995), until such time that this Agreement is terminated.
We further agree that if we give notice to you of the
termination of this Agreement under Section VIII hereof at any
time prior to thirty-six (36) months from the date of this
Agreement, we will pay to you at the time of termination a
prepayment charge in an amount equal to the Minimum Charge for
each month remaining from the time or termination until the
date thirty-six (36) months after the date of this Agreement
as additional compensation for your costs of entering into
this Agreement, provided, however, that if such termination
occurs after the first twelve (12) months after the date of
this Agreement, and such termination results from any of your
affiliates providing us with a credit facility replacing the
credit governed by this Agreement, no such prepayment charge
will be due.
Section 3. Conditions to Effectiveness of Amendment. This Amendment
shall not become effective until, and shall become effective as the date first
written above when, each of the following provisions shall have been fulfilled:
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3.01 Republic shall have received this Amendment, duly
executed by the Borrower;
3.02 Republic shall have received a copy of the resolutions of
the Board of Directors of the Borrower ratifying and authorizing the execution,
delivery and performance of this Amendment, certified as true and accurate by
the Borrower's Secretary or Assistant Secretary;
3.03 Republic shall have received a consent to the execution
and delivery of this Amendment by the Borrower and reaffirmation of related
undertakings in the form of Exhibit A hereto, duly executed by each of Xxxx X.
Xxxxxxxx; and
3.04 Republic shall have received such other documents as
Republic may reasonably request.
Section 4. Acknowledgments. The Borrower acknowledges and agrees that
its obligations to Republic under the Agreement and exist and are owing without
offset, defense or counterclaim assertable by the Borrower against Republic. The
Borrower further acknowledges and agrees that its obligations to Republic under
the Agreement, as amended, constitute "Obligations" within the meaning of the
Security Agreement and are secured by the Security Agreement, as amended.
Section 5. Effect of Amendments; Representations and Warranties; No
Waiver. Republic and the Borrower agree that after this Amendment becomes
effective, the Agreement, as hereby amended, shall remain in full force and
effect. The Borrower warrants and represents that on and as of the date hereof
and after giving effect to this Amendment, (i) all of the representations and
warranties contained in the Agreement are correct and complete, as of the date
hereof, and (ii) there will exist no Event of Default under the Security
Agreement on such date. The Borrower represents and warrants that the Borrower
has all power and legal right and authority to enter into this Amendment.
Section 6. Incorporation of Agreement and Other Loan Documents by
Reference; Ratification of Loan Documents Except as expressly modified under
this Amendment, all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of
the Borrower under the Agreement, the Security Agreement, and any and all other
documents and agreements entered into with respect to the obligations under the
Agreement (collectively, the "Loan Documents") are incorporated herein by
reference and are hereby ratified and affirmed in all respects by the Borrower.
All references in the Agreement to "this Agreement," "herein," "hereof," and
similar references, and all
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references in the other Loan Documents to the "Agreement," shall be deemed to
refer to the Agreement, as amended by this Amendment.
Section 7. Merger and Integration, Superseding Effect. This Amendment,
from and after the date hereof, embodies the entire agreement and understanding
between the parties hereto.
Section 8. Governing Law. This Amendment is governed by the laws of the
State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Accounts Receivable Financing Agreement to be executed as of the date and year
first above written.
XYZ GROUP, INC., a/k/a XYZ
DISTRIBUTORS
By /s/ Xxxx X. Xxxxxxxx
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Its President
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REPUBLIC ACCEPTANCE CORPORATION
By /s/ Xxxxxxx Xxxxxx
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Its Regional Manager
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EXHIBIT A TO AMENDMENT TO ACCOUNTS
RECEIVABLE FINANCING AGREEMENT
July 25, 1996
Republic Acceptance Corporation
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Re: Consent to Amendment to Financing Agreement dated as of July __, 1996
(the "Amendment") by and between Republic Acceptance Corporation
("Republic") and XYZ Group, Inc., a/k/a XYZ Distributors (the
"Company") and Reaffirmation of related Undertakings
Ladies and Gentlemen:
This will confirm that:
a) The undersigned hereby consents to the terms of the Amendment and to
the execution and delivery of the Amendment by the Company; and
b) The obligations and indebtedness of the Company under the Financing
Agreement dated August 1, 1995 between Republic and the Company, as amended by
the Amendment (collectively, the "Financing Agreement"), constitute the
obligations and indebtedness of the Company within the meaning of, and are
guaranteed pursuant to, that Guaranty of Payment for Existing and/or Future
Indebtedness of the undersigned dated August 1, 1995 (the "Guaranty"), and all
of the terms, covenants and conditions of the Guaranty remain in full force and
effect.
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx