EXHIBIT 10.13
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AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (this "Amendment") is
entered into as of December 13, 1996, by and between SEATTLE
FILMWORKS, INC., a Washington corporation ("Original Borrower"),
OptiColor, Inc., a Washington corporation, and SEATTLE FILMWORKS
MANUFACTURING COMPANY, a Washington corporation, (collectively,
"Additional Borrowers," individually an "Additional Borrower"),
and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Original Borrower is currently indebted to Bank
pursuant to the terms and conditions of that certain Loan
Agreement between Original Borrower and Bank dated as of April
10, 1996, as amended from time to time ("Loan Agreement");
WHEREAS, pursuant to Section 6.11 of the Loan Agreement,
Original Borrower has formed Additional Borrowers as wholly-owned
subsidiaries of Original Borrower for the purpose of transferring
all or a major portion of its operating assets to Additional
Borrowers; and
WHEREAS, Original Borrower and Bank have agreed to certain
changes in the terms and conditions set forth in the Loan
Agreement for the purpose of adding Additional Borrowers as
Borrowers under the Loan Agreement, and Original Borrower and
Bank have agreed to amend the Credit Agreement to reflect said
changes; and
WHEREAS, Additional Borrowers have agreed to become parties
to the Loan Agreement and certain other related loan documents as
provided herein.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1.The definition of the term "Borrower" in Section 1 of
the Loan Agreement is hereby deleted in its entirety and replaced
with the following:
"Borrower" means Seattle Film Works, Inc., a Washington
corporation, and any successor thereto ("Original
Borrower"), or OptiColor, Inc., a Washington
corporation ("OptiColor"), and any successor thereto,
or Seattle FilmWorks Manufacturing Company, a
Washington corporation, or any successor thereto ("SF
Manufacturing") (OptiColor and SF Manufacturing are
each referred to individually herein as "Additional
Borrower," and are referred to collectively herein as
"Additional Borrowers"), in the disjunctive, except
that (a) the term "Borrower" shall mean each Original
Borrower and each Additional Borrower, in the
conjunctive, in all places in this Agreement where a
reference to Original Borrower and each Additional
Borrower in the conjunctive is necessary to reflect the
joint and several nature of their obligations
hereunder, as set forth in Section 15 hereof; (b) the
representations and warranties of "Borrower" herein
shall be deemed to be representations and warranties
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which are made by each Original Borrower and each
Additional Borrower, with respect to itself and with
respect to the other Borrowers; (c) for purposes of
Section 6.6 hereof (Financial Covenants), financial
covenant compliance shall be determined on a
consolidated basis; (d) for purposes of Section 6.7
hereof, "Borrower" shall mean "Original Borrower and
each Additional Borrower," as applicable, except that
the financial statements required thereunder shall be
of Original Borrower and Additional Borrowers, on a
consolidated and consolidating basis; (e) the amounts
referred to in the negative covenants set forth in
Section 7.2 (Indebtedness), Section 7.3 (Capital
Expenditures), and Section 7.4 (Guaranties) shall apply
to the aggregate amount of indebtedness, expenditures,
and guaranties, as applicable, of Original Borrower and
Additional Borrowers taken together; and(f) for
purposes of Section 7.8, the restrictions on declaring
and paying dividends apply only to Original Borrower,
so long as each Additional Borrower is a wholly-owned
subsidiary of Original Borrower.
2.Section 6.11 is hereby deleted in its entirety, with no
substitution.
0.Xx correct a typographical error in Section 7.7 and
amend it as necessary to reflect the addition of Additional
Borrowers as Borrower under the Agreement, Section 7.7 is hereby
deleted in its entirety, and replaced with the following:
7.7 Expansion. Acquire capital stock or assets of, or
any interest in, any other entity; provided that
Original Borrower and Additional Borrowers may
invest in capital stock or assets in a similar
line of business (direct to consumer marketing,
digital image processing, sales and distribution
of imaging materials and/or photo finishing),
provided that the aggregate of all such
investments by Original Borrower and Additional
Borrowers may not exceed (when combined with
capital expenditures pursuant to Section 7.3
hereof) the greater of three million dollars
($3,000,000) or the consolidated cash and short-
term investment position, less outstanding bank
debt, as reported by Original Borrower in its most
recent 10-Q or 10-K Report filed by Original
Borrower with the Securities and Exchange
Commission, in any fiscal year, non-cumulative
from year to year. Original Borrower and
Additional Borrowers shall notify Bank of any such
investment in excess of one hundred thousand
dollars ($100,000).
4.The following is hereby added as new Section 15 of the
Agreement:
15.Joint And Several Liability.
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(a)Original Borrower and Additional Borrowers
are referred to collectively in this Section 15 as Co-
Borrowers and individually as a Co-Borrower. Each Co-
Borrower has determined and represents and warrants to
Bank that it is in its best interests and in pursuance
of its legitimate business purposes to induce Bank to
extend credit pursuant to this Agreement. Each Co-
Borrower acknowledges and represents that the
availability of the commitments provided for herein
benefits each Co-Borrower, and advances and other
credit extensions made hereunder will be for and inure
to the benefit of all Co-Borrowers, individually and as
a group, regardless of whether such credit is disbursed
to a joint account of Co-Borrowers or to or for the
account or accounts of any Co-Borrower or fewer than
all of the Co-Borrowers.
(b)Each Co-Borrower has determined and
represents and warrants to Bank that it has, and after
giving effect to the transactions contemplated by this
Agreement will have, assets having a fair saleable
value in excess of its debts, after giving effect to
any rights of contribution or subrogation which may be
available to such Co-Borrower, and each Co-Borrower
has, and will have, access to adequate capital for the
conduct of its business and the ability to pay its
debts as such debts mature.
(c)Each Co-Borrower agrees that it is jointly
and severally liable to Bank for, and each Co-Borrower
agrees to pay to Bank when due the full amount of, all
indebtedness and other obligations now existing or
hereafter arising to Bank under or in connection with
this Agreement and all modifications, extensions and
renewals thereof (such indebtedness and other
obligations are hereinafter referred to as "Co-
Borrowers' obligations hereunder"), including without
limitation all advances disbursed to any Co-Borrower
under the Line of Credit, all interest which accrues
thereon, all fees, costs and expenses chargeable to Co-
Borrowers in connection therewith, all Letters of
Credit issued for the account of any Co-Borrower, all
reimbursement obligations thereunder, all interest
which accrues on any unreimbursed amount of any drafts
paid by Bank thereunder, all fees, costs and expenses
chargeable to Co-Borrowers in connection therewith, all
interest which accrues on any unreimbursed amounts due
to Bank in connection therewith and all fees, costs and
expenses chargeable to Co-Borrowers in connection
therewith. Co-Borrowers' obligations hereunder shall
be in addition to any obligations of any Co-Borrower to
Bank under any other agreement heretofore or hereafter
given to Bank, and this Agreement shall not, unless
expressly herein provided, affect or invalidate any
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such other agreement.
(d)Co-Borrowers' obligations hereunder shall be
reinstated and revived and the rights of Bank shall
continue if and to the extent that for any reason any
amount at any time paid on account of this Agreement is
rescinded or must otherwise be restored by Bank,
whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, all as though such amount
had not been paid.
(e)Each Co-Borrower represents and warrants to
Bank that it has established adequate means of
obtaining from each other Co-Borrower on a continuing
basis financial and other information pertaining to
each other Co-Borrower's financial condition, and each
Co-Borrower agrees to keep adequately informed from
such means of any facts, events or circumstances which
might in any way affect its risks hereunder. Each Co-
Borrower further agrees that Bank shall have no
obligation to disclose to it any information or
material about any other Co-Borrower which is acquired
by Bank in any manner.
(f)Each Co-Borrower waives any right to require
Bank to: (i) proceed against any other Co-Borrower or
any other Person; (ii) proceed against or exhaust any
security held from any other Co-Borrower or any other
Person; (iii) pursue any other remedy in Bank's power;
(iv) apply payments received by Bank from any other Co-
Borrower to any Co-Borrowers' obligations hereunder; or
(v) make any presentments or demands for performance,
or give any notices of nonperformance, protests,
notices of protest or notices of dishonor in connection
with this Agreement.
(g)Each Co-Borrower waives any defense to its
liability under this Agreement based upon or arising by
reason of: (i) any disability or other defense of any
other Co-Borrower or any other Person; (ii) the
cessation or limitation from any cause whatsoever,
other than payment in full, of the liability of any
other Co-Borrower under this Agreement; (iii) any lack
of authority of any officer, director, partner, agent
or other person acting or purporting to act on behalf
of any other Co-Borrower or any defect in the formation
of any other Co-Borrower; (iv) the application by any
other Co-Borrower of the proceeds of the Line of Credit
for purposes other than the purposes intended or
understood by Bank or any Co-Borrower; (v) any act or
omission by Bank which directly or indirectly results
in or aids the discharge of any other Co-Borrower by
operation of law or otherwise, or which in any way
impairs or suspends any rights or remedies of Bank
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against any other Co-Borrower; (vi) any impairment of
the value of any interest in any security for the Line
of Credit, including without limitation, the failure to
obtain or maintain perfection or recordation of any
interest in any such security, the release of any such
security without substitution, and/or the failure to
preserve the value of, or to comply with applicable law
in disposing of, any such security; or (vii) any
modification of any other Co-Borrower's obligations
hereunder, including without limitation the renewal,
extension, acceleration or other change in time for
payment of, or other change in the terms of, the
indebtedness of any other Co-Borrower for the Line of
Credit, including increase or decrease of the rate of
interest thereon. Until the Line of Credit and all
other Co-Borrowers' obligations hereunder shall have
been paid and satisfied in full, no Co-Borrower shall
have any right of subrogation with respect to the
rights of bank against any other Co-Borrower. Each Co-
Borrower waives all rights and defenses it may have
arising out of (A) any election of remedies by Bank,
even though that election of remedies destroys its
rights of subrogation or its rights to proceed against
any other Co-Borrower for reimbursement, or (B) any
loss of rights it may suffer by reason of any rights,
powers or remedies of any other Co-Borrower in
connection with any anti-deficiency laws or any other
laws limiting, qualifying or discharging any Co-
Borrower's indebtedness for the Line of Credit, whether
by operation of Sections 726 or 580d of the Code of
Civil Procedure as from time to time amended, or
otherwise. Until the Line of Credit and Co-Borrowers'
obligations hereunder shall have been paid in full,
each Co-Borrower waives any right to enforce any remedy
which Bank now has or may hereafter have against any
other Co-Borrower or any other Person, and waives any
benefit of, or any right to participate in, any
security now or hereafter held by Bank.
(h)If any of the waivers herein is determined to
be contrary to any applicable law or public policy,
such waiver shall be effective only to the extent
permitted by law.
5.Additional Borrowers hereby ratify and agree, as of the
date hereof, to be bound by and liable under the Loan Agreement
and all of the other Loan Documents to which Original Borrower is
a party or by which Original Borrower is bound as of the date
hereof, jointly and severally as provided in new Section 15 added
to the Loan Agreement hereby, and Additional Borrowers agree to
execute and deliver to Bank such further agreements, documents,
and instruments in furtherance thereof as Bank may require from
time to time.
6.Each Additional Borrower hereby makes, as of the date
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hereof and with respect to itself and Original Borrower, all of
the representations and warranties of Original Borrower set forth
in the Loan Agreement and the other Loan Documents to which
Original Borrower is a party or by which Original Borrower is
bound.
7.Except as specifically provided herein, all terms and
conditions of the Loan Agreement remain in full force and effect,
without waiver or modification. Except as otherwise provided
herein, all terms defined in the Loan Agreement shall have the
same meaning when used in this Amendment. This Amendment and the
Loan Agreement shall be read together, as one document.
8.Original Borrower hereby remakes all representations
and warranties contained in the Loan Agreement and reaffirms all
covenants set forth therein. Original Borrower and Additional
Borrowers hereby certify that as of the date of this Amendment
there exists no Event of Default as defined in the Loan
Agreement, nor any condition, act or event which with the giving
of notice or the passage of time or both would constitute any
such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the day and year first written
above.
XXXXX FARGO BANK,
SEATTLE FILMWORKS, INC. NATIONAL ASSOCIATION
By: /s/ Case X. Xxxxx By: /s/ Xxx Xxxxxxx
Xxx Xxxxxxx
Title: Vice President Vice President
OPTICOLOR, INC. SEATTLE FILMWORKS
MANUFACTURING COMPANY
By: /s/ Xxxxxx Xxxx By: /s/ Xxxx X. Xxxxxxxxxxxxxx
Title: President Title: President
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