EXHIBIT 10.1
SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Second Amendment, dated as of May 21, 1998, is made by and
between MEDAMICUS, INC., a Minnesota corporation (the "Borrower"), and NORWEST
CREDIT, INC., a Minnesota corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of March 5, 1996, as amended by First Amendment to Credit and
Security Agreement dated as of June 24, 1997 (as amended, the "Credit
Agreement"). Capitalized terms used in these recitals have the meanings given to
them in the Credit Agreement unless otherwise specified.
The Borrower has requested that certain amendments be made to the
Credit Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Second Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended by adding or amending, as the case may be, the
following definitions:
"'Second Amendment' means that certain Second Amendment to Credit
and Security Agreement, dated as of May 21, 1998."
2. Book Net Worth Covenant. Section 6.7 of the Credit Agreement is
hereby amended in its entirety and replaced with the following:
"Section 6.7 Minimum Book Net Worth. The Borrower will at all times
maintain during each period described below, its Book Net Worth (on an
unconsolidated, Borrower-only basis), determined as of the end of each
month, of at least the amount set forth opposite such period:
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PERIOD MINIMUM BOOK NET WORTH
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April 1, 1998 through
June 30, 1998 $2,400,000
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3. New Compliance Certificate. Attached hereto as Exhibit A is the
revised form of Compliance Certificate.
4. No Other Changes. Except as explicitly amended by this Second
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.
5. Conditions Precedent. This Second Amendment shall be effective
when the Lender shall have received an executed original hereof, together with
such other matters as the Lender may require, each in substance and form
acceptable to the Lender in its sole discretion.
6. Representations and Warranties. The Borrower hereby represents
and warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to execute
this Second Amendment and to perform all of its obligations hereunder, and
this Second Amendment has been duly executed and delivered by the Borrower
and constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms.
(b) The execution, delivery and performance by the Borrower of this
Second Amendment have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or approval by
any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrower, or the articles
of incorporation or by-laws of the Borrower, or (iii) result in a breach
of or constitute a default under any indenture or loan or credit agreement
or any other agreement, lease or instrument to which the Borrower is a
party or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof as though
made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.
7. References. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.
8. No Waiver. The execution of this Second Amendment and acceptance
of any documents related hereto shall not be deemed to be a waiver of any
Default or Event of Default under the Credit Agreement or breach, default or
event of default under any
Security Document or other document held by the Lender, whether or not known to
the Lender and whether or not existing on the date of this Second Amendment.
9. Release. The Borrower hereby absolutely and unconditionally
releases and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Second Amendment, whether such claims, demands
and causes of action are matured or unmatured or known or unknown.
10. Costs and Expenses. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Second Amendment and the documents and instruments incidental hereto. The
Borrower hereby agrees that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrower, make a
loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses.
11. Miscellaneous. This Second Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the date first written above.
NORWEST CREDIT, INC. MEDAMICUS, INC.
By By
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Xxxxx X. Xxxxxxxx Xxxxx Xxxxxxx
Its Assistant Vice President Its President
Exhibit A to Second Amendment to Credit
and Security Agreement
COMPLIANCE CERTIFICATE
To: Xxxxx X. Xxxxxx
Norwest Credit, Inc.
Date: __________________, 199___
Subject: MedAmicus, Inc.
Financial Statements
In accordance with our Credit and Security Agreement dated as of
March 5, 1996, as amended by First Amendment to Credit and Security Agreement
dated as of June 24, 1997 (as amended, the "Credit Agreement"), attached are the
financial statements of MedAmicus, Inc. (the "Borrower") as of and for
________________, 19___ (the "Reporting Date") and the year-to-date period then
ended (the "Current Financials"). All terms used in this certificate have the
meanings given in the Credit Agreement.
I certify that the Current Financials have been prepared in
accordance with GAAP, subject to year-end audit adjustments, and fairly present
the Borrower's financial condition as of the date thereof.
Events of Default. (Check one):
|_| The undersigned does not have knowledge of the occurrence of a
Default or Event of Default under the Credit Agreement.
|_| The undersigned has knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement and attached hereto is a
statement of the facts with respect to thereto.
Financial Covenants. I further hereby certify as follows:
1. Minimum Book Net Worth. Pursuant to Section 6.7 of the Credit
Agreement, as of the Reporting Date, the Borrower's Book Net Worth was
$____________, which |_| satisfies |_| does not satisfy the requirement
that such amount be not less than $_____________ on the Reporting Date as
set forth in table below:
PERIOD MINIMUM BOOK NET WORTH
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April 1, 1998 through
June 30, 1998 $2,400,000
Attached hereto are all relevant facts in reasonable
detail to evidence, and the computations of the financial covenants
referred to above. These computations were made in accordance with
GAAP.
MEDAMICUS, INC.
By
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Its Chief Financial Officer
