EXHIBIT 4.2
EIGHTH AMENDMENT TO
TERM LOAN AGREEMENT
This Amendment is made as of this 16th day of April, 1997, by
and between INTERRA FINANCIAL INCORPORATED, a Delaware
corporation, formerly known as Inter-Regional Financial Group,
Inc. (the "Borrower") and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association (the "Bank").
The Borrower and the Bank have entered into a Term Loan
Agreement dated as of October 16, 1992, as amended by a First
Amendment to Term Loan Agreement dated as of March 12, 1993, a
Second Amendment to Term Loan Agreement dated as of June 23,
1993, a Third Amendment to Term Loan Agreement dated as of
November 30, 1993, a Fourth Amendment to Term Loan Agreement
dated as of June 27, 1994, a Fifth Amendment to Term Loan
Agreement dated as of September 30, 1994, a Sixth Amendment to
Term Loan Agreement dated as of June 29, 1995 and a Seventh
Amendment to Term Loan Agreement dated as of March 15, 1996 (as
amended, the "Loan Agreement"), pursuant to which the Bank made
the Term Loan to the Borrower subject to the terms and conditions
set forth in the Loan Agreement.
The Term Loan made by the Bank to the Borrower under the Loan
Agreement is evidenced by the Term Note of the Borrower dated
October 16, 1992, payable to the order of the Bank in the
original principal of $2,000,000 (the "Term Note").
The Borrower has requested that the Bank amend certain
provisions of the Loan Agreement and the Bank is willing to do so
pursuant to the terms and conditions set forth in this Agreement.
ACCORDINGLY, the parties hereto agree as follows:
1. All capitalized terms used in this Amendment, unless
specifically defined herein, shall have the meanings given to
such terms in the Loan Agreement.
2. The Exhibit B referred to in Section 4.04 of the Credit
Agreement is hereby replaced with the Exhibit C attached to this
Amendment, which new Exhibit C reflects that (i) Interra Lending
Services Inc. is a Subsidiary of the Borrower, (ii) Regional
Operations Group, Inc. has changed its name to Interra Clearing
Services, Inc. and (iii) IFG Asset Management Services, Inc. has
changed its name to Interra Advisory Services Inc.
3. The Loan Agreement is hereby amended by adding the
following new Section 5.10 immediately following existing Section
5.09:
"Section 5.10 Policy and Procedures for Lending by
Interra Lending Services. Attached as Exhibit A to the
Eighth Amendment to Term Loan Agreement dated as of April
16, 1997 are the Policy and Procedures which have been
established for Interra Lending Services Inc. ("ILS"). The
Borrower covenants and agrees that it will promptly deliver
to the Bank any amendment, supplement or restatement to such
Policy and Procedures which is adopted after the date of the
Eighth Amendment to Credit Agreement."
4. Section 6.03(c) of the Loan Agreement is hereby amended
by deleting existing Section 6.03(c) in its entirety and by
substituting therefor the following new Section 6.03(c):
"(c) in addition to any guaranties set forth in
Exhibit D,
(i) a guaranty by the Borrower of indebtedness of
Interra Lending Services Inc. ("ILS") to The Chase
Manhattan Bank ("Chase") pursuant to the guaranty (the
"Chase Guaranty") in the form of Exhibit B attached to
the Eighth Amendment to Term Loan Agreement dated as of
April 16, 1997, between the Borrower, the Bank;
provided, however, that the Bank's consent to the Chase
Guaranty is and shall remain effective only for so long
as the Borrower and ILS are in compliance with each of
the following requirements: (A) the credit facility
(and the outstanding indebtedness thereunder) of Chase
to ILS does not exceed at any time $50,000,000 in the
aggregate, (B) all loans made by Chase to ILS are
secured by ILS's pledge of the underlying loans made by
ILS to its customers, including the stock pledged by
customers of ILS to ILS, (C) if the stock pledged by
the customers of ILS to ILS are subject to Rule
144/Rule 145 restrictions, such pledged stock meets
Rule 144/Rule 145 requirements for saleability and are
not subject to a lockup or other restrictions, (D) all
loans made by ILS to its customers meet the following
minimum equity to collateral requirements with respect
to the pledged stock: (1) with respect to each loan at
the time such loan is made, the ratio of the pledged
stock value minus the loan amount to the pledged stock
value is at least 50% and (2) with respect to each loan
at all times after the time such loan is made, the
ratio of the pledged stock value minus the loan amount
to the pledged stock value is at least 35%, and (E) the
Chase Guaranty has not been amended without the prior
written consent of the Bank,
(ii) a guaranty by the Borrower of indebtedness
of ILS to the Bank and/or First Bank National
Association ("First Bank") or a syndicate of financial
institutions of which the Bank and First Bank are
parties (such lender or lenders is herein called the
"Additional ILS Lender") pursuant to a guaranty (the
"Additional Guaranty") which is similar to the Chase
Guaranty; provided, however, that the Bank's consent to
the Additional Guaranty is and shall remain effective
only for so long as the Borrower and ILS are in
compliance with each of the following requirements: (A)
the sum of the outstanding indebtedness of Chase to ILS
and of the Additional ILS Lender to ILS does not exceed
at any time $50,000,000 in the aggregate, (B) all loans
made by the Additional ILS Lender to ILS are secured by
ILS's pledge of the underlying loans made by ILS to its
customers, including the stock pledged by customers of
ILS to ILS, (C) if the stock pledged by the customers
of ILS to ILS are subject to Rule 144/Rule 145
restrictions, such pledged stock meets Rule 144/Rule
145 requirements for saleability and are not subject to
a lockup or other restrictions, (D) all loans made by
ILS to its customers meet the following minimum equity
to collateral requirements with respect to the pledged
stock: (1) with respect to each loan at the time such
loan is made, the ratio of the pledged stock value
minus the loan amount to the pledged stock value is at
least 50% and (2) with respect to each loan at all
times after the time such loan is made, the ratio of
the pledged stock value minus the loan amount to the
pledged stock value is at least 35%, and (E) the
Additional Guaranty has not been amended without the
prior written consent of the Bank, and
(iii) guaranties by the Borrower of indebtedness
(including capitalized lease obligations) and operating
leases of the Subsidiaries (other than the guaranties
permitted by Sections 6.03(c)(i) or (ii), 6.03(d) and
6.03(e)); provided that the sum of the aggregate
principal amount of indebtedness guaranteed plus the
aggregate amount of all payments under operating leases
guaranteed under this clause (iii) shall not exceed
$6,000,000;"
5. All references in the Loan Documents to Inter-Regional
Financial Group, Inc. are hereby amended to be references to
Interra Financial Corporation. All references in the Loan
Documents to Regional Operations Group, Inc. or "ROG" are hereby
amended to be references to Interra Clearing Services Inc. All
references in the Loan Documents to IFG Asset Management
Services, Inc. are hereby amended to be references to Interra
Advisory Services Inc.
6. The Borrower hereby represents and warrants to the Bank
that:
(a) The Borrower has all requisite power and authority,
corporate or otherwise, to conduct its business, to own its
properties and to execute and deliver this Amendment and
perform all of its obligations under the Loan Agreement, as
amended by this Amendment, and under the Term Note.
(b) The execution, delivery and performance by the
Borrower of its obligations under the Loan Agreement, as
amended by this Amendment, and under the Term Note have been
duly authorized by all necessary corporate action on the
part of the Borrower and do not and will not (1) require any
consent or approval of the stockholders of the Borrower, or
any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (2) violate any
provision of any law, rule or regulation (including, without
limitation, Regulation X of the Board of Governors of the
Federal Reserve System) or of any order, writ, injunction or
decree presently in effect having applicability to the
Borrower or of the Certificate of Incorporation or Bylaws of
the Borrower, (3) 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 the Borrower or its
properties may be bound or affected, or (4) result in, or
require, the creation or imposition of any mortgage, deed of
trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower.
(c) The Loan Agreement, as amended by this Amendment,
and the Term Note constitute the legal, valid and binding
obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms.
(d) All of the representations and warranties contained
in Article IV of the Loan Agreement are correct on and as of
the date hereof, except to the extent that such
representations and warranties relate solely to an earlier
date.
7. On the date this Amendment becomes effective, all
references in the Loan Agreement to "this Agreement" and all
references in the Term Note to the "Term Loan Agreement" shall be
deemed to refer to the Loan Agreement as amended by this
Amendment.
8. Except as explicitly amended by this Amendment, all of
the original terms and conditions of the Loan Agreement and the
Term Note shall remain in full force and effect.
9. The Borrower hereby agrees to pay all reasonable fees and
disbursements of counsel to the Bank for the services performed
by such counsel in connection with the preparation of this
Amendment and any documents or instruments incidental thereto.
10. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and
all such counterparts, taken together, shall constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
INTERRA FINANCIAL INCORPORATED
By: Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: Senior Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
Its: Vice President
