EXHIBIT 10.1
FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Fifth Amendment, dated as of June __, 2000, is made by and
between MEDAMICUS, INC., a Minnesota corporation (the "Borrower") and XXXXX
FARGO CREDIT, INC. f/k/a 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 a First Amendment to Credit
and Security Agreement dated as of June 27, 1997, a Second Amendment to Credit
and Security Agreement dated as of May __, 1998, a Third Amendment to Credit and
Security Agreement dated as of June 17, 1998, and a Fourth Amendment to Credit
and Security Agreement dated as of April 29, 1999 (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 Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.
(a) The definition of "Eligible Inventory" is hereby amended as
follows:
(i) Subparagraph (iii) is hereby deleted and replaced with the
following "(iii) Work-in-process Inventory, including subassemblies;
" and
(ii) The following new subparagraph is added immediately
following subparagraph (x): "(xi) Introducers Inventory."
(b) In addition, Section 1.1 of the Credit Agreement is further
amended by adding or amending, as the case may be, the following
definitions:
"'Borrowing Base' means, at any time and subject to change
from time to time in the Lender's sole discretion, the lesser of:
(a) the Maximum Line; or
(b) the sum of
(i) 85% of Eligible Accounts;
(ii) the lesser of
(A) the sum of (1) 25% of Eligible Inventory
plus (2) the lesser of (a) 50% of
Introducers Inventory or (b) $350,000, or
(B) $700,000; and
(iii) the lesser of (A) the Fixed Asset Percentage of
Eligible Fixed Assets or (B) $229,000."
"'Fifth Amendment' means that certain Fifth Amendment to
Credit and Security Agreement, dated as of June __, 2000, by and
between the Borrower and the Lender."
"'Fixed Asset Percentage' means (i) 75% from the date of the
Fifth Amendment to June 30, 2000; and (ii) beginning on August 1,
2000 and on the first day of each month thereafter the percentage
will decrease by 1% each month."
"'Introducers Inventory' means raw materials used in the
assembly of introducer kits, including but not limited to, plastic
and metal trays, syringes and needles, work-in-process introducer
kits consisting of assembled kits needing only sterilization and
shrink-wrapping introducer kits, and shrink-wrapped, sterilized
introducer kits"
"'Maturity Date' means June 30, 2001."
"'Maximum Line' means $2,500,000."
"'Note' means the Borrower's Revolving Note dated as of the
date of the Fifth Amendment, in the form attached as Exhibit A to
the Fifth Amendment."
2. Minimum Interest. Section 2.2(b) of the Credit Agreement is
hereby amended in its entirety and replaced with the following:
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"(b) Reserved."
3. 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
------ ----------------------
------------------------------ ---------------------------
May 31, 2000 through
August 30, 2000 $2,100,000
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September 1, 2000
through
November 30, 2000 $2,400,000
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December 1, 2000 and
thereafter $2,800,000
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4. Compliance Certificate. Exhibit A to the Credit Agreement is
amended to read as Exhibit B attached hereto.
5. No Other Changes. Except as explicitly amended by this 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.
6. Conditions Precedent. This Amendment shall be effective when the
Lender shall have received an executed original hereof, together with each of
the following, each in substance and form acceptable to the Lender in its sole
discretion:
(a) The Note substantially in the form of Exhibit A hereto, duly
executed on behalf of the Borrower.
(b) A Certificate of the Secretary of the Borrower certifying as to
(1) the resolutions of the board of directors of the Borrower approving
the execution and delivery of this Fifth Amendment and the Note, (2) the
fact that the Articles of Incorporation and Bylaws of the Borrower, which
were certified and delivered to the Lender pursuant to the Certificate of
the Borrower's Secretary dated as of March 26, 1996, continue in full
force and effect and have not been amended or otherwise modified except as
set forth in Certificates previously delivered or the Certificate to be
delivered, and (3) certifying that the officers and agents of the Borrower
who have
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been certified to the Lender, pursuant to the Certificate of Authority of
the Borrower's Secretary dated as of March 26, 1996, as being authorized
to sign and to act on behalf of the Borrower continue to be so authorized
or setting forth the sample signatures of each of the officers and agents
of the Borrower authorized to execute and deliver this Fourth Amendment
and all other documents, agreements and certificates on behalf of the
Borrower.
(c) Such other matters as the Lender may require.
7. 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 Amendment and the Note and to perform all of its obligations
hereunder, and this Amendment and the Note have been duly executed and
delivered by the Borrower and constitute 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
Amendment and the Note 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.
8. 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. Upon the
satisfaction of each of the conditions set forth in paragraph 6 hereof, the
definition of "Note" and all references thereto in the Credit Agreement shall be
deemed amended to describe the Note.
9. No Waiver. The execution of this Amendment and acceptance of the
Note and any documents related hereto shall not be deemed to be a waiver of any
Default or
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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 Amendment.
10. 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 Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.
11. 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 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.
12. Miscellaneous. This 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 Fourth
Amendment to be duly executed as of the date first written above.
XXXXX FARGO CREDIT, INC. f/k/a MEDAMICUS, INC.
Norwest Credit, Inc.
By By
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Xxxxx X. Xxxxxx Xxxxx X. Xxxxxxx
Its Assistant Vice President Its President
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