EXHIBIT 10.2
AMENDMENT OF $3,000,000 PROMISSORY NOTE
This AMENDMENT of $3,000,000 PROMISSORY NOTE made and entered into
effective this 30th day of December, 1998, by and between Nortech Systems
Incorporated and Nortech Medical Services, Inc. ("BORROWER") and Norwest Bank
Minnesota South, N.A., formerly known as Norwest Bank North Country, N.A., a
national banking association ("LENDER").
RECITALS:
1. Borrower executed and delivered that certain Commercial/Agricultural
Revolving Note Variable Rate dated December 31, 1997 in the original principal
amount of $3,000,000.00 (the "$3,000,000 Note").
2. The parties desire to enter into this modification agreement to amend
and modify the Principal Amount/Credit Limit and Maturity Date under the
$3,000,000 Note.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The Principal Amount/Credit Limit under the $3,000,000 Note shall be
and hereby is amended to be $5,000,000.00.
2. The Maturity Date under the $3,000,000 Note shall be and hereby is
amended to be the date of January 1, 2000, and all outstanding principal and
accrued interest shall be due and payable in full on such date.
Dated: December 30, 1998 NORWEST BANK MINNESOTA SOUTH, N.A.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Its Sr. Vice President
-----------------------------------
Dated: December 30, 1998 NORTECH SYSTEMS INCORPORATED
By: /s/ X. X. Xxxxxxx
-----------------------------------
Its Sr. V.P. Corporate Finance/Treasurer
-----------------------------------
Dated: December 30, 1998 NORTECH MEDICAL SERVICES, INC.
By: /s/ X. X. Xxxxxxx
-----------------------------------
Its Sr. V.P. Corporate Finance/Treasurer
-----------------------------------
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FIFTH AMENDMENT TO LOAN AGREEMENT
This Fifth Amendment is made and entered into as of December 30, 1998, by
and among Norwest Bank Minnesota South, N.A., a national banking association,
formerly known as Norwest Bank North Country, N.A. and as Northern National Bank
("Lender"), Nortech Systems Incorporated, a Minnesota corporation ("Systems"),
and Nortech Medical Services, Inc., a Minnesota corporation ("Medical"; which
together with Systems shall hereinafter be referred to collectively as
"Borrower").
RECITALS
A. Borrower and Lender are parties to a Commercial Loan Agreement dated
December 29, 1995 (the "Original Loan Agreement"), in connection with which
Lender extended certain financial accommodations to Borrower.
B. The Original Loan Agreement was amended pursuant to an Amendment to
Loan Agreement dated November 4, 1996, by and between Systems and Lender (the
"First Amendment"), a Second Amendment to Loan Agreement, dated as of December
31, 1996, by and among Systems, Medical and Lender (the "Second Amendment"), a
Third Amendment to Loan Agreement, dated as of December 31, 1997, by and among
Systems, Medical and Lender (the "Third Amendment"), and a Fourth Amendment to
Loan Agreement dated as of September 29, 1998, by and among Systems Medical and
Lender (the "Fourth Amendment") which together with the Original Loan Agreement,
the First Amendment, the Second Amendment, and the Third Amendment shall
hereinafter be referred to collectively as the "Loan Agreement").
C. By this Fifth Amendment, Borrower and Lender wish to amend certain
terms of the Loan Agreement.
NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Borrower, Lender, and Systems agree as follows:
1. Schedule A to the Loan Agreement is amended to read as follows:
TYPE INTEREST PRINCIPAL FUNDING/ MATURITY CUSTOMER LOAN
OF RATE AMOUNT/ AGREEMENT DATE NUMBER NUMBER
LOAN CREDIT DATE
LIMIT
--------------------------------------------------------------------------------
Revolving Variable $5,000,000 12/31/97 01/01/00 237945
Term Variable $ 510,000 12/29/95 01/01/01 237945 9003
Term Variable $ 640,000 12/29/95 01/01/01 237945 9004
Term Variable $ 500,000 12/31/97 01/01/00 237945 9005
Term Variable $1,500,000 12/31/97 01/01/00 237945
Term Fixed $ 300,000 09/24/93 05/01/99 237945 9001
Draw Variable $ 400,000 11/25/96 01/01/00 237945 9006
Term Variable $ 125,000 03/18/93 04/01/00 237945 9002
2. Paragraph I.3 of the Financial Covenants Schedule of the Loan
Agreement is amended to read as follows:
"DEBT TO WORTH. A ratio of total liabilities to tangible net worth of
not greater than 2.5:1.0"
3. Paragraph III of the Financial Covenants Schedule of the Loan
Agreement shall be amended to read as follows:
"CASH FLOW COVERAGE; Borrower shall maintain a minimum
cash-flow-to-debt service coverage ratio of 1.5:1.0. The ratio shall
be calculated on a four quarter trailing basis. The cash flow ratio
shall be calculated as net income after taxes + interest expense +
depreciation/amortization expense + non-cash tax expense - dividends
divided by all principal + interest payable during the time period
being measured."
4. Schedule B of the Loan Agreement is amended to add the following Loan
Documents:
"Fifth Amendment to Loan Agreement
Amendment of Guaranty
Second Amendment to Mortgage
Amendment of $3,000,000 Promissory Note
Amendment of $1,500,000 Promissory Note"
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5. Schedule B of the Loan Agreement is amended to delete the following
Loan Document:
$1,500,000 Commercial/Agricultural Revolving Note - Variable Rate
Loan Number 533909"
6. All the terms, covenants and conditions of the Loan Agreement remain
in full force and effect except as specifically modified herein.
IN WITNESS WHEREOF, the parties have executed this Fifth Amendment to Loan
Agreement as of the day and year first above written.
NORWEST BANK MINNESOTA SOUTH,
N.A., A NATIONAL BANKING ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Its: Sr. Vice President
----------------------------
NORTECH SYSTEMS INCORPORATED, A
MINNESOTA CORPORATION
By: /s/ X. X. Xxxxxxx
--------------------------------
Its: Sr. V.P. Finance/Treasurer
----------------------------
NORTECH MEDICAL SERVICES, INC.
A MINNESOTA CORPORATION
By: /s/ X. X. Xxxxxxx
--------------------------------
Its: Sr. V.P. Finance/Treasurer
----------------------------
3
U.S. Bank #000034
SECOND AMENDMENT TO MORTGAGE
This Second Amendment to Mortgage is made and entered into as of December
30, 1998, by and between Nortech Systems Incorporated, a Minnesota corporation
("Mortgagor"), and Norwest Bank Minnesota South, N.A., formerly known as Norwest
Bank North Country, N.A. and as Northern National Bank, a national banking
association, ("Mortgagee").
R E C I T A L S
A. Mortgagor and Mortgagee are parties to a Combination Mortgage,
Security Agreement and Fixture Financing Statement dated December 29, 1995, and
recorded on January 3, 1996, in the Office of the County Recorder for the County
of Xxxxxx, Minnesota, as Document No. 323918, as amended by Amendment to
Mortgage dated December 31, 1996, and recorded on __________, in the Office of
the County Recorder for the County of Xxxxxx, Minnesota, as Document
No. ____________(the "Mortgage").
B. The Mortgage encumbers the real property legally described on EXHIBIT
A attached hereto.
C. The Mortgage secures, INTER ALIA, the repayment of indebtedness
evidenced by certain promissory notes payable to the order of Mortgagee.
D. Mortgagor has requested that Mortgagee increase the original principal
amount from $3,000,000 to $5,000,000 of that certain Commercial/Agricultural
Revolving Note-Variable Rate dated December 31, 1997 by Mortgagor payable to
the order of Mortgagee (the "$5,000,000 Note") and extend the time within which
to repay the $5,000,000 Note from June 30, 1999 to January 1, 2000.
E. Mortgagor and Mortgagee desire to amend the Mortgage to conform to and
secure repayment of the $5,000,000 Note.
NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Mortgagor hereby certifies and acknowledges that no Event of Default
has occurred or is continuing under the Mortgage and no event has
occurred which with the giving of notice or the passage of time would
mature into such an Event of Default.
2. Mortgagor restates and reaffirms all of the representations and
warranties contained in the Mortgage the same as if they were made on
the date hereof and were fully set forth herein.
3. All the terms, covenants and conditions of the Mortgage remain in full
force and effect except as specifically modified herein.
4. All references in the Mortgage to the Notes shall be deemed to include
the $5,000,000 Note and the Mortgage shall secure, INTER ALIA, the
repayment of all indebtedness evidenced thereby whether payable to
Mortgagee by Mortgagor or by Nortech Medical Services, Inc., a
Minnesota corporation.
IN WITNESS WHEREOF, the parties have caused this Second Amendment to
Mortgage to be duly executed as of the day and year first above written.
NORTECH SYSTEMS INCORPORATED
By: /s/ X. X. Xxxxxxx
---------------------------------------
Its Sr. V.P. Corporate Finance/Treasurer
------------------------------------
NORWEST BANK MINNESOTA SOUTH, N.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Its Sr. Vice President
----------------------------------
STATE OF MINNESOTA )
)ss.
COUNTY OF BELTRAMI )
The foregoing instrument was acknowledged before me this 30th day of
December, 1998, by Xxxxx Xxxxxxx as Sr. V.P./Treasurer of Nortech Systems
Incorporated, a Minnesota corporation, on behalf of such corporation.
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------
[Notary Seal] Notary Public
2
STATE OF MINNESOTA )
)ss.
COUNTY OF BELTRAMI )
The foregoing instrument was acknowledged before me this 30th day of
December, 1998, by Xxxxxxx X. Xxxxx as Sr. V.P. of Norwest Bank Minnesota South,
N.A., a national banking association, on behalf of the bank.
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------
[Notary Seal] Notary Public
This instrument was drafted by:
Robins, Kaplan, Xxxxxx & Xxxxxx L.L.P.
0000 XxXxxxx Xxxxx
000 XxXxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
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U.S. BANK #000083
AMENDMENT OF $1,500,000 PROMISSORY NOTE
This Amendment of $1,500,000 Promissory Note made and entered into
effective this 30th day of December, 1998, by and between Nortech Systems
Incorporated and Nortech Medical Services, Inc. ("BORROWER") and Norwest Bank
Minnesota South, N.A., formerly known as Norwest Bank North Country, N.A., a
national banking association ("LENDER").
RECITALS:
1. Borrower executed and delivered that certain Variable Rate Commercial
Promissory Note dated December 31, 1997 in the original principal amount of
$1,500,000.00, payable to the order of Lender (the "$1,500,000 Note").
2. The parties desire to enter into this modification agreement to amend
and modify the Maturity Date under the $1,500,000 Note.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
The Maturity Date under the $1,500,000 Note shall be and hereby is amended
to be the date of January 1, 2000, and all outstanding principal and accrued
interest shall be due and payable in full on such date.
Dated: December 30, 1998 NORWEST BANK MINNESOTA SOUTH, N.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Its Sr. Vice President
----------------------------------
Dated: December 30, 1998 NORTECH SYSTEMS INCORPORATED
By: /s/ X. X. Xxxxxxx
----------------------------------------
Its Sr. V.P. Corporate Finance/Treasurer
-------------------------------------
Dated: December 30, 1998 NORTECH MEDICAL SERVICES, INC.
By: /s/ X. X. Xxxxxxx
----------------------------------------
Its Sr. V.P. Corporate Finance/Treasurer
-------------------------------------
CONSENT
The undersigned being Guarantor of the above-referenced $1,500,000 Note
pursuant to that certain Commercial Continuing Guaranty (Limited) dated December
31, 1997 in favor of Norwest Bank Minnesota South, N.A., formerly known as
Norwest Bank North Country, N.A., does hereby consent to the foregoing Amendment
of $1,500,000 Note.
--------------------------------
Xxxxx Xxxxx
CONSENT
The undersigned being Guarantor of the above-referenced $1,500,000 Note
pursuant to that certain Commercial Continuing Guaranty (Limited) dated December
31, 1997 in favor of Norwest Bank Minnesota South, N.A., formerly known as
Norwest Bank North Country, N.A., does hereby consent to the foregoing Amendment
of $1,500,000 Note.
Xxxxxx Xxxxxx, Inc.
By:
--------------------------
Xxxxx Xxxxx, Chairman
2
AMENDMENT OF GUARANTY
Norwest Bank Minnesota South, N.A., a national banking association,
formerly known as Norwest Bank North Country, N.A. and as Northern National Bank
(the "Bank") hereby amends that certain Commercial Continuing Guaranty (Limited)
of Xxxxx Xxxxx ("Guarantor") to the Bank dated December 31, 1997, guaranteeing
the obligations of Nortech Systems, Incorporated (the "Guaranty") to release
from the obligations of the Guarantor that certain Commercial/Agricultural
Revolving Note-Variable Rate dated December 31, 1997 by Nortech Systems
Incorporated and Nortech Medical Services, Inc. payable to the order of the Bank
in the original principal amount of $1,500,000; PROVIDED, HOWEVER, that such
release shall not effect Guarantor's obligation for that certain Variable Rate
Commercial Promissory Note dated December 31, 1997 by Nortech Systems
Incorporated payable to the order of the Bank in the original principal amount
of $1,500,000.
Dated this 30th day of December, 1998.
NORWEST BANK MINNESOTA
SOUTH, N.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Its: Sr. Vice President
-------------------------
