THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AND
SECURITY AGREEMENT
This Amendment, dated as of February 26, 1998, Is made by and between
ULTRA PAC, INC., a Minnesota corporation (the "Borrower"), and NORWEST CREDIT,
INC., a Minnesota corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into Second Amended and
Restated Credit and Security Agreement dated as of February 7, 1997, as amended
by letter amendments dated as of August 1, 1997 and December 10, 1997 (as so
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. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:
" 'Equipment Term Advance' has the meaning given in Section 2.10A."
" 'Equipment Term Note' means the Borrower's promissory note, payable
to the order of the Lender in substantially the form of Exhibit A to the Third
Amendment and any note or notes issued in substitution therefor, as the same may
hereafter be amended, supplemented or restated from time to time."
" 'Term Advance' means a Working Capital Term Advance, a Real Estate
Term Advance, a Capex Term Advance or an Equipment Advance, and 'Term Advances'
means the Working Capital Term Advances, the Real Estate Term Advance, the Capex
Term Advances and the Equipment Term Advance."
" 'Term Notes' means the Working Capital Note, the Real Estate Term
Note, the Capex Term Note and the Equipment Term Note collectively, and "Term
Note" means any of such notes individually."
" 'Third Amendment' means the Third Amendment to Second Amended and
Restated Credit and Security Agreement by and between the Lender and the
Borrower dated as of February 26, 1998."
" 'Mellon Loan' means the term loan Mellon U.S. Leasing ("Mellon") made
to the Borrower in or about December, 1994 in an original principal amount of
$2,493,817."
2. Equipment Term Advance. New Section 2.10A is added, reading as
follows:
"Section 2.1OA Equiument Term Advance. The Lender agrees to make a
single advance to the Borrower in the amount of $1,867,157.97 (the 'Equipment
Term Advance') to enable the Borrower to refinance the Mellon Loan. The
Borrower's obligation to pay the Equipment Term Advance shall be evidenced by
the Equipment Term Note and shall be secured by the Personal Property Collateral
as provided in Article III."
3. Payment of Term Notes. Section 2.11 is amended by subsection (d),
reading as follows:
"(d) EQUIPMENT TERM NOTE. The Equipment Term Note shall be due and
payable in equal monthly installments of $39,899, beginning on March 1, 1998,
and on the first day of each month thereafter until the Termination Date when
the entire unpaid balance of the Equipment Term Note, and all unpaid interest
accrued thereon, shall in any event be due and payable."
4. Permitted Liens. Schedule 7.1 is replaced in its entirety by the
schedule attached hereto as Exhibit B to this Amendment.
5. No Other Charges. 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 Equipment Term Note, duly executed on behalf of the Borrower.
(b) A payoff letter executed by Mellon and addressed to the Lender
wherein Mellon, in exchange for an amount to be paid by the Lender, agrees to
terminate its financing arrangement with the Borrower under the Mellon Loan and
all its security interest in the Borrower's property.
(c) Such additional searches of UCC filings as are necessary, in the
Lender's discretion, to satisfy the Lender that it holds a first priority
perfected security interest in each of the pieces of Equipment originally
financed by the Mellon Loan, as described in Exhibit C attached hereto.
(d) An amendment to the Participation Agreement by and between the
Lender and Xxxxxx Trust and Savings Bank dated as of February 18, 1997, duly
executed by the parties thereto, whereby the Lender agrees to sell, and Xxxxxx
Trust and Savings Bank agrees to purchase, a participating interest in the
Equipment Term Advance.
(e) A Certificate of the Secretary of the Borrower certifying as to (i)
the resolutions of the board of directors of the Borrower approving the
execution and delivery of this Amendment, (ii) 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 Authority of the Borrower's Secretary
dated as of February 6, 1997 in connection with the execution and delivery of
the Credit Agreement continue in full force and effect and have not been amended
or otherwise modified except as set forth in the Certificate to be delivered,
and (iii) certifying that the officers and agents of the Borrower who have been
certified to the Lender, pursuant to the Certificate of Authority of the
Borrower's Secretary dated as of February 6, 1997, 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 Amendment and all other documents,
agreements and certificates on behalf of the Borrower.
(f) 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 Equipment Term Note and to perform all
of its obligations hereunder, and this Amendment and the Equipment Term
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 Equipment Term 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.
9. No Waiver. The execution of this Amendment and acceptance of the
Equipment Term Note and 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 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 toil 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 Amendment
to be duly executed as of the date first written above.
NORWEST CREDIT, INC. ULTRA PAC, INC.
By /s/ Xxx X. Xxxxxx By Xxxx X. Xxxx
Xxx X. Xxxxxx Xxxx X. Xxxx
Its Vice President Its Chief Financial Officer
Exhibit A to Third Amendment
EQUIPMENT TERM NOTE
$1,867,157.97
Minneapolis, Minnesota
February 26, 1998
For value received, the undersigned, ULTRA PAC. INC., a Minnesota
corporation. (the "Borrower"), hereby promises to pay on the Maturity Date under
the Credit Agreement (defined below), to the order of NORWEST CREDIT, INC., a
Minnesota corporation (the "Lender"), at its main office in Minneapolis,
Minnesota, or at any other place designated at any time by the holder hereof, in
lawful money of the United States of America and in immediately available funds,
the principal sum of One Million Eight Hundred Sixty-Seven Thousand One Hundred
Fifty-Seven Dollars and Ninety-Seven Cents ($1,867,157.97) or, if less, the
aggregate unpaid principal amount of the Equipment Term Advance made by the
Lender to the Borrower under the Credit Agreement (defined below) together with
interest on the principal amount hereunder remaining unpaid from time to time,
computed on the basis of the actual number of days elapsed and a 360-day year,
from the date hereof until this Note is fully paid at the rate from time to time
in effect under the Second Amended and Restated Credit and Security Agreement
dated as of February 7, 1997, as amended by letter amendments dated as of August
1, 1997 and December 10, 1997 and a Third Amendment to Second Amended and
Restated Credit Agreement of even date herewith (as amended, the "Credit
Agreement") by and between the Lender and the Borrower. The principal hereof and
interest accruing thereon shall be due and payable as provided in the Credit
Agreement. This Note may be prepaid only in accordance with the Credit
Agreement.
This Note is issued pursuant, and is subject, to the Credit Agreement,
which provides, among other things, for acceleration hereof. This Note is the
Equipment Term Note referred to in the Credit Agreement. This Note is secured,
among other things, pursuant to the Credit Agreement and the Security Documents
as therein defined, and may now or hereafter be secured by one or more other
security agreements, mortgages, deeds of trust, assignments or other instruments
or agreements.
The Borrower hereby agrees to pay all costs of collection, including
attorneys' and legal expenses in the event this Note is not paid when due,
whether or not legal proceedings are commenced.
