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Exhibit 10.24
FIFTH AMENDMENT TO CREDIT AGREEMENT
This Fifth Amendment, dated as of February 15, 2001, is entered into
by and between YOUNG AMERICA CORPORATION, a Minnesota corporation (the
"Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION (assignee of Norwest
Bank Minnesota, National Association), a national banking association (the
"Bank").
RECITALS
The Borrower and the Bank have entered into a Credit Agreement dated
as of April 6, 1998, as amended by a First Amendment to Credit Agreement dated
as of November 13, 1999, a Second Amendment to Credit Agreement dated as of
March 12, 1999, a Third Amendment to Credit Agreement dated as of February 25,
2000, and a Fourth Amendment dated as of August 21, 2000 (as so amended, the
"Credit Agreement").
The Borrower has requested that certain amendments be made to the
Credit Agreement, which the Bank 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 Fifth Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein.
2. Amendment of Section 1.1. Section 1.1 of the Credit Agreement is
hereby amended by substituting or adding, as the case may be, the following
defined terms:
"'Commitment Amount' means $3,000,000, unless said amount is reduced
pursuant to Section 2.6, in which event it means the amount to which said
amount is reduced."
"'Commitment Termination Date' means June 30, 2001, or the earlier
date of termination in whole of the Commitment pursuant to Section 2.6 or
Section 7.2(a)."
"'Fifth Amendment' means the Fifth Amendment to Credit Agreement dated
as of February 15, 2001, by and between the Borrower and the Bank."
"'Floating Rate' means an annual rate equal to the Base Rate plus
one-half of one percent (0.50%) per annum."
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3. Waiver of Certain Events of Default. The Borrower hereby
acknowledges and agrees that the following Event of Default has occurred and is
continuing: The Borrower's cumulative EBITDA as of December 31, 2000 was
$5,045,371, constituting a default under Section 5.11 of the Credit Agreement,
which requires that the Borrower's cumulative EBITDA be not less than
$13,600,000 as of December 31, 2000.
The Bank hereby waives compliance with Section 5.11 of the Credit
Agreement for the period ending December 31, 2000.
4. Amendment of Article II. Article II of the Credit Agreement is
hereby amended as follows:
(a) Interest Rate. The Borrower's option to elect a Eurodollar Rate
under Article II for application to any outstanding principal of the Note
is hereby terminated and each and every reference in the Credit Agreement
to the Eurodollar Rate and Eurodollar Rate Fundings is hereby deleted. The
entire unpaid principal balance of the Note shall bear interest at the
Floating Rate, subject to increase to the Default Rate as provided in
Section 2.2(e).
(b) Section 2.8(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(b) Non-Usage Fees. The Borrower shall pay the Bank a non-usage
fee at the rate of 0.50% per annum on the average daily unused amount
of the Commitment Amount from January 1, 2001 to and including the
Commitment Termination Date, payable monthly on the last day of each
calendar month. Any non-usage fee remaining unpaid on the Commitment
Termination Date shall be due and payable on that date."
5. Amendment of Article V. Article V of the Credit Agreement is
hereby amended as follows:
(a) Section 5.9 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Reserved."
(b) Section 5.10 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Reserved."
(c) Section 5.11 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Section 5.11 EBITDA. The Borrower's cumulative EBITDA during
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each computation period set forth below shall not be less than
the amount set forth opposite such period:
Computation Period Minimum EBITDA
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January 1, 2001 through
January 31, 2001 $500,000
January 1, 2001 through
February 28, 2001 $1,000,000
January 1, 2001 through
March 31, 2001 $3,000,000
January 1, 2001 through
April 30, 2001 $3,750,000
January 1, 2001 through
May 31, 2001 $4,000,000
January 1, 2001 through
June 30, 2001 $5,000,000"
6. Amendment of Article VI. Article VI of the Credit Agreement is
hereby amended as follows:
(a) Section 6.12 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Beginning with the calendar quarter ending March 31, 2001, the
Borrower will not make Capital Expenditures during any calendar
quarter in excess of $750,000, regardless of whether such expenditures
are payable currently or in the future, provided that any unused
portion of permitted Capital Expenditures for a calendar quarter may
be expended in the next succeeding calendar quarter."
7. Substitution of Monthly Compliance Certificate. Exhibit B-1 to
the Third Amendment to Credit Agreement is replaced with Exhibit B-1 to the
Fifth Amendment to Credit Agreement, which is attached hereto.
8. No Other Changes. Except as explicitly amended by this Fifth
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.
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9. Representations and Warranties. The Borrower hereby represents
and warrants to the Bank as follows:
(a) The Borrower has all requisite power and authority to execute
this Fifth Amendment and to perform all of its obligations hereunder, and
this Fifth 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
Fifth Amendment has been duly authorized by all necessary corporate action
and does 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 IV
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.
10. 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 Loan Documents to the Credit Agreement shall
be deemed to refer to the Credit Agreement as amended hereby.
11. No Waiver. Except as expressly provided in paragraph 3 above, the
execution of this Fifth Amendment 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 Loan Document or
other document held by the Bank, whether or not known to the Bank and whether or
not existing on the date of this Fifth Amendment.
12. Release. The Borrower hereby absolutely and unconditionally
releases and forever discharges the Bank, 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 Fifth
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Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.
13. Costs and Expenses. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Bank on demand for all costs
and expenses incurred by the Bank in connection with the Credit Agreement, the
Loan Documents and the other instruments and documents to be delivered hereunder
and thereunder, including the reasonable fees and reasonable out-of-pocket
expenses of counsel for the Bank with respect thereto, whether paid to outside
counsel or reasonably allocated to the Bank by in-house counsel.
14. Miscellaneous. This Fifth 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 Fifth
Amendment to be duly executed as of the date first written above.
XXXXX FARGO BANK, NATIONAL ASSOCIATION YOUNG AMERICA CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxx
Assistant Vice President President
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Exhibit B-1 to
Fifth Amendment to Credit Agreement
(To be re-typed on Borrower's letterhead)
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MONTHLY COMPLIANCE CERTIFICATE
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Date: ____________________, 2001
To: Xxxxx Fargo Bank, National Association
Leveraged Finance Division
MAC # X0000-000
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Assistant Vice President
Re: Credit Agreement dated as of April 6, 1998
between Young America Corporation and
Xxxxx Fargo Bank, National Association
In accordance with the requirements of the above referenced
agreement (the "Credit Agreement"), attached are the consolidated financial
statements of Young America Corporation (the "Borrower") as of and for the
calendar month and year-to-date periods ended _________________ (the "Current
Financials"). Capitalized terms used herein but not otherwise defined shall have
the same meanings as the meanings assigned to them in the Credit Agreement.
I hereby certify that the Current Financials have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis, subject to year-end audit adjustments, and fairly present the financial
condition of the Borrower 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 thereto.
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Young America Corporation
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Financial Covenants. I hereby further certify as follows:
1. EBITDA. Pursuant to Section 5.11 of the Credit Agreement, for the
computation period ending on _______________, the consolidated
EBITDA of the Borrower is _______________. The Credit Agreement
requires that such amount be not less than _______________ as of
such computation date.
Computation Period Minimum EBITDA
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January 1, 2001 through January 31, 2001 $ 500,000
January 1, 2001 through February 28, 2001 $1,000,000
January 1, 2001 through March 31, 2001 $3,000,000
January 1, 2001 through April 30, 2001 $3,750,000
January 1, 2001 through May 31, 2001 $4,000,000
January 1, 2001 through June 30, 2001 $5,000,000
2. Capital Expenditures. Pursuant to Section 6.12 of the Credit
Agreement, for the computation period ending on _______________,
the consolidated Capital Expenditures of the Borrower
are_______________. The Credit Agreement requires that such amount
be not more than _______________ as of such computation date.
Attached hereto are all relevant facts in reasonable detail to evidence
the computations of the Financial Covenants referred to above. These
computations were prepared in accordance with generally accepted accounting
principles applied on a basis that is consistent with the accounting practices
reflected in the annual financial statements of the Borrower previously
delivered to you.
Young America Corporation
By ___________________________
Its ___________________________
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