AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (together with all
appendices, exhibits, schedules and attachments hereto, collectively this
"AMENDMENT") is made and entered into as of April 18, 1997, by and between
XXXXXX MANUFACTURING, INC., a Minnesota corporation, with its principal place of
business at 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000 ("BORROWER") and
SANWA BUSINESS CREDIT CORPORATION, a Delaware corporation, with its principal
place of business at Xxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 ("LENDER").
RECITALS
WHEREAS, Borrower and Lender entered into that certain Loan and Security
Agreement dated as of December 31, 1995 (the "LOAN AGREEMENT") together with
documents ancillary thereto;
WHEREAS, the Loan Agreement secures, among other things, Borrower's
obligations to Lender under that certain Junior Subordinated Secured Promissory
Note dated December 31, 1995 in the original principal amount of $1,000,000 (the
"JUNIOR NOTE") and that certain Income Sharing Agreement dated December 31, 1995
(the "INCOME SHARING AGREEMENT");
WHEREAS, Borrower and Lender have agreed to terminate the Junior Note
and the Income Sharing Agreement in exchange for a settlement payment by
Borrower to Lender of the Termination Fee (as defined in the Release and
Termination Agreement of even date herewith between Borrower and Lender);
WHEREAS, Borrower and Lender wish to amend the Loan Agreement to
incorporate certain changes due to the termination of the Junior Note and the
Income Sharing Agreement;
NOW THEREFORE, for and in consideration of the premises, the mutual
covenants hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, the parties
hereby agree as follows:
ARTICLE
1.
RECITALS AND DEFINITIONS
1.1. Borrower represents and warrants that the foregoing recitals are
true and correct and constitute an integral part of this Amendment and Borrower
and Lender hereby agree that all of the recitals of this Amendment are hereby
incorporated herein and made a part hereof.
1.2. Unless otherwise defined herein or the context otherwise requires,
all capitalized terms used herein shall have the same meanings as ascribed to
them in the Loan Agreement.
ARTICLE
2.
AMENDMENT OF THE LOAN AGREEMENT
2.1. Section 1.4 hereby is deleted in its entirety and the following
substituted therefor:
1.4 "ANCILLARY AGREEMENTS" SHALL MEAN ALL SECURITY DOCUMENTS AND
ALL AGREEMENTS, INSTRUMENTS, AND DOCUMENTS, INCLUDING WITHOUT
LIMITATION, THE SENIOR SUBORDINATED SECURED PROMISSORY NOTE, AND ANY AND
ALL OTHER NOTES, GUARANTIES, MORTGAGES, DEEDS OF TRUST, CHATTEL
MORTGAGES, PLEDGES, POWERS OF ATTORNEY, CONSENTS, ASSIGNMENTS,
CONTRACTS, NOTICES, SECURITY AGREEMENTS, LEASES, FINANCING STATEMENTS,
SUBORDINATION AGREEMENTS, TRUST ACCOUNT AGREEMENTS AND ALL OTHER WRITTEN
MATTER WHETHER HERETOFORE, NOW OR HEREAFTER EXECUTED BY OR ON BEHALF OF
BORROWER OR ANY OTHER PERSON OR DELIVERED TO LENDER OR ANY PARTICIPANT
WITH RESPECT TO THIS AGREEMENT OR WITH RESPECT TO ANY AGREEMENT ENTERED
INTO BY BORROWER.
2.2. Section 2.4 hereby is deleted in its entirety and the following
substituted therefor:
2.4 TERM OF AGREEMENT. THIS AGREEMENT SHALL BE IN EFFECT UNTIL
ALL OF THE LIABILITIES ARE PAID IN FULL, SUBJECT TO EARLIER TERMINATION
BY LENDER UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AS PROVIDED IN
SECTION 11. UNTIL ALL OF THE LIABILITIES SHALL HAVE BEEN FULLY PAID AND
SATISFIED, LENDER SHALL BE ENTITLED TO RETAIN ITS SECURITY INTEREST IN
THE COLLATERAL.
2.3. Sections 10.1(C)(iv), (v) and (vi) hereby are deleted in their
entirety.
1.4.Section 10.1(F) is deleted in its entirety and the following
substituted therefor:
(F) NOTIFY LENDER ON THE FIRST DAY OF EACH CALENDAR QUARTER
DURING THE TERM HEREOF OF ANY PROPOSED EXPENDITURES NOT APPROVED IN THE
BUDGET;
2.5. Section 10.2(F) hereby is deleted in its entirety and the
following substituted therefor:
(F) ENTER INTO ANY TRANSACTION WHICH MATERIALLY AND ADVERSELY
AFFECTS THE COLLATERAL OR BORROWER'S ABILITY TO REPAY THE INDEBTEDNESS;
2.6. Section 10.1(J) is deleted in its entirety and the following
substituted therefor:
(J) MAKE CAPITAL EXPENDITURES (EXCLUDING THEREFROM THE ANNUAL
DEBT SERVICE PAYMENTS PERMITTED IN SECTION 7.3 HEREINBEFORE) WHICH, IN
THE AGGREGATE, EXCEED SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($600,000)
DURING BORROWER'S 1997 FISCAL YEAR AND DURING EACH OF BORROWER'S FISCAL
YEARS THEREAFTER;
2.7. Section 10.2(K) hereby is deleted in its entirety.
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ARTICLE
3.
REPRESENTATIONS AND WARRANTIES
3.1. Borrower hereby makes the following representations and warranties
to Lender, which representations and warranties shall constitute the continuing
covenants of Borrower and shall remain true and correct until all of Borrower's
liabilities are paid and performed in full:
a. The representations and warranties of Borrower contained in
the Loan Agreement are true and correct on and as of the date hereof as
though made on and as of such date;
b. No Event of Default or event which, but for the lapse of
time or the giving of notice, or both, would constitute an Event of
Default under the Loan Agreement has occurred and is continuing or would
result from the execution and delivery of this Amendment;
c. Borrower is in full compliance with all of the terms,
conditions and all provisions of the Loan Agreement and the other
agreements;
d. This Amendment and all other agreements required hereunder
to be executed by Borrower and delivered to Lender, have been duly
authorized, executed and delivered on Borrower's behalf pursuant to all
requisite corporate authority and this Amendment and each of the other
agreements required hereunder to be executed and delivered by Borrower
to Lender constitute the legal, valid and binding obligations of
Borrower enforceable in accordance with their terms, except as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors'
rights; and
e. Borrower hereby acknowledges and agrees that Borrower has no
defense, offset or counterclaim to the payment of said principal,
interest, fees or other liabilities and hereby waives and relinquishes
any such defense, offset or counterclaim and Borrower hereby releases
Lender and its respective officers, directors, agents, affiliates,
successors and assigns from any claim, demand or cause of action, known
or unknown, contingent or liquidated, which may exist or hereafter be
known to exist relating to any matter prior to the date hereof.
ARTICLE
4.
RATIFICATION
Except as expressly amended hereby, the Loan Agreement and all other
agreements executed in connection therewith shall remain in full force and
effect. The Loan Agreement, as amended hereby, and all rights and powers
created thereby and thereunder or under such other agreements, are in all
respects ratified and confirmed. From and after the date hereof, the Loan
Agreement shall be deemed amended and modified as herein provided but, except as
so amended and modified, the Loan Agreement shall continue in full force and
effect and the Loan Agreement and this Amendment shall be read, taken and
construed as one and the same
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instrument. On and after the date hereof, the term "Agreement" as used in the
Loan Agreement and all other references to the Loan Agreement therein, in any
other instrument, document or writing executed by Borrower or any guarantor or
furnished to Lender by Borrower or any guarantor in connection therewith or
herewith shall mean the Loan Agreement as amended by this Amendment.
ARTICLE
5.
WAIVER OF EVENTS OF DEFAULT
Borrower represents and warrants to Lender that CIT Group/Credit
Finance, Inc. ("CIT") has waived certain defaults more fully set forth on
EXHIBIT A attached hereto (the "WAIVED DEFAULTS"). To the extent that the
Waived Defaults now constitute or have previously constituted an Event(s) of
Default pursuant to Section 11.1(B) and/or 11.1(D) of the Loan Agreement, Lender
hereby waives such Events of Default. Further, Lender acknowledges that the
Events of Default, if any, that occurred or existed under the Junior Note or the
Income Sharing Agreement are not considered as continuing under or with respect
to the Loan Agreement or Senior Subordinated Secured Promissory Note. Lender's
waiver herein shall not be construed as a bar to or waiver of any such right or
remedy which Lender would otherwise have on any future occasion, whether similar
in kind or otherwise.
ARTICLE
6.
MISCELLANEOUS
6.1. Borrower agrees to promptly pay or reimburse all out-of-pocket
costs and expenses of Lender, including without limitation, reasonable
attorneys' fees, costs, expenses incurred by Lender in connection with the
negotiation, preparation, execution and delivery of this Amendment and all other
matters pertaining hereto.
6.2. This Amendment may be signed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
6.3. Except as otherwise specified herein, this Amendment embodies the
entire agreement and understanding between Lender and Borrower with respect to
the subject matter hereof and supersedes all prior agreements, consents and
understandings relating to such subject matter.
6.4. The headings in this Amendment have been inserted for convenience
only and shall be given no substantive meaning or significance in construing the
terms of this Amendment.
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6.5. This Amendment shall inure to the benefit of Lender and its
successors and assigns and shall be binding upon and inure to the successors and
assigns of Borrower, except that Borrower may not assign any of its rights in
and to this Amendment.
6.6. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one in the same document.
IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to
Loan and Security Agreement to be executed and delivered as of the day and year
written above.
XXXXXX MANUFACTURING, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President
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SANWA BUSINESS CREDIT CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxxxx
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Title: Vice President
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