EXHIBIT 10.23
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of November 24, 1997, is made by and between
NICOLLET PROCESS ENGINEERING INC., a Minnesota corporation (the "Borrower"), and
NORWEST BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").
RECITALS
The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of May 28, 1997 (as the same may be amended or supplemented
from time to time, 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 the Lender waive certain Defaults and reset
certain financial covenants to the Credit Agreement which the Lender is willing
to do 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. FINANCIAL COVENANTS. Section 6.7 of the Credit Agreement is hereby
amended in its entirety and replaced with the following new section:
"Section 6.7 MINIMUM BOOK NET WORTH. The Borrower will maintain its
Book Net Worth, determined as at the end of each month listed below, at an
amount not less than the amount set forth opposite such period:
----------------------------------------------------------
MONTH MINIMUM BOOK NET WORTH
----------------------------------------------------------
November 30, 1997 $580,000
December 31, 1997 $480,000
January 31, 1998 $480,000
February 28, 1998 $480,000
March 31, 1998 $480,000
April 30, 1998 $480,000
May 31, 1998 $680,000
----------------------------------------------------------
"Provided however, that if upon the Lender's receipt of the Borrower's
audited fiscal year-end financial reports for the fiscal year ending August
31,1997, such audited reports show that the Borrower's fiscal year-end Book
Net Worth varied from $472,000 by more than $10,000, then
"(i) if the variance is $10,000 or more greater than $472,000, then
each of the financial covenants above shall be increased by the amount
that the Borrower's fiscal year-end Book Net Worth varies from
$472,000; and
"(ii) if the variance is $10,000 or more less than $472,000, then the
Lender, in its sole discretion, may consider amending the covenant
levels.
"If both parties agree to extend the Maturity Date beyond May 28,
1998, then on or before June 30, 1998, the Lender shall establish
acceptable covenant levels for this Section based upon the Borrower's
projections for such periods."
2. 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.
3. WAIVER OF DEFAULTS. The Borrower is in default of the following
provisions of the Credit Agreement (collectively, the "Defaults"):
--------------------------------------------------------------------------------
SECTION/COVENANT PERIOD REQUIRED ACTUAL
--------------------------------------------------------------------------------
6.7 Minimum Book Net Work 6/97 not less than $1,310,000 $1,303,000
7/97 not less than $1,310,000 $1,094,000
FYE not less than $1,310,000 $ 472,000
8/97
--------------------------------------------------------------------------------
Upon the terms and subject to the conditions set forth in this Amendment, the
Lender hereby waives the Defaults. This waiver shall be effective only in this
specific instance and for the specific purpose for which it is given, and this
waiver shall not entitle the Borrower to any other or further waiver in any
similar or other circumstances.
4. AMENDMENT FEE. The Borrower shall pay the Lender as of the date
hereof a fully earned, non-refundable fee in the amount of $2,000 in
consideration of the Lender's execution of this Amendment.
5. CONDITIONS PRECEDENT. This Amendment, and the waiver set forth in
Paragraph 3 hereof, 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) payment of the fee described in Paragraph 4; and
(b) such other matters as the Lender may require in its sole discretion.
2
6. 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 to perform all of its obligations hereunder, and this
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
Amendment have been duty 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 bylaws 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.
7. 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.
8. NO OTHER WAIVER. Except as set forth in Paragraph 3 hereof, the
execution of this Amendment and acceptance of 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.
9. 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.
3
10. 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.
11. 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 BUSINESS CREDIT, INC. NICOLLET PROCESS ENGINEERING,
INC.
By /s/ Xxxxxx X. Xxxxxxx By /s/ Xxxx Xxxxxxxx
---------------------------- ------------------------------------
Xxxxxx X. Xxxxxxx Xxxx Xxxxxxxx
Its Assistant Vice President Its Controller
4
Exhibit B to Credit and Security
Agreement
COMPLIANCE CERTIFICATE
To: Xxxxxx Xxxxxxx
Norwest Business Credit, Inc.
Date: __________,199__
Subject: Nicollet Process Engineering, Inc.
Financial Statements
In accordance with our Credit and Security Agreement dated as of May 28,
1997 (the "Credit Agreement"), attached are the financial statements of Nicollet
Process Engineering, Inc. (the "Borrower") as of and for ____________________,
19____ (the "Reporting Date") and the year-to-date period then ended (the
"Current Financials"). All terms used in this certificate have the meanings
given in the Credit Agreement.
I certify that the Current Financials have been prepared in accordance with
GAAP, subject to year-end audit adjustments, and fairly present the Borrower's
financial condition 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 to thereto.
FINANCIAL COVENANTS. I further hereby certify as follows:
1. MINIMUM BOOK NET Worth. Pursuant to Section 6.7 of to Credit
Agreement, as of the Reporting Date, the Borrower's Book Net Worth was $______
which / / satisfies / / does not satisfy the requirement that such amount be not
less than $_____________ during such period as set forth in table below:
MONTH MINIMUM BOOK NET WORTH
----- ----------------------
November 30, 1997 $580,000
December 31, 1997 $480,000
January 31, 1998 $480,000
February 28, 1998 $480,000
March 31, 1998 $480,000
April 30, 1998 $480,000
May 31, 1998 $680,000
Attached hereto are all relevant acts in reasonable detail to evidence, and
the computations of the financial covenants referred to above. These
computations were made in accordance with GAAP.
NICOLLET PROCESS ENGINEERING, INC.
By___________________________________
Its Chief Financial Officer
2
