EXHIBIT 10.6
CONSENT AND REAFFIRMATION
OF GUARANTY
THIS CONSENT AND REAFFIRMATION, made and entered into as of the 31st day of May,
1998 by XXXXX XXXXXX, XXXXXX X. XXXXXXXX, XXXXX X. XXXXXXXX and XXXXXX X.
XXXXXXXX (collectively, the "Guarantors") in favor of NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association (the "Lender").
WHEREAS, the Lender entered into a certain Amended and Restated Demand
Discretionary Revolving Credit Agreement dated as of March 18, 1994 (the "Credit
Agreement") with Xxxxxxxx Bros. Construction, Inc., a Minnesota corporation (the
"Borrower") concerning the extension by the Lender to the Borrower of a
$2,200,000 Revolving Line of Credit; and
WHEREAS, the Borrower subsequently requested that the Lender agree to an
increase in the "Maximum Loan Amount" as set forth in that certain Amendment,
Extension and Reaffirmation Agreement dated March 14, 1995, among the Lender,
the Borrower and the undersigned (the "First Amendment"); and
WHEREAS, the Borrower subsequently requested that the Lender agree to an
increase in the "Maximum Loan Amount" as set forth in that certain Second
Amendment, Extension and Reaffirmation Agreement dated February 24, 1997, among
the Lender, the Borrower and the undersigned (the "Second Amendment"); and
WHEREAS, the obligation of the Borrower to repay advances under the Credit
Agreement was evidenced by that certain Fifth Amended and Restated Revolving
Note dated February 24, 1997, executed by the Borrower in the original principal
amount of Four Million Two Hundred Fifty Thousand Dollars and payable to the
order of Lender (the "Fifth Amended Note"); and
WHEREAS, the Borrower has now requested that the Lender agree to an increase in
the Maximum Loan Amount as set forth in that certain Third Amendment, Extension
and Reaffirmation Agreement of even date herewith among the Lender, the Borrower
and the undersigned (the "Third Amendment"); and
WHEREAS, the Fifth Amended Note has now been superseded in its entirety by a
certain Sixth Amended and Restated Revolving Note of even date herewith executed
by the Borrower in the original principal amount of $4,750,000.00 and payable to
the order of the Lender (the "New Revolving Note"); and
WHEREAS, the obligations of the Borrower under and pursuant to the Credit
Agreement, the First Amendment, Second Amendment, Third Amendment, and the New
Revolving Note are secured by, among other things, the First Life Insurance
Assignment, the Second Life Insurance Assignment, the Third Life Insurance
Assignment and the Guarantor Life Insurance Assignments (as those terms are
defined in the First Amendment); and
WHEREAS, the payment and performance of the obligations of the Borrower under
and pursuant to the Fourth Amended Note and the Credit Agreement, as amended,
among other things, have been jointly and severally guaranteed by the Guarantors
pursuant to that certain Guaranty dated as of November 5, 1990, executed by the
Guarantors and Xxxxxxx X. Xxxxx and delivered to the Lender (the "Guaranty");
and
WHEREAS, the Lender is willing to execute the Third Amendment and to extend
advances to or for the benefit of the Borrower pursuant to the New Revolving
Note only upon receipt of this Consent and Reaffirmation from the Guarantors.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are hereby
made a part hereof, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, do hereby
agree as follow:
1. Each of the Guarantors hereby consents to the terms of the Third Amendment
and the New Revolving Note and all of the terms and provisions contained
therein.
2. Each of the Guarantors hereby repeats, reasserts, and reaffirms as of the
date hereof, all of the representations, warranties and covenants contained in
the Guaranty and the documents executed in connection therewith, as if said
representations, warranties and covenants were fully set forth herein.
3. Each of the Guarantors hereby acknowledges and agrees that any and all
references contained in the Guaranty to the term "Note" shall henceforth mean
and refer to the New Revolving Note and that all indebtedness of the Borrower to
the Lender pursuant to the New Revolving Note shall constitute "Obligations,"
the payment and performance of which are absolutely and unconditionally
guaranteed to the Lender by the Guarantors pursuant to the Guaranty.
4. The Guarantors further acknowledge and agree that the Guaranty shall be and
is hereby amended to provide that all references contained in the Guaranty to
the term "Credit Agreement" shall henceforth mean and refer to the Credit
Agreement, as amended by the First Amendment, the Second Amendment and the Third
Amendment.
5. The Guarantors hereby further acknowledge and agree that the Guaranty remains
fully enforceable and in full force and effect in accordance with its original
terms, except as expressly amended hereby and as previously amended in writing,
and is not subject to any defense, counterclaim or right of setoff as of the
date hereof. The Guarantors further acknowledge that the liability of the
Guarantors under the Guaranty is and continues to be joint and several.
6. Each of the Guarantors hereby releases the Lender, and each of its officers,
directors, agents, employees, legal counsel and other representatives from any
and all claims, demands, causes of action, liability, damage, loss, cost and
expense which any of them have paid, incurred, or sustained, known or unknown,
absolute or contingent, as a result of or related to (a) the transactions
evidenced by or related to any of the Loan Documents (as that term is defined in
the
Third Amendment) or (b) any acts or omissions of the Lender, or any of its
officers, directors, agents, employees, legal counsel or other representatives
in connection therewith or related thereto.
7. In light of the impending separation of Xxxxxxx X. Xxxxx from service with
the Borrower, the Lender has not required Xx. Xxxxx to execute this Consent and
Reaffirmation. Guarantors acknowledge, however, that the Lender intends that Xx.
Xxxxx remain obligated and liable to the Lender under the Guaranty, in
accordance with its terms, notwithstanding his failure to execute this Consent
and Reaffirmation. Nothing contained herein should be interpreted as an
expression of intent by the Lender to release or reduce the liability of Xx.
Xxxxx under the Guaranty.
8. This Consent and Reaffirmation of Guaranty may be executed in counterparts,
each of which shall be deemed an original but all of which, taken together,
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Guarantors have executed and delivered this Consent and
Reaffirmation of Guaranty as of the day and year first above written.
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XXXXX XXXXXX
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XXXXXX X. XXXXXXXX
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XXXXX X. XXXXXXXX
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XXXXXX X. XXXXXXXX
