Exhibit 10.19
AMENDMENT TO
LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT is made and entered into as of this 30th
day of March 2004, by and between Redline Performance Products, Inc., a
Minnesota corporation, (hereinafter referred to as the "Borrower") with an
address of 0000 Xxxxxxx, Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000
(Borrower); and Community National Bank, a United States corporation, (Lender)
with an address of 0000 Xx. Xxxxx Xxxxx, Xxxxx Xxxxxx, XX 00000.
RECITALS:
A. Borrower and Lender entered into a loan agreement dated November 26,
2003 ("Agreement"), which set forth the terms and conditions of a loan in the
original principal amount of Two Million and No/100ths Dollars ($2,000,000.00)
("Original Note") made by Lender to Borrower to be used in Borrower's business
of manufacturing snowmobiles. A loan agreement was executed by Borrower and
Lender in connection with the Loan ("Loan Agreement") and the parties hereto now
desire to amend the terms and conditions of the Loan Agreement.
B. Borrower now desires to borrow and Lender has agreed to lend to
Borrower the additional sum of Five Hundred Thousand and NO/100ths Dollars
($500,000.00), ("Second Note").
C. In order to induce Lender to make the Loan, Xxxxxx X. Xxxx, Guarantor,
has agreed to guaranty the repayment of the Second Note.
Now therefore, the parties hereto hereby agree as follows:
1. Except as specifically modified hereby, the terms and conditions of the
Loan Agreement shall remain in full force and affect and shall apply to the
Second Note.
2. Borrower agrees to execute and delivery a Security Agreement in the
form provided herewith securing payment of the Second Note and such documents as
are necessary to create a security interest in Borrower's patents. Borrower
further agrees that all payments to be made pursuant to the contract by and
between Redline Performance Products, Inc. and GE Commercial Distribution
Finance Corporation effective as of October 10, 2003, (hereinafter referred to
as "GE Contract") shall be made to Lender until both the Original Note and
Second Note are paid in full and Borrower shall not direct those payments to any
other parties until such notes are paid in full. Borrower shall further provide
such loan documentation as Lender shall reasonably require.
3. The minimum sales price to be obtained from each Unit shall be Ten
Thousand Three Hundred Forty and NO/100ths Dollars ($10,340.00).
4. Advances of principal on the Second Note shall be made at the
reasonable discretion of the Lender and shall be made from time to time upon
application of Borrower as follows:
(a) Borrower shall provide all documentation
required by any of the Loan Documents.
(b) Borrower shall not be in default on any of
the terms or conditions of the Loan Documents.
5. The repayment terms of the principal amount owing on the Original Note
shall be as set forth in the Amendment to Note executed herewith and are as
follows:
a. Three Thousand and No/100ths Dollars
($3,000.00) of the sales price from the sale of
each of Units One (1) through Two Hundred (200);
and
b. Seven Thousand and No/100ths Dollars
($7,000.00 from the sale of each of Units Two
Hundred One (201) through Four Hundred (400).
6. The repayment of terms of the principal amount owing on the Second Note
shall be as set forth in the Second Note executed herewith and are as follows:
a. One Thousand and No/100ths Dollars
($1,000.00) from the sale of each of Units One
Hundred One (101) through Two Hundred (200);
b. One Thousand Give Hundred and No/100ths
Dollars ($1,500.00) from the sale of each of
Units Two Hundred One (201) through Three
Hundred (300);
c. Two Thousand Five Hundred and No/100ths
Dollars ($2,500.00) from the sale of each of
Units Three Hundred One (301) through Four
Hundred (400); and
d. Three Thousand and No/100ths Dollars
($3,000.00) from the sale of each Unit after
Four Hundred Units are sold until all amounts
due and owing pursuant to this Promissory Note
are paid in full.
7. Borrower shall pay to Lender upon execution of this Agreement, an
origination fee equal to two (2) percent of the maximum proposed amount of the
Second Note.
8. The parties agree that in the event of a default in the Loan Documents
and the foreclosure of either of the security interests created by the Security
Agreements executed by Borrower to secure the Original Note and/or the Second
Note, Lender shall apply the proceeds received from the sale of the Collateral
in accordance with the Collateral Proceeds Agreement executed by and among the
parties hereto, the guarantors of the Original Note and the Guarantor and dated
March 30, 2004.
9. Lender and Borrower agree that they may not amend the terms and
conditions of any of the Loan Documents, including, but not limited to, the Loan
Agreement and the Second Note prior to the Second Note being paid in full as
required by the Guaranty of Xxxxxx X. Xxxx executed herewith. The Lender and
Borrower further agree that they may not amend or alter the requirement that
the payments made pursuant to the GE Contract are to be delivered directly to
the Lender prior to the Second Note being paid in full as required by the
guaranty of Xxxxxx X. Xxxx executed herewith.
This Amendment to Loan Agreement made and entered on this 30th day of
March, 2004.
Redline Performance Products, Inc.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
President & Chief Financial Officer
Community National Bank
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Executive Vice President
