[LOGO] XXXXX FARGO BANK MINNESOTA, EXHIBIT 10.1
XXXXX NATIONAL ASSOCIATION FIRST AMENDMENT
FARGO
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THIS FIRST AMENDMENT (the "First Amendment") dated to be effective as of August
28, 2002 is between Xxxxx Fargo Bank Minnesota, National Association (the
"Bank") and Medamicus, Inc., a Minnesota corporation (the "Borrower").
BACKGROUND
The Bank and the Borrower entered into a Credit Agreement dated July 31, 2001
(the "Agreement"), pursuant to which the Bank extended to the Borrower a Two
Million and 00/100 Dollars ($2,000,000.00) line of credit (the "Line").
Borrowings under the Line are evidenced by a $2,000,000.00 Revolving Note dated
July 31, 2001 (the "July 2001 Revolving Note").
The Borrower has requested that the Bank increase the Line by One Million and
00/100 Dollars ($1,000,000.00) to Three Million and 00/100 Dollars
($3,000,000.00) and extend the Line Availability Period to August 1, 2003.
The Bank is agreeable to meeting the Borrower's request, provided that the
Borrower agrees to the terms and the conditions of this First Amendment.
Capitalized terms not otherwise defined in this First Amendment shall have the
meaning given them in the Agreement.
In consideration of the above premises, the Bank and the Borrower agree that the
Agreement is hereby amended as of the date of this First Amendment as follows:
1. Sections 1.1, 1.2, 1.3, and 1.4 of the Agreement are hereby deleted in
their entirety and restated as follows:
1.1 Line of Credit Amount. DURING THE LINE AVAILABILITY PERIOD
DEFINED BELOW, THE BANK AGREES TO PROVIDE A REVOLVING LINE OF
CREDIT (THE "LINE") TO THE BORROWER. OUTSTANDING AMOUNTS UNDER
THE LINE SHALL NOT, AT ANY ONE TIME, EXCEED THE LESSER OF THE
BORROWING BASE OR THREE MILLION AND 00/100 DOLLARS
($3,000,000.00). THE BORROWING BASE IS DEFINED IN EXHIBIT A-1
TO THIS AGREEMENT.
1.2 Line Availability Period. THE "LINE AVAILABILITY PERIOD" SHALL
MEAN THE PERIOD OF TIME FROM THE EFFECTIVE DATE OR THE DATE ON
WHICH ALL CONDITIONS PRECEDENT DESCRIBED IN THIS AGREEMENT
HAVE BEEN MET, WHICHEVER IS LATER, TO THE LINE EXPIRATION DATE
OF AUGUST 1, 2003.
1.3 The Revolving Note. THE BORROWER'S OBLIGATION TO REPAY
ADVANCES UNDER THE LINE SHALL BE EVIDENCED BY A PROMISSORY
NOTE (THE "REVOLVING NOTE") DATED AS OF THE EFFECTIVE DATE,
AND IN FORM AND CONTENT ACCEPTABLE TO THE BANK. REFERENCE IS
MADE TO THE REVOLVING NOTE FOR INTEREST RATE AND REPAYMENT
TERMS. THE REVOLVING NOTE SHALL REPLACE, BUT NOT BE DEEMED TO
SATISFY THE AUGUST 2000 REVOLVING NOTE AND CORRESPONDING
AMENDMENTS.
1.4 Mandatory Prepayment. IF AT ANY TIME THE PRINCIPAL OUTSTANDING
UNDER THE REVOLVING NOTE EXCEEDS THE LESSER OF THE BORROWING
BASE OR $3,000,000.00, THE BORROWER MUST IMMEDIATELY PREPAY
THE REVOLVING NOTE IN AN AMOUNT SUFFICIENT TO ELIMINATE THE
EXCESS.
2. Section 7.1 (a) and (b) of the Agreement is hereby deleted in its
entirety and restated as follows:
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(a) ANNUAL FINANCIAL STATEMENTS. PROVIDE THE BANK WITHIN 120 DAYS
OF THE BORROWER'S FISCAL YEAR END, THE BORROWER'S ANNUAL
FINANCIAL STATEMENTS. THE STATEMENTS MUST BE AUDITED BY A
CERTIFIED PUBLIC ACCOUNTANT ACCEPTABLE TO THE BANK.
(b) Annual Covenant Compliance Certificate. Provide the Bank
within 120 days of the Borrower's fiscal year end, an Annual
Covenant Compliance Certificate in the form of Exhibit D.
3. Section 7.2 (b) of the Agreement is hereby deleted in its entirety and
restated as follows:
(b) Total Liabilities to Tangible Net Worth. Maintain a ratio of
total liabilities to Tangible Net Worth of less than 1.0 to
1.0 as of the end of each quarter, beginning with the quarter
ending September 30, 2002.
4. To reflect these changes to the Line, the Borrower will replace the
existing promissory note by executing and delivering to the Bank a new
promissory note in form and content acceptable to the Bank (the
"Revolving Note"), which shall be dated as of the date of this First
Amendment and which shall replace, but not be deemed to satisfy, the
August 2001 Revolving Note. The Revolving Note shall evidence the
unpaid amount due to the Bank as was due to the Bank under the August
2001 Revolving Note as of the date of this First Amendment. Each
reference in the Agreement to the Revolving Note shall be deemed to
refer to the Revolving Note dated as of the date of this First
Amendment.
5. The Borrower hereby represents and warrants to the Bank as follows:
A. The Agreement as amended by this First Amendment remains in
full force and effect.
B. The Borrower has no knowledge of any default under the
terms of the Agreement or any note evidencing any of the obligations of
the Borrower that are documented in the Agreement, or of any event that
with notice or the lapse of time or both would constitute a default
under the Agreement or any such notes.
C. The execution, delivery and performance of this First
Amendment and all related documentation described in this First
Amendment are within its corporate powers, have been duly authorized
and are not in contravention of law or the terms of the Borrower's
articles of incorporation or by-laws, or of any undertaking to which
the Borrower is a party or by which it is bound.
D. The resolutions set forth in the Corporate Certificate of
Authority dated November 15, 2001 and delivered by the Borrower to the
Bank have not been amended or rescinded, and remain in full force and
effect.
6. Except as modified by this First Amendment, the Agreement remains
unchanged and in full force and effect.
IN WITNESS WHEREOF, the Bank and Borrower have executed this First Amendment to
be effective as of the above date.
XXXXX FARGO BANK MINNESOTA, MEDAMICUS, INC.
NATIONAL ASSOCIATION
BY: /s/ XXXXXX XXXX BY: /s/ XXXXX X. XXXXXXX
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ITS: VICE-PRESIDENT ITS: PRESIDENT & CEO
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