THIRD AMENDMENT TO
FINANCING AGREEMENT
This Third Amendment to Financing Agreement, dated as of September 12,
1996 ("Amendment"), is made by and between XXXX INCORPORATED, a Minnesota
corporation (the "Borrower") and REPUBLIC ACCEPTANCE CORPORATION, a Minnesota
corporation ("Republic").
WHEREAS, the Borrower and Republic have entered into a Financing Agreement
dated as of April 28, 1995, as amended by that First Amendment to Financing
Agreement dated as of September 30, 1995 and by that Second Amendment to
Financing Agreement dated as of January 18, 1996 (collectively, the
"Agreement"); and
WHEREAS, the obligations and indebtedness of the Borrower to Republic under
the Agreement are secured, INTER ALIA, by a Security Agreement dated as of April
28, 1995 between the Borrower and Republic (as amended, the "Security
Agreement") and a Pledge Agreement dated as of April 28, 1995 between the
Borrower and Republic (as amended, the "Pledge Agreement"); and
WHEREAS, Republic and the Borrower desire to amend the Agreement in order
to amend certain of the provisions therein, upon the terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree to be bound as follows:
Section 1. CAPITALIZED TERMS. All capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Agreement.
Section 2. AMENDMENTS.
2.01 Section I of the Agreement is hereby amended to read as
follows:
At our request, you in your sole discretion may
lend to us (i) up to eighty percent (80%) of the net
amount of accounts which are listed in current schedules
provided by us and which are deemed eligible for
advances by you, or any greater or lesser percentage at
your absolute and sole discretion, not to exceed a
maximum amount of $6,700,000 from time to time
outstanding ("Eligible Account Advances"); and (ii) up
to twenty-five percent (25%) of the net amount of
inventory which is listed in monthly inventory
certificates provided by us and which is deemed eligible
for advances by you, or any greater or lesser percentage
at your absolute and sole discretion, not to exceed a
maximum amount of $700,000 from time to time outstanding
("Eligible Inventory
Advances"); and (iii) up to an aggregate amount of $400,000.00
against a maximum of eighty percent (80%) of the fair market value
of our existing equipment, which amount shall be reduced as set
forth below (the "Existing Equipment Advance"); and (iv) between
December 1, 1995 and May 31, 1996, up to an aggregate amount of
$200,000 against a maximum of eighty percent (80%) of the purchase
price of our new equipment purchases, as evidenced by our
submission to you of the original invoices for such new equipment,
which amount shall be reduced as set forth below (the "New
Equipment Advances"); and (v) $266,308.00, which amount shall be
reduced as set forth below (the "Initial Overline Advance"); and
(vi) between September 1, 1996 and June 1, 1997, up to an
aggregate amount of $200,000 against a maximum of eighty percent
(80%) of the purchase price of our new equipment purchases, as
evidenced by our submission to you of the original invoices for
such new equipment, which amount shall be reduced as set forth
below (the "Additional New Equipment Advances"); PROVIDED HOWEVER,
that the maximum aggregate amount of all such advances from time
to time outstanding under clauses (i) through (vi) above shall not
exceed $6,700,000. Loans for additional sums requested by us may
be made at your sole discretion based upon your valuation of other
collateral or other factors. All borrowings pursuant hereto shall
be due on demand. Nothing set forth in this Agreement, the
Security Agreement, the Pledge Agreement or any other agreement
between you and us shall in any way limit your discretion to make
or not to make loans to us hereunder or your right to demand
payment of our obligations to you hereunder.
In addition, at our request, and subject to your
authorization in your sole discretion, First Bank
National Association (the "Bank") may from time to time
issue letters of credit for our account (the "Letters of
Credit") up to an aggregate amount outstanding at any
time (whether drawn or undrawn) of no more than
$400,000. Upon the occurrence of any draw under a
Letter of Credit that you have in writing guaranteed,
you will pay to the Bank 100% of such draw and treat
such payment as an advance against Eligible Accounts by
you to us hereunder and a reimbursement by us in full of
such draw, whether or not you have determined for all
other purposes to cease making loans to us hereunder.
The amount of any unreimbursed draw and the amount
available to be drawn under any Letter of Credit shall
both be treated as an outstanding advance against Eligible
Accounts hereunder for the purpose of determining the
amount which may be advanced under this Section I
against Eligible Accounts. We also agree that at any
time that the Bank issues a Letter of Credit payable in
currency other than U.S. Dollars, the amount of the
exposure
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related to the borrowings under this Agreement connected with such
Letter of Credit shall be increased by a percentage to be set by
you in your sole discretion unless and until we purchase an
appropriate foreign exchange forward contract or otherwise
mitigate the foreign exchange risk to your satisfaction.
Unless demand for payment of the Existing
Equipment Advance is sooner made, commencing on December
1, 1995 and continuing on the first (1st) day of each
month thereafter until the Existing Equipment Advance is
paid in full, the Existing Equipment Advance shall be
reduced in equal monthly principal installments based
upon a forty-eight (48) month amortization of the
Existing Equipment Advance.
Unless demand for payment of the Initial Overline
Advance is sooner made, commencing on December 1, 1995 and
continuing on the first (1st) day of each month thereafter
until the Initial Overline Advance is paid in full, the
Initial Overline Advance shall be reduced in equal monthly
principal installments based upon a thirty-six (36) month
amortization of the Initial Overline Advance.
Unless demand for payment of the New Equipment
Advances is sooner made, commencing on June 1, 1996 and
continuing on the first day of each month thereafter until
the New Equipment Advances are paid in full, the New
Equipment Advances shall be reduced in equal monthly
principal installments based upon a forty-eight month
amortization of the outstanding principal amount of the
New Equipment Advances as of June 1, 1996.
Unless demand for payment of the Additional New
Equipment Advances is sooner made, commencing on June 1,
1997 and continuing on the first day of each month
thereafter until the Additional New Equipment Advances are
paid in full, the Additional New Equipment Advances shall
be reduced in equal monthly principal installments based
upon a forty-eight month amortization of the outstanding
principal amount of the Additional New Equipment Advances
as of June 1, 1997.
You may from time to time furnish to us a statement
of our account. Any such statement shall be conclusive on
us unless and except as written objections thereto calling
your attention to errors are received by you within 30 days
after it is mailed or delivered to us.
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2.02 Section II(A) of the Agreement is hereby amended to read as
follows:
(A) We agree to pay interest on the net balance
owed to you at the close of each day at a rate per annum
(computed on the basis of actual number of days elapsed
and a year of 360 days) which is equal to a) from the
date of this Agreement through September 30, 1995, a
rate per annum which is four percent (4%) in excess of
the publicly announced reference rate (or other publicly
announced prime rate) of interest charged by the Bank,
b) from and after September 30, 1995, through September
1, 1996, a rate per annum which is three percent (3%) in
excess of the publicly announced reference rate (or
other publicly announced prime rate) of interest charged
by the Bank, and c) from and after September 1, 1996, a
rate per annum which is two and one-half percent (2.5%)
in excess of the publicly announced reference rate (or
other publicly announced prime rate) of interest charged
by the Bank. Such interest will be due and payable to
you at the close of each month.
Section 3. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment
shall not become effective until, and shall become effective as the date first
written above when, each of the following provisions shall have been fulfilled:
3.01 Republic shall have received this Amendment, duly executed
by the Borrower;
3.02 Republic shall have received a copy of the resolutions of
the Board of Directors of the Borrower ratifying and authorizing the execution,
delivery and performance of this Amendment, certified as true and accurate by
the Borrower's Secretary or Assistant Secretary; and
3.03 Republic shall have received such other documents as
Republic may reasonably request, including, without limitation, the
Reaffirmation of Subordination Agreement in the form attached as Exhibit A, duly
executed by the Subordinated Lender as defined therein.
Section 4. ACKNOWLEDGMENTS. The Borrower acknowledges and agrees that
its obligations to Republic under the Agreement exist and are owing without
offset, defense or counterclaim assertable by the Borrower against Republic.
The Borrower further acknowledges and agrees that its obligations to Republic
under the Agreement, as amended, constitute "Obligations" within the meaning of
the Security Agreement and the Pledge Agreement and are secured by the Security
Agreement and the Pledge Agreement.
Section 5. EFFECT OF AMENDMENTS; REPRESENTATIONS AND WARRANTIES; NO
WAIVER. Republic and the Borrower agree that after this Amendment becomes
effective, the Agreement, as hereby amended, shall remain in full force and
effect. The Borrower warrants and represents that on and as of the date hereof
and after giving effect to this Amendment, (i) all of the representations and
warranties contained in the Agreement are correct and complete, as of the
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date hereof, and (ii) there will exist no Event of Default under the Security
Agreement or the Pledge Agreement on such date. The Borrower represents and
warrants that the Borrower has all power and legal right and authority to enter
into this Amendment.
Section 6. INCORPORATION OF AGREEMENT AND OTHER LOAN DOCUMENTS BY
REFERENCE; RATIFICATION OF LOAN DOCUMENTS. Except as expressly modified under
this Amendment, all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of
the Borrower under the Agreement, the Security Agreement, the Pledge Agreement
and any and all other documents and agreements entered into with respect to the
obligations under the Agreement (collectively, the "Loan Documents") are
incorporated herein by reference and are hereby ratified and affirmed in all
respects by the Borrower. All references in the Agreement to "this Agreement,"
"herein," "hereof," and similar references, and all references in the other Loan
Documents to the "Agreement," shall be deemed to refer to the Agreement, as
amended by this Amendment.
Section 7. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This Amendment,
from and after the date hereof, embodies the entire agreement and understanding
between the parties hereto.
Section 8. GOVERNING LAW. This Amendment is governed by the laws of
the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Financing Agreement to be executed as of the date and year first above written.
XXXX INCORPORATED
By /s/ Xxxxxxxxx X. Xxxxx
-------------------------------------------
Its President and CEO
REPUBLIC ACCEPTANCE CORPORATION
By /s/
- -------------------------------------------
Its Account Executive
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FOURTH AMENDMENT TO
FINANCING AGREEMENT
This Fourth Amendment to Financing Agreement, dated as of September ___,
1996 ("Amendment"), is made by and between XXXX INCORPORATED, a Minnesota
corporation (the "Borrower") and FIRST BANK NATIONAL ASSOCIATION (the "Lender").
WHEREAS, the Borrower and Republic Acceptance Corporation have entered into
a Financing Agreement dated as of April 28, 1995, as amended by that First
Amendment to Financing Agreement dated as of September 30, 1995, by that Second
Amendment to Financing Agreement dated as of January 18, 1996 and by that Third
Amendment to Financing Agreement dated as of September 12, 1996 (collectively,
the "Agreement"); and
WHEREAS, the obligations and indebtedness of the Borrower to Republic under
the Agreement are secured, inter alia, by a Security Agreement dated as of April
28, 1995 between the Borrower and Republic (as amended, the "Security
Agreement") and a Pledge Agreement dated as of April 28, 1995 between the
Borrower and Republic (as amended, the "Pledge Agreement"); and
WHEREAS, Republic has assigned to the Lender all obligations and
indebtedness owing by the Borrower under the Agreement, the Agreement, the
Security Agreement and the Pledge Agreement and all related documents and
undertakings by assignment agreement dated as of September 12, 1996; and
WHEREAS, the Lender and the Borrower desire to amend the Agreement in order
to amend certain of the provisions therein, upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree to be bound as follows:
Section 1. CAPITALIZED TERMS. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the
Agreement.
Section 2. AMENDMENTS.
2.01 Section II(A) of the Agreement is hereby amended to read as
follows:
(A) We agree to pay interest on the net balance owed to you
at the close of each day at a rate per annum (computed on the basis
of actual number of days elapsed and a year of 360 days) which is
equal to a) from the date of this Agreement through September 30,
1995, a rate per annum which is four percent (4%) in excess of the
publicly announced reference rate (or other publicly
announced prime rate) of interest charged by the Bank, b) from and
after September 30, 1995, through September 1, 1996, a rate per
annum which is three percent (3%) in excess of the publicly
announced reference rate (or other publicly announced prime rate)
of interest charged by the Bank, and c) from and after September 1,
1996, a rate per annum which is three-quarters of one percent
(.75%) in excess of the publicly announced reference rate (or other
publicly announced prime rate) of interest charged by the Bank.
Such interest will be due and payable to you at the close of each
month.
Section 3. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment shall
not become effective until, and shall become effective as the date first written
above when, each of the following provisions shall have been fulfilled:
3.01 The Lender shall have received this Amendment, duly executed
by the Borrower;
3.02 The Lender shall have received a copy of the resolutions of
the Board of Directors of the Borrower ratifying and authorizing the execution,
delivery and performance of this Amendment, certified as true and accurate by
the Borrower's Secretary or Assistant Secretary.
Section 4. ACKNOWLEDGMENTS. The Borrower acknowledges and agrees that
its obligations to the Lender under the Agreement exist and are owing without
offset, defense or counterclaim assertable by the Borrower against the Lender or
Republic. The Borrower further acknowledges and agrees that its obligations to
the Lender and Republic under the Agreement, as amended, constitute
"Obligations" within the meaning of the Security Agreement and the Pledge
Agreement and are secured by the Security Agreement and the Pledge Agreement.
Section 5. EFFECT OF AMENDMENTS; REPRESENTATIONS AND WARRANTIES; NO
WAIVER. The Lender and the Borrower agree that after this Amendment becomes
effective, the Agreement, as hereby amended, shall remain in full force and
effect. The Borrower warrants and represents that on and as of the date hereof
and after giving effect to this Amendment, (i) all of the representations and
warranties contained in the Agreement are correct and complete, as of the date
hereof, and (ii) there will exist no Event of Default under the Security
Agreement or the Pledge Agreement on such date. The Borrower represents and
warrants that the Borrower has all power and legal right and authority to enter
into this Amendment. The Borrower acknowledges that any participant in the
obligations owed to the Lender under the Agreement may charge interest at rates
other than the rate or rates set forth in this Amendment.
Section 6. INCORPORATION OF AGREEMENT AND OTHER LOAN DOCUMENTS BY
REFERENCE; RATIFICATION OF LOAN DOCUMENTS. Except as expressly modified under
this Amendment, all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of
the Borrower under the Agreement, the Security Agreement, the Pledge
2
Agreement and any and all other documents and agreements entered into with
respect to the obligations under the Agreement (collectively, the "Loan
Documents") are incorporated herein by reference and are hereby ratified and
affirmed in all respects by the Borrower. All references in the Agreement to
"this Agreement," "herein," "hereof," and similar references, and all references
in the other Loan Documents to the "Agreement," shall be deemed to refer to the
Agreement, as amended by this Amendment.
Section 7. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This Amendment,
from and after the date hereof, embodies the entire agreement and understanding
between the parties hereto.
Section 8. GOVERNING LAW. This Amendment is governed by the laws of
the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to
Financing Agreement to be executed as of the date and year first above written.
XXXX INCORPORATED
By /s/ Xxxxxxxxx X. Xxxxx
-------------------------------------------
Its President and CEO
FIRST BANK NATIONAL ASSOCIATION
By /s/
-------------------------------------------
Its Vice President