FIRST AMENDMENT TO CREDIT AGREEMENT
This Amendment is made as of the 15th day of March, 1996 by and between
Electronic Hair Styling, Inc., a Washington corporation (the "Borrower"), and
Norwest Business Credit, Inc., a Minnesota corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into the Credit and Security Agreement
dated as of November 16, 1995 (the "Credit Agreement").
The Lender has agreed to make a term loan, a real estate loan and certain loan
advances to the Borrower pursuant to the terms and conditions set forth in the
Credit Agreement.
The term loan is evidenced by the Borrower's term note dated November 16, 1995
in the original principal amount of $2,300,000, the real estate loan is
evidenced by the Borrower's real estate note dated November 16, 1995 in the
original principal amount of $3,700,000 and the loan advances under the Credit
Agreement are evidenced by the Borrower's revolving note dated as of November
16, 1995, in the maximum principal amount of $14,000,000, each of which notes
are payable to the order of the Lender (collectively, the "Note").
All indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Credit Agreement and all other Security Documents as defined therein
(collectively, the "Security Documents").
The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make 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. Terms used in this Amendment which are defined in the Credit Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.
2. The Credit Agreement is hereby amended as follows:
(a) Section 6.13 of the Credit Agreement is hereby amended by deleting
the portion of said Section set forth in table form and replacing the
same with the following:
Book Net Worth
For the Month Ending Plus Subordinated Indebtedness
December 31, 1995 $10,050,000
January 31, 1996 $8,550,000
February 29,1996 $8,550,000
March 31, 1996 $8,250,000
April 30, 1996 $8,250,000
May 31, 1996 $8,250,000
June 30, 1996 $8,250,000
July 31, 1996 $8,550,000
August 31, 1996 $8,850,000
September 30,1996 $8,850,000
October 31, 1996 $9,250,000
November 30, 1996 $9,750,000
December 31, 1996 $10,050,000
(b) Section 6.14 of the Credit Agreement is hereby amended by deleting
the portion of said Section set forth in table form and replacing the
same with the following:
For the Month Ending Leverage Ratio
-------------------- --------------
January 31, 1996 4.06 to 1.0
February 29, 1996 4.35 to 1.0
March 31, 1996 4.39 to 1.0
April 30, 1996 4.45 to 1.0
May 31, 1996 4.26 to 1.0
June 30, 1996 4.36 to 1.0
July 31, 1996 4.52 to 1.0
August 31, 1996 4.49 to 1.0
September 30, 1996 4.14 to 1.0
October 31, 1996 3.86 to 1.0
November 30, 1996 3.59 to 1.0
December 31, 1996 3.58 to 1.0
(c) Section 6.15 of the Credit Agreement is hereby amended by deleting
the portion of said Section set forth in table form and replacing the
same with the following:
For the Month Ending Net Income
-------------------- ----------
January 31, 1996 ($1,500,000)
February 29, 1996 ($1,500,000)
March 31, 1996 ($1,500,000)
April 30, 1996 ($1,800,000)
May 31, 1996 ($1,800,000)
June 30, 1996 ($1,800,000)
July 31, 1996 ($1,500,000)
August 31, 1996 ($1,200,000)
September 30, 1996 ($1,200,000)
October 31, 1996 ($800,000)
November 30, 1996 ($300,000)
December 31, 1996 -0-
(d) Section 6.16 of the Credit Agreement is hereby amended by adding to
said Section the following proviso:
"; provided, however, that the Borrower may reduce the
outstanding principal balance of the Subordinated Indebtedness
by up to $5,000,000, solely out of the proceeds of the
Borrower's initial public offering of its common stock, if and
only if the net proceeds from any such initial public offering
are equal to or in excess of $15,000,000."
(e) Section 6.17 of the Credit Agreement is hereby amended by adding to
said Section a new sentence, reading as follows:
"In addition to the foregoing, the Lender shall have the right
to modify (i) any or all of such covenants in its discretion,
within 60 days after the close of the Borrower's initial
public offering of its common stock, and (ii) Leverage Ratio
and Book Net Worth Plus Subordinated Indebtedness covenants if
at any time the value of the Borrower's Class A preferred
stock is determined to be greater than $7,000,000."
(f) Section 7.5 of the Credit Agreement is hereby amended by adding to the
end of said Section the following proviso:
"provided, further, however, that the Borrower may redeem up
to $5,000,000 of its Class B preferred stock, solely out of
the proceeds of the Borrower's initial public offering of the
its common stock, if and only if the net proceeds from any
such initial public offering are equal to or in excess of
$15,000,000."
(g) Section 8.1(q) of the Credit Agreement is hereby amended by adding to
the end of said Section the following proviso:
"; provided, however, that such minimum ownership percentage
requirement shall be reduced to 24% of the voting stock of the
Borrower if the Borrower raises at least $15,000,000 of net
proceeds from the Borrower's initial public offering of its
common stock."
3. 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 loan or advance thereunder.
4. This Amendment shall be effective upon receipt by the Lender of an executed
facsimile copy hereof, to be supplemented with an executed original hereof
within two (2) business days, together with the following, in substance and form
acceptable to the Lender in its sole discretion:
(a) Certificate of the Secretary of the Borrower certifying as to (i)
the resolutions of the board of directors of the Borrower approving the
execution and delivery of this Amendment, (ii) the fact that the
Articles of Incorporation and Bylaws of the Borrower, which were
certified and delivered to the Lender pursuant to the Certificate of
the Borrower's Secretary dated as of November 16, 1995 in connection
with the execution and delivery of the Credit Agreement continue in
full force and effect and have not been amended or otherwise modified
except as set forth in the Certificate to be delivered, and (iii)
certifying that the officers and agents of the Borrower who have been
certified to the Lender, pursuant to the Certificate of the Borrower's
Secretary dated as of November 16, 1995, as being authorized to sign
and to act on behalf of the Borrower continue to be so authorized or
setting forth the sample signatures of each of the officers and agents
of the Borrower authorized to execute and deliver this Amendment and
all other documents, agreements and certificates on behalf of the
Borrower.
5. The Borrower hereby represents and warrants to the Lender as follows:
(a) The Borrower has 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 duly 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 by-laws 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.
6. 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. 7. 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.
8. 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.
9. 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.
10. 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 day and year first above written.
ELECTRONIC HAIR STYLING, INC.
By: _________/s/ DON G. HOFF_____
Its: _________________________________
NORWEST BUSINESS CREDIT, INC.
By: ___________________________________
Its: _________________________________
69493_4
SECOND AMENDMENT TO CREDIT AGREEMENT
This Amendment is made as of the 30th day of August, 1996 by and between
Electronic Hair Styling, Inc., a Delaware corporation (the "Borrower"), and
Norwest Business Credit, Inc., a Minnesota corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into the Credit and Security Agreement
dated as of November 16, 1995, as amended by the First Amendment To Credit
Agreement dated as of March 15, 1996 (the "Credit Agreement").
The Lender has agreed to make a term loan, a real estate loan and certain loan
advances to the Borrower pursuant to the terms and conditions set forth in the
Credit Agreement.
The term loan is evidenced by the Borrower's term note dated November 16, 1995
in the original principal amount of $2,300,000, the real estate loan is
evidenced by the Borrower's real estate note dated November 16, 1995 in the
original principal amount of $3,700,000 and the loan advances under the Credit
Agreement are evidenced by the Borrower's revolving note dated as of November
16, 1995, in the maximum principal amount of $14,000,000, each of which notes
are payable to the order of the Lender (collectively, the "Note").
All indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Credit Agreement and all other Security Documents as defined therein
(collectively, the "Security Documents").
The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make 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. Terms used in this Amendment which are defined in the Credit Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.
2. The Credit Agreement is hereby amended as follows:
(a) The definition of "Revolving Loan Floating Rate" set forth in
Section 1.1 of the Credit Agreement is hereby amended, effective as of
July 1, 1996, by deleting the phrase "one and one-quarter percent
(1.25%)" therefrom and replacing the same with the phrase "one-half of
one percent (0.50%)".
(b) The definition of "Term Loan Floating Rate" set forth in Section
1.1 of the Credit Agreement is hereby amended, effective as of July 1,
1996, by deleting the phrase "one and one-half percent (1.50%)"
therefrom and replacing the same with the phrase "three-fourths of one
percent (0.75%)".
(c) Section 1.1 of the Credit Agreement is hereby further amended by
adding to said Section new definitions of "Availability", "L/C Amount",
"Letter of Credit", "Obligation of Reimbursement", "Special Account"
and "L/C Application", reading as follows:
"Availability" means the Borrowing Base minus the outstanding
balance under the Revolving Note, minus the L/C Amount. "L/C Amount"
means the sum of (i) the face amount of any issued and outstanding
Letters of Credit and (ii) the unpaid amount of the Obligation of
Reimbursement. "L/C Application" means an application and agreement
for letters of credit in Lender's then-current standard form. "Letter
of Credit" has the meaning specified in Section 2.15 hereof.
"Obligation of Reimbursement" has the meaning specified in Section
2.16 hereof. "Special Account" means a specified cash collateral
account maintained by the Lender in connection with Letters of Credit,
as contemplated by Sections 2.17 and 3.1a. hereof.
(d) Section 2.1 of the Credit Agreement is hereby amended by deleting
the first paragraph, as well as sub-paragraph (a) thereof in their
entirety and replacing the same with the following:
"Section 2.1 Advances. The Lender agrees, on the terms and
subject to the conditions herein set forth, to make Advances
to the Borrower from time to time during the period from the
date hereof to and including the Termination Date, or the
earlier date of termination in whole of the Credit Facility
pursuant to Sections 2.6 or 8.2 hereof, in an aggregate amount
at any time outstanding not to exceed the Borrowing Base less
the L/C Amount, which advances shall be secured by the
Collateral as provided in Article III hereof. The Credit
Facility should be a revolving facility and it is contemplated
that the Borrower will request advances, make prepayments and
request additional Advances. The Borrower agrees to comply
with the following procedures in requesting Advances under
this Section 2.1:
(a) Borrower will not request any Advance under this
Section 2.1, if, after giving effect to such
requested Advance, the sum of the outstanding and
unpaid Advances under this Section 2.1 or otherwise
would exceed the Borrowing Base less the L/C Amount."
(e) Section 2.5 of the Credit Agreement is hereby amended by
adding thereto a new sub-section (e), reading as follows:
"(e) Notwithstanding the interest payable pursuant to Sections
2.5(a), (b) and (c) hereof, the Borrower shall be liable to
the Lender for interest hereunder of not less than $600,000
for each calendar year during the term of the Agreement other
than any calendar year in which this Agreement is terminated
prior to the Termination Date (such amount, the "Minimum
Interest Charge"), and the Borrower shall pay any deficiency
between the Minimum Interest Charge and the amount of interest
otherwise calculated under Sections 2.5(a), (b), and (c)
hereof for each such calendar year on the day immediately
succeeding the last day of each such calendar year."
(f) Section 2.6(d) of the Credit Agreement is hereby amended by
deleting clauses (c) and (d) thereof in their entirety, and by
inserting the word "and" immediately before clause (b) thereof.
(g) Section 2.8 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the following:
"Section 2.8 Payment. All payments of principal and interest
on the Advances, the Term Loan, the Real Estate Loan, the
Obligation of Reimbursement, the Commissions and Fees
hereunder and amounts required to be paid to the Lender for
deposit in the Special Account shall be made to the Lender in
immediately available funds. The Borrower hereby authorizes
the Lender to charge against the Borrower's account with the
Lender an amount equal to the Obligation of Reimbursement,
principal, accrued interest, commissions and fees from time to
time due and payable to the Lender hereunder and amounts
required to be paid to the Lender for deposit in the Special
Account and further authorizes the Lender, in its discretion,
and without request by Borrower to make an Advance under the
Credit Facility to the extent necessary to pay any such
amounts and any fees, costs or expenses hereunder or under the
Loan Documents."
(h) Section 2.11 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the following:
"Section 2.11 Liability Records. Lender may maintain from time
to time, at its discretion, liability records as to any and
all Advances, the Term Loan, the Real Estate Loan and the
Obligation of Reimbursement made or repaid in interest accrued
or paid under this Agreement. All entries made on any such
record shall be presumed correct until the Borrower
establishes the contrary. On demand by the Lender, the
Borrower will admit and certify in writing the exact principal
balance that the Borrower then asserts to be outstanding to
the Lender for Advances, the Term Loan, the Real Estate Loan,
and all Obligations of Reimbursement under this Agreement. Any
billing statement or accounting rendered by the Lender shall
be conclusive and fully binding on the Borrower unless
specific written notice of exception is given to the Lender by
the Borrower within thirty days after its receipt by the
Borrower."
(i) Section 2.12 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the following:
"Section 2.12 Setoff. The Borrower agrees that the Lender may
at any time or from time to time, at its sole discretion and
without demand and without notice to anyone, setoff any
liability owed to Borrower by the Lender, whether or not due,
against any indebtedness owed to the Lender by the Borrower
(for Advances, the Term Loan, the Real Estate Loan, any
Obligations of Reimbursement or for any other transaction or
event), whether or not due. In addition, each other Person
holding a participating interest in any Advances, the Term
Loan, the Real Estate Loan and/or any Letters of Credit made
to or issued for the benefit of the Borrower by the Lender
shall have the right to appropriate or setoff a deposit or
other liability then owed by such Person to the Borrower,
whether or not due, and apply the same to the payment of said
participating interest, as fully as if such Person had lent
directly to the Borrower the amount of such participating
interest."
(j) Section 2.13 of the Credit Agreement is hereby amended by deleting
sub-section (b) thereof in its entirety and replacing the same with the
following:
"(b) Intentionally omitted."
(k) Section 2.13 of the Credit Agreement is hereby further amended by
deleting the number "four (4)" contained in subsection (c) thereof and
replacing the same with the number "three (3)".
(l) Section 2.13 of the Credit Agreement is hereby further amended by
adding to said Section a new sub-section (d) reading as follows:
"(d) The Borrower hereby agrees to pay the Lender a commission
with respect to each Letter of Credit, if any, accruing on a
daily basis and computed at the annual rate of one and
one-half percent (1.5%) of the available amount of such Letter
of Credit (as it may be changed from time to time) from and
including the date of issuance of such Letter of Credit until
such date as such Letter of Credit shall terminate by its
terms, payable monthly in arrears, and prorated for any part
of a full calendar month in which such Letter of Credit
remains outstanding. The Borrower further agrees to pay the
Lender, on written demand, the administrative fees charged by
the Lender in the ordinary course of business in connection
with the honoring of drafts under any Letter of Credit,
amendments thereto, transfers thereof and all other activity
with respect to the Letters of Credit at the then-current
rates published by the Lender for services rendered on behalf
of customers of the Lender generally."
(m) The Credit Agreement is hereby amended by adding thereto the
following new Sections 2.15, 2.16, 2.17 and 2.18, reading as follows:
Section 2.15. Issuance of Letters of Credit.
(a) The Lender may, in its sole discretion, issue one or more
letters of credit for the account of the Borrower (each a
"Letter of Credit") from time to time during the period from
the date hereof until the Termination Date or until the Credit
Facility is terminated pursuant to Section 8.2(a), whichever
first occurs, in an aggregate amount at any time outstanding
not to exceed the Borrowing Base less the sum of (i) all
outstanding and unpaid Advances hereunder and (ii) the unpaid
amount of the Obligation of Reimbursement. Each Letter of
Credit, if any, shall be issued pursuant to a separate L/C
Application entered into between the Borrower and the Lender,
completed in a manner satisfactory to the Lender. The terms
and conditions set forth in each such L/C Application shall
supplement the terms and conditions hereof, but in the event
of inconsistency between the terms of any such L/C Application
and the terms hereof, the terms hereof shall control.
(b) The Borrower will not request the issuance of any Letter
of Credit under this Section 2.15 if, after the issuance of
such requested Letter of Credit, the sum of the face amounts
of all issued and outstanding Letters of Credit would exceed
the Borrowing Base less the sum of (i) all outstanding and
unpaid Advances hereunder and (ii) the unpaid amount of the
Obligation of Reimbursement.
(c) No Letter of Credit shall be issued with an expiry date
later than the Termination Date in effect as of the date of
issuance.
(d) Any request for the issuance of a Letter of Credit under
this Section 2.15 shall be deemed to be a representation by
the Borrower that (i) the condition set forth in Section
2.15(b), hereof has been met, and (ii) the statements set
forth in Article V hereof are correct as of the time of the
request.
Section 2.16. Payment of Amounts Drawn Under Letters of Credit. Draws
under any Letter of Credit shall be reimbursed to the Lender in
accordance with the applicable L/C Application and as follows:
(a) The Borrower hereby agrees to pay the Lender on the day a
draft is honored under any Letter of Credit a sum equal to all
amounts drawn under such Letter of Credit plus any and all
reasonable charges and expenses that the Lender may pay or
incur relative to such draw, plus interest on all such
amounts, accruing from the date such draft is honored through
and including the date of payment by the Borrower at the
interest rate then applicable to Advances hereunder, charges
and expenses as set forth below (all such amounts are
hereinafter referred to, collectively, as the "Obligation of
Reimbursement").
(b) The Borrower hereby agrees to pay the Lender on demand
interest on all amounts, charges and expenses payable by the
Borrower to the Lender under this Section 2.16, accrued from
the date any such draft, charge or expense is paid by the
Lender until payment in full by the Borrower at the Default
Rate.
If the Borrower fails to pay to the Lender promptly the amount
of its Obligation of Reimbursement in accordance with the
terms hereof and the L/C Application pursuant to which such
Letter of Credit was issued, the Lender is hereby irrevocably
authorized and directed, in its sole discretion, to make an
Advance in an amount sufficient to discharge the Obligation of
Reimbursement, including all interest accrued thereon but
unpaid at the time of such Advance, and such Advance shall be
evidenced by the Revolving Note and shall bear interest as
provided therein.
Section 2.17 Special Account. If the Credit Facility is terminated
pursuant to Section 8.2(a), or the Credit Facility is otherwise
terminated for any reason whatsoever, while any Letter of Credit is
outstanding, the Borrower shall thereupon pay the Lender in immediately
available funds for deposit in the Special Account an amount equal to
the maximum aggregate amount available to be drawn under all Letters of
Credit then outstanding, assuming compliance with all conditions for
drawing thereunder. Amounts in the Special Account may be invested as
Lender shall determine, including in certificates of deposit issued by
Lender. Any interest and earnings on such amounts shall be credited to
the Special Account. The Borrower shall not be responsible for any
losses from the investment or use of funds in the Special Account.
Amounts on deposit in the Special Account may be applied by the Lender
at any time or from time to time to the Borrower's Obligation of
Reimbursement, and shall not be subject to withdrawal by the Borrower
so long as the Lender maintains a security interest therein; provided,
however, that, upon the occurrence of any Event of Default, the Lender
may apply such amounts to any of the Obligations in its sole
discretion. The Lender agrees to transfer any balance in the Special
Account to the Borrower at such time as the Lender is required to
release its security interest in the Special Account under applicable
law.
Section 2.18 Obligations Absolute. The obligations of the Borrower
arising under this Agreement shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement, under all circumstances whatsoever, including (without
limitation) the following circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit or any other agreement or instrument relating to any
Letter of Credit (collectively the "Related Documents");
(b) any amendment or waiver of or any consent to departure
from all or any of the Related Documents;
(c) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time, against any
beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), or other person or entity, whether
in connection with this Agreement, the transactions
contemplated herein or in the Related Documents or any
unrelated transactions;
(d) any statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever;
(e) payment by or on behalf of the Lender under any Letter of
Credit against presentation of a draft or certificate which
does not strictly comply with the terms of such Letter of
Credit; or
(f) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing."
(n) Section 3.1 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the following:
"Section 3.1 Grant of Security Interest. The Borrower hereby
assigns and grants to the Lender a security interest
(collectively referred to as the "Security Interests") in the
Collateral, as security for the payment and performance of
each and every debt, liability and obligation of every type
and description which the Borrower may now or at any time
hereafter owe to the Lender (whether such debt, liability or
obligation now exists or is hereafter created or incurred,
whether it arises in a transaction involving the Lender alone
or in a transaction involving other creditors of the Borrower,
and whether it is direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or
unliquidated, or sole, joint, several or joint and several,
and including specifically, but not limited to, the Obligation
of Reimbursement and all indebtedness of the Borrower arising
under this Agreement, any L/C Application completed by the
Borrower or any other loan or credit agreement or guaranty
between Borrower and Lender, whether now in effect or
hereafter entered into; all such debts, liabilities and
obligations are herein collectively referred to as the
"Obligations")."
(o) The Credit Agreement is hereby amended by adding thereto a new Section
3.1a., reading as follows: "3.1a. Security Interest in Special
Account. The Borrower
hereby pledges and grants to the Lender a security interest in
all funds held in the Special Account from time to time and
all proceeds thereof, as security for the payment of all
present and future Obligations of Reimbursement and all other
amounts due hereunder or under the Loan Documents."
(p) Section 3.2 of the Credit Agreement is hereby amended by deleting the
parenthetical phrase contained in the first sentence of said Section
and replacing the same with the following: "(but only after the
occurrence of an Event of Default)".
(q) Section 6.1(d) of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the
following:
"(d) within 15 days of the end of each month, a schedule of
assigned receivables, a collection report and such other
documents regarding the Borrower's accounts receivable and
collections as the Lender may request, on forms provided by
the Lender; provided, however, that if the Borrower's
Availability becomes less than $5,000,000, such reports and
schedules shall be provided to the Lender on a weekly basis;
provided, further, that if the Borrower's Availability becomes
less than $5,000,000 during any weekly reporting period, such
reports and schedules shall thereafter be provided to the
Lender on a daily basis.
(r) Section 6.1(j) of the Credit Agreement is hereby amended by adding the
following phrase to the end of clause (i) thereof: "which seek a
monetary recovery against the Borrower in excess of $50,000", and by
adding the following phrase to the end of clause (ii) thereof: "with
an aggregate invoice price in excess of $50,000".
(s) Section 6.13 of the Credit Agreement is hereby amended by deleting the
portion of said Section set forth in table form and replacing the same
with the following:
Book Net Worth
For the Month Ending Plus Subordinated Indebtedness
July 31, 1996 $28,310,000
August 31, 1996 $28,610,000
September 30,1996 $28,610,000
October 31, 1996 $29,010,000
November 30, 1996 $29,510,000
December 31, 1996 $29,810,000
January 31, 1997 $28,310,000
February 28, 1997 $28,310,000
March 31, 1997 $28,310,000
April 30, 1997 $28,310,000
(t) Section 6.14 of the Credit Agreement is hereby amended by deleting the
portion of said Section set forth in table form and replacing the same
with the following:
For the Month Ending Leverage Ratio
July 31, 1996 1.2 to 1.0
August 31, 1996 1.2 to 1.0
September 30, 1996 1.2 to 1.0
October 31, 1996 1.2 to 1.0
November 30, 1996 1.2 to 1.0
December 31, 1996 1.2 to 1.0
January 31, 1997 1.2 to 1.0
February 29, 1997 1.2 to 1.0
March 31, 1997 1.2 to 1.0
April 30, 1997 1.2 to 1.0
(u) Section 6.15 of the Credit Agreement is hereby amended by deleting the
portion of said Section set forth in table form and replacing the same
with the following:
For the Month Ending Net Income
July 31, 1996 ($1,500,000)
August 31, 1996 ($1,200,000)
September 30, 1996 ($1,200,000)
October 31, 1996 ($800,000)
November 30, 1996 ($300,000)
December 31, 1996 -0-
January 31, 1997 ($1,500,000)
February 29, 1997 ($1,500,000)
March 31, 1997 ($1,500,000)
April 30, 1997 ($1,500,000)
(v) Section 7.4(a) of the Credit Agreement is hereby amended by deleting
the introductory paragraph thereof in its entirety and replacing the
same with the following:
"(a) The Borrower will not purchase or hold beneficially any
stock or other securities or evidence of indebtedness of, make
or permit to exist any loans or advances to, or make any
investment or acquire any interest whatsoever in, any other
Person, including specifically but without limitation any
partnership or joint venture, except:".
(w) Section 7.4(a) of the Credit Agreement is hereby further amended by
deleting subparagraph (4) thereof in its entirety and re-numbering
subparagraph (5) as subparagraph (4).
(x) Section 7.10 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the
following:
"Section 7.10 Capital Expenditures. The Borrower will not
expend or contract to expend Capital Expenditures more than
$3,400,000 in the aggregate during the Borrower's fiscal year
ending December 31, 1996, or more than $2,000,000 in the
aggregate during any fiscal year thereafter or more than
$500,000 in any one transaction (except that the Borrower may
expend up to $1,700,000 in 1996 in a single transaction for
the purchase of a new computer system)."
(y) Section 7.12 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the
following:
"Section 7.12 Discounts, etc.. The Borrower will not, after
notice from the Lender, grant any discount, credit or
allowance to any customer of the Borrower or accept any return
of goods sold or modify, amend, subordinate, cancel or
terminate the obligation of any account debtor or other
obligor of the Borrower."
(z) Section 7.17 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the
following:
"Section 7.17 Salaries. The Borrower will not pay excessive
or unreasonable salaries, bonuses, commissions, consultant fees
or other compensation."
(aa) Section 8.1(a) of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the
following:
"(a) Default in the payment of any interest on or principal of
the Note, or failure to pay any amount specified in Section
2.16 hereof relating to the Borrower's Obligation of
Reimbursement or shall fail to pay any amounts required to be
paid for deposit in the Special Account under Section 2.17
hereof, in each case when the same becomes due and payable
hereunder; or".
(bb) Section 8.1(c) of the Credit Agreement is hereby amended by
deleting said Section in its entirety and replacing the same with
the following:
"(c) Default in the performance, or breach, of any covenant or
agreement of the Borrower contained in this Agreement;
provided, however, that if and as long as the Borrower
maintains availability in excess of $4,000,000, the Borrower's
non-compliance with the covenants set forth in Sections 6.12,
6.13, 6.14, 6.15 and/or 7.10 of this Agreement shall
constitute a Event of Default or an Event of Default only if
such non-compliance continues for in excess of 31 consecutive
days; or".
(cc) Section 8.2 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and replacing the same with the following:
"(a) The Lender may, by notice, to the Borrower, declare the
Credit Facility to be terminated, where upon the same shall
forthwith terminate, and/or may refuse to issue or cause to be
issued any Letter of Credit;".
(dd) Section 8.2 of the Credit Agreement is hereby further amended by
adding to said Section a new sub-section (g), reading as follows:
"(g) The Lender may make demand upon the Borrower and,
forthwith upon such demand, the Borrower will pay to the
Lender in immediately available funds for deposit in the
Special Account pursuant to Section 2.17 hereof an amount
equal to the maximum aggregate amount available to be drawn
under Letters of Credit then outstanding assuming compliance
with all conditions for drawing thereunder."
(ee) Section 9.7 of the Credit Agreement is hereby amended by adding to
said Section a new second sentence reading as follows:
"Without limiting the foregoing in any way, the Borrower
agrees to pay on demand all costs and expenses, including
without limitation reasonable attorney's fees, incurred by the
Lender in connection with the Obligations, this Agreement, the
Loan Documents, any Letters of Credit and any other document
or Agreement related hereto or thereto, and the transactions
contemplated hereby."
3. 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 loan or advance thereunder.
4. The Borrower hereby acknowledges that, on July 6, 1996, the Borrower prepaid
the Revolving Note in part in the amount of $8,000,000, out of the proceeds of
the Borrower's initial public offering (the "Prepayment"). The Borrower further
acknowledges and agrees that, pursuant to Section 2.6(d) of the Credit
Agreement, the Borrower was obligated to pay to the Lender a prepayment premium
in the amount of $160,000, in connection with the Prepayment and that the
Borrower has not paid such prepayment premium. The Lender hereby waives the
prepayment premium which would otherwise have been payable with respect to the
Prepayment. The Borrower shall pay a fee in the amount of $80,000 if, but only
if, and when the Revolving Note is prepaid in whole, and the Credit Facility is
terminated, before November 15, 1998, except for any prepayment from the
proceeds of a refinancing with the Lender or an affiliate of Lender. If the
Borrower prepays the Revolving Note in full from the proceeds of a refinancing
with the Lender or an affiliate of the Lender and subsequently prepays the
loan(s) relating to such refinancing in whole before November 15, 1998, the
$80,000 fee described in the immediately preceding sentence shall be due and
payable in full to the Lender at the time of such prepayment. The provisions of
this Section 4 are in addition to, and not in replacement or substitution of,
the prepayment provisions set forth in the Credit Agreement, which shall remain
in full force and effect, as otherwise amended in this Amendment.
5. This Amendment shall be effective upon receipt by the Lender of (a) an
executed original hereof within two (2) business days, and (b) a Certificate of
the Secretary of the Borrower in a form acceptable to the Lender. The Borrower
shall pay to the Lender an amendment fee in the amount of $80,000 on or before
February 28, 1997.
6. The Borrower hereby represents and warrants to the Lender as follows:
(a) The Borrower has 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 duly 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 by-laws 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. 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. 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. 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.
10. 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. 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 day and year first above written.
ELECTRONIC HAIR STYLING, INC.
By: __/s/ XXXX X. XXXXXXXX ______
Its: _Vice President Finance__________
NORWEST BUSINESS CREDIT, INC.
By: _/s/ XXXXXXXX GUETTER__________
Its: _/s/ AVP________________________
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 30th day of August,
1996, by Xxxx Xxxxxxxx, the VP of Finance of Electronic Hair Styling, Inc., a
California corporation, for and on behalf of said corporation.
/s/ X.X. XXXXXX
Notary Public
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 30th day of August,
1996, by Xxxxxxxx Xxxxxxx, the AVP of Norwest Business Credit, Inc., a Minnesota
corporation, for and on behalf of said corporation.
/s/ X.X. XXXXXX
Notary Public
89128_4
AMENDMENT AGREEMENT
October 18, 1996
Reference is hereby made to (a) that certain Credit and Security Agreement dated
November 16, 1995 by and between Electronic Hair Styling, Inc., a Delaware
corporation (the "Company") and Norwest Business Credit, Inc., a Minnesota
corporation ("NBCI"), as amended (the "Credit Agreement") and (b) that certain
Collateral Account Agreement dated November 16, 1995 by and among the Company,
NBCI and Norwest Bank Minnesota, National Association, a national banking
association (the "Bank"), as the same may have been amended (the "Collateral
Account Agreement").
1. Section 4 of the Collateral Account Agreement is hereby amended by replacing
the number "2" set forth therein and replacing the same with the number "1".
2. Section 6.10 of the Credit Agreement is hereby amended by deleting the number
"2" set forth in the seventh sentence of said section and replacing the same
with the number "1".
3. In consideration of the Bank's agreement to the amendments set forth above,
NBCI agrees to indemnify and reimburse the Bank, within ten (10) days after
demand, for any item which constitutes cash receipts of NBCI's "Collateral" (as
defined in the Credit Agreement) deposited in the "Collateral Account" (as
defined in the Collateral Account Agreement) which is returned unpaid and for
which the Company does not reimburse the Bank, provided that the Bank shall
notify NBCI within five business days of the day the Bank learns that any such
item shall be or has been returned unpaid (whichever occurs first).
This Agreement shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of Minnesota. Each
party consents to the personal jurisdiction of the state and federal courts
located in the State of Minnesota in connection with any controversy related to
this Agreement, waives any argument that venue in any such forum is not
convenient, and agrees that any litigation initiated by any of them in
connection with this Agreement shall be venued in either the District Court of
Hennepin County, Minnesota, or the United States District Court, District of
Minnesota, Fourth Division. The parties waive any right to trial by jury in any
action or proceeding based on or pertaining to this Agreement. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.
COMPANY: ELECTRONIC HAIR STYLING, INC.
By: __/s/ XXXX X. HELLMANN_____________
Its: _Vice President______________________
BANK: NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By: __/s/ XXXX X. HULSTRAND__________
Its: _Vice President____________
NBCI: NORWEST BUSINESS CREDIT, INC.
By: _/s/ XXXXXXXX GUETTER_____________
Its: __AVP________________________
THIRD AMENDMENT TO CREDIT AGREEMENT
This Amendment is made as of the 30th day of January, 1997 by and between
Electronic Hair Styling, Inc., a Delaware corporation (the "Borrower"), and
Norwest Business Credit, Inc., a Minnesota corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into the Credit and Security Agreement
dated as of November 16, 1995, as amended by the First Amendment To Credit
Agreement dated as of March 15, 1996 and by the Second Amendment to Credit
Agreement dated as of August 30, 1996 (the "Credit Agreement").
The Lender has agreed to make a term loan, a real estate loan and certain loan
advances to the Borrower pursuant to the terms and conditions set forth in the
Credit Agreement.
The term loan is evidenced by the Borrower's term note dated November 16, 1995
in the original principal amount of $2,300,000, the real estate loan is
evidenced by the Borrower's real estate note dated November 16, 1995 in the
original principal amount of $3,700,000 and the loan advances under the Credit
Agreement are evidenced by the Borrower's revolving note dated as of November
16, 1995, in the maximum principal amount of $14,000,000, each of which notes
are payable to the order of the Lender (collectively, the "Note").
All indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Credit Agreement and all other Security Documents as defined therein
(collectively, the "Security Documents").
The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make 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. Terms used in this Amendment which are defined in the Credit Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.
2. The Credit Agreement is hereby amended as follows:
(a) Section 6.12 of the Credit Agreement is hereby amended by deleting
the number "1.2" therefrom and replacing the same with the number
"1.0".
(b) Section 6.13 of the Credit Agreement is hereby amended by (i)
deleting the number "$29,510,000" (the minimum figure applicable to
November 30, 1996) therefrom and replacing the same with the number
"$29,310,000", and (ii) deleting the number "$29,810,000" (the minimum
figure applicable to December 31, 1996) therefrom and replacing the
same with the number "$29,577,000".
(c) Section 8.2 of the Credit Agreement is hereby amended by adding
thereto sub-sections (b) through (f), together with the paragraph
immediately following sub-section (f), in each case in form and
substance identical to that which existed prior to the Second Amendment
to Credit Agreement dated as of August 30, 1996, by and between the
Borrower and the Lender.
3. 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 loan or advance thereunder.
4. This Amendment shall be effective upon receipt by the Lender of (a) an
executed original hereof within two (2) business days after the date hereof, and
(b) a Certificate of the Secretary of the Borrower in a form acceptable to the
Lender.
5. The Borrower hereby represents and warrants to the Lender as follows:
(a) The Borrower has 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 duly 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 by-laws 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.
6. 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. 7. The Borrower has indicated to the Lender
that the Borrower intends to redeem certain of its presently issued and
outstanding common stock. Pursuant to Section 7.5 of the Credit Agreement, the
Borrower is prohibited from making any payment on account of the purchase,
redemption or any other retirement of any shares of its stock, without the
Lender's prior written consent. The Lender hereby consents to the Borrowers's
payment of up to $1,500,000 on account of the Borrower's redemption of its $.01
par value common stock, provided that such redemption is consummated, and such
payment is made, on or before July 31, 1997. Except as set forth in the
immediately preceding sentence, the execution of this Amendment and acceptance
of any documents related hereto shall not be deemed to be a consent to or 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.
8. 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.
9. 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.
10. 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 day and year first above written.
ELECTRONIC HAIR STYLING, INC.
By: _/s/ XXXX X. HELLMANN____________
Its: __Vice President________________
NORWEST BUSINESS CREDIT, INC.
By: __/s/ XXXXXXXX GUETTER_____________
Its: ___AVP_________________________
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this 30th day of January,
1997, by Xxxx X. Xxxxxxxx, the Vice President Finance of Electronic Hair
Styling, Inc., a California corporation, for and on behalf of said corporation.
/s/ XXXXXXXX X. XXXXX
Notary Public
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 30th day of January,
1997, by Xxxxxxx Xxxxxxx, the AVP of Norwest Business Credit, Inc., a Minnesota
corporation, for and on behalf of said corporation.
/s/ XXXXXXXXX XXXXXXX
Notary Public
106098-3
Electronic Hair Styling, Inc.
Certificate of Secretary
I, Xxxx X. Xxxxxxxx, Secretary of Electronic Hair Styling, Inc., a Delaware
corporation (the "Company"), hereby certify that:
(a) attached hereto as Exhibit A is a true and complete copy of resolutions
duly adopted by the Board of Directors of the Company, and such resolutions
have not been amended, modified or rescinded, and remain in full force and
effect;
(b) the Certificate of Incorporation of the Company (the "Certificate"), and
the By-Laws of the Company (the "By-Laws"), in the forms delivered to
Norwest on August 30, 1996 pursuant to a Secretary's Certificate dated
August 30, 1996, delivered in connection with the execution and delivery of
that certain Second Amendment to the Credit Agreement (the "Amendment"),
between the Company and Norwest, are true and correct copies of the same,
including all amendments thereto, and said Certificate and By-Laws have not
been further amended except as set forth in any amendments attached hereto,
and no action has been taken by the Company or its shareholders, directors
or officers in contemplation of any such amendment, and are in full force
and effect on the date hereof; and
(c) each person who, as an officer of the Company, signed the Amendment was
duly elected or appointed, qualified and acting as such officer at the time
of signing and delivery, and the signature of such person appearing on the
Amendment is a genuine signature.
In witness whereof, I have hereunto signed this Certificate as of this 30 day of
January, 1997.
_/s/ XXXX X. HELLMANN__________________
Xxxx X. Xxxxxxxx, Secretary
Exhibit A to Certificate of Secretary
RESOLVED, that the Chairman of the Board and Chief Executive Officer, and the
Vice President, Finance and Chief Financial Officer, acting alone or together,
be, and each of them hereby is authorized to execute, deliver and perform a
certain Third Amendment to Credit Agreement (the "Amendment") by and between the
Company and Norwest Business Credit, Inc. ("Norwest"), and any and all other
documents and agreements required by Norwest in connection with the Amendment,
the approval and acceptability of the Amendment and all such other documents and
agreements to the Company to be conclusively evidenced by the execution thereof
by either of the above referenced officers.
