SEVENTH AMENDMENT
TO
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
This Seventh Amendment is made as of the 4th day of April, 1997,
by and among XXXXXXXX, INC., a Minnesota corporation (the "Borrower"),
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association
("Norwest"), XXXXXX TRUST AND SAVINGS BANK, a bank organized and existing
under the laws of the State of Illinois ("Xxxxxx"), and NBD BANK, a Michigan
banking corporation ("NBD"; NBD, Norwest and Xxxxxx, collectively the
"Lenders" and each a "Lender"), and Norwest as Agent for and on behalf of
the Lenders (in such capacity, the "Agent").
Recitals
The Borrower, Norwest and Xxxxxx entered into an Amended and
Restated Credit and Security Agreement dated as of November 24, 1993, as
amended by a First Amendment to Amended and Restated Credit and Security
Agreement dated as of December 2, 1993, a Second Amendment to Amended and
Restated Credit and Security Agreement dated as of May 12, 1994, a Third
Amendment to Amended and Restated Credit and Security Agreement dated as of
January 24, 1995, a Fourth Amendment to Amended and Restated Credit and
Security Agreement dated as of January 29, 1996 and a Fifth Amendment to
Amended and Restated Credit and Security Agreement dated as of March 12, 1996
and a Sixth Amendment to Amended and Restated Credit and Security Agreement
dated as of November 1, 1996 (as amended, the "Credit Agreement") under
which the Lenders agreed to make certain revolving credit and term loans
available to the Borrower.
The Borrower and the Lenders have agreed to amend the Credit
Agreement to provide for a supplemental $12,000,000 revolving line of credit
facility and to make certain other changes thereto.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Seventh
Amendment which are defined in the Credit Agreement shall have the same
meanings as defined therein, unless otherwise defined herein.
2. Amended Definitions. Section 1.1 of the Credit Agreement is
hereby amended by adding, or amending and restating in their entirety, as the
case may be, the following definitions:
"Borrowing Base" means, at any time, the lesser of:
(a) the aggregate Revolving Commitment Amounts of the Lenders,
or
(b) the sum of:
(i) eighty percent (80%) of Eligible Accounts, plus
(ii) sixty percent (60%) of Eligible Raw Materials
Inventory, plus
(iii) fifty percent (50%) of Eligible Finished Goods
Inventory, plus
(iv) twenty percent (20%) of Eligible Other Inventory, plus
(v) fifty percent (50%) of the net book value of Eligible
Equipment, in no event, however, to exceed $30,000,000.
"Capital Expenditure Limit" means $33,000,000 for the Borrower's
fiscal year 1997 and, for each subsequent fiscal year, an amount
mutually agreed upon by the Borrower and the Required Lenders; provided,
however, that if on or prior to the sixtieth (60th) day following the
end of the prior fiscal year, the Borrower and the Required Lenders are
unable to agree, in writing, upon the appropriate level of Capital
Expenditures for the immediately succeeding fiscal year, the Required
Lenders may, in their discretion, declare an Event of Default as of such
date.
"Eligible Equipment" means all Equipment owned by the Borrower
free and clear of any other lien, security interest or encumbrance, and
also including all Equipment being acquired and installed by the
Borrower and shown as "construction in progress" on the Borrower's
financial statements; provided, however, that after the Maturity Date
with respect to Facility B, "construction in progress" will no longer
be included.
"Facility A" is the $35,000,000 revolving credit facility
evidenced by the Borrower's Revolving Notes to the Lenders dated March
12, 1996.
"Facility A Notes" means those promissory notes of the Borrower
to the Lenders dated March 12, 1996, as the same may be amended,
supplemented or replaced from time to time.
"Facility B" means the $12,000,000 revolving credit facility
evidenced by the Borrower's Revolving Notes to the Lenders dated as of
the date of the Seventh Amendment.
"Facility B Notes" means those certain promissory notes from the
Borrower to the Lenders dated as of the date of the Seventh Amendment,
as the same may be amended, supplemented or replaced from time to time.
"Maturity Date" means (i) December 31, 1998, with respect to
Facility A and (ii) December 31, 1997, with respect to Facility B.
"Revolving Advance" means an Advance under Facility A or
Facility B, as the case may be, as specified in Section 2.1 hereof.
"Revolving Commitment Amount" means, with respect to each
Lender, the aggregate amount of such Lender's Commitments for Facility A
and Facility B, as set forth in the Seventh Amendment, unless said
amount is reduced pursuant to Section 2.11(b) hereof, in which event,
such amount shall be reduced by the aggregate amount of such reductions
pursuant to Section 2.11(b).
"Revolving Notes" means the Borrower's promissory notes payable
to the order of each of the Lenders, including both Facility A Notes and
Facility B Notes.
"Seventh Amendment" means the Seventh Amendment to Amended and
Restated Credit and Security Agreement dated April 4, 1997.
3. Eligible Accounts. Section 1.1 of the Credit Agreement is
further amended by deleting item (5) from the definition of "Eligible
Accounts" and replacing it with the following new item (5):
"(5) Accounts owed by an account debtor located outside the
United States which are not backed by a bank letter of credit
assigned to the Agent (if such assignment is required by the
Agent), in the possession of the Agent and acceptable to the Agent
in all respects, in its sole discretion; provided, however, that,
subject to clause (12) below, Accounts due and owing from Siemens,
Bosch, Delco, Ford, Texas Instruments, Polaroid, 3M and Motorola
shall be allowed;"
4. Revolving Advances. Section 2.1 of the Credit Agreement is
modified by adding the following thereto:
"All requests for Borrowings under this Section 2.1 shall
be deemed a request for Revolving Advances under Facility A,
until such time as Facility A has been fully funded, and
thereafter shall be deemed a request for Borrowings under
Facility B. Revolving Advances made under Facility A shall
be evidenced by and repayable in accordance with the
Facility A Notes and Revolving Advances made under Facility
B shall be evidenced by and repayable in accordance with the
Facility B Notes. Repayments of Revolving Advances shall be
applied (i) first, against the outstanding principal balance
of Facility B and (ii) next, against the outstanding
principal balance of Facility A."
5. Revolving Commitments. The Commitments of the Lenders and
their respective Percentages as set forth on the signature page of the Credit
Agreement are hereby amended in their entirety to read as follows:
Norwest Facility A Commitment Amount $11,666, 666.67
Facility B Commitment Amount $4,000,000
Total Revolving Commitment Amount $15,666,666.67
Percentage of Total Revolving
Commitment Amount 33 1/3%
Xxxxxx Facility A Commitment Amount $11,666, 666.67
Facility B Commitment Amount $4,000,000
Total Revolving Commitment Amount $15,666,666.67
Percentage of Total Revolving
Commitment Amount 33 1/3%
NBD Facility A Commitment Amount $11,666, 666.67
Facility B Commitment Amount $4,000,000
Total Revolving Commitment Amount $15,666,666.67
Percentage of Total Revolving
Commitment Amount 33 1/3%
6. Issuance of New Promissory Notes. To evidence the Facility
B Commitments of the Lenders, the Borrower agrees to issue and deliver to each
Lender a new promissory note, of even date herewith, payable to the order of
such Lender in the original principal amount of $4,000,000 (collectively, the
"New Notes"). Upon issuance thereof, all references in the Credit Agreement
and in each other Loan Document to the "Notes" or the "Revolving Notes"
shall be deemed references to the Notes previously issued pursuant to the
Credit Agreement, together with the New Notes.
7. Fee. The Borrower hereby agrees to pay to the Lenders a
non-refundable fee of $15,000, to be divided pro-rata among the Lenders, to
induce the Lenders to enter into this Seventh Amendment, payable upon
execution and delivery hereof.
8. Minimum Net Income. Section 6.15 of the Credit Agreement is
hereby amended in its entirety to read as follows:
"Section 6.15 Minimum Net Income. The Borrower and its
Subsidiaries will have Net Income for each fiscal year subsequent to
fiscal year 1997, at a level mutually agreed upon by the Borrower and
the Required Lenders; provided, however, that if on or prior to the
sixtieth (60th) day following the end of the prior fiscal year, the
Borrower and the Required Lenders are unable to agree, in writing, upon
the appropriate level of Net Income for any subsequent fiscal year, the
Required Lenders may, in their sole discretion, declare an Event of
Default as of such date. There is no Minimum Net Income requirement in
effect for fiscal year 1997."
9. Liens. Section 7.1(e) of the Credit Agreement is amended
in its entirety to read as follows:
"(e) purchase money security interests relating to the
acquisition of Equipment of the Borrower securing indebtedness not in
excess of $10,000,000, in the aggregate, at any time outstanding, so
long as the Borrower is in, and maintains, compliance with every other
provision of this Agreement."
10. Conditions Precedent. This Seventh Amendment shall become
effective on the business day on which the Agent shall have received the
following, each in form and substance satisfactory to the Agent, but in no
event shall the Agent receive the same later than the close of business on
April 4, 1997:
(a) This Seventh Amendment, duly executed on behalf of the
Borrower and each Lender.
(b) The New Notes, duly executed on behalf of the Borrower.
(c) A certified copy of the Resolutions adopted by the Board of
Directors of the Borrower approving the execution and delivery of this
Seventh Amendment, the New Notes and such other documents as are
contemplated hereby.
(d) An opinion of the Borrower's counsel as to such matters as
the Agent may reasonably request.
(e) Evidence satisfactory to the Agent of payment by the
Borrower of all fees contemplated in paragraph 6 above, together with
such costs and expenses incurred by the Agent, including attorneys fees
and expenses, in connection with the preparation and negotiation of this
Seventh Amendment and other matters as contemplated hereby.
11. Representations and Warranties. To induce the Lenders to
enter into this Seventh Amendment, the Borrower hereby represents and warrants
to the Lenders as follows:
(a) The Borrower has all requisite power and authority to
execute this Amendment and to perform all of its obligations hereunder.
(b) The execution, delivery and performance by the Borrower of
this Amendment has been duly authorized by all necessary corporate
action and does not (i) require any authorization, consent or approval
by any governmental department, commissions, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate (A) 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 (B) the
articles of incorporation or by-laws of the Borrower, or (ii) result in
the breach 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) Subject to the modifications set forth in Schedule I
attached hereto, the representations and warranties contained in Article
V of the Credit Agreement are true and correct as of the date hereof as
though made on and as of this date, except to the extent that such
representations and warranties relate solely to an earlier date.
12. Release. The Borrower hereby releases and forever
discharges the Lenders and each of their respective former and present
directors, officers, employees, agents and representatives of and from every
and all claims, demands, causes of action (at law or in equity) and
liabilities, of any kind or nature, whether known or unknown, liquidated or
unliquidated, absolute or contingent, which the Borrower ever had, presently
has or claims to have against a Lender or any of its respective directors,
officers, employees, agents or representatives of or relating to events,
occurrences, actions, inactions or any other matters occurring prior to the
date of this Amendment.
13. No Waiver. The execution of this Amendment 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 Lenders, whether or not known to the Lenders and
whether or not existing on the date of this Amendment.
14. Costs and Expenses. The Borrower hereby reaffirms its
agreement under Section 10.7 of the Credit Agreement to pay or reimburse the
Agent, among other costs and expenses, all expenses incurred by the Agent in
connection with the amendment, performance or enforcement of the Loan
Documents, including without limitation, all reasonable fees and disbursements
of legal counsel to the Agent.
15. References. Except as expressly amended hereby, all
provisions of the Loan Documents shall remain in full force and effect. After
the effective date hereof, each reference to any Loan Document or any other
document executed in connection with the Credit Agreement to the "Credit
Agreement" or to "this Agreement", "hereunder" or "hereof" or words of
like import referring to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.
16. Execution in Counterparts. This Amendment may be executed
in any number of counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts, taken
together, shall constitute but one in the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
XXXXXXXX, INC.
/s/ Xxxx X. XxXxxxx
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Lender and Agent
/s/ Xxxxx Xxxxxx
XXXXXX TRUST AND SAVINGS BANK
/s/ Xxxxx Xxxxxx
NBD BANK
/s/ Xxxxxxxxxx Xxxxxxx
SCHEDULE I TO SEVENTH AMENDMENT
Xxxxxxxx has received notice from the U.S. Environmental Protection Agency
that it may have contributed materials containing hazardous substances to the
Revere Chemical Corporation in Bucks County, Pennsylvania and, consequently,
may be responsible, along with other entities, for environmental contamination
at the Revere Chemical Corporation property. An attorney from the EPA, in
response to information provided by Xxxxxxxx, has informally indicated that no
further action would be pursued against Xxxxxxxx with respect to this matter.
That attorney, however, would provide no written assurances to Xxxxxxxx.
