Exhibit 10.2
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT ("Amendment") is made
effective as of August 1, 2001, among RDO FINANCIAL SERVICES CO., ("Borrower") a
North Dakota corporation whose address is 1500 Radisson Tower, 000 -0xx Xxxxxx
Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000, XXXXX FARGO BANK NORTH DAKOTA, N.A., F/K/A
NORWEST BANK NORTH DAKOTA, NATIONAL ASSOCIATION ("Norwest") a national banking
association with offices located in Fargo, North Dakota and AG CAPITAL COMPANY,
a Delaware corporation whose address is 1500 Radisson Tower, 000 - 0xx Xxxxxx
Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000, as a lender hereunder and as agent for all the
lenders hereunder (the "Agent"). (Norwest and Agent are sometimes hereinafter
individually referred to as a "Lender" and collectively referred to as
"Lenders".)
RECITALS
A. The Borrower and the Lenders entered into a Credit Agreement dated
as of June 1, 2000 which has been amended by way of a First Amendment to Credit
Agreement dated January 31, 2001 and a Second Amendment to Credit Agreement
dated as of July 1, 2001 (hereinafter collectively referred to as the "Credit
Agreement").
B. The Subject Notes referred to in the Credit Agreement matured by
their terms and conditions on July 31, 2001. (Capitalized terms used in this
Amendment shall have the respective meanings ascribed them in the Credit
Agreement unless herein defined or the context shall otherwise require.)
C. The Borrower has requested the Lenders to extend the maturity date
of the Subject Notes to January 31, 2002. The Lenders are willing to extend the
maturity date of the Subject Notes upon the terms and conditions set forth in
this Amendment.
NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this Amendment set forth in Section
3 hereof, and in consideration of good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Borrower and the Lenders do
hereby agree as follows:
SECTION 1. AMENDMENTS
1.1 The definition of "Maturity" set forth in Section 1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"Maturity" of the Subject Notes means the earlier of
(a) the date on which the Subject Notes become due
and payable upon the occurrence of an Event of
Default; or (b) January 31, 2002 unless extended in
writing by all of the parties hereto in their sole
discretion.
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1.2 The definition of the term "Receivable Borrowing Base" set forth in
Section 1 of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
"Receivable Borrowing Base" means:
(a) from the date of this Amendment through and including
August 31, 2001, the lesser of (a) $12,000,000 or (b)
the sum of (i) ninety percent (90%) of the Borrower's
Eligible Retail Receivables; (ii) eighty-five percent
(85%) of the Borrower's Eligible Store Receivables;
(iii) seventy-five percent (75%) of the Borrower's
Eligible Foreign Receivables; and (iv) the lesser of
(A) seventy-five percent (75%) of the Borrower's
Eligible Repossessed Inventory or (B) $500,000;
(b) from September 1, 2001, through and including October
31, 2001, the lesser of (a) $12,000,000 or (b) the
sum of (i) seventy percent (70%) of the Borrower's
Eligible Store Receivables; (ii) seventy-five percent
(75%) of the Borrower's Eligible Foreign Receivables;
and (iii) the lesser of (A) seventy-five percent
(75%) of the Borrower's Eligible Repossessed
Inventory or (B) $500,000;
(c) from November 1, 2001, through and including December
14, 2002, the lesser of (a) $10,000,000 or (b) the
sum of (i) seventy percent (70%) of the Borrower's
Eligible Store Receivables; (ii) seventy-five percent
(75%) of the Borrower's Eligible Foreign Receivables;
and (iii) the lesser of (A) seventy-five percent
(75%) of the Borrower's Eligible Repossessed
Inventory or (B) $500,000; and
(d) from December 15, 2001, through and including January
31, 2002, the lesser of (a) $8,000,000 or (b) the sum
of (i) seventy percent (70%) of the Borrower's
Eligible Store Receivables; (ii) seventy-five percent
(75%) of the Borrower's Eligible Foreign Receivables;
and (iii) the lesser of (A) seventy-five percent
(75%) of the Borrower's Eligible Repossessed
Inventory or (B) $500,000;
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1.3 The definition of the term "Receivable Commitment" set forth in
Section 1 of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
"Receivable Commitment" means the maximum principal
amount each Lender is obligated to extend as part of
the Advances which in the case of Norwest shall be
in the amount of $9,000,000 from the date of this
Amendment through and including October 31, 2001,
$7,500,000 from November 1, 2001 through and
including December 14, 2001 and $6,000,000 from
December 15, 2001 through and including January 31,
2002, and in the case of the Agent shall be in the
amount of $3,000,000 from the date of this Amendment
through and including October 31, 2001, $2,500,000
from November 1, 2001 through and including December
14, 2001 and $2,000,000 from December 15, 2001
through and including January 31, 2002.
1.4 The definition of the term "Receivable Note(s)" set forth in
Section 1 of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
"Receivable Note(s)" means, individually or
collectively, the Receivable Note(s), dated June 1,
2000, made by the Borrower payable to the order of
each of the Lenders, the aggregate original
principal amount of which is Twelve Million Dollars
($12,000,000) (as such amount will be reduced on
November 1, 2001 and December 15, 2001), and the
individual original principal amount of which is the
Receivable Commitment of the applicable Lender (as
such amounts will be reduced on November 1, 2001 and
December 15, 2001), together with all extensions,
renewals, modifications, substitutions and changes
in form thereof effected by written agreement
between the Borrower and all of the Lenders.
1.5 The definition of the term "Termination Date" set forth in Section
1 of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:
"Termination Date" means the earlier of (a) January
31, 2002 (unless extended in writing by the parties
hereto in their sole discretion); or (b) the date
upon which the Lenders' willingness to consider
making Advances is terminated pursuant to Section
2.7.
1.6 The form of the "Receivable Notes" set forth in Section 1 of the
Credit Agreement are hereby amended and restated in their entirety to read as
set forth on Exhibit "A" attached hereto.
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1.7 The form of Exhibit "B" to the Credit Agreement, the monthly
borrowing base certificate, is hereby amended and restated in its entirety to
read as set forth in Exhibit "B" attached hereto.
1.8 The form of Exhibit "C" to the Credit Agreement, the weekly
borrowing base certificate, is hereby amended and restated in its entirety to
read as set forth in Exhibit "C" attached hereto.
1.9 Section 2.4(a) of the Credit Agreement shall be and is hereby
amended and restated in its entirety to read as follows:
(a) The Borrower agrees to pay interest on the
outstanding principal amount of the Receivable
Note(s) from the date hereof through August 31, 2001,
at a rate per annum equal to the one month LIBOR plus
240 basis points and from September 1, 2001, until
paid in full at a rate per annum equal to the one
month LIBOR plus 290 basis points, all determined two
(2) Business Days prior to the first Business Day of
the then current calendar week and fixed until the
first Business Day of the following calendar week.
1.10 Section 2.7 of the Credit Agreement shall be and is hereby amended
and restated in its entirety to read as follows:
Termination. The obligation of the Lenders' to make Advances
under the Receivable Commitment shall terminate:
(a) Upon receipt by the Lenders of three (3) days'
written notice of termination from the Borrower given
at any time when no amount is outstanding under the
Receivable Notes;
(b) Immediately and without further action upon the
occurrence of an Event of Default of the nature
referred to in Subsection 8.1(d); or
(c) Immediately when any Event of Default (other than one
of the nature specified in Subsection 8.1(d)) shall
have occurred and be continuing and either (i) the
Majority Lenders shall have demanded payment of the
Receivable Note(s) or (ii) the Majority Lenders shall
elect to terminate any such future consideration by
giving notice to Borrower.
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1.11 Section 6.1 of the Credit Agreement shall be and is hereby amended
to add the following additional subparagraph (j) which shall provide as follows:
(j) As soon as available, but in any event within five
(5) Business Days of each calendar month a letter
from the Borrower, to the Lenders, describing in
detail the progress to date of the take out financing
to be provided by Xxxx Deere Credit through Xxxx
Deere's PowerPlan.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
2.1 To induce the Lenders to execute and deliver this Amendment (which
representations shall survive the execution and delivery of this Amendment), the
Borrower represents and warrants to the Lenders that:
(a) this Amendment, and the documents to be executed in
connection with this Amendment, have been duly
authorized, executed and delivered and constitute the
legal, valid and binding obligations, contracts and
agreements of the Borrower enforceable against it in
accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally;
(b) the Credit Agreement, as amended by this Amendment,
constitutes the legal, valid and binding obligation,
contract and agreement of the Borrower enforceable
against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or
equitable principles relating to or limiting
creditors' rights generally;
(c) the execution, delivery and performance by the
Borrower of this Amendment, (i) has been duly
authorized by all requisite corporate action of the
Borrower and, if required, shareholder action, (ii)
does not require the consent or approval of any
governmental or regulatory body or agency, and (iii)
will not (A) violate (1) any provision of law,
statute, rule or the Borrower's articles of
incorporation or bylaws, (2) any order of any court
or any rule, regulation or order of any other agency
or government binding upon it, or (3) any provision
of any material indenture, agreement or other
instrument to which it is a party or by which its
properties or assets are or may be bound, or (B)
result in a breach of or constitute (alone or with
due notice or lapse of time or both) a default under
any indenture, agreement or other instrument referred
to in clause (iii)(A)(3) of this Section 2.1(c);
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(d) as of the date hereof and after giving effect to this
Amendment, no Event of Default has occurred which is
continuing;
(e) all the representations and warranties contained in
Article 5 of the Credit Agreement are true and
correct in all material respects with the same force
and effect as if made by the Borrower on and as of
the date hereof; and
(f) pursuant to Section 3.1(b), the Borrower shall also
remit to the Agent (for the exclusive benefit of the
Agent) extension fee payments of $4,000 on October 1,
2001, $4,000 on November 1, 2001, $3,000 on December
1, 2001 and $3,000 on January 1, 2002.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT
3.1 This Amendment shall not become effective until, and shall become
effective when, each and every one of the following conditions shall have been
satisfied on terms and conditions satisfactory to the Lenders in their
discretion:
(a) receipt by Norwest of an extension fee in the amount
of $7,500;
(b) receipt by the Agent of an initial extension fee
payment in the amount of $4,000, to be applied toward
a total extension fee in the amount of $18,000, the
balance of which shall be paid in accordance with
Section 2.1(f) of this Amendment;
(c) replacement Receivable Notes dated as of June 1,
2000, duly executed by the Borrower shall have been
delivered to the Lenders;
(d) a certified copy of the resolutions of the Borrower
authorizing the execution, delivery and performance
of this Amendment, the replacement Receivable Notes
and other matters contemplated hereby;
(e) the representations and warranties of the Borrower
set forth in Section 2 hereof are true and correct on
and with respect to the date hereof; and
(f) any and all other agreements, documents, instruments
and powers as the Lenders may require or deem
necessary to carry into effect the purposes of the
documents described in this Section 3 and this
Amendment.
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SECTION 4. MISCELLANEOUS
4.1 This Amendment shall be construed in connection with and as part of
the Credit Agreement, and except as modified and expressly amended by this
Amendment, all terms, conditions and covenants contained in the Credit Agreement
are hereby ratified and shall be and remain in full force and effect. The
Borrower warrants and represents that the Credit Agreement and the Loan
Documents, as amended herein, are legally valid and binding obligations of the
Borrower subject to no defenses, set-offs or counterclaims and are in full force
and effect. By entering into this Amendment, the Lenders do not waive any right,
power or remedy to which they are entitled as the result of any Event of Default
which may exist.
4.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Amendment may
refer to the Credit Agreement without making specific reference to this
Amendment but nevertheless all such references shall include this Amendment
unless the context otherwise requires.
4.3 The descriptive headings of the various Sections or parts of this
Amendment are for convenience only and shall not affect the meaning on
construction of any of the provisions hereof.
4.4 This Amendment constitutes the entire agreement between the parties
and shall not in any way be modified, varied or amended unless in writing signed
the parties. This Amendment shall control with respect to any of its provisions
that conflict or are inconsistent with the Loan Documents and Guaranties and any
other such documents, but to the extent not conflicting or inconsistent, the
Loan Documents and Guaranties and any other such documents executed in
connection with the transaction contemplated by this Amendment and the Credit
Agreement shall be in full force and effect.
4.5 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, when taken together, shall constitute but one and the
same instrument. Facsimile signatures of this Amendment shall be treated as
originals until such time as the original signatures can be obtained.
4.6 The Borrower agrees to do such further acts and things and execute
and deliver, or cause to be executed and delivered, such agreements, powers and
instruments as the Lenders may reasonably require or deem necessary to carry
into effect the purposes of this Amendment.
4.7. This Amendment shall be governed by and construed in accordance
with the laws of the State of North Dakota.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.
RDO FINANCIAL SERVICES CO.,
a North Dakota corporation
By: /s/ Xxxxxx X Xxxxx
------------------------------------
Xxxxxx K, Espel
Its Assistant Secretary/Treasurer
AG CAPITAL COMPANY,
a Delaware corporation
Receivable Commitment as of: By: /s/ Xxxx X. Xxxxx
August 1, 2001 = $3,000,000 ------------------------------------
November 1, 2001 = $2,500,000 Xxxx X. Xxxxx
December 15, 2001 = $2,000,000 Its Loan Officer
XXXXX FARGO BANK NORTH DAKOTA,
N.A., F/K/A NORWEST BANK NORTH
DAKOTA, N.A., a national banking
association
Receivable Commitment as of: By: /s/ Xxxxx X Xxxxxxx, VP
August 1, 2001 = $9,000,000 ------------------------------------
November 1, 2001 = $7,500,000 Xxxxx X. Xxxxxxx
December 15, 2001 = $6,000,000 Its Vice President
[Signatures continued]
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The undersigned, as Guarantors, acknowledge and agree to the foregoing
Third Amendment to Credit Agreement.
RDO EQUIPMENT COMPANY
Date: August 1, 2001 By /s/ Xxxxxx X. Xxxxx
-------------- -------------------------------------
Xxxxxx X. Xxxxx
Its Assistant Secretary/Treasurer
RDO AGRICULTURE EQUIPMENT CO.
Date: August 1, 2001 By /s/ Xxxxxx X. Xxxxx
-------------- -------------------------------------
Xxxxxx X. Xxxxx
Its Assistant Secretary/Treasurer
RDO CONSTRUCTION EQUIPMENT CO.
Date: August 1, 2001 By /s/ Xxxxxx X. Xxxxx
-------------- -------------------------------------
Xxxxxx X. Xxxxx
Its Assistant Secretary/Treasurer
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