FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is entered into as of March 21, 2003, by and between XXXXXXX
BUSINESS SERVICES, INC., a Maryland corporation ("Borrower"), and XXXXX FARGO
BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
A. Borrower is currently indebted to Bank pursuant to the
terms and conditions of that certain Amended and Restated Credit Agreement
between Borrower and Bank dated as of September 2, 2002, as amended from time to
time ("Credit Agreement").
B. Pursuant to the Credit Agreement, Borrower remains indebted
to Bank under a line of credit in the maximum principal amount of Eleven Million
Dollars ($11,000,000.00) (the "Line of Credit"), which is evidenced by that
certain Revolving Line of Credit Note dated September 2, 2002, as modified from
time to time (the "Line of Credit Note"). The Line of Credit Note shall mature
and become due and payable in full on April 30, 2003 and as of the date hereof,
the outstanding principal balance under the Line of Credit is $3,554,447.96,
plus accrued but unpaid interest.
C. Pursuant to the Credit Agreement, Borrower remains indebted
to Bank under a term loan in the original principal amount of Six Hundred
Ninety-three Thousand Seven Hundred Fifty Dollars ($693,750.00) (the "Term
Loan"), which is evidenced by that certain Promissory Note dated August 12,
1993, as modified from time to time (the "Term Note"). The Term Note shall
mature and become due and payable in full on August 1, 2003 and as of the date
hereof, the outstanding principal balance under the Term Loan is $334,013.45,
plus accrued but unpaid interest.
D. Bank and Borrower have agreed to certain changes in the
terms and conditions set forth in the Credit Agreement and have agreed to amend
the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, subject to the terms and
conditions described herein, the parties hereto agree that the Credit Agreement
shall be amended as follows: provided, however, that nothing shall terminate any
security interests, or other documents in favor of Bank, all of which shall
remain in full force and effect unless expressly amended hereby:
1. Amendment to Section 1.3(d). Section 1.3(d) of the Credit
Agreement is hereby deleted in its entirety, and the following substituted
therefor:
"(d) Letter of Credit Fees. Borrower shall pay to Bank fees
upon the issuance of each Letter of Credit, upon the payment or
negotiation of each drawing under any Letter of Credit and upon the
occurrence of any other activity with respect to any Letter of Credit
(including without limitation, the transfer, amendment or cancellation
of any Letter of Credit) determined in accordance with Bank's standard
fees and charges then in effect
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for such activity but in any event not more than 1.50% per annum for
any Letter of Credit issued or renewed, without prior notice."
2. Amendment to Section 2.5. Section 2.5 is hereby amended by
deleting "June 30, 2002" as the date of Borrower's most current financial
statement delivered to Bank, and by substituting "January 31, 2003" for said
date.
3. Amendment to Section 4.9. Section 4.9 of the Credit
Agreement is hereby deleted in its entirety, and the following substituted
therefor:
"SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's
financial condition as follows using generally accepted accounting
principles consistently applied and used consistently with prior
practices (except to the extent modified by the definitions herein),
with compliance determined commencing with Borrower's financial
statements for the period ending March 31, 2003;
(a) Current Ratio not at any time less than 1.10 to 1.0 with
"Current Ratio" defined as total current assets divided by total
current liabilities.
(b) EBITDA not less than negative $600,000.00, measured on a
trailing four-quarter basis, with "EBITDA" defined as net profit before
tax plus interest expense (net of capitalized interest expense),
depreciation expense and amortization expense."
4. Restructuring Fee. In consideration of the changes set
forth herein and as a condition to the effectiveness hereof, immediately upon
signing this Amendment Borrower shall pay to Bank a non-refundable fee of
$10,000.00 (the "Restructuring Fee").
5. Conditions Precedent. The obligation of Bank to amend the
terms and conditions of the Credit Agreement as provided herein, is subject to
the fulfillment to Bank's satisfaction of all of the following conditions by no
later than March 21, 2003:
(a) Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:
(i) This Amendment.
(ii) First Modification To Promissory Note,
(iii) Such other documents as Bank may require under
any other section of this Amendment.
(b) Restructuring Fee. Bank shall have received the
Restructuring Fee in immediately available funds.
(c) Title. Bank shall have received policy datedown
endorsements to its original policies of title insurance, insuring that
the priority and enforceability of each Bank's Mortgage or Deed of
Trust is unaffected by this Amendment and shall remain in full force
and effect,
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subject only to such exceptions as Bank shall approve in its
discretion, with the costs of $100.00 to be paid by Borrower.
(d) Other Fees and Costs. In addition to Borrower's
obligations under the Credit Agreement and the other Loan Documents,
Borrower shall have paid to Bank the full amount of all costs and
expenses, including reasonable attorneys' fees (including the allocated
costs of Bank's in-house counsel) expended or incurred by Bank in
connection with the negotiation and preparation of this Amendment, for
which Bank has made demand.
(d) Interest. Interest under the Line of Credit Note shall
have been paid current.
(e) Interest and Principal. Interest and principal under the
Term Note shall have been paid current.
6. General Release. In consideration of the benefits provided
to Borrower under the terms and provisions hereof, Borrower hereby agrees as
follows ("General Release"):
(a) Borrower, for itself and on behalf of its successors and
assigns, does hereby release, acquit and forever discharge Bank, all of Bank's
predecessors in interest, and all of Bank's past and present officers,
directors, attorneys, affiliates, employees and agents, of and from any and all
claims, demands, obligations, liabilities, indebtedness, breaches of contract,
breaches of duty or of any relationship, acts, omissions, misfeasance,
malfeasance, causes of action, defenses, offsets, debts, sums of money,
accounts, compensation, contracts, controversies, promises, damages, costs,
losses and expenses, of every type, kind, nature, description or character,
whether known or unknown, suspected or unsuspected, liquidated or unliquidated,
each as though fully set forth herein at length (each, a "Released Claim" and
collectively, the "Released Claims"), that Borrower now has or may acquire as of
the later of: (i) the date this Amendment becomes effective through the
satisfaction (or waiver by Bank) of all conditions hereto; (ii) the date that
Borrower has executed and delivered this Amendment to Bank (hereafter, the
"Release Date"), including without limitation, those Released Claims in any way
arising out of, connected with or related to any and all prior credit
accommodations, if any, provided by Bank, or any of Bank's predecessors in
interest, to Borrower, and any agreements, notes or documents of any kind
related thereto or the transactions contemplated thereby or hereby, or any other
agreement or document referred to herein or therein.
(b) Borrower hereby acknowledges, represents and warrants to
Bank that it agrees to assume the risk of any and all unknown, unanticipated or
misunderstood defenses and Released Claims which are released by the provisions
of this General Release in favor of Bank, and Borrower hereby waives and
releases all rights and benefits which it might otherwise have under any state
or local laws or statutes with regard to the release of such unknown,
unanticipated or misunderstood defenses and Released Claims.
(c) Each person signing below on behalf of Borrower
acknowledges that he or she has read each of the provisions of this General
Release. Each such person fully understands that this General Release has
important legal consequences, and each such person realizes that they are
releasing any and all Released Claims that Borrower may have as of the Release
Date. Borrower hereby acknowledges that it has had an opportunity to obtain a
lawyer's advice concerning the legal consequences of each of the provisions of
this General Release.
(d) Borrower hereby specifically acknowledges and agrees that:
(i) none of the provisions of this General Release shall be construed as or
constitute an admission of any
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liability on the part of Bank; (ii) the provisions of this General Release shall
constitute an absolute bar to any Released Claim of any kind, whether any such
Released Claim is based on contract, tort, warranty, mistake or any other
theory, whether legal, statutory or equitable; and (iii) any attempt to assert a
Released Claim barred by the provisions of this General Release shall subject
Borrower to the provisions of applicable law setting forth the remedies for the
bringing of groundless, frivolous or baseless claims or causes of action.
7. Miscellaneous. Except as specifically provided herein, all
terms and conditions of the Credit Agreement shall remain in full force and
effect, without waiver or modification. All terms defined in the Credit
Agreement shall have the same meaning when used in this Amendment. This
Amendment and the Credit Agreement shall be read together, as one document. This
Amendment may be executed in any number of counterparts, each of which when
executed and delivered shall be deemed to be an original, and all of which when
taken together shall constitute one and the same Amendment.
8. Reaffirmation; Certification. Borrower hereby remakes all
representations and warranties contained in the Credit Agreement and reaffirms
all covenants set forth therein. Borrower further certifies that as of the date
of this Amendment there exists no Event of Default as defined in the Credit
Agreement, nor any condition, act or event which with the giving of notice or
the passage of time or both would constitute an Event of Default.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the day and year first written above.
XXXXXXX BUSINESS SERVICES, INC. XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Day
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Xxxxxxx X. Xxxxxxxxxx Xxxxxxx X. Day
Vice President-Finance Vice President
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