Exhibit 4.1
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of April 28, 2000,
amends and supplements that certain Credit Agreement dated as of April 30, 1998
(as amended to the date, the "Credit Agreement") among BANDO XXXXXXXXXX CAPITAL
CORPORATION, a Wisconsin corporation (the "Company") and FIRSTAR BANK, N.A.
(formerly known as Firstar Bank Milwaukee, N.A.) (the "Bank").
RECITAL
The Company and the Bank desire to amend the Credit Agreement as provided
below.
AGREEMENTS
In consideration of the promises and agreements set forth in the Credit
Agreement, as amended hereby, the Bank and the Company agree as follows:
1. Definitions and References. Capitalized terms not otherwise defined
herein have the meanings assigned to them in the Credit Agreement. All
references to the Credit Agreement contained in the Loan Documents shall, upon
fulfillment of the conditions set forth in section 3 below, mean the Credit
Agreement as amended by this Third Amendment.
2. Amendments to Credit Agreement. The Credit Agreement is amended as
follows:
(a) The following definition of "Revolving Loan Commitmnent" is added
to section 1 of the Credit Agreement to appear in the appropriate alphabetical
sequence:
"Revolving Loan Commitment" means $7,500,000; provided, however,
that such amount shall be reduced to $7,000,000 as of January 31, 2001.
(b) The definition of "BMIC" contained in section 1 of the Credit
Agreement is amended to read as follows:
"BMIC" means Xxx Xxxxxxxxx Original Dolls, Inc., formerly known as
Bando XxXxxxxxxx Investment Corporation, a Wisconsin corporation and
successor by merger with Xxx Xxxxxxxxx Original Dolls, Inc., an Ohio
corporation.
(c) The definition of "Maturity Date" contained in section 1 of the
Credit Agreement is amended by deleting "April 30, 2000" contained therein and
substituting "June 30, 2000" in its place.
(d) Section 2.1 is amended to read as follows:
2.1 Revolving Loans; Borrowing Procedures.
(a) Revolving Loans. On or about April 30, 1998 the Bank made
a term loan to the Company, the current outstanding principal balance
of which is $5,000,000. The Bank and the Company have agreed to convert
the outstanding term loan to a revolving loan and the Bank is willing,
subject to the terms hereof, to advance additional sums to the Company.
The Bank will lend to the Company, subject to the terms and conditions
hereof, up to the maximum applicable Revolving Loan Commitment at any
time outstanding during the period from the date hereof to the Maturity
Date. Within such maximum amount, loans may be made, repaid and made
again. All advances and loans to the Company shall be evidenced by the
Note from the Company and shall, except as otherwise provided herein,
be payable on the Maturity Date. Although the Note shall be expressed
to be payable in the maximum amount available to the Company, the
Company shall be obligated to pay only the amount actually disbursed to
or for the account of the Company, together with interest on the unpaid
balance of the sums so disbursed, which remains outstanding from time
to time as shown on the records of the Bank.
(b) Borrowing Procedures. The Company shall request advances
by written notice, or by telephonic notice, confirmed in writing if
requested by the Bank, to the Bank, not later than 2 p.m., Milwaukee
time, on the requested borrowing date
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(which must be a business day). Each such request by the Company must
specify the amount of the requested advance and the requested borrowing
date therefor. In the event of any inconsistency between the telephonic
notice and the written confirmation thereof, the telephonic notice
shall control. Each such request for an advance shall be irrevocable
and shall constitute a certification by the Company that the borrowing
conditions specified in sections 4.2(a) and 4.2(b) will be satisfied on
the specified Borrowing Date. Upon fulfillment of the applicable
borrowing conditions set forth in section 4, the Bank shall deposit the
requested advance in the Company's account maintained with the Bank or
as the Company may otherwise direct in writing.
(e) Section 2.2 is amended to read as follows:
2.2 Interest Rates.
(a) The unpaid principal balance of the Note outstanding from
time to time shall bear interest prior to the Maturity Date at an
annual rate equal to the Prime Rate and such rate shall change on each
day on which the Prime Rate changes. Accrued interest shall be due on
the last business day of each calendar quarter, commencing June 30,
2000, and on the Maturity Date.
(b) Notwithstanding the provisions of section 2.2(a) above,
the Company shall may elect to fix the variable rate of interest
otherwise payable on the Note at a fixed rate quoted by the Bank (the
"Fixed Rate"), provided that (i) no Default or Event of Default then
exists, (ii) the portion of principal outstanding under the Note
subject to the Fixed Rate must be at least $1,000,000 and (iii) the
portion of the Note the Company elects to subject to the Fixed Rate
must be fixed during the entire period from the date of the Company's
election through the Maturity Date of the Note.
(c) Notwithstanding the provisions of section 2.2(a) above,
upon the occurrence and during the
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continuance of an Event of Default, the unpaid principal balance of the
Note shall, upon notice from the Bank to the Company, bear interest at
the rate otherwise in effect plus two (2.00%) percentage points (the
"Default Rate"), payable upon demand, and on and after the Maturity
Date, the unpaid principal balance of the Note and all accrued interest
thereon shall bear interest at the Default Rate and shall be payable
upon demand.
(d) Interest shall be calculated for the actual number of
days elapsed on the basis of a 360-day year.
(f) Section 2.4 is amended to read as follows:
2.4 Prepayments. The Company will give the Bank notice of any
optional prepayment of the Note not later than the day prior to the
prepayment date, specifying the prepayment date and the amount to be
prepaid. Each prepayment of the Note shall be in a minimum amount of
$100,000. The amount of such prepayment shall become due and payable by
2:00 p.m., Milwaukee time, on the specified prepayment date. If any portion
of the Note bearing interest at the Fixed Rate is prepaid, whether by the
Company, as a result of acceleration upon default or otherwise, the Company
agrees to pay all of the Bank's costs, expenses and Interest Differential
(as defined herein) (as determined by the Bank) incurred as a result of
such prepayment. The term "Interest Differential" shall mean that sum equal
to the greater of 0 or the financial loss incurred by the Bank resulting
from prepayment, calculated as the difference between the amount of
interest the Bank would have earned (from like investments in the Money
Markets (as defined herein) as of the first day of the loan) had prepayment
not occurred and the interest the Bank will actually earn (from like
investments in the Money Markets as of the date of prepayment) as a result
of the redeployment of funds from the prepayment. The term "Money Markets"
refers to one or more wholesale funding markets available to the Bank,
including negotiable certificates of deposit, commercial paper, eurodollar
deposits, bank notes, federal funds and others. Because of the short-term
nature of this facility, the Company agrees that the Interest Differential
shall not be discounted to its present value.
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The Bank's internal records of applicable interest rates shall be
determinative in the absence of manifest error. Any partial prepayment of
the Note shall be applied first to any fees and expenses then owing to the
Bank hereunder, then to accrued interest on the Note, then to the portion
of principal outstanding under the Note bearing interest by reference to
the Prime Rate (if any), then to any prepayment fee required pursuant to
the terms hereof, and finally to the portion of principal outstanding under
the Note bearing interest by reference to the Fixed Rate.
(g) Section 4.2 is created to read as follows:
4.2 On or Before Each Subsequent Borrowing Date:
(a) Borrowing Procedure. The Company shall have complied with
the borrowing procedure specified in section 2.1(b).
(b) Representations and Warranties True and Correct. The
representations and warranties contained in section 3 hereof and in the
other Loan Documents shall be true and correct on and as of the
relevant borrowing date except (i) that the representations and
warranties contained in section 3.3 shall apply to the most recent
financial statements delivered pursuant to sections 5.1 and 5.2 and
(ii) for changes contemplated or permitted by this Agreement.
(c) No Default. There shall exist on that borrowing date no
Default or Event of Default.
(d) Proceedings and Documentation. The Bank shall have
received such instruments and other documents as it may reasonably
request in connection with the making of such loan, and all such
instruments and documents shall be in form and content satisfactory to
the Bank.
(h) Exhibit A attached hereto shall be deemed to be a exhibit to the
Credit Agreement and shall replace its predecessor attached thereto.
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3. Effectiveness of Third Amendment. This Third Amendment shall become
effective upon its execution and delivery by the Company and the Bank, and the
satisfaction of the following conditions:
(a) Replacement Note. The Bank shall have received the promissory note
of the Company in the form of Exhibit A, duly executed by the Company (the
"Replacement Note).
(b) Pledge Agreement. The Bank shall have received a pledge agreement,
duly executed by the Company, pledging to, and granting a security interest in
favor of, the Bank in all of the Company's right, title and interest in and to
(i) all outstanding shares of the capital stock of the Company's subsidiaries,
Bando XxXxxxxxxx Small Business Lending Corporation ("BMSBLC") and Xxx Xxxxxxxxx
Original Dolls, Inc. ("Xxx Xxxxxxxxx") and (ii) that certain Promissory Note in
the stated principal amount of $2,500,000 from InvestorsBancorp, Inc. ("IBI")
payable to the Company, together with any all original stock certificates and
instruments evidencing the foregoing, and all necessary endorsements,
assignments or stock powers, in blank.
(c) Guaranty Reaffirmations. The Bank shall have received a guaranty
reaffirmation duly executed by BMSBLC and Xxx Xxxxxxxxx, respectively, whereby
each entity reaffirms its obligations under its previously executed guaranty in
favor of the Bank with respect to the obligations of the Company.
(d) Opinions of Counsel. The Bank shall have received the following
opinions of counsel:
(i) An opinion from counsel to the Company covering the
transactions between the Company and the Bank; and
(ii) An opinion of counsel to IBI covering the transaction
involving the issuance of the Promissory Note referred to above.
(e) Closing Certificate. The Bank shall have received copies,
certified by the Secretary of the Company to be true and correct and in full
force and effect as of the date of this Third Amendment, of (i) the Articles of
Incorporation and By-Laws of the Company; (ii) resolutions of the Board of
Directors of the Company authorizing the issuance, execution and delivery of
this
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Third Amendment; and (iii) a statement containing the names and titles of the
officer or officers of the Company authorized to sign such documents, together
with true signatures of such officers.
(f) Proceedings Satisfactory. All other proceedings contemplated by
this Third Amendment shall be satisfactory to the Bank, and the Bank shall have
received such other information relating hereto as the Bank may reasonably
request.
4. Waiver. The Bank hereby waives the Company's compliance with section
6.11 of the Credit Agreement to permit the Company to amend that certain
Business Note dated April 30, 1998 in the amount of $5,000,000 from Xxx
Xxxxxxxxx to the Company to reduce the interest payable thereunder from 20% to
12%; provided that the original of such amended Business Note is delivered to
the Bank pursuant to the terms of the Pledge Agreement dated as of April 30,
1998 from the Company to the Bank. Nothing contained herein shall be deemed to
be a waiver of any other provision of the Credit Agreement or of any Default or
Event of Default now existing or hereafter arising, whether known or unknown,
under the Credit Agreement.
5. Acknowledgment Regarding Future Issuance of Shares. The Company
acknowledges that as outlined in (a) that certain letter dated November 18, 1999
from InvestorsBank to the Federal Reserve Bank of Chicago and (b) that certain
letter dated December 27, 1999 from the Federal Reserve Bank of Chicago to
InvestorsBank should the earnings of IBI prove insufficient to allow IBI to
service its debt obligation owing to the Company, IBI shall additional shares of
its capital stock in a minimum amount of $500,000 to Xxxxxx Xxxxxxxx, President
of the Company and IBI.
6. Representations and Warranties. The Company represents and warrants to
the Bank that:
(a) The execution, delivery and issuance of this Third Amendment and
the Replacement Note, and the performance by the Company of its obligations
hereunder, are within its corporate power, have been duly authorized by proper
corporate action on the part of the Company, are not in violation of any
existing law, rule or regulation of any governmental agency or authority, any
order or decision of any court, the Articles of Incorporation or By-Laws of the
Company or the terms of any agreement, restriction or undertaking to
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which the Company is a party or by which it is bound, and do not require the
approval or consent of the shareholders of the Company, any governmental body,
agency or authority or any other person or entity; and
(b) The representations and warranties contained in the Loan Documents
are true and correct in all material respects as of the date of this Third
Amendment except (i) the representations and warranties contained in section 3.3
of the Credit Agreement shall apply to the most recent financial statements
delivered by the Company to the Bank pursuant to sections 5.1 and 5.2 of the
Credit Agreement and (ii) for changes contemplated or permitted by the Loan
Documents and, to the Company's knowledge, no condition exists or event or act
has occurred that, with or without the giving of notice or the passage of time,
would constitute an Event of Default under the Credit Agreement.
7. Costs and Expenses. The Company agrees to pay to the Bank, on demand,
all costs and expenses (including reasonable attorneys' fees) paid or incurred
by the Bank in connection with the negotiation, execution and delivery of this
Third Amendment.
8. Full Force and Effect. The Credit Agreement, as amended hereby, remains
in full force and effect.
9. Counterparts. This Third Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of parties hereto may execute this Third Amendment by signing any such
counterpart.
BANDO XXXXXXXXXX CAPITAL CORPORATION
BY_____________________________
Its___________________________
FIRSTAR BANK, N.A. (formerly
known as Firstar Bank Milwaukee, N.A.)
BY_____________________________
Its___________________________
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