Exhibit 10.1
SEVENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of June 16, 1999, is made by and between
MEDICAL GRAPHICS CORPORATION, a Minnesota corporation (the "Borrower") and
XXXXX FARGO BUSINESS CREDIT, INC. f/k/a NORWEST BUSINESS CREDIT, INC., a
Minnesota corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of March 31, 1997 as amended by First Amendment to Credit
and Security Agreement dated as of July 10, 1997, Second Amendment to Credit
and Security Agreement dated as of November 12, 1997, Third Amendment to
Credit and Security Agreement dated as of March 26, 0000, Xxxxxx Xxxxxxxxx to
Credit and Security Agreement dated as of August 14, 1998 Fifth Amendment to
Credit and Security Agreement dated as of September 10, 1998 and Sixth
Amendment to Credit and Security Agreement dated as of March 25, 1999 (as so
amended, the "Credit Agreement"). Capitalized terms used in these recitals
have the meanings given to them in the Credit Agreement unless otherwise
specified.
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. DEFINED TERMS. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined
therein, unless otherwise defined herein. In addition, Section 1.1 of the
Credit Agreement is amended by adding or amending, as the case may be, the
following definitions:
"`Base Rate' means the Prime Rate."
"`Borrowing Base' means, at any time, the lesser of:
(a) the Maximum Line less the Norwest Bank Revolving Advances; or
(b) the Borrowing Power."
"`Borrowing Power' means the sum of:
(i) 80% of Eligible Accounts; plus
(ii) the lesser of (A) 40% of Eligible Inventory or (B) $1,500,000;
plus
(iii) the Overadvance Component."
"`Overadvance Component' means (a) from June 16, 1999 through
September 30, 1999, the lesser of 20% of Eligible Inventory or $500,000,
and (b) thereafter, $0."
"`Overadvance Floating Rate' means an annual rate equal to the sum of
the Base Rate plus six percent (6%), which annual rate shall change when
and as the Base Rate changes."
"`Prime Rate' means the rate publicly announced from time to time by
Xxxxx Fargo Bank, N.A. as its "prime rate" or, if such bank ceases to
announce a rate so designated, any similar successor rate designated by the
Lender."
2. OVERADVANCE INTEREST RATE. Section 2.2 of the Credit Agreement is hereby
amended by adding the following new subsection (f):
"(f) OVERADVANCE INTEREST RATE. Except as set forth in subsections
2.2(c) and 2.2(e), the greater of (i) the difference of the outstanding
principal balance of the Advances and the Borrowing Power, and (ii) the
Overadvance Component, shall bear interest at the Overadvance Floating
Rate."
3. NO OTHER CHANGES. 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 advance or letter of credit thereunder.
4. OVERADVANCE FEE. On the earlier of September 30, 1999 or the Termination
Date, the Borrower shall pay the Lender a fully earned, non-refundable fee in
the amount of $20,000 for the privilege of including the Overadvance Component
in the Borrowing Power.
5. CONDITIONS PRECEDENT. This Amendment shall be effective when the Lender
shall have received an executed original hereof, together with such other
matters as the Lender may require. If the Overadvance fee set forth in Paragraph
4 hereof is not paid in full when due, the Borrower will not have the privilege
of including the Overadvance Component in the Borrowing Power and the Borrower
will be considered to be in default if at any time the outstanding principal
balance of the Revolving Advances exceeded the difference of the Borrowing Power
and the Overadvance Component.
6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Lender as follows:
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(a) The Borrower has all 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. REFERENCES. 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. NO WAIVER. 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. RELEASE. 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,
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whether such claims, demands and causes of action are matured or unmatured or
known or unknown.
10. COSTS AND EXPENSES. 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. MISCELLANEOUS. 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 date first written above.
XXXXX FARGO BUSINESS CREDIT, INC MEDICAL GRAPHICS CORPORATION
/s/ Xxxxx X. Xxxxxx /s/ Xxxx X. Xxxxxxx
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Xxxxx X. Xxxxxx Xxxx X. Xxxxxxx
Its Officer Its Chief Financial Officer
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