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TERM LOAN SUPPLEMENT
TO
CREDIT AGREEMENT
This Agreement is made this 14 day of March, 1995, by Technical
Publishing Solutions, Inc., a Minnesota corporation (herein called
"Borrower"), for the benefit of Diversified Business Credit, Inc., a Minnesota
corporation (herein referred to as the "Lender").
RECITALS
Borrower has executed and delivered to Lender a credit and security
agreement dated March __, 1995 (herein called the "Credit Agreement") pursuant
to which Lender, at its sole discretion, has made or may make certain loans to
Borrower, repayable on demand. These loans and all other debts, liabilities
and obligations of Borrower to Lender are secured pursuant to the Credit
Agreement and other security documents (all herein called the "Security
Documents") referred to in the Credit Agreement.
Borrower has requested that Lender, at its sole discretion, make one or
more loans (herein collectively called the "Term Loan") under the Credit
Agreement, repayable in installments, rather than on demand. This Agreement
supplements the Credit Agreement to set forth the terms on which any such Term
Loan shall be repaid.
ACCORDINGLY, to induce Lender to make one or more advances on the Term
Loan under this Supplement, and in consideration of the mutual agreements
herein contained, Borrower and Lender hereby agree that:
1. THE TERM LOAN. Lender shall not be obligated to make, renew or
readvance any advance on the Term Loan to Borrower under this Supplement, and
Lender may at any time, at its sole and absolute discretion, decline to make
any advance requested by Borrower. If Borrower desires to borrow under this
Supplement, Borrower will submit borrowing requests in the manner set forth in
the Credit Agreement and will notify Lender that the advance is requested on
the Term Loan under this Supplement. The Term Loan shall bear interest at the
rate specified in the Credit Agreement, shall be secured by the Credit
Agreement, Security Documents and all other collateral security (without
apportionment, exclusion or segregation) as provided in the Credit Agreement.
- Each month, on the first day of the month, Borrower shall pay all
interest accrued on the Term Loan in the preceding month.
- Each month, on the 15th day of the month, Borrower shall pay
$8,333.00 on account of the Term Loan.
- On March __, 1998, the entire unpaid principal balance of the Term
Loan, and all unpaid interest accrued thereon, shall in any event be due
and payable.
2. MAXIMUM AMOUNT OF THE TERM LOAN. Borrower shall not request advances
on the Term Loan in an amount which, when added to the principal balance then
outstanding on the Term Loan, would cause the Term Loan to exceed $300,000
reduced by $8,333.00 effective May 1, 1995 and reduced by the same amount on
the same day in each month thereafter.
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3. PREPAYMENT OF THE TERM LOAN. Borrower shall prepay the Term Loan
whenever required to assure that the maximum amount of the Term Loan does not
exceed the amount prescribed in paragraph 2. In the event Borrower shall sell,
collect insurance proceeds on, or otherwise dispose of or realize on any
collateral security, other than inventory and trade accounts receivable,
granted to Lender, Borrower shall immediately prepay the Term Loan by the full
amount of the proceeds so realized (it being understood and agreed that no such
collateral security may be sold or otherwise disposed of or realized on except
with the written consent of Lender and that Borrower shall pay over and account
for all proceeds of inventory and trade accounts receivable as provided in the
Credit Agreement). No prepayment under this paragraph 3 shall reduce any
monthly installment due on the Term Loan pursuant to paragraph 1.
4. ACCELERATION OF THE TERM LOAN. Upon or at any time after the
occurrence of any one or more of the Events of Default hereinafter set forth,
Lender shall have the right at its option to declare the entire principal
balance of the Term Loan owed to it, and all unpaid interest accrued thereon,
to be immediately due and payable; and upon such declaration such principal
balance and unpaid interest shall be immediately due and payable, without
notice or demand. Each of the following occurrences shall constitute such an
Event of Default:
(a) Borrower shall fail duly and punctually to make any payment
to be made by Borrower to Lender under the Credit Agreement or this
or any other Supplement to the Credit Agreement or the Security
Documents or any other security agreement, instrument, indenture,
agreement or obligation binding on Borrower and enforceable by
Lender; or shall fail duly and punctually to perform or observe any
covenant, agreement or obligation binding upon Borrower under the
Credit Agreement or any such Supplement or the Security Documents
or any such other security agreement, instrument, indenture,
agreement or obligation.
(b) Any representation or warranty contained in the Credit
Agreement or this or any other Supplement to the Credit Agreement
or the Security Documents or any other security agreement or
mortgage given to Lender by Borrower or any other person as
security for indebtedness of Borrower shall prove to have been
materially false or misleading when made or as of this date or
(except to the extent of changes caused by transactions permitted
or consented to in writing under the Credit Agreement) as of any
date on which a loan is made to Borrower by Lender; or any other
representation or warranty made by or on behalf of Borrower to
Lender (whether made in any financial statement, report,
certificate or writing furnished to Lender by or on behalf of
Borrower, or otherwise in any manner) shall prove to have been
false or materially misleading as of the time as of which such
representation or warranty was made.
(c) Borrower shall fail to pay when due any substantial
liability or liabilities other than its indebtedness under the
Credit Agreement; or the maturity of any such liability or
liabilities shall be accelerated; or any breach, default or event
of default shall occur under any indenture, loan agreement, note or
agreement pertaining to any such liability, entitling a creditor or
representative of creditors of Borrower, acting with or without the
consent or concurrence of other creditors and with or without
notice or a period of grace, to accelerate the maturity of or
demand payment of any such liability, unless such breach,
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default or event of default is waived in writing by the creditor so
entitled. "Substantial", for these purposes, means in excess of
$25,000.
(d) Any breach, default or event of default shall occur under
the Credit Agreement or this or any other Supplement thereto or any
of the Security Documents or any other security agreement or
mortgage or other agreement, conveyance or instrument now in effect
or hereafter made for the benefit of Lender by Borrower or by any
other person in connection with or as security for indebtedness
arising under the Credit Agreement.
(e) Any guaranty of any indebtedness of Borrower to Lender shall
be repudiated or purported to be revoked; or any grant of
collateral by a third person as security for Borrower's
indebtedness to Lender shall be repudiated or purported to be
revoked.
(f) Borrower or any corporation or person controlling,
controlled by, or under common control with, or otherwise
affiliated with, Borrower (i) shall suspend or go out of business;
or (ii) shall be or become insolvent; or (iii) shall file or have
filed against it, voluntarily or involuntarily, a petition under
the United States Bankruptcy Code or any other bankruptcy or
insolvency law; or (iv) shall procure, permit or suffer,
voluntarily or involuntarily, the imposition of any security
interest or lien not permitted in the Credit Agreement or the
appointment of a receiver for any or all of its property or the
sequestration of any or all of its property; or (v) shall make an
assignment for the benefit of creditors; or (vi) shall initiate or
have initiated against it, voluntarily or involuntarily, any act,
process or proceeding for liquidation, dissolution, arrangement,
composition or reorganization or under any insolvency law or other
statute or law providing for a modification or adjustment of the
rights of creditors.
Lender's right to accelerate the Term Loan shall continue after the occurrence
of any such Event of Default notwithstanding any indulgence or failure to
act and despite any cure or attempted cure of the Event of Default, until the
Event of Default is waived by Lender in writing.
The Term Loan shall be immediately and automatically due and payable, without
notice or demand, if any case under the United States Bankruptcy Code is
filed by or against the Borrower.
(Left Blank Intentionally)
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5. MISCELLANEOUS PROVISIONS. This Supplement is part of the Credit
Agreement and, as supplemented and modified hereby, the Credit Agreement
remains in full force and effect. No waiver or modifications of any of the
provisions hereof shall be binding on Lender unless agreed to in a writing
signed by Lender.
This Supplement has been duly executed and delivered as of the date hereof.
BORROWER: Technical Publishing Solutions, Inc.
By /s/ Xxxxxx X. Xxxxx
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Chief Executive Office
By /s/ Xxxx Xxxxxxx
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Secretary
LENDER: Diversified Business Credit, Inc.
By /s/ Illegible Signature
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Vice President
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