EXHIBIT 4.1
SECOND AMENDMENT TO CREDIT AGREEMENT
This Amendment is made as of this 16th day of April, 1997, by
and among INTERRA FINANCIAL INCORPORATED, a Delaware corporation,
formerly known as Inter-Regional Financial Group, Inc. (the
"Borrower"), the financial institutions that have executed this
Amendment (the "Banks") and Norwest Bank Minnesota, National
Association, a national banking association, as agent for the
Banks (the "Agent").
The Borrower, the Banks and the Agent have entered into a
Credit Agreement dated as of June 29, 1995, as amended by a First
Amendment to Credit Agreement dated as of March 14, 1996 (the
"Credit Agreement"). The Banks have agreed, severally but not
jointly, to make loans to the Borrower on the terms and
conditions set forth in the Credit Agreement.
Loans made by the Banks under the Credit Agreement are
evidenced by promissory notes dated as of June 29, 1995 executed
by the Borrower in favor of each Bank (each, a "Note"). The
Notes mature on June 30, 1997.
The Borrower has requested that the Banks and the Agent amend
certain provisions of the Credit Agreement, and the Banks and the
Agent are willing to do so pursuant to the terms and conditions
set forth in this Amendment.
ACCORDINGLY, the parties hereto hereby agree as follows:
1. Terms used in this Amendment which are defined in
the Credit Agreement shall have the same meanings as defined
therein, unless otherwise defined herein.
2. The Exhibit C referred to in Section 4.4 of the
Credit Agreement is hereby replaced with the Exhibit C attached
to this Amendment, which new Exhibit C reflects that (i) Interra
Lending Services Inc. is a Subsidiary of the Borrower, (ii)
Regional Operations Group, Inc. has changed its name to Interra
Clearing Services Inc. and (iii) IFG Asset Management Services,
Inc. has changed its name to Interra Advisory Services Inc.
3. The Credit Agreement is hereby amended by adding
the following new Section 5.10 immediately following existing
Section 5.9:
"Section 5.10 Policy and Procedures for Lending by
Interra Lending Services. Attached as Exhibit A to the
Second Amendment to Credit Agreement dated as of April 16,
1997 are the Policy and Procedures which have been
established for Interra Lending Services Inc. ("ILS"). The
Borrower covenants and agrees that it will promptly deliver
to the Banks any amendment, supplement or restatement to
such Policy and Procedures which is adopted after the date
of the Second Amendment to Credit Agreement."
4. Section 6.3(c) of the Credit Agreement is hereby
amended by deleting existing Section 6.3(c) in its entirety and
by substituting therefor the following new Section 6.3(c):
"(c) in addition to any guaranties set forth in
Exhibit E,
(i) a guaranty by the Borrower of indebtedness of
Interra Lending Services Inc. ("ILS") to The Chase
Manhattan Bank ("Chase") pursuant to the guaranty (the
"Chase Guaranty") in the form of Exhibit B attached to
the Second Amendment to Credit Agreement dated as of
April 16, 1997, among the Borrower, the Bank and the
Agent; provided, however, that the Banks' consent to
the Chase Guaranty is and shall remain effective only
for so long as the Borrower and ILS are in compliance
with each of the following requirements: (A) the credit
facility (and the outstanding indebtedness thereunder)
of Chase to ILS does not exceed at any time $50,000,000
in the aggregate, (B) all loans made by Chase to ILS
are secured by ILS's pledge of the underlying loans
made by ILS to its customers, including the stock
pledged by customers of ILS to ILS, (C) if the stock
pledged by the customers of ILS to ILS are subject to
Rule 144/Rule 145 restrictions, such pledged stock
meets Rule 144/Rule 145 requirements for saleability
and are not subject to a lockup or other restrictions,
(D) all loans made by ILS to its customers meet the
following minimum equity to collateral requirements
with respect to the pledged stock: (1) with respect to
each loan at the time such loan is made, the ratio of
the pledged stock value minus the loan amount to the
pledged stock value is at least 50% and (2) with
respect to each loan at all times after the time such
loan is made, the ratio of the pledged stock value
minus the loan amount to the pledged stock value is at
least 35%, and (E) the Chase Guaranty has not been
amended without the prior written consent of the Banks,
(ii) a guaranty by the Borrower of indebtedness
of ILS to Norwest Bank Minnesota, National Association
("Norwest") and/or First Bank National Association
("First Bank") or a syndicate of financial institutions
of which Norwest and First Bank are parties (such
lender or lenders is herein called the "Additional ILS
Lender") pursuant to a guaranty (the "Additional
Guaranty") which is similar to the Chase Guaranty;
provided, however, that the Banks' consent to the
Additional Guaranty is and shall remain effective only
for so long as the Borrower and ILS are in compliance
with each of the following requirements: (A) the sum of
the outstanding indebtedness of Chase to ILS and of the
Additional ILS Lender to ILS does not exceed at any
time $50,000,000 in the aggregate, (B) all loans made
by the Additional ILS Lender to ILS are secured by
ILS's pledge of the underlying loans made by ILS to its
customers, including the stock pledged by customers of
ILS to ILS, (C) if the stock pledged by the customers
of ILS to ILS are subject to Rule 144/Rule 145
restrictions, such pledged stock meets Rule 144/Rule
145 requirements for saleability and are not subject
to a lockup or other restrictions, (D) all loans made
by ILS to its customers meet the following minimum
equity to collateral requirements with respect to the
pledged stock: (1) with respect to each loan at the
time such loan is made, the ratio of the pledged stock
value minus the loan amount to the pledged stock value
is at least 50% and (2) with respect to each loan at
all times after the time such loan is made, the ratio
of the pledged stock value minus the loan amount to the
pledged stock value is at least 35%, and (E) the
Additional Guaranty has not been amended without the
prior written consent of the Banks, and
(iii) guaranties by the Borrower of indebtedness
(including capitalized lease obligations) and operating
leases of the Subsidiaries (other than the guaranties
permitted by Sections 6.3(c)(i) or (ii), 6.3(d) and
6.3(e)(i)); provided that the sum of the aggregate
principal amount of indebtedness guaranteed plus the
aggregate amount of all payments under operating leases
guaranteed under this clause (iii) shall not exceed
$6,000,000;"
5. All references in the Loan Documents to Inter-
Regional Financial Group, Inc. are hereby amended to be
references to Interra Financial Corporation. All references in
the Loan Documents to Regional Operations Group, Inc. or "ROG"
are hereby amended to be references to Interra Clearing Services
Inc. All references in the Loan Documents to IFG Asset
Management Services, Inc. are hereby amended to be references to
Interra Advisory Services Inc.
6. Except as explicitly amended by this Amendment, all
of the terms and conditions of the Credit Agreement shall remain
in full force and effect.
7. The Borrower hereby represents and warrants to the
Banks as follows:
(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 IV 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.
8. 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 Loan Documents
shall be deemed to refer to the Credit Agreement as amended
hereby.
9. 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 Loan Document or
other document held by the Agent, whether or not known to the
Agent and whether or not existing on the date of this Amendment.
10. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Agent on demand for
all costs and expenses incurred by the Agent in connection with
the Loan 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 Agent for the services
performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental
hereto.
11. 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 executed by their respective officers thereunto
duly authorized, as of the date first above written.
INTERRA FINANCIAL INCORPORATED
By: Daniel J. Reuss
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Daniel J. Reuss
Its: Senior Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as agent
By: Edward J. Meyer
----------------------
Edward J. Meyer
Its: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: Edward J. Meyer
----------------------
Edward J. Meyer
Its: Vice President
FIRST BANK NATIONAL ASSOCIATION
By: Robert York
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Robert York
Its: Senior Vice President