Exhibit 4.2
MODIFICATION AGREEMENT
THIS AGREEMENT made as of the 31st day of October, 1996, by and
between FIRST BANK (N.A.) ("Bank") and BANDO McGLOCKLIN SMALL BUSINESS
INVESTMENT CORPORATION, a Wisconsin corporation ("Borrower").
R E C I T A L S :
i. Bank and Borrower are parties to a certain Amended and
Restated Loan Agreement dated as of the 28th day of June, 1996 (said
Amended and Restated Loan Agreement is hereinafter referred to as the
"Loan Agreement"). All capitalized terms not otherwise defined herein
shall have the meanings given them in the Loan Agreement.
ii. Pursuant to the Loan Agreement the Bank agreed to extend to
Borrower a revolving Credit Facility of up to $12,500,000.00.
iii. The availability of the Credit Facility terminates on
October 31, 1996, and Borrower has requested that the Bank extend the
availability of the Credit Facility to October 31, 1997.
iv. Bank is willing to agree to the foregoing request of
Borrower but only on the terms and conditions hereinafter set forth and in
reliance on the warranties and representations of Borrower contained
herein.
A G R E E M E N T S :
NOW, THEREFORE, in consideration of the matters stated in the
foregoing Recitals and the covenants hereinafter set forth, the parties
hereto agree as follows:
1. To induce Bank to enter into this Agreement, Borrower
warrants and represents to Bank as follows:
A. The Recitals set forth above are each true and
correct.
B. The Loan Agreement is, and as modified herein shall
be, valid, binding and enforceable.
C. Borrower has no defenses, set-offs, claims or rights
of recoupment against its obligations to pay to Bank the
outstanding balance of the Credit Facility pursuant to the Loan
Agreement.
D. All of the representations and warranties set forth in
section 6 of the Loan Agreement are true and correct as though
made on the date of this Agreement and as though applicable to
this Agreement in the same manner as they were applicable to the
Loan Agreement.
2. The definition of Maturity Date as set forth in section 1
of the Loan Agreement is amended and restated to read in its entirety as
follows:
"Maturity Date shall mean October 31, 1997, or such earlier
date on which Bank declares the Note to be immediately due and
payable pursuant to section 10 of this Agreement."
3. The Borrower shall promptly notify Bank upon Borrower's
obtaining all necessary Securities & Exchange Commission and shareholder
approvals relating to Borrower's desire to (1) deregister its status as a
"small business investment company" under the Investment Company Act of
1940, (2) surrender its U.S. Small Business Administration small business
investment company license and (3) conduct its operations as a real estate
investment trust under Section 856 of the Internal Revenue Code of 1986,
as amended, all of which are to be effective as of the close of Borrower's
business on December 31, 1996. Bank acknowledges that Borrower is
currently in the process of obtaining all such necessary approvals and
Bank acknowledges that upon satisfactory review by Bank of all
documentation relating to the deregistration of Borrower and the execution
of all documentation reasonably deemed necessary by Bank to preserve
Bank's rights against Borrower (including, without limitation,
documentation relating to any existing interest rate swap agreements),
Bank shall not unreasonably withhold its consent, which consent is
required under the Loan Agreement, to the transactions described in this
paragraph.
4. All references to the "Lending Agreement" in the Amended
and Restated General Security Agreement dated the 28th day of June, 1996,
between Borrower and Bank shall be deemed to mean the Loan Agreement as
modified and amended by this Agreement.
5. Except as expressly modified and amended herein, all terms
and provisions of the Loan Agreement shall be and remain in full force and
effect.
6. Borrower shall not be entitled to receive any advances
under the Credit Facility after October 31, 1996, and this Agreement shall
not be effective against or binding upon the Bank unless and until (a)
Firstar Bank Milwaukee N.A. and LaSalle National Bank shall have agreed in
writing to extend the maturity and availability of their respective
Permitted Credit Facilities to October 31, 1997, or a later date, and (b)
a copy of such agreement shall have been delivered to the Bank.
7. Borrower shall, upon demand by Bank, reimburse Bank for all
costs and expenses incurred by Bank in connection with this Agreement,
including, but not limited to, the reasonable fees of Bank's attorneys.
8. The provisions of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors
and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
FIRST BANK (N.A.) BANDO McGLOCKLIN SMALL
BUSINESS INVESTMENT
CORPORATION
By: ___________________________ By: _________________________________
Dennis Bowgren George R. Schonath
Vice President Chairman of the Board and
Chief Executive Officer
By: _________________________________
Jon P. McGlocklin
President