EXHIBIT 10.1
SECOND AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement (this
"Second Amendment"), dated as of August 29, 1996, is entered into by and between
RIMAGE CORPORATION, a Minnesota corporation (the "Company") and FIRST BANK
NATIONAL ASSOCIATION, a national banking association (the "Bank").
RECITALS
WHEREAS, the Company and the Bank previously entered into that certain
Loan Agreement dated as of October 13, 1995, as amended by a First Amendment to
Amended and Restated Credit Agreement (as amended, the "Agreement");
WHEREAS, the Company and the Bank desire to amend the Agreement to
extend the maturity date of the Revolving Note and to add an additional term
loan thereto;
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed by and between the Company and the Bank as
follows:
1. DEFINED TERMS. All capitalized terms used in this Second
Amendment shall, except as otherwise defined herein or where the context
otherwise requires, have the meaning set forth in the Agreement.
2. AMENDMENT. The Agreement is hereby amended as follows:
2.1 AMENDMENT NUMBER ONE: Article I of the Agreement is amended
by amending the definitions of "Dunhill Term Note", "Note" and "Replacement Term
Note" in their entireties to provide as follows:
"DUNHILL TERM NOTE": As defined in Section 2.9.
"NOTE": The Revolving Note or the Term Note (together,
the "Notes").
"REPLACEMENT TERM NOTE": The promissory note defined in Section
2.9 and issued in replacement of the Dunhill Term Note.
2.2 AMENDMENT NUMBER TWO: The definition of Maturity Date in
Section 2.1 of the Agreement is amended by deleting the date "August 15,
1996" and inserting in its place "June 30, 1997".
2.3 AMENDMENT NUMBER THREE: Section 2.4 of the Agreement is
amended in its entirety to provide as follows:
Section 2.4 INTEREST RATES, INTEREST PAYMENTS AND DEFAULT INTEREST.
Interest on the Revolving Note shall accrue and be payable at a floating
rate per annum equal to the sum of the Reference Rate plus one-half of one
percent (0.5%) per annum, provided that, upon the occurrence and during the
continuation of an Event of Default, all amounts outstanding under the
Revolving Note shall bear interest at the rate otherwise applicable
thereto, plus 2.0% per annum. Interest shall be payable monthly in arrears
on the first day of each month commencing September 1, 1996 and at the
Maturity Date.
2.4 AMENDMENT NUMBER FOUR: Section 2.9 of the Agreement is
amended in its entirety to provide as follows:
Section 2.09 TERM LOAN. The Bank has previously made term loans to
the Borrower as evidenced by that certain term note from the Borrower to
the Bank in the original principal amount of $600,000 dated March 18, 1994
(the "Prior Term Note") and by that certain Replacement Term Note in the
original principal amount of $1,500,000 dated as of October 13, 1995 (the
"Replacement Term Note") which replaced that certain term note from the
Bank to Dunhill Software Services, Inc. (which was acquired by the
Borrower) dated as of June 30, 1995 in the original principal amount of
$1,800,000 (the "Dunhill Term Note"). On the date of the Second Amendment
to this Agreement (the "Second Amendment") the Bank shall lend to the
Borrower the principal amount of $2,800,000 (the "Term Loan"). The
proceeds of the Term Loan shall be used in part to refinance the amounts
due under the Prior Term Note and the Replacement Term Note, each of which
shall be replaced by the term note, substantially in the form of Exhibit A
attached to the Second Amendment (the "Term Note"). The remaining proceeds
of the Term Loan shall be used to purchase equipment and to term out a
portion of the Borrower's indebtedness under the Revolving Note. The Term
Loan shall bear interest and shall be repaid in accordance with the
provisions of the Term Note.
2.5 AMENDMENT NUMBER FIVE: Section 2.10 of the Agreement is
amended in its entirety to provide as follows:
Section 2.10 INTENTIONALLY OMITTED.
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2.6 AMENDMENT NUMBER SIX: Section 5.1(a) of the Agreement is
amended in its entirety to provide as follows:
5.1(a) As soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, audited financial statements of
the Borrower consisting of at least statements of income, cash flow and
changes in stockholders' equity, and a balance sheet as at the end of such
year, setting forth in each case in comparative form corresponding figures
from the previous annual audit, certified without qualification by
independent certified public accountants of recognized national standing
selected by the Borrower and acceptable to the Bank, with computations
showing whether the Borrower is in compliance with all financial covenants
of this Agreement.
2.7 AMENDMENT NUMBER SEVEN: Section 5.1(b) of the Agreement is
amended by adding at the end thereof, prior to the period, the following:
", together with a covenant compliance certificate in a form
satisfactory to the Bank and including therewith such calculation
detail as the Bank may reasonably require"
2.8 AMENDMENT NUMBER EIGHT: Section 5.1(d) of the Agreement is
amended in its entirety to provide as follows:
5.1(d) As soon as practicable and in any event within 30 days after
the end of each month, an accounts receivable aging report signed by the
chief financial officer of the Borrower, as of the last day of the month
just ended.
2.9 AMENDMENT NUMBER TEN: There is added to the Agreement the
following new Section 5.12:
Section 5.12 FOREIGN CREDIT INSURANCE. The Borrower will secure
foreign credit insurance in form and substance satisfactory to the Bank and
covering the accounts of Rimage Europe GmbH by no later than November 30,
1996 and will provide proof of the same to the Bank.
2.10 AMENDMENT NUMBER TEN: Section 6.6 of the Agreement is
amended in its entirety to provide as follows:
Section 6.6 TANGIBLE CAPITAL BASE. The Borrower will not permit
its Tangible Capital Base to be less than $6,700,000 at any time through
December 30, 1996, and $8,500,000 on December 31, 1996 and at any time
thereafter.
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2.11 AMENDMENT NUMBER ELEVEN: Section 6.7 of the Agreement is
amended in its entirety to provide as follows:
Section 6.7 WORKING CAPITAL. The Borrower will not permit its Working
Capital (the excess of its current assets over its current liabilities) to
be less than $3,000,000 at any time.
2.12 AMENDMENT NUMBER TWELVE: Section 6.8 of the Agreement is
amended in its entirety to provide as follows:
Section 6.8 LEVERAGE RATIO. The Borrower will not permit its Leverage
Ratio (the ratio of its liabilities, excluding minority interests in any
subsidiary, to its Tangible Capital Base) to be more than 2.5 to 1.0 at any
time through December 30, 1996 and more than 2.0 to 1.0 on December 31,
1996 and at any time thereafter.
2.13 AMENDMENT NUMBER THIRTEEN: There is added to the Agreement
the following new Section 6.9:
Section 6.9 Net Income. The Borrower will not permit its net income
after taxes and after distributions to be less than $1,000,000 for the year
ending December 31, 1996.
3. CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT. This
Second Amendment shall not become effective until, and shall become effective
when, each of the following conditions precedent shall have been fulfilled:
(a) The Bank shall have received this Second Amendment, the
Term Note and such other documents as the Bank may require, each duly
executed by the Company;
(b) The Bank shall have received a copy of the
Resolutions of the Board of Directors of the Company authorizing
the execution, delivery and performance of this Second Amendment,
and the other documents required by the Bank with such resolutions
certified by the Secretary of the Company as accurate, not
rescinded or repealed and entered into the corporate minutes of the
Company;
(c) The Bank shall have received a certification by the
secretary of the Company (i) certifying that there has been no
amendment to the Articles of Incorporation or Bylaws of the Company
since the same were delivered to the Bank pursuant to the Agreement;
(ii) certifying that the Company remains in good standing as a
corporation under Minnesota law since the date of the Agreement; and
(iii) identifying the officers executing
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this Second Amendment and the other documents required by the Bank under
paragraph 3(a) above, and certifying as to their incumbency;
(d) The Bank shall have received a Collateral Assignment of
Patents in form satisfactory to the Bank, duly executed by the Company;
(e) The Bank shall have received a Third Party Security
Agreement in form satisfactory to the Bank duly executed by Rimage Europe,
GmbH. granting the Bank a security interest in the assets of Rimage Europe,
GmbH. as security for the indebtedness of the Company, together with a
certification of the secretary of Rimage Europe, GmbH. (or another officer)
of the resolutions of the Board of Directors of such company authorizing
the execution and delivery of the Third Party Security Agreement and
certifying the incumbency of the officer or officers executing such Third
Party Security Agreement.
(f) The Bank shall have received proof of the insurance required
under the Third Party Security Agreement in form and substance satisfactory
to the Bank.
(g) The Bank shall have received the Reaffirmation of Security
Interest in the forms of Exhibits B and C hereto, duly executed by the
parties thereto.
4. GENERAL. After this Second Amendment becomes effective, the
Agreement, as hereby amended, shall remain in full force and effect.
As of the date of this Second Amendment, the Company reaffirms all of
the representations and warranties made under the Agreement and such
representations and warranties are true and accurate as of the date hereof and
as amended hereby, and all covenants under the Agreement, as hereby amended,
are maintained in full.
The Company represents and warrants that it has the power to enter
into this Second Amendment and the other documents required by the Bank under
paragraph 3(a) above, and has duly authorized the execution and delivery of such
documents by proper corporate action, and none of such documents nor the
agreements contained herein or therein contravene or constitute a default under
any agreement, instrument, or indenture to which the Company is a party or a
signatory or any provision of its Articles of Incorporation, its Bylaws or,
to the best of its knowledge, any other agreement or requirement of law.
The Company hereby reaffirms the security interest granted to the Bank
under the Security Agreement executed in connection with the Agreement.
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Such security interest remains in full force and effect and secures all amounts
owed by the Company to the Bank, including, without limitation, all amounts owed
under the Agreement, as amended. Each reference to the "Agreement", "this
Agreement", "herein" or similar references in the Agreement, shall mean the
Agreement, as amended hereby.
The Company agrees to pay the Bank, upon demand, reasonable expenses,
including attorneys' fees and legal expenses, incurred by the Bank in connection
with this Second Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the date first above written.
RIMAGE CORPORATION
By /s/ David J. Suden
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David J. Suden, President
By /s/ Jon D. Wylie
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Jon D. Wylie, CFO, Systems Group
FIRST BANK NATIONAL ASSOCIATION
By
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Richard D. Hartman, Vice President
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