AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and
entered into as of October __,1996, is by and between THE O'BOISIE CORPORATION,
an Illinois corporation (the "Borrower"), and REPUBLIC ACCEPTANCE CORPORATION,
a Minnesota Corporation (the "Lender").
RECITALS
1. The Lender and the Borrower entered into a Credit Agreement dated
as of July 3, 1996 (the "Credit Agreement"); and
2. The Borrower desires to amend certain provisions of the
Agreement, and the Lender has agreed to make such amendments, subject to the
terms and conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
Section 1. CAPITALIZED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement, unless the context shall otherwise require.
Section 2. AMENDMENTS. The Credit Agreement is hereby amended as
follows:
2.1 DEFINITIONS. The definition of "COMMITMENTS", "NOTES", "TOTAL
COMMITMENT AMOUNT"and "TOTAL OUTSTANDINGS" contained in Section 1.1 of the
Credit Agreement are amended in their entirety as follows:
"COMMITMENTS": The Revolving Commitment, the Term Loan Commitment and
the Additional Term Loan Commitment.
"NOTES": The Revolving Note, The Term Note and the Additional Term
Note.
"TOTAL COMMITMENT AMOUNT": The sum of the Revolving Commitment
Amount, the Term Loan Commitment Amount and the Additional Term Loan Commitment
Amount.
"TOTAL OUTSTANDINGS": At the time of any determination, the sum of
the unpaid balance of the Revolving Note, the unpaid balance of the Term Note
and the unpaid balance of the Additional Term Note.
Section 1.1 of the Credit Agreement is further amended by adding the
definitions of
""ADDITIONAL TERM LOAN", ADDITIONAL TERM LOAN COMMITMENT","ADDITIONAL TERM LOAN
COMMITMENT AMOUNT" and "ADDITIONAL TERM NOTE" thereto in correct alphabetical
order:
"ADDITIONAL TERM LOAN": As defined in Section 2.1.
"ADDITIONAL TERM LOAN COMMITMENT": The obligation of the Lender to
make a term loan to the Borrower in the Additional Term Loan Commitment Amount
upon the terms and subject to the conditions and limitations of this Agreement.
"ADDITIONAL TERM LOAN COMMITMENT AMOUNT": As defined in Section 2.1.
"ADDITIONAL TERM NOTE": As defined in Section 2.3.
2.2 THE NOTES. Section 2.3 of the Credit Agreement is amended in
its entirety as follows:
Section 2.3 THE NOTES. The Advances on the Revolving Loan shall be
evidenced by a single promissory note (the "Revolving Note"), substantially in
the form of Exhibit 2.3 (a) hereto, in the amount of the Revolving Commitment
Amount originally in effect. The Term Loan shall be evidenced by a promissory
note (the "Term Note"), substantially in the form of Exhibit 2.3 (b) hereto, in
an amount equal to the Term Loan Commitment Amount. The Additional Term Loan
shall be evidenced by a promissory note (the "Additional Term Note"),
substantially in the form of Exhibit 2.3 (c) hereto, in an amount equal to the
Additional Term Loan Commitment Amount. The Lender shall enter in its ledgers
and records the payments made on the Term Loan, the Additional Term Loan and
Advances made and the payments made thereon, and the Lender is authorized by the
Borrower to enter on schedules attached to the Notes a record of such Advances
and repayments.
2.3 INTEREST RATES, INTEREST PAYMENTS AND DEFAULT INTEREST. Section
2.4 of the Credit Agreement is amended in its entirety as follows:
Section 2.4 INTEREST RATES, INTEREST PAYMENTS AND DEFAULT INTEREST.
Interest shall accrue and be payable on the unpaid balance of the Revolving Note
at a floating rate per annum equal to the sum of the Reference Rate plus 1.75%
(the latter being the "Applicable Revolving Margin"); PROVIDED, HOWEVER, that
any amount of principal of the Revolving Note not paid when due (whether at such
date or upon acceleration following an Event of Default) shall thereafter bear
interest at a floating rate equal to the sum of (a) the Reference Rate, plus (b)
the Applicable Revolving Margin, plus (c) 3 1/2%. Interest shall accrue and be
payable on the unpaid balance of the Term Note at a floating rate per annum
equal to the sum of the Reference Rate plus 1.75% (the latter being the
"Applicable Term Margin"); PROVIDED, HOWEVER, that any amount of principal of
the Term Note not paid when due after giving effect to any applicable grace
period, if any (whether at the date scheduled therefor or upon acceleration
following an Event of Default) shall thereafter bear interest at a floating rate
equal to the sum of (a) the Reference Rate, plus (b) the Applicable Term Margin,
plus (c) 3 1/2%. Interest shall accrue and be payable on the unpaid balance of
the Additional Term Note at a floating rate per annum equal to the sum of the
Reference
Rate plus 3.00% (the latter being the "Applicable Additional Term Margin");
PROVIDED, HOWEVER, that any amount of principal of the Additional Term Note not
paid when due after giving effect to any applicable grace period, if any
(whether at the date scheduled therefor or upon acceleration following an Event
of Default) shall thereafter bear interest at a floating rate equal to the sum
of (a) the Reference Rate, plus (b) the Applicable Additional Term Margin, plus
(c) 3 1/2%. If any amount of principal of the Revolving Note, the Term Note
and/or the Additional Term Note is not paid when due (whether at such date or
upon acceleration following an Event of Default) the Revolving Note shall
thereafter bear interest at a floating rate equal to the sum of (a) the
Reference Rate, plus (b) the Applicable Revolving Margin, plus (c) 3 1/2%, the
Term Note shall thereafter bear interest at a floating rate equal to the sum of
(a) the Reference Rate, plus (b) the Applicable Term Margin, plus (c) 3 1/2%,
the Additional Term Note shall thereafter bear interest at a floating rate equal
to the sum of (a) the Reference Rate, plus (b) the Applicable Revolving Margin,
plus (c) 3 1/2%. Interest shall be payable monthly in arrears and upon final
payment of the respective Notes.
2.4 ADDITIONAL TERM LOAN. A new section 2.1(c) is added to provide as
follows:.
Section 2.1(c) ADDITIONAL TERM LOAN. An Additional Term Loan to
mature June 1, 1999 (the "Additional Term Loan") from the Lender to the Borrower
on the Closing Date in the amount of $1,000,000 (the "Additional Term Loan
Commitment Amount"); PROVIDED, HOWEVER, that the Additional Term Loan will not
be made if, after giving effect thereto, the Total Outstandings would exceed the
Borrowing Base (including the Equipment).
2.5 REPAYMENT OF THE ADDITIONAL TERM LOAN. A new section 2.7(d) is
added to provide as follows:.
Section 2.7(d) REPAYMENT OF THE ADDITIONAL TERM LOAN. Principal of
the Additional Term Note is payable as provided in the Additional Term Note.
The Borrower may prepay the Additional Term Note at any time without premium or
penalty. Any such prepayment must be accompanied by accrued and unpaid interest
on the amount prepaid. Each partial prepayment shall be in an amount of $50,000
or an integral multiple thereof. Amounts so prepaid cannot be reborrowed. In
the event that Borrower secures an Initial Public Offering, the Additional Term
Note shall be due and payable immediately upon the funding of the Initial Public
Offering.
Section 3. EFFECTIVENESS OF AMENDMENTS. The amendments contained in
this Amendment shall become effective upon delivery by the Borrower of, and
compliance by the Borrower with, the following:
3.1 This Amendment, duly executed by the Borrower.
3.2 A copy of the resolutions of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of this Amendment certified
as true and accurate by its Secretary or Assistant Secretary, along with a
certification by such Secretary or Assistant Secretary (i) certifying that there
has been no amendment to the
Articles of Incorporation or Bylaws of the Borrower since true and accurate
copies of the same were delivered to the Lender with a certificate of the
Secretary of the Borrower dated July 3, 1996, and (ii) identifying each officer
of the Borrower authorized to execute this Amendment and any other instrument or
agreement executed by the Borrower in connection with this Amendment, and
certifying as to specimens of such officer's signature and such officer's
incumbency in such offices as such officer holds.
3.3 Certified copies of all documents evidencing any necessary
corporate action or consent with respect to this Amendment.
3.4 The Additional Term Note substantially in the form of Exhibit
2.3(c) hereto.
3.5 A consent and reaffirmation by Donald Schumacher II in the form
of Exhibit A attached to this Amendment, duly executed by Donald Schumacher II.
3.6 The sum of $20,000 as a closing fee.
3.7 A Collateral Assignment of Trademarks.
3.8 The Borrower shall have satisfied such other conditions as
specified by the Lender or counsel to the Lender, including payment of all
unpaid legal fees and expenses incurred by the Lender through the date of this
Amendment in connection with the Credit Agreement.
Section 4. REPRESENTATIONS; ACKNOWLEDGMENTS. The Borrower hereby
represents that on and as of the date hereof and after giving effect to this
Amendment (a) all of the representations and warranties contained in the Credit
Agreement, and in any and all other Loan Documents of the Borrower, are true,
correct and complete in all respects as of the date hereof as though made on and
as of such date, except for changes permitted by the terms of the Credit
Agreement, and (b) the Borrower is in compliance with all covenants and
agreements of the Borrower as set forth in the Credit Agreement and in any and
all other Loan Documents of the Borrower. The Borrower represents and warrants
that the Borrower has the power and legal right and authority to enter into this
Amendment and has duly authorized as appropriate the execution and delivery of
this Amendment and other agreements and documents executed and delivered by the
Borrower in connection herewith or therewith by proper corporate action. The
Borrower acknowledges and agrees that its obligations to the Lender under the
Credit Agreement and exist and are owing without offset, defense or counterclaim
assertable by the Borrower against the Lender. The Borrower further
acknowledges and agrees that its obligations to the Lender under the Credit
Agreement, as amended, constitute "Obligations" within the meaning of the
Security Agreement and are secured by the Security Agreement and the Collateral
Assignment of Trademarks.
Section 5. AFFIRMATION, FURTHER REFERENCES. Except as expressly
modified under this Amendment, all of the terms, conditions, provisions,
agreements, requirements, promises, obligations, duties, covenants and
representations of the Borrower under the Credit Agreement, the Security
Agreement, and any and all other Loan Documents entered into with respect to the
obligations under the Credit Agreement are incorporated herein by reference and
are hereby ratified and affirmed in all respects by the Borrower. All
references in the Credit Agreement to "this Agreement," "herein," "hereof," and
similar references, and all references in the other Loan Documents to the
"Agreement," shall be deemed to refer to the Agreement, as amended by this
Amendment.
Section 6. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This
Amendment, from and after the date hereof, embodies the entire agreement and
understanding between the parties hereto and supersedes and has merged into it
all prior oral and written agreements on the same subjects by and between the
parties hereto with the effect that this Amendment, shall control with respect
to the specific subjects hereof and thereof.
Section 7. SEVERABILITY. Whenever possible, each provision of this
Amendment and any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto shall be interpreted in such manner as
to be effective, valid and enforceable under the applicable law of any
jurisdiction, but, if any provision of this Amendment or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be held to be prohibited, invalid or unenforceable under the
applicable law, such provision shall be ineffective in such jurisdiction only to
the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Amendment or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto in such
jurisdiction, or affecting the effectiveness, validity or enforceability of such
provision in any other jurisdiction.
Section 8. SUCCESSORS. This Amendment shall be binding upon the
Borrower and the Lender and their respective successors and assigns, and shall
inure to the benefit of the Borrower and the Lender and the successors and
assigns of the Lender.
Section 9. LEGAL EXPENSES. The Borrower agrees to reimburse the
Lender, upon execution of this Amendment, for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses of Dorsey & Whitney,
counsel for the Lender) incurred in connection with the Credit Agreement,
including in connection with the negotiation, preparation and execution of this
Amendment and all other documents negotiated, prepared and executed in
connection with this Amendment, and in enforcing the obligations of the Borrower
under the Credit Agreement, as amended by this Amendment, which obligations of
the Borrower shall survive any termination of the Credit Agreement.
Section 10. HEADINGS. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.
Section 11. COUNTERPARTS. This Amendment may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed,
shall be deemed an original, provided that all such counterparts shall be
regarded as one and the same document, and either party to this Amendment may
execute any such agreement by executing a counterpart of such
agreement.
Section 12. GOVERNING LAW. The Amendment Documents shall be governed
by the internal laws of the State of Minnesota, without giving effect to
conflict of law principles thereof.
(REMAINDER OF PAGE LEFT BLANK INTENTIONALLY)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date and year first above written.
THE O'BOISIE CORPORATION
By:
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Title:
REPUBLIC ACCEPTANCE CORPORATION
By:
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Title: