FOURTH AMENDMENT TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is entered into
as of January 22, 1999, by and between TITAN MOTORCYCLE CO. OF AMERICA, a Nevada
corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender").
RECITALS
WHEREAS, Borrower is currently indebted to Lender pursuant to the terms and
conditions of that certain Loan Agreement between Borrower and Lender dated as
of April 10, 1998 ("Loan Agreement").
WHEREAS, Lender and Borrower have agreed to certain changes in the terms
and conditions set forth the Loan Agreement and have agreed to amend the Loan
Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Loan Agreement
shall be amended as follows:
1. Paragraph 2.1(c) is hereby amended by adding the following at the end
thereof:
"Notwithstanding the foregoing, but still subject to the Maximum
Amount, Lender agrees to permit outstanding borrowings under the Line
of Credit to exceed the amount otherwise available under the lending
formulas set forth Section 2.1 of this Agreement by an amount not to
exceed Seven Hundred Fifty Thousand Dollars ($750,000.00) (the
"Overadvance") on the condition that the Overadvance (and availability
for borrowings thereunder) shall be reduced by and repaid (i) promptly
upon receipt by borrower of the net proceeds of any infusions of
equity or equity offerings, by amount equal to 50% of such net
proceeds, and (ii) to the extent not fully reduced and repaid pursuant
to clause (i) hereof, on
Wednesday of each week in amounts of $125,000.00 each (or such lesser
amount as may be required on any such Wednesday to reduce to zero and
repay in full the Overadvance), commencing on May 5, 1999 until repaid
in full. Revolving Loans made under the Line of Credit shall be made
first under the applicable lending formulas against Eligible Inventory
and Eligible Accounts and then under the Overadvance, and repayments
of principal under the Line of Credit shall be applied, in inverse
order. Interest on the outstanding principal balance of the
Overadvance shall accrue at a rate per annum (computed on the basis of
a 360 day year) equal to 2.50% above the Prime Rate in effect from
time to time, and shall be payable at the times and place interest is
otherwise payable under the Line of Credit note. As a condition of
Lender's agreement herein, Borrower shall cause Frank Keery and
Barbara Keery to execute and deliver to Lender (contemporaneously with
the execution of this Amendment) a Continuing Guaranty in form and
content acceptable to Lender whereby Frank Keery and Barbara Keery
shall guarantee repayment of a portion of the Overadvance in the
principal amount of $375,000.00. Nothing in this Section shall
obligate Lender to permit any overadvance other than the Overadvance
or imply any such obligation." 2. Borrower shall pay to Lender a
non-refundable fee for the Overadvance in the amount of $7,500.00,
which shall be fully earned as of and payable on the date of this
Amendment.
3. Except as specifically provided herein, all terms and conditions of the
Loan Agreement remain in full force and effect without waiver or modification.
All terms defined in the Loan Agreement shall have the same meaning when used in
this Amendment. This Amendment and the Loan Agreement shall be read together, as
one document.
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4. Borrower hereby remakes all representations and warranties contained in
the Loan Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment and except as Set forth
in this Amendment, there exists no Event of Default as defined in the Loan
Agreement, nor any condition, act or event which with the giving of notice or
the passage of time or both would constitute any such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
TITAN MOTORCYCLE CO. OF WELLS FARGO BANK,
AMERICA NATIONAL ASSOCIATION
By: /s/ Robert P. Lobban By: /s/ Gerald W. Widasky
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Title: Chief Financial Officer Title: Vice President
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