FIFTH AMENDMENT TO
CREDIT AGREEMENT
This Fifth Amendment to Credit Agreement, dated as of August 24, 1998
("Fifth Amendment"), is made by and between POLARIS INDUSTRIES INC., a
Minnesota corporation (the "Borrower"); U.S. BANK NATIONAL ASSOCIATION, formerly
known as FIRST BANK NATIONAL ASSOCIATION, BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, formerly known as BANK OF AMERICA ILLINOIS and FIRST UNION
NATIONAL BANK, formerly known as FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(collectively, the "Banks"); and U.S. BANK NATIONAL ASSOCIATION, as
administrative agent for the Banks (the "Administrative Agent").
WHEREAS, the Borrower, the Banks and the Administrative Agent have entered
into that certain Credit Agreement dated as of May 8, 1995, as amended by First
Amendment to Credit Agreement dated as of November 15, 1995, Second Amendment
to Credit Agreement dated as of February 13, 1996, Third Amendment to Credit
Agreement dated as of September 30, 1996 and Fourth Amendment to Credit
Agreement dated as of March 31, 1997 (as so amended, the "Credit Agreement").
WHEREAS, the Borrower has requested the Banks and the Administrative Agent
to modify certain provisions of the Credit Agreement, and the Banks and the
Administrative Agent are willing to do so on the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree to be bound as follows:
Section 1. CAPITALIZED TERMS. All capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Credit Agreement.
Section 2. AMENDMENTS.
(a) The definitions of "EBIT", "EBITDA", "Revolving Commitment
Amount" and "Revolving Note" in Section 1.1 of the Credit Agreement are amended
to read in their entirety as follows:
"EBIT": For any period of determination, the consolidated net income
of the Borrower before deductions for income taxes and Interest Expense (and for
fiscal year 1998, before deduction for litigation loss in connection with the
litigation
described in paragraph 1 of Exhibit 4.6 hereto), but after deductions for
depreciation and amortization, all as determined in accordance with GAAP.
"EBITDA": For any period of determination, the consolidated net
income of the Borrower before deductions for income taxes, Interest Expense,
depreciation and amortization (and for fiscal year 1998, before deduction for
litigation loss in connection with the litigation described in paragraph 1 of
Exhibit 4.6 hereto), all as determined in accordance with GAAP.
"REVOLVING COMMITMENT AMOUNT": With respect to a Bank:
(a) during the period commencing August 24, 1998 and ending on and
including March 30, 1999, the amount set opposite such Bank's name in the
table immediately below or as specified in the most recent Assignment
Agreement to which such Bank is a party, but as the same may be from time
to time reduced pursuant to Section 2.14:
BANK REVOLVING COMMITMENT AMOUNT PRIOR TO
MARCH 31, 1999
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U.S. Bank National Association $63,000,000
Bank of America $56,000,000
First Union National Bank $56,000,000
(b) during the period beginning on March 31, 1999 and ending on March
30, 2000, the amount set opposite such Bank's name in the table immediately
below or as specified in the most recent Assignment Agreement to which such
Bank is a party, but as the same may be from time to time reduced pursuant
to Section 2.14:
BANK REVOLVING COMMITMENT AMOUNT ON AND
AFTER MARCH 31, 1999 THRU MARCH 30,
2000
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U.S. Bank National Association $54,000,000
Bank of America $48,000,000
First Union National Bank $48,000,000
(c) during the period beginning on March 31, 2000 and ending on the
Revolving Commitment Ending Date, the amount set opposite such Bank's
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name in the table immediately below or as specified in the most recent
Assignment Agreement to which such Bank is a party, but as the same may be
from time to time reduced pursuant to Section 2.14:
BANK REVOLVING COMMITMENT AMOUNT ON AND
AFTER MARCH 30, 2000 THRU THE
REVOLVING COMMITMENT ENDING DATE
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U.S. Bank National Association $45,000,000
Bank of America $40,000,000
First Union National Bank $40,000,000
"REVOLVING NOTE": A promissory note of the Borrower in the form of
Exhibit 1.1-2-5 hereto.
(b) Section 6.13 of the Credit Agreement is amended to read in its
entirety as follows:
Section 6.13 TANGIBLE NET WORTH. The Borrower will not permit its
Tangible Net Worth at any time to be less than: (a) $75,000,000 at all
times through December 30, 1999; and (b) $100,000,000 at all times on and
after December 31, 1999.
Section 3. CONDITIONS TO EFFECTIVENESS OF FIFTH AMENDMENT. The
Amendments contained in this Fifth Amendment shall not become effective until,
and shall become effective when, the Administrative Agent shall have received
each of the following, in sufficient number to distribute to each Bank:
(a) The Agent shall have received, with a counterpart for each Bank,
this Amendment, duly executed by the Borrower, the Banks and the Agent,
and consented to by the Guarantors;
(b) The Agent shall have received a Revolving Note in the form of
Exhibit 1.1-2-5 to this Amendment, duly executed by the Borrower, payable
to each Bank in the amount shown as that Bank's Revolving Commitment Amount
in clause (a) of the definition of that term in Section 1.1, as amended by
this Agreement (each, a "Replacement Revolving Note;" collectively as to
all the Banks, the "Replacement Revolving Notes");
(c) The Agent shall have received, with a counterpart for each Bank,
a copy of resolutions adopted by the Borrower, authorizing the
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execution, delivery and performance of this Amendment and the Replacement
Revolving Notes by the Borrower, certified by the Borrower's secretary or
assistant secretary;
(d) The Agent shall have received, with a counterpart for each Bank,
a copy of resolutions adopted by each Guarantor, authorizing the execution,
delivery and performance of that Guarantor's consent to this Amendment,
certified by that Guarantor's secretary or assistant secretary;
(e) The Agent shall have received, with a counterpart for each Bank,
a certificate signed by the secretary or assistant secretary of the
Borrower certifying (i) as to the incumbency of the person or persons
authorized to execute and deliver on behalf of the Borrower this Amendment
and the Replacement Revolving Notes, and (ii) that the articles or
certificate of incorporation and bylaws of the Borrower have not been
repealed, rescinded, amended or otherwise modified since copies of the same
were delivered to the Banks on or about May 8, 1995, pursuant to Section
3.1 of the Credit Agreement;
(f) The Agent shall have received, with a counterpart for each Bank,
a certificate signed by the secretary or assistant secretary of each
Guarantor certifying (i) as to the incumbency of the person or persons
authorized to execute and deliver on behalf of that Guarantor its consent
to this Amendment, and (ii) that the articles or certificate of
incorporation and bylaws of that Guarantor have not been repealed,
rescinded, amended or otherwise modified since copies of the same were
delivered to the Banks on or about (x) May 8, 1995, pursuant to Section 3.1
of the Credit Agreement, or (y) the date such Guarantor became a Guarantor,
pursuant to Section 6.5 of the Credit Agreement;
(g) The Agent shall have received certificates of good standing for
the Borrower and each Guarantor, in the jurisdiction of its incorporation
or organization, in the State of Iowa (with respect to the Borrower), in
the State of Wisconsin (with respect to Polaris Real Estate Corporation),
in the State of Iowa (with respect to Polaris Real Estate Corporation of
Iowa), and in the State of Minnesota (with respect to Polaris Industries
Inc.), certified by the appropriate governmental officials as of a date not
more than 15 days prior to the date hereof;
(h) The Agent shall have received, for the account of each Bank, a
written opinion from Xxxxxx, Xxxxxxxx & Xxxxxx, P.A. covering the matters
set forth on Exhibit A attached hereto; and
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(i) The Agent shall have received, with a counterpart for each Bank,
such other documents, instruments, approvals and, if requested by the
Agent, certified duplicates of executed copies thereof, that the Agent may
reasonably request.
(j) Each Bank shall have received a fee equal to .20% of the increase
such Bank's Revolving Commitment Amount.
Upon execution and delivery by the Borrower of the Replacement Revolving Notes
and the satisfaction of all of the conditions specified in this Section 3: (i)
all amounts of principal and interest due and payable on those certain Revolving
Notes dated March 31, 1997, in the aggregate principal amount of $150,000,000,
shall be due and payable under the appropriate Replacement Revolving Notes; and
(ii) each reference to the Revolving Notes in the Credit Agreement, any Loan
Document or any other document related thereto shall be deemed to be a reference
to the Replacement Revolving Notes in the form of Exhibit 1.1-2-5 attached
hereto.
Section 4. ACKNOWLEDGMENT. The Borrower acknowledges and agrees that
its obligations to the Banks and the Administrative Agent under the Credit
Agreement, as amended hereby, and the Revolving Notes exist and are owing
without offset, defense or counterclaim assertable by the Borrower against the
Banks and the Administrative Agent.
Section 5. WAIVER. Pursuant to the provisions of Section 7.1(i) of the
Credit Agreement the entry of judgment against the Borrower in excess of
$500,000 is an Event of Default if either (i) the judgment creditor executes on
such judgment or (ii) such judgment remains unpaid or undischarged for more than
the longer of 60 days from the date of entry thereof or such longer period
during which execution of such judgment shall be stayed during an appeal from
such judgment. The Borrower has informed the Banks that it may be in violation
of such Section 7.1(i) due to the entry of judgment against the Borrower in the
litigation described in paragraph 1 of Exhibit 4.6 to the Credit Agreement and
the subsequent ruling on the Borrower's appeal of such judgment. The Banks
hereby waive the Event of Default under Section 7.1(i) of the Credit Agreement,
if any, due to the entry of judgment against the Borrower in the litigation
described in paragraph 1 of Exhibit 4.6 to the Credit Agreement and the
subsequent ruling on the Borrower's appeal of such judgment. This waiver is
limited to the express terms hereof and shall not apply to any other Default or
Event of Default. This waiver is not and shall not be deemed a course of
performance upon which the Borrower may rely with respect to any other Default,
Event of Default or request for a waiver and the Borrower expressly waives any
such claim.
Section 6. EFFECT OF FIFTH AMENDMENT; REPRESENTATIONS AND WARRANTIES;
NO WAIVER. The Banks, the Administrative Agent and the Borrower agree that
after
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this Fifth Amendment becomes effective, the Credit Agreement, as hereby amended,
shall remain in full force and effect. The Borrower represents and warrants
that on and as of the date hereof and after giving effect to this Fifth
Amendment: (i) all of the representations and warranties contained in the Credit
Agreement are correct and complete in all material respects as of the date
hereof, as though made on and as of such date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true and correct as of such earlier date; (ii) there will exist
no Default or Event of Default on such date except as waived herein; (iii) there
has been no change in any of the certificates or articles of incorporation,
bylaws or partnership agreements of the Borrower or any Guarantor since the
Closing Date or (if later) the date such Guarantor became a Guarantor; (iv) the
Borrower has the power and legal right and authority to enter into this Fifth
Amendment; (v) neither this Fifth Amendment, nor the agreements contained herein
or therein contravene or constitute a default under any agreement, instrument or
indenture to which the Borrower is a party or signatory or a provision of the
Borrower's articles of incorporation or, to the best of the Borrower's
knowledge, any other agreement or requirement of law; and (vi) no consent,
approval or authorization of or registration or declaration with any Person,
including but not limited to any governmental authority, is required in
connection with the execution and delivery by the Borrower of this Fifth
Amendment, or the performance of obligations of the Borrower herein or therein
described.
Section 7. INCORPORATION OF CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS
BY REFERENCE; RATIFICATION OF LOAN DOCUMENTS. Except as expressly modified
under this Fifth Amendment, all of the terms, conditions, provisions,
agreements, requirements, promises, obligations, duties, covenants and
representations of the Borrower under the Credit Agreement, the Revolving Notes
and any and all other documents and agreements 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
"Credit Agreement," shall be deemed to refer to the Credit Agreement, as amended
by this Fifth Amendment.
Section 8. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This Fifth
Amendment, from and after the date hereof, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof 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 Fifth Amendment shall control.
Section 9. EXPENSES. As provided in Section 9.2 of the Credit
Agreement, the Borrower agrees to pay all of the expenses, including reasonable
attorneys'
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fees and expenses, incurred by the Administrative Agent in connection with this
Fifth Amendment.
Section 10. COUNTERPARTS. This Fifth Amendment may be executed in any
number of counterparts, and by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original but all such
counterparts together shall constitute but one and the same instrument.
Section 11. GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS FIFTH AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
Credit Agreement to be executed as of the date and year first above written.
POLARIS INDUSTRIES INC., a Minnesota corporation
By /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Administrative Agent and a Bank
By /s/ Xxxxxxxx X. Xxxxxxxx
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Name Xxxxxxxx X. Xxxxxxxx
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Title SVP
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BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Documentation Agent
and a Bank
By /s/ R. Xxx Xxxxxxxxx
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Name R. Xxx Xxxxxxxxx
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Title Managing Director
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FIRST UNION NATIONAL BANK, as a Documentation
Agent and a Bank
By /s/ Xxxxx Xxxxxxxx
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Name Xxxxx Xxxxxxxx
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Title Vice President
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