EXHIBIT 10.13
THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of December ___, 1999 is made by and between
XATA CORPORATION, a Minnesota corporation (the "Borrower"), and XXXXX FARGO
BUSINESS CREDIT, INC., f/k/a Norwest Business Credit, Inc., a Minnesota
corporation (the "Lender").
Recitals
The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of October 23, 1998, as amended by a First Amendment to
Credit and Security Agreement dated as of November 30, 1998, and a Second
Amendment to Credit and Security Agreement dated as of January 8, 1999 (as so
amended, the "Credit Agreement").
The Borrower has requested that certain amendments be made to the
Credit Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:
"'Borrowing Base' means, at any time and subject to change
from time to time in the Lender's sole discretion, the lesser of:
(a) the Maximum Line; or
(b) the sum of:
(i) the lesser of (A) 80% of Eligible
Accounts
plus
(ii) the lesser of (A) 50% of Eligible
Inventory or (B) $25,000
plus
(iii) the Overadvance Component."
"'Overadvance Component' means (1) $ 200,000, from December
__, 1999, through and including January 31, 2000, (2) $100,000 from
February 1, 2000, through and including February 29, 2000, and (3) $0
from March 1, 2000 and thereafter."
"'Overadvance Floating Rate' means an annual rate equal to the
sum of the Base Rate plus four percent (4.0%), which annual rate shall
change when and as the Base Rate Changes."
2. Interest. Section 2.2 subsection (a) is amended and subsection (e)
is added as follows:
"(a) REVOLVING NOTE. Except as set forth in subsections (c),
(d) and (e), the outstanding principal balance of the Revolving Note
shall bear interest at the Floating Rate."
"(e) OVERADVANCE INTEREST RATE. Except as set forth in
subsections (b) and (c), the outstanding principal balance of the
Revolving Note that exceeds the Borrowing Base (when determined without
the Overadvance Component) shall bear interest at the Overadvance
Floating Rate."
3. Minimum Book Net Worth. Section 6.7 of the Credit Agreement is
hereby amended to read as follows:
"Section 6.7 Minimum Book Net Worth. The Borrower will
maintain, as of each month end described below, its Book Net Worth at
an amount not less than the amount set forth opposite such month end:
--------------------------------------------------
Month Ending Minimum Book Net Worth
--------------------------------------------------
October 31, 1999 $3,525,000
--------------------------------------------------
November 30, 1999 $3,560,000
--------------------------------------------------
December 31, 1999 $3,830,000
--------------------------------------------------
January 31, 2000 $4,070,000
--------------------------------------------------
February 28, 2000 $4,190,000
--------------------------------------------------
March 31, 2000 $3,980,000
--------------------------------------------------
April 30, 2000 $4,350,000
--------------------------------------------------
May 31, 2000 $4,225,000
--------------------------------------------------
June 30, 2000 $4,455,000
--------------------------------------------------
July 31, 2000 $4,960,000
--------------------------------------------------
August 31, 2000 $5,030,000
--------------------------------------------------
September 30, 2000 $4,930,000
--------------------------------------------------
4. New Covenants. On or before August 31, 2000, the Borrower and the
Lender shall agree on new covenant levels for Section 6.7 for periods after such
date. The
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new covenant levels will be based on the Borrower's projections for such periods
and shall be no less stringent than the present levels.
5. New Compliance Certificate. Exhibit B to the Credit Agreement is
hereby amended in its entirety and replaced with Exhibit A to this Amendment.
6. No Other Changes. Except as explicitly amended by this Amendment,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any advance or letter of credit thereunder.
7. Conditions Precedent. This Amendment shall be effective when the
Lender shall have received an executed original hereof, together with each of
the following, each in substance and form acceptable to the Lender in its sole
discretion:
(a) A Certificate of the Secretary of the Borrower certifying
as to (i) the resolutions of the board of directors of the Borrower
approving the execution and delivery of this Amendment, (ii) the fact
that the articles of incorporation and bylaws of the Borrower, which
were certified and delivered to the Lender in connection with the
execution of the Credit Agreement continue in full force and effect and
have not been amended or otherwise modified except as set forth in the
Certificate to be delivered, and (iii) certifying that the officers and
agents of the Borrower who have been previously certified to the
Lender, pursuant to the Certificate of Authority of the Borrower's
secretary or assistant secretary dated as of November 30, 1998, as
being authorized to sign and to act on behalf of the Borrower continue
to be so authorized or setting forth the sample signatures of each of
the officers and agents of the Borrower authorized to execute and
deliver this Amendment and all other documents, agreements and
certificates on behalf of the Borrower.
(b) Payment of the fee described in Paragraph 8 and the costs
and expenses described in Paragraph 13.
(c) Such other matters as the Lender may require.
8. Overadvance Fee. The Borrower shall pay the Lender on the date
hereof a fully earned, non-refundable fee in the amount of $1,000 in
consideration of the Lender's provision of the Overadvance Component.
9. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to
execute this Amendment and to perform all of its obligations hereunder,
and this Amendment has been duly executed and delivered by the Borrower
and constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
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(b) The execution, delivery and performance by the Borrower of
this Amendment have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or approval by
any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrower, or the
articles of incorporation or bylaws of the Borrower, or (iii) result in
a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which
the Borrower is a party or by which it or its properties may be bound
or affected.
(c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct on and as of the date
hereof as though made on and as of such date, except to the extent that
such representations and warranties relate solely to an earlier date.
10. References. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.
11. No Waiver. The execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of
this Amendment.
12. Release. The Borrower hereby absolutely and unconditionally
releases and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.
13. Costs and Expenses. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the
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foregoing, the Borrower specifically agrees to pay all fees and disbursements of
counsel to the Lender for the services performed by such counsel in connection
with the preparation of this Amendment and the documents and instruments
incidental hereto. The Borrower hereby agrees that the Lender may, at any time
or from time to time in its sole discretion and without further authorization by
the Borrower, make a loan to the Borrower under the Credit Agreement, or apply
the proceeds of any loan, for the purpose of paying any such fees,
disbursements, costs and expenses and the fee required under paragraph 8 hereof.
14. Miscellaneous. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX FARGO BUSINESS CREDIT, INC., XATA CORPORATION
f/k/a Norwest Business Credit, Inc.
By
----------------------------------
By Xxxxxxx X. Xxxxxxxx
---------------------------------- Its Chairman
Xxxxx Xxxxxxxx
Its Vice President
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EXHIBIT A TO THIRD AMENDMENT
TO CREDIT AND SECURITY AGREEMENT
COMPLIANCE CERTIFICATE
To: Xxxxxxx Xxxxxxx
Xxxxx Fargo Business Credit, Inc.
Date: __________________, 200___
Subject: XATA Corporation
Financial Statements
In accordance with our Credit and Security Agreement dated as of
October 23, 1998, as amended by a First Amendment to Credit and Security
Agreement dated as of November 30, 1998, a Second Amendment to Credit and
Security Agreement dated as of January 8, 1999, and a Third Amendment to Credit
and Security Agreement dated as of December ___, 1999 (the "Credit Agreement"),
attached are the financial statements of XATA Corporation (the "Borrower") as of
and for ________________, 200__ (the "Reporting Date") and the year-to-date
period then ended (the "Current Financials"). All terms used in this certificate
have the meanings given in the Credit Agreement.
I certify that the Current Financials have been prepared in
accordance with GAAP, subject to year-end audit adjustments, and fairly present
the Borrower's financial condition as of the date thereof.
Events of Default. (Check one):
[ ] The undersigned does not have knowledge of the occurrence of a
Default or Event of Default under the Credit Agreement.
[ ] The undersigned has knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement and attached hereto is a
statement of the facts with respect to thereto.
Financial Covenants. I further hereby certify as follows:
1. Minimum Book Net Worth. Pursuant to Section 6.7 of the Credit
Agreement, as of the Reporting Date, the Borrower's Book Net Worth was
$____________ which [ ] satisfies [ ] does not satisfy the requirement that such
amount be not less than $_____________ on the Reporting Date as set forth in the
table below:
--------------------------------------------------
Month Ending Minimum Book Net Worth
--------------------------------------------------
October 31, 1999 $3,525,000
--------------------------------------------------
November 30, 1999 $3,560,000
--------------------------------------------------
December 31, 1999 $3,830,000
--------------------------------------------------
January 31, 2000 $4,070,000
--------------------------------------------------
February 28, 2000 $4,190,000
--------------------------------------------------
March 31, 2000 $3,980,000
--------------------------------------------------
April 30, 2000 $4,350,000
--------------------------------------------------
May 31, 2000 $4,225,000
--------------------------------------------------
June 30, 2000 $4,455,000
--------------------------------------------------
July 31, 2000 $4,960,000
--------------------------------------------------
August 31, 2000 $5,030,000
--------------------------------------------------
September 30, 2000 $4,930,000
--------------------------------------------------
2. Capital Expenditures. Pursuant to Section 6.9 of the Credit
Agreement, for the year-to-date period ending on the Reporting Date, the
Borrower has expended or contracted to expend during the _____________ year
ended ______________, 200___, for Capital Expenditures, $__________________ in
the aggregate, which [ ] satisfies [ ] does not satisfy the requirement that
such expenditures not exceed $3,000,000 in the aggregate during such year.
Attached hereto are all relevant facts in reasonable detail to
evidence, and the computations of the financial covenants referred to above.
These computations were made in accordance with GAAP.
XATA CORPORATION
By
--------------------------------
Its Chief Financial Officer
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