EXHIBIT 10
THIRD AMENDMENT TO LETTER LOAN AGREEMENT
This THIRD AMENDMENT TO LETTER LOAN AGREEMENT (this
"Amendment"), made and entered into as of November 27, 1998, is
by and between Xxxx Incorporated, a corporation organized under
the laws of the State of Minnesota (the "Borrower"), and U.S.
Bank National Association, formerly known as First Bank National
Association, a national banking association (the "Lender").
RECITALS
1. The Lender and the Borrower entered into a Letter Loan
Agreement dated as of February 25, 1997, as amended by a First
Amendment to Letter Loan Agreement, and a Second Amendment to
Letter Loan Agreement (as amended, the "Credit Agreement"); and
2. The Borrower desires to amend certain provisions of the
Credit 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 Introductory paragraph: The introductory
paragraph of the Credit Agreement is amended to read in its
entirety as follows:
U.S. Bank National Association (the "Lender") agrees to
make (i) revolving advances ("Advances") to Xxxx
Incorporated (the "Borrower"), in an aggregate amount
outstanding from time to time of up to the lesser of
$4,000,000 or the Borrowing Base (defined below), from the
date of the Third Amendment to this Agreement (the "Third
Amendment") until October 1, 1999 under a promissory note
dated the date of the Third Amendment (as the same may
hereafter be amended, restated, extended, renewed or
otherwise modified from time to time, the "Revolving Note"),
(ii) two term loans of up to $300,000 each, (each an
"Existing Term Loan") (the Existing Term Loans were funded
prior to the date of the Third Amendment), and (iii) in its
sole and absolute discretion and without any commitment to
do so, one or more new term loans (each a "New Term Loan")
or up to $400,000 in the aggregate (the Existing Term Loans
and the New Term Loans, if any, are all "Term Loans" and
each is a Term Loan). Each Term Loan is or shall be
evidenced by a term note dated the date of such Term Loan
(as the same may hereafter be amended, restated, or
otherwise modified from time to time, each a "Term Note")
(the Revolving Note, each Term Note and all other notes from
the Borrower to the Lender are collectively the "Notes").
Advances and Term Loans will be made upon the following
terms and subject to the following conditions:
2.2 Nonuse fee. The following new paragraph 1(c) is
added to the Credit Agreement:
(c) Nonuse fee. The Borrower will pay to the Lender a
nonuse fee equal to one quarter of one percent of the amount
by which $4,000,000 exceeds the average daily outstanding
principal balance of the Advances from the date of the Third
Amendment until the maturity of the Revolving Note. Such
nonuse fee shall be payable on a semi-annual basis on June 1
and December 1 of each year, and on the maturity date of the
Revolving Note.
2.3 Discretionary Term Loans. The following two
sentences are added at the end of paragraph 7 of the Credit
Agreement, after paragraph 7 (b):
SATISFACTION OF THE CONDITIONS OF THIS PARAGRAPH 7 DOES NOT
IN ANY WAY ALTER THE DISCRETIONARY NATURE OF THE TERM LOANS.
THE LENDER IS UNDER NO OBLIGATION TO MAKE ANY TERM LOAN.
2.4 Revolving Note. The Revolving Note in the form of
Exhibit A hereto is substituted as the Revolving Note under
the Credit Agreement. Each reference to the Revolving Note
in the Credit Agreement shall be deemed a reference to the
Revolving Note in the form of Exhibit A attached hereto.
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 and the Revolving Note in the form
of Exhibit A hereto (the "New Revolving Note"), each 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 and the New
Revolving Note 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 last delivered to the Lender, and (ii)
identifying each officer of the Borrower authorized to
execute this Amendment, the New Revolving Note and any other
instrument or agreement executed by the Borrower in
connection with this Amendment (collectively, the "Amendment
Documents"), and certifying as to specimens of such
officer's signature and such officer's incumbency in such
offices as such officer holds.
3.3 The Borrower shall have satisfied such other
conditions as specified by 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 and the Amendment Documents.
Section 4. Representations, Warranties, Authority, No
Adverse Claim.
4.1 Reassertion of Representations and Warranties, No
Default. 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 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)
there will exist no Event of Default under the Credit Agreement
as amended by this Amendment on such date which has not been
waived by the Lender.
4.2 Authority, No Conflict, No Consent Required. The
Borrower represents and warrants that the Borrower has the power
and legal right and authority to enter into the Amendment
Documents and has duly authorized as appropriate the execution
and delivery of the Amendment Documents and other agreements and
documents executed and delivered by the Borrower in connection
herewith or therewith by proper corporate, and none of the
Amendment Documents 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 a
signatory or a provision of the Borrower's Articles of
Incorporation, Bylaws or any other agreement or requirement of
law, or result in the imposition of any lien on any of its
property under any agreement binding on or applicable to the
Borrower or any of its property except, if any, in favor of the
Lender. The Borrower represents and warrants that 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 or the Amendment Documents or other
agreements and documents executed and delivered by the Borrower
in connection therewith or the performance of obligations of the
Borrower therein described, except for those which the Borrower
has obtained or provided and as to which the Borrower has
delivered certified copies of documents evidencing each such
action to the Lender.
4.3 No Adverse Claim. The Borrower warrants, acknowledges
and agrees that no events have been taken place and no
circumstances exist at the date hereof which would give the
Borrower a basis to assert a defense, offset or counterclaim to
any claim of the Lender with respect to the Borrower's
obligations under the Credit Agreement as amended by this
Amendment.
Section 5. Affirmation of Credit Agreement, Further
References, Affirmation of Security Interest. The Lender and the
Borrower each acknowledge and affirm that the Credit Agreement,
as hereby amended, is hereby ratified and confirmed in all
respects and all terms, conditions and provisions of the Credit
Agreement, except as amended by this Amendment, shall remain
unmodified and in full force and effect. All references in any
document or instrument to the Credit Agreement are hereby amended
and shall refer to the Credit Agreement as amended by this
Amendment. The Borrower confirms to the Lender that the
Borrower's obligations under the Credit Agreement, as amended by
this Amendment are and continue to be secured by the security
interest granted by the Borrower in favor of the Lender under
that certain security agreement dated as of February 25, 1997,
and made by the Borrower in favor of the Lender, and all of the
terms, conditions, provisions, agreements, requirements,
promises, obligations, duties, covenants and representations of
the Borrower under such documents 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.
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 this Amendment 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 the other Amendment Documents 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, the other Amendment Documents 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, the
other Amendment Documents 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. The Amendment Documents 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 Xxxxxx & Xxxxxxx LLP, counsel for the
Lender)incurred in connection with the Credit Agreement,
including in connection with the negotiation, preparation and
execution of the Amendment Documents and all other documents
negotiated, prepared and executed in connection with the
Amendment Documents, and in enforcing the obligations of the
Borrower under the Amendment Documents, and to pay and save the
Lender harmless from all liability for, any stamp or other taxes
which may be payable with respect to the execution or delivery of
the Amendment Documents, 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. The Amendment Documents 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 the Amendment
Documents 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, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, THEIR
HOLDING COMPANIES AND THEIR AFFILIATES.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date and year first above
written.
BORROWER: XXXX INCORPORATED
By:
Title:
LENDER: U.S. BANK NATIONAL ASSOCIATION
By:
Title:
