Exhibit 10.3
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT, dated as of August 17, 1998, amends and modifies
a certain Credit Agreement, dated as of November 25, 1996, as amended by an
Amendment dated as of May 23, 1997 (as so amended, the "Credit Agreement"),
among ▇▇▇▇▇▇▇ CORPORATION (the "Borrower"), U.S. BANK NATIONAL ASSOCIATION,
formerly known as First Bank National Association, as Agent (the "Agent"),
and the banks or financial institutions party thereto, which currently
consist of U.S. BANK NATIONAL ASSOCIATION and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION (the "Banks"). Terms not otherwise expressly defined
herein shall have the meanings set forth in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower, the Agent and the Banks agree that the
Credit Agreement is amended as follows.
ARTICLE I - AMENDMENTS TO THE CREDIT AGREEMENT
1.1 CONSOLIDATION AND MERGER; ACQUISITION OF ASSETS AND STOCK. The final
sentence of Section 9.6 is amended to read as follows:
"The Borrower agrees that in each consecutive 12 month period, the
aggregate amount that is expended (whether in cash or in stock) by the
Borrower and its Subsidiaries to acquire all or substantially all of the
assets or any stock of another Person, and to merge or consolidate with
another Person, shall not exceed $15,000,000 in the aggregate."
1.2 EXPENDITURES FOR FIXED ASSETS. Section 9.8 is amended by deleting
"$20,000,000" and inserting "$30,000,000" in place thereof.
1.3 SCHEDULE OF CONTINGENT LIABILITIES. SCHEDULE 7.6 is amended by
including the text on Exhibit A attached hereto respecting contingent purchase
payments in connection with the acquisition of Executech, Inc. and World Wide
Scan Services LLC.
1.4 CONSTRUCTION. All references in the Credit Agreement to "this
Agreement", "herein" and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this Amendment and to
make and maintain the Loans under the Credit Agreement as amended hereby, the
Borrower hereby warrants and represents to the Agent and the Banks that it is
duly authorized to execute and deliver this Amendment, and to perform its
obligations under the Credit Agreement as amended hereby, and that this
Amendment constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
ARTICLE III - CONDITIONS PRECEDENT
This Amendment shall become effective on the date first set forth above,
provided, however, that the effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions precedent:
3.1 WARRANTIES. Before and after giving effect to this Amendment, the
representations and warranties in ARTICLE VII of the Credit Agreement shall
be true and correct as though made on the date hereof, except for changes
that are permitted by the terms of the Credit Agreement. The execution by the
Borrower of this Amendment shall be deemed a representation that the Borrower
has complied with the foregoing condition.
3.2 DEFAULTS. Before and after giving effect to this Amendment, no
Default and no Event of Default shall have occurred and be continuing under
the Credit Agreement. The execution by the Borrower of this Amendment shall
be deemed a representation that the Borrower has complied with the foregoing
condition.
3.3 DOCUMENTS. The Borrower, the Agent and the Banks shall have executed
and delivered this Amendment, and Guarantors shall have executed Guarantors'
Acknowledgments in the form of those attached hereto.
3.4 NEW SUBSIDIARY. The Borrower's new Subsidiary, ▇▇▇▇▇▇▇/Executech,
Inc., shall issue a Guaranty as provided in SECTION 8.14, and shall deliver
certified copies of its approval resolution for such guaranty and its
incumbency certificate.
ARTICLE IV - GENERAL
4.1 EXPENSES. The Borrower agrees to reimburse the Agent upon demand for
all reasonable expenses (including reasonable attorneys' fees and legal
expenses) incurred by this Agent in the preparation, negotiation and
execution of this Amendment and any other document required to be furnished
herewith, and in enforcing the obligations of the Borrower hereunder, and to
pay and save the Agent and the Banks harmless from all liability for, any
stamp or other taxes which may be payable with respect to the execution or
delivery of this Amendment, which obligations of the Borrower shall survive
any termination of the Credit Agreement.
4.2 COUNTERPARTS. This Amendment may be executed in as many counterparts
as may be deemed necessary or convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
instrument.
4.3 SEVERABILITY. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
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4.4 LAW. This Amendment shall be a contract made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties
hereunder.
4.5 SUCCESSORS; ENFORCEABILITY. This Amendment shall be binding upon the
Borrower, the Agent and the Banks and their respective successors and
assigns, and shall accrue to the benefit of the Borrower, the Agent and the
Banks and the successors and assigns of the Agent and the Banks. Except as
hereby amended, the Credit Agreement shall remain in full force and effect
and is hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Minneapolis, Minnesota by their respective officers thereunto
duly authorized as of the date first written above.
▇▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Vice President - Finance, Chief Financial
Officer and Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, General Counsel
and Secretary
U.S. BANK NATIONAL ASSOCIATION,
as Agent and as a Bank
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
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Exhibit A
Executech Contingent Purchase Price Rider:
Contingent purchase price consideration in connection with the acquisition of
substantially all of the assets of Executech, Inc. and World Wide Scan
Services, LLC pursuant to the Asset Purchase Agreement (the "Executech
Purchase Agreement"), dated as of June 11, 1998, is by and between ▇▇▇▇▇▇▇
Corporation, ▇▇▇▇▇▇▇ Acquisition Corporation, Executech, Inc., World Wide Scan
Services, LLC, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. The contingent
purchase price is payable annually through January 31, 2002 and is equal to
the following:
FISCAL YEAR CONTINGENT PURCHASE PRICE PAYMENT
----------- ---------------------------------
January 1, 1998 through January 31, 1999 450% of the After-Tax Earnings for the First
("FIRST FISCAL YEAR") Fiscal Year (the "BASE YEAR EARNINGS");
provided however, the Base Year Earnings
equal or exceed Four Hundred Thousand
Dollars ($400,000)
February 1, 1999 through January 31, 2000 50% of the After-Tax Earnings for the Second
("SECOND FISCAL YEAR") Fiscal Year in excess of the greater of (x)
120% of Base Year Earnings; and (y) Seven
Hundred Twenty Thousand Dollars ($720,000)
February 1, 2000 through January 31, 2001 50% of the After-Tax Earnings for the Third
("THIRD FISCAL YEAR") Fiscal Year in excess of the greater of (x)
144% of the Base Year Earnings; and (y) Eight
Hundred Sixty Four Thousand ($864,000)
February 1, 2001 through January 31, 2002 50% of the After-Tax Earnings for the Fourth
("FOURTH FISCAL YEAR") Fiscal Year in excess of the greater of (x)
172.8% of the Base Year Earnings; and (y)
One Million Thirty-Six Thousand Eight
Hundred Dollars ($1,036,800)
GUARANTORS' ACKNOWLEDGMENT
The undersigned have executed and delivered a Guaranty, dated as of
November 25, 1996 (the "Guaranty"), whereby the undersigned have jointly and
severally guaranteed payment and performance of obligations of ▇▇▇▇▇▇▇
CORPORATION (the "Borrower") to U.S. Bank National Association, formerly
known as First Bank National Association, as Agent (the "Agent"), and each of
the other Banks (the "Banks") under a Credit Agreement, dated as of
November 25, 1996 (as thereafter amended, modified, extended, renewed and
replaced from time to time called the "Credit Agreement"), each Note issued
thereunder and each further Loan Document, as defined in the Credit
Agreement, and all further obligations defined as the "Liabilities" in the
Guaranty. Each of the undersigned acknowledges that it has received a copy of
the proposed Second Amendment to the Credit Agreement, to be dated on or
about August 17, 1998 (the "Amendment"). Each of the undersigned agrees and
acknowledges that the Amendment shall in no way impair or limit the right of
the Bank under the Guaranty, and confirms that by the Guaranty, it continues
to guaranty payment and performance of the Liabilities, including without
limitation obligations under the Credit Agreement as amended pursuant to the
Amendment. Each of the undersigned hereby confirms that the Guaranty remains
in full force and effect, enforceable against the undersigned in accordance
with its terms.
▇▇▇▇▇▇▇/NEW YORK COMPANY
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
▇▇▇▇▇▇▇/MAY, INC.
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
(Additional Signature Pages Follow)
FMC RESOURCE MANAGEMENT CORPORATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
▇▇▇▇▇▇▇/MAGNUS PUBLISHING CORPORATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
▇▇▇▇▇▇▇ CORPORATION CANADA
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
(Additional Signature Page Follows)
▇▇▇▇▇▇▇ INTERNATIONAL INC.
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
▇▇▇▇▇▇▇ REAL ESTATE COMPANY
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
GUARANTORS' ACKNOWLEDGMENT
The undersigned has executed and delivered a Guaranty, dated as of
April 23, 1997 (the "Guaranty"), whereby the undersigned has guaranteed
payment and performance of obligations of ▇▇▇▇▇▇▇ CORPORATION (the
"Borrower") to U.S. Bank National Association, formerly known as First Bank
National Association, as Agent (the "Agent"), and each of the other Banks
(the "Banks") under a Credit Agreement, dated as of November 25, 1996 (as
thereafter amended, modified, extended, renewed and replaced from time to
time called the "Credit Agreement"), each Note issued thereunder and each
further Loan Document, as defined in the Credit Agreement, and all further
obligations defined as the "Liabilities" in the Guaranty. The undersigned
acknowledges that it has received a copy of the proposed Second Amendment to
the Credit Agreement, to be dated on or about August 17, 1998 (the
"Amendment"). The undersigned agrees and acknowledges that the Amendment
shall in no way impair or limit the right of the Bank under the Guaranty, and
confirms that by the Guaranty, it continues to guaranty payment and
performance of the Liabilities, including without limitation obligations
under the Credit Agreement as amended pursuant to the Amendment. The
undersigned hereby confirms that the Guaranty remains in full force and
effect, enforceable against the undersigned in accordance with its terms.
▇▇▇▇▇▇▇ TRAINING & TECHNOLOGY, INC. (formerly
known as ▇▇▇▇▇▇▇/Superstar Computing Company)
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
