FIRST AMENDMENT TO
CREDIT FACILITY AND SECURITY AGREEMENT ("Amendment")
WHEREAS, XXXXXXXXXX INDUSTRIES, INC. (herein called the "Borrower")
and KEY BANK OF WASHINGTON (herein called the "Bank") entered into a
certain Credit Facility and Security Agreement dated April 12, 1996 (herein
called the "Agreement"), and
WHEREAS, the Borrower and the Bank have agreed to increase the amount
of the revolving credit to $15,000,000, to extend the Termination Date to
September 30, 1998, and to make certain other amendments to the Agreement.
NOW, THEREFORE, for valuable consideration received to their mutual
satisfaction, the Borrower and the Bank hereby agree as follows:
1. Section 1 of the Agreement is hereby amended by deleting the
definitions of "Borrowing Base" and "Termination Date" in their entirety
and substituting the following in place thereof:
"Borrowing Base" means an amount not in excess of the sum of the
following:
(a) Eighty percent (80 %) of the amount due and owing on
Qualified Accounts Receivable, plus
(b) Fifty percent (50%) of the cost or market value (whichever
is lower) of Borrower's Qualified Inventory, up to a maximum
of $2,000,000, less
(c) Reserves for Letters of Credit.
"Termination Date" means September 30, 1998, or such earlier date on
which the commitment of the Bank to make Advances pursuant to Section
2(a) hereof shall have been terminated pursuant to Section 9 of this
Agreement.
2. Section 2(a)(i) of the Agreement is hereby amended by (a) deleting
the amount "Ten Million Dollars ($10,000,000)" from the sixth and seventh
lines and inserting the amount "Fifteen Million Dollars ($15,000,000)" in
place thereof, and (b) deleting the amount "Two Million Five Hundred
Thousand Dollars ($2,500,000)" from the eighth and ninth lines and
inserting the amount "Three Million Dollars ($3,000,000)" in place thereof.
3. Section 2(c)(iii) of the Agreement is hereby amended by deleting it
in its entirety and substituting the following in place thereof:
-1-
"(iii) Borrower agrees to pay Bank a facility fee of Fifteen Thousand
Dollars ($15,000) annually, paid quarterly in arrears in
installments of Three Thousand Seven Hundred Fifty Dollars
($3,750) each on the last day of each March, July, September and
December."
4. Section 4(p) of the Agreement is hereby amended by deleting it in
its entirety and substituting the following in place thereof:
"(p) Borrower has its place of business or maintains its Inventory at
the following locations: 0000 X.X. Xxxxxxxx Xxx-Xxx Xxxx, Xxxxxx,
Xxxxxx 00000-0000; 0000 Xxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxx 00000;
00000 000xx Xxxxx X.X., Xxxxxxx, Xxxxxxxxxx 00000; and 00000 Xxx
Xxxx Xxxxxxx Xxxx., Xxxxxxx, Xxxxxxxxxx 00000."
5. Section 5 of the Agreement is hereby amended by deleting subparts
(q),(z), (aa) and (dd) in their entirety and substituting the following in
place thereof:
"(q) shall not, without the prior written consent of Bank, borrow any
money or, directly or indirectly, create, incur, assume,
guarantee, or otherwise become or remain liable with respect to
any indebtedness for borrowed money or advances other than (1)
Borrower's Obligations, (2)Subject to the limitations provided in
Section 5 (q) (5) below, any indebtedness of Borrower existing on
the date hereof and not required by Bank to be prepaid as a
condition to execution of this Agreement, (3) Subordinated Debt,
(4) equipment leases as provided under Section 5(z) hereof, and
(5) any other indebtedness for borrowed money (including
indebtedness permitted under Section 5 (q) (2) above) in an
amount not to exceed Twenty Million Dollars ($20,000,000).
(t) shall not, without the prior written consent of Bank, mortgage,
pledge, grant a security interest, or otherwise voluntarily place
or permit to be placed any lien upon any assets of the Borrower
except any security interest granted to or in favor of Bank;
provided, however, Borrower may grant a security interest in any
asset of Borrower not constituting collateral securing the
Obligations all in connection with the indebtedness permitted in
Section 5(q)(5) hereof.
(z) shall not permit the amount of all rental and lease payments of
the Borrower for any current or future period of twelve (12)
consecutive months for real or personal property to be at any
time in excess of $4,000,000.
(aa) shall not permit the aggregate of its Tangible Net Worth to be at
any time less than the sum of (a) $21,000,000.00 plus (b) fifty
percent (50%) of the positive net income of the Borrower on a
cumulative basis beginning with its quarter ending September 30,
1996;
-2-
(dd) shall not permit the ratio of the sum of its earnings before
interest, taxes, depreciation, amortization and lease payments
(before any extraordinary gains or losses) to the sum of its
interest, taxes, lease payments, current maturities and net
capital spending, calculated at the same point in time, to be at
any time, less than 1.1 to 1.0, measured on a rolling four (4)
quarter basis. The calculation for said ratio shall not include
the amount paid for the Circuit Technologies, Inc. and Trend
Circuits, Inc., acquisitions and the impact of certain real
estate transactions amounting, in the aggregate, of $7,300,000,
by and between Xxxxxx Xxxxxxxxxx and Borrower, (which
transactions were consummated on or before April 30, 1996)
6. Exhibit B to the Agreement is hereby amended by deleting it in its
entirety and substituting the form attached hereto as Exhibit B-1. The
Borrower hereby agrees that it will, contemporaneously with the execution
of this Amendment, execute and deliver to the Bank a promissory note in the
form of Exhibit B-1 to replace the promissory note currently held and owned
by the Bank representing the Borrower's borrowings under the Agreement.
7. Borrower shall pay Bank an amendment fee in the amount of Six
Thousand Two Hundred Fifty Dollars ($6,250) payable on the date of
execution of this Amendment.
8. Except as herein specifically amended, directly or by reference,
all of the terms and conditions set forth in the Agreement are confirmed
and ratified and shall remain in full force and effect. This Amendment
shall be construed in accordance with the laws of the State of Oregon,
without regard to principles of conflict of laws.
9. In consideration of this Amendment, Borrower hereby releases and
discharges the Bank and its shareholders, directors, officers, employees,
attorneys, affiliates and subsidiaries from any and all claims, demands,
liability, and causes of action whatsoever, now known or unknown, arising
out of or in any way related to the extension or administration of the
Loan, the Agreement or any mortgage or security interest related thereto.
10. Borrower hereby represents and warrants to Bank that (a) Borrower
has the legal power and authority to execute and deliver this Amendment;
(b) the officials executing this Amendment have been duly authorized to
execute and deliver the same and bind Borrower with respect to the
provisions hereof; (c) the execution and delivery hereof by Borrower and
the performance and observance by Borrower of the provisions hereof do not
violate or conflict with the organizational agreements of Borrower or any
law applicable to Borrower or result in a breach of any provisions of or
constitute a default under any other agreement, instrument or document
binding upon or enforceable against Borrower; and (d) this Amendment
constitutes a valid and binding obligation upon Borrower in every respect.
-3-
Under Oregon law, most agreements, promises and commitments made by a
bank after October 3, 1989 concerning loans or other credit extensions
which are not for personal, family or household purposes or secured solely
by the borrower's residence must be in writing, express consideration and
be signed by the bank to be enforceable.
IN WITNESS WHEREOF, the Borrower and the Bank have caused this
Amendment to be executed by their duly authorized officers as of the 20th
day of August, 1996.
BANK: BORROWER:
KEY BANK OF WASHINGTON XXXXXXXXXX INDUSTRIES
By Xxxxx X. Xxxxxx By: Xxxxxxx X. Xxxxxxxx
------------------------------- -------------------------------
Title: Commercial Banking Officer Title Senior Vice President
--------------------------- -----------------------------
And Xxxxxx X. Xxxxxxxxxx
-------------------------------
Title President
-----------------------------
-4-
AMENDED AND RESTATED
MASTER PROMISSORY NOTE
$15,000,000.00 Executed at ______________________
August 20th, 1996
On September 30, 1998, undersigned (herein called "Borrower") promises to
pay to the order of KEY BANK OF WASHINGTON, (herein called `'Bank"), the
sum of Fifteen Million Dollars ($15,000,000.00) or such lesser amount of
Advances as shall have actually been borrowed by Borrower from Bank and not
previously repaid, pursuant to the terms of a certain "Credit Facility and
Security Agreement" by and between Borrower and Bank dated April 12, 1996,
including any partial or total extension, restatement, renewal, amendment,
and substitution thereof or therefor (herein called "Agreement") with
interest payable at such interest rates and at such times as are specified
in Section 2(a) of the Agreement.
Borrower has assigned to Bank all of Borrower's "Accounts Receivable" and
has granted to Bank a security interest in all of Borrower's "Accounts
Receivable", "Inventory", Cash Security", funds on deposit in the "Cash
Collateral Account", certain other assets, and all "Proceeds", products,
profits, and rents thereof, as security for the payment of this Note and
all other "Obligations", as those terms are defined in Section 1 of the
Agreement (all herein called "Obligations").
Upon the occurrence of any one or more "Events of Default", any and all
Obligations shall, at the option of Bank, immediately become due and
payable without demand, presentment, protest, or notice of any kind, all as
provided in the Agreement.
Borrower expressly waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, assent to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral, and to the addition or
release of any other person primarily or secondarily liable. Borrower
understands and agrees that this Note is subject to and shall be construed
according to the laws of the State of Oregon.
Reference is made to the Agreement for certain provisions concerning
prepayment of this Note, rights of Bank and its successors and assigns with
respect to this Note, and related matters. This Note is the "Master
Promissory Note" referred to in the Agreement.
-1-
This Note is being executed and delivered as an amendment to and
restatement of an existing Master Promissory Note executed by Borrower and
dated April 12, 1996, and the execution and delivery of this Note shall not
constitute a novation and shall not terminate or otherwise affect the first
lien and security interest of the Bank in Borrower's property.
Under Oregon law, most agreements, promises and commitments made by a
bank after October 3, 1989 concerning loans or other credit extensions
which are not for personal, family or household purpose or secured solely
by the borrower's residence must be in writing, express consideration and
be signed by the bank to be enforceable
XXXXXXXXXX INDUSTRIES, INC.
By: Xxxxxxx X. Xxxxxxxx
-------------------------------
Title Senior Vice President
-----------------------------
By: Xxxxxx X. Xxxxxxxxxx
-------------------------------
Title: President
-----------------------------
-2-
