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EXHIBIT 10.34
MODIFICATION AGREEMENT
BY THIS MODIFICATION AGREEMENT, made and entered into as of the 27th day of
May, 1997, AMERICAN COIN MERCHANDISING, INC., a Delaware corporation, whose
address is 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (hereinafter called
"Borrower"), and XXXXX FARGO BANK (COLORADO), NATIONAL ASSOCIATION, whose
address is 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (hereinafter called
"Lender"), confirm and agree as follows:
SECTION 1. RECITALS.
1.1 Borrower and Lender entered into a Credit Agreement dated
September 23, 1996 (the "Credit Agreement"), which provides for a revolving
loan by Lender to Borrower in the maximum principal amount of $6,000,000.00
upon the terms and conditions contained therein (the "Loan").
1.2 The Loan is evidenced by a Promissory Note dated
September 23, 1996, executed by Borrower, payable to the order of Lender, in
the principal amount of $6,000,000.00 (the "Note").
1.3 The Loan is secured in part by a Continuing Security
Agreement dated September 23, 1996, executed by Borrower as the Debtor for the
benefit of Lender as the Secured Party (the "Security Agreement").
1.4 The Credit Agreement, the Note, the Security Agreement,
and all other documents and instruments executed and delivered in connection
with the Loan or that secure payment of the Loan, are hereinafter called the
"Loan Documents."
1.5 The total principal and accrued interest outstanding
under the Loan Documents as of May 23, 1997, is $5,964,240.18, comprised of
principal of $5,932,174.08 and interest of $32,066.10.
1.6 Borrower and Lender desire to make modifications to the
Credit Agreement and other Loan Documents as set forth herein.
SECTION 2. CREDIT AGREEMENT.
2.1 The first sentence of subsection (a) of Section 1.1 of
the Credit Agreement is hereby deleted in its entirety and the following
inserted in lieu thereof:
"(a) Revolving Line of Credit. Subject to the terms and
conditions of this Agreement, and including, the conversion right set
forth in Section 1.2 hereof, Bank hereby agrees to make advances to
Borrower from time to time up to and including July 5, 1999, not to
exceed at any time the aggregate outstanding principal amount of Nine
Million Dollars ($9,000,000) ("Revolving Line of Credit"), the
proceeds of which shall be used for working capital, equipment
purchases, capital expenditures, letters of credit and retirement of
existing Bank debt."
2.2 The following paragraph is hereby added to Section 1.3
of the Credit Agreement, as subsection 1.3(e):
"(e) Unused Commitment Fee. Borrower shall pay to Bank a fee
equal to one-eighth of one percent (1/8%) per annum (computed on the
basis of a 360-day year, actual days elapsed) on the average daily
unused amount of the Revolving Line of Credit, which fee shall be
calculated on a quarterly basis by Bank and shall be due and payable
by Borrower in arrears on the last day of the month immediately
following the end of each fiscal quarter, commencing July 31, 1997."
2.3 Subsections (a) through (d) of Section 4.3 of the Credit
Agreement are hereby deleted in their entirety and replaced with the following:
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"(a) not later than 90 days after and as of the end of each
fiscal year, an unqualified financial statement of Borrower, prepared
by certified public accountants reasonably satisfactory to the Bank;
(b) not later than 45 days after and as of the end of each
fiscal quarter, a financial statement of Borrower, prepared in
accordance with GAAP by Borrower, to include accounts receivable
agings, income and profit and loss statements;
(c) not later than 45 days after and as of the end of each
fiscal quarter, a borrowing base certificate in the form attached
hereto as Exhibit A, an inventory collateral report, an aged listing
of accounts receivable, a reconciliation of accounts, Borrower's
internally prepared ratios described in paragraph 4.9 hereof and
immediately upon each request from Bank, a list of the names and
addresses of all of Borrower's account debtors;
(d) not later than 30 days prior to the end of each fiscal
year, a projection, prepared by Borrower for the upcoming year to and
including next fiscal year-end, to include projected income
statements, balance sheets and cash flows;"
2.4 Subsections (a) through (c) of Section 4.9 of the Credit
Agreement are hereby deleted in their entirety and replaced with the following:
"(a) Current Ratio at any quarter end not less than 1.15 to
1.0, with "Current Ratio" defined as total current assets divided by
total current liabilities.
(b) Total Liabilities to Tangible Net Worth ratio of not
greater than 1.5 to 1.0, as of each quarter end, with "Total
Liabilities" defined as the aggregate of current liabilities and
non-current liabilities, and with "Tangible Net Worth" defined as the
aggregate of total stockholders' equity less costs in excess of assets
acquired.
(c) Funded Debt to EBITDA ratio of not greater than 1.5 to
1.0 as of each quarter end, with "Funded Debt" defined as the sum of
all Bank debt, all amounts due to related parties and any
acquisition-related carryback debt, and with "EBITDA" defined as the
prior four quarters' net profit plus interest expense, income tax
expense, depreciation and amortization expense."
2.5 Section 2.1 of the Credit Agreement is amended to state
that the Borrower from time to time does business as Sugarloaf Creations, Inc.
SECTION 3. NOTE.
3.1 The header and first paragraph of the Note are hereby
deleted in their entirety and the following is inserted in lieu thereof:
"$9,000,000.00 Denver, Colorado
September 23, 1996
FOR VALUE RECEIVED, the undersigned AMERICAN COIN
MERCHANDISING, INC., ("Borrower") promises to pay to the order of
XXXXX FARGO BANK (COLORADO), NATIONAL ASSOCIATION ("Bank") at its
office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, or at such other
place as the holder hereof may designate, in lawful money of the
United States of America and in immediately available funds, the
principal sum of NINE MILLION AND NO/100 DOLLARS ($9,000,000.00) or so
much thereof as may be advanced and be outstanding, with interest
thereon, to be computed on each advance from the date of its
disbursement (computed on the basis of a 360-day year, actual days
elapsed) at a fluctuating rate per annum equal to the Prime Rate in
effect from time to time. Each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is
announced within Bank."
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3.2 The last sentence of paragraph C.1 of the Note is hereby
deleted in its entirety and the following is inserted in lieu thereof:
"The outstanding principal balance of this Note shall be due and
payable in full on July 5, 1999, or as otherwise provided in the
Credit Agreement of even date herewith executed by Borrower and Bank
as such Credit Agreement may be amended from time to time."
SECTION 4. OTHER MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.
4.1 All references to the Credit Agreement in the other Loan
Documents are hereby amended to refer to the Credit Agreement as amended by
this Agreement.
4.2 All references to the Note in the other Loan Documents
are hereby amended to refer to the Note as amended by this Agreement.
4.3 All references to any other Loan Document in the other
Loan Documents are hereby amended to refer to that Loan Document as amended by
this Agreement.
4.4 Borrower acknowledges that the indebtedness evidenced by
the Note is just and owing, that the balance thereof is correctly shown in
Section 1.5 hereof, and Borrower agrees to pay the indebtedness evidenced by
the Note and secured by the Loan Documents, according to the terms thereof, as
modified by this Agreement.
4.5 Borrower reaffirms to Lender each of the representations,
warranties, covenants and agreements of Borrower set forth in all the Loan
Documents, with the same force and effect as if each were separately stated
herein and made as of the date of this Agreement.
4.6 Borrower ratifies, reaffirms, acknowledges, and agrees
that the Loan Documents, as amended by this Agreement, represent valid,
enforceable and collectible obligations of Borrower, and that there are no
existing claims, defenses, personal or otherwise, or rights of setoff
whatsoever with respect to any of these documents or instruments. In addition,
Borrower hereby expressly waives, releases and absolutely and forever
discharges Lender and its shareholders, directors, officers, employees and
agents, and their heirs, personal representatives, successors and assigns, from
any and all liability, claims, demands, damages, actions and causes of action
that Borrower may now have, or has had prior to the date hereof and, without
limiting the generality of the foregoing, from any and all liability, claims,
demands, damages, actions and causes of action arising out of, or in any way
connected with, the Loan. Borrower further acknowledges and represents that no
Event of Default (as defined in the Credit Agreement) or matter which, with the
giving of notice, passage of time, or both, would constitute an Event of
Default exists.
4.7 All terms, conditions and provisions of the Loan
Documents are continued in full force and effect and shall remain unaffected
and unchanged except as specifically amended by this Modification Agreement.
4.8 Borrower shall pay to Lender on the execution hereof by
Lender a loan modification fee of $5,000.00.
SECTION 5. GENERAL.
5.1 This Agreement in no way acts as a release or
relinquishment of those liens, security interests and rights securing payment
of the Loan, including, without limitation, the liens created by the Security
Agreement and the other Loan Documents. Such liens, security interests and
rights are hereby ratified, confirmed, renewed and extended by Borrower in all
respects.
5.2 Borrower shall execute and deliver such additional
documents and do such other acts as Lender may reasonably require to fully
implement the intent of this Agreement, including, but not limited to, the
execution of such financing statements or amendments thereto as Lender may
require to reflect Borrower's doing business as Sugarloaf Creations, Inc.
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5.3 Borrower shall pay all costs and expenses, including,
without limitation, recording fees and reasonable attorneys' fees incurred by
Lender in connection with this Agreement. Lender, at its option, but without
any obligation to do so, may advance funds to pay any such costs and expenses
that are the obligation of the Borrower, and all such funds advanced shall bear
interest at the Prime Rate provided in the Note, shall be due and payable upon
demand and shall be secured by all of the Loan Documents.
5.4 Notwithstanding anything to the contrary contained herein
or in any other instrument executed by Borrower or Lender or in any other
action or conduct undertaken by Borrower or Lender on or before the date of
this Agreement, the agreements, covenants and provisions contained herein shall
constitute the only evidence of Lender's consent to modify the terms and
provisions of the Loan Documents. Accordingly, no express or implied consent to
any further modifications involving any of the matters set forth in this
Agreement or otherwise shall be inferred or implied by Lender's execution of
this Agreement. Further, Lender's execution of this Agreement shall not
constitute a waiver (either express or implied) of the requirement that any
further modification of the Loan or of the Loan Documents shall require the
express written approval of Lender; no such approval (either express or
implied) has been given as of the date of this Agreement.
5.5 This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their heirs, personal representatives,
successors and assigns.
5.6 This Agreement is made for the sole protection and
benefit of the parties hereto, and no other person or entity shall have any
right of action hereon.
5.7 This Agreement shall be governed by and construed
according to the laws of the State of Colorado.
IN WITNESS WHEREOF, this Agreement is executed as of the date
indicated above.
BORROWER:
AMERICAN COIN MERCHANDISING, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: President, Chief Executive Officer
LENDER:
XXXXX FARGO BANK (COLORADO), NATIONAL
ASSOCIATION
By: /s/ Xxxxx Xxxxxxxx
----------------------------------------
Title: Vice President
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STATE OF COLORADO )
) ss.
COUNTY OF BOULDER )
The foregoing instrument was acknowledged before me this 27
day of May, 1997, by Xxxxxx X. Xxxxx, the President, Chief Executive Officer of
American Coin Merchandising, Inc., a Delaware corporation.
My commission expires: November 13, 1998
Witness my hand and official seal.
/s/ Xxxxxxx La Terra
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Notary Public
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 27
day of May, 1997, by Xxxxx Xxxxxxxx, the Vice President of Xxxxx Fargo Bank
(Colorado), National Association.
My commission expires: June 14, 2000
Witness my hand and official seal.
/s/ Xxxxx X. Xxxxxx
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Notary Public
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