EXHIBIT 10.1
FIFTH AMENDMENT AND MODIFICATION OF
REVOLVING LINE OF CREDIT PROMISSORY NOTE,
LOAN AGREEMENT AND REAFFIRMATION OF GUARANTIES
This Fifth Amendment and Modification of Revolving Line of Credit
Promissory Note, Loan Agreement and Reaffirmation of Guaranties ("Amendment") is
made effective the 1st day of January, 2007 ("Effective Date") by and among WSI
Industries, Inc., a Minnesota corporation, having an address of ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Borrower"), Taurus Numeric Tool, Inc., having an
address of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and WSI Rochester, Inc.,
having an address of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (jointly
"Guarantor") and Excel Bank Minnesota, a Minnesota banking corporation, having
an address of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Bank").
WHEREAS, on or about December 4, 2002, (the "Loan Date") Borrower executed
a Revolving Line of Credit Promissory Note in favor of the Bank in the original
principal amount of One Million and no/100 Dollars ($1,000,000.00) ("Note"); and
WHEREAS, on or about the Loan Date, Borrower and the Bank executed that
certain Loan Agreement ("Loan Agreement") which Loan Agreement, among other
things, described the terms and conditions under which the Borrower would borrow
money from and repay the money to the Bank; and
WHEREAS, to secure the sums due and payable to the Bank pursuant to the
Note and the Loan Agreement, Borrower also executed that certain Security
Agreement, also dated as of the Loan Date, whereby the Bank took a security
interest in all assets of Borrower ("Security Agreement); and
WHEREAS, to further secure the sums due and payable to the Bank pursuant to
the Note and the Loan Agreement, to perform the covenants and conditions thereof
and of certain documents executed in conjunction therewith, each Guarantor
executed an unconditional and unlimited guaranty ("Guaranty"), also dated as of
the Loan Date, whereby each Guarantor unconditionally guaranteed the Borrower's
performance of the Note and the Loan Agreement and the other loan documents
executed therewith; and
WHEREAS, the Note, the Loan Agreement and the Security Agreement were
amended and extended pursuant to those certain Amendments and Modifications of
Revolving Line of Credit Promissory Note, Loan Agreement and Reaffirmation of
Guaranties dated effective December 31, 2003, May 3, 2004, January 1, 2005, and
January 1, 2006 (the "Amendments"); and
WHEREAS, the Note, the Loan Agreement, the Security Agreement, the
Amendments and all of the documents executed in conjunction therewith are
sometimes jointly referred to herein as the "Loan Documents"; and
WHEREAS, the Borrower has requested that the Bank again amend and extend
the maturity date of the Note and modify the terms of the Loan Agreement; and
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WHEREAS, the Bank and the Borrower and each Guarantor desire that the Note
and the Loan Agreement be amended and modified as hereinafter described and each
Guarantor wishes to acknowledge and reaffirm the terms and conditions of such
Guarantor's Guaranty.
NOW, THEREFORE, in consideration of the above recitals, and in
consideration of credit given or to be given by the Bank to the Borrower and for
other good and valuable consideration, all of which consideration is hereby
acknowledged, the parties hereto agree as follows:
1. Each of the above recitals is true and correct and is incorporated herein
by this reference.
2. The Note is hereby amended, modified and extended as follows:
"On and after the Effective Date hereof the Note shall bear interest at the
variable rate of equal to the Base Rate of interest as established by Excel
Bank Minnesota from time to time ("Base Rate"). On the Effective Date
hereof the Base Rate is eight and one-fourth percent (8.25%) per annum and
the initial rate of interest under the Note as of the Effective Date is
eight and one-fourth percent (8.25%) per annum. If the Base Rate is no
longer established or is otherwise no longer available the holder of this
Note may substitute a reasonably equivalent index to substitute for the
Base Rate. The rate of interest hereunder shall change when, if, and as
often as the Base Rate changes.
The principal and interest due pursuant to the Note shall be repaid as
follows: In monthly payments of all accrued interest on the sums actually
advanced thereunder commencing on February 1, 2007 and continuing monthly
thereafter on the 1st day of each and every month until January 31, 2008,
at which time the entire remaining balance due under the Note, including
all principal and accrued but unpaid interest, shall be due and payable in
full."
3. The following section of the Loan Agreement is hereby amended and modified
as described below (all capitalized terms have the meanings given to them
in the Loan Agreement):
Section 5.08 of the Loan Agreement shall be amended as follows:
"Section 5.08 MINIMUM NET WORTH. So long as the Note shall remain
unpaid or the Bank shall have any Commitment hereunder, the Borrower
will maintain, during and at the end of each fiscal quarter end, Net
Worth at an amount not less than Six Million Seven Hundred Fifty
Thousand and no/100 Dollars ($6,750,000.00) through August 31, 2007,
and not less than Six Million Nine Hundred Fifty Thousand and no/100
Dollars ($6,950,000.00) thereafter."
4. Borrower hereby acknowledges and reaffirms each and every representation,
warranty, term, covenant and condition of the Loan Documents. Borrower
further acknowledges and agrees that the Loan Documents (as hereby amended
and modified) are fully enforceable against Borrower and that Borrower has
no defense, right of offset or otherwise to preclude enforcement of the
Loan Documents, as hereby amended and modified, by the Bank against
Borrower.
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5. The Security Agreement shall continue to secure all sums owing to the Bank
by the Borrower pursuant to the terms and conditions of the Note and the
Loan Agreement, together with all interest thereon, in accordance with the
terms and conditions of the Note and all other sums due and owing or to
become due and owing pursuant to the terms and conditions of this
Amendment, the Loan Agreement, the Security Agreement and the Note, as
amended, including but not necessarily limited to any further or additional
extensions or renewals thereof.
6. Borrower and each Guarantor acknowledge that the principal balance
remaining unpaid on the Note as of the Effective Date hereof is $ zero (0).
7. Each Guarantor hereby acknowledges, ratifies and reaffirms each and every
term, covenant, agreement, provision, and condition of their respective
Guaranty and any collateral security documents securing such guaranty,
including but not limited to the security agreement dated of even date with
the Guaranty ("Collateral Security Documents"), and the Loan Documents, as
amended, and hereby acknowledges and agrees that the Guaranty guarantees to
the Bank the repayment of all sums due and owing to the Bank pursuant to
the terms, conditions and covenants of the Note, as amended, and the
performance of the terms and covenants of the balance of the Loan
Documents, as amended. Each Guarantor hereby affirms and agrees that each
such Guaranty is unconditional and unlimited and that such Guaranty along
with the Collateral Security Documents related thereto are fully
enforceable against such Guarantor. Each Guarantor hereby further affirms
and agrees and that such Guarantor has no defense, right of offset, claim,
cause of action or otherwise to preclude the absolute and immediate
enforcement of the Guaranty and/or the Collateral Security Documents
supporting such Guaranty by the Bank.
8. On or before the execution hereof, Borrower shall pay to the Bank, the
Bank's costs including its reasonable attorneys' fees, incurred in drafting
this Amendment and related documents, if any.
9. Except as herein specifically modified, amended or extended, all terms and
conditions of the Loan Documents shall otherwise remain unchanged and in
full force and effect.
10. Notwithstanding anything to the contrary herein, this Amendment or any
failure by the Bank to exercise any of its rights upon an event of default
under the Loan Documents or the Guaranty or the Collateral Security
Documents, whether prior to or subsequent to the effective date of this
Amendment, shall not be deemed a waiver of the Bank's available remedies
under the Loan Documents, the Guaranty, or the Collateral Security
Documents or any amendments thereof, or any other documents executed in
conjunction therewith or incident thereto.
11. All the terms of this Amendment shall be binding upon and inure to the
benefit of and be enforceable by the successors and assigns of the parties
hereto, to the extent assignment is permitted pursuant to the Loan
Documents or the Guaranty.
12. This Amendment is being executed in and is intended to be performed in the
State of Minnesota and shall be construed and enforced in accordance with
the laws of such state.
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13. This Amendment contains the entire agreement between the parties with
respect to the covenants and promises contemplated herein and may be
amended only in a writing signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Amendment on the day and
year first above written.
BORROWER:
WSI INDUSTRIES, INC., a Minnesota
corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Its: VP/CFO
GUARANTOR:
TAURUS NUMERIC TOOL, INC., a Minnesota
corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: VP/Asst Sec.
WSI ROCHESTER, INC., a Minnesota
corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: VP/Asst Sec.
EXCEL BANK MINNESOTA, a Minnesota
banking corporation,
By ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Its: VP
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