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EXHIBIT 4.4
TENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of August 13, 2001, is made by and
among ▇▇▇▇▇▇▇▇, INC., a Minnesota corporation (the "Borrower"), ▇▇▇▇▇ FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION f/k/a Norwest Bank Minnesota, National
Association, a national banking association ("▇▇▇▇▇ Fargo"; in its separate
capacity as administrative agent for the Lenders, the "Agent"), and each of the
financial institutions appearing on the signature pages hereof.
Recitals
The Borrower, the Agent and the Lenders are parties to a
Credit and Security Agreement dated as of June 19, 1998, as amended by a First
Amendment to Credit and Security Agreement dated as of November 25, 1998, a
Second Amendment to Credit and Security Agreement dated as of March 31, 1999, a
Third Amendment to Credit and Security Agreement dated as of April 5, 1999, a
Fourth Amendment to Credit and Security Agreement dated as of November 9, 1999,
a Fifth Amendment to Credit and Security Agreement dated as of June 16, 2000, a
Sixth Amendment to Credit and Security Agreement dated as of June 27, 2000, a
Seventh Amendment to Credit and Security Agreement dated as of November 7, 2000,
an Eighth Amendment to Credit and Security Agreement and Waiver of Defaults
dated as of December 26, 2000, and a Ninth Amendment to Credit and Security
Agreement and Waiver of Defaults dated as of May 23, 2001 (as so amended, the
"Credit Agreement"). Capitalized terms used in these recitals have the meanings
given to them in the Credit Agreement unless otherwise specified.
The Borrower has requested that the Lenders and the Agent
consent to certain transactions and that certain amendments be made to the
Credit Agreement. The Agent and the Lenders are willing to grant the Borrower's
requests pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended by adding or amending, as the case may be, the
following definitions:
"`Tenth Amendment' means the Tenth Amendment to Credit and
Security Agreement by and among the Borrower, the Lenders and the Agent
dated as of August 13, 2001."
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"`Tenth Amendment Effective Date' means the date all
conditions set forth in Paragraph 10 of the Tenth Amendment are
satisfied."
2. Term Note Payments. Section 2.10 is amended by deleting and
replacing such section in its entirety as follows:
Section 2.10 Payment of Term Notes. The principal of the Term
Notes will be payable in aggregate equal monthly installments of
$205,130 beginning January 1, 1999 and on the first day of each month
thereafter until the Termination Date at which time the outstanding
principal balance of the Term Notes and all interest accrued thereon
shall be due and payable in full. The Agent has obtained, at the
Borrower's expense, an appraisal of the Eligible Equipment and all
equipment owned by all Subsidiaries of the Borrower following the
Merger (the "Combined Equipment") which has established that the
aggregate outstanding principal balance of the Term Notes exceeds 75%
of the orderly liquidation value of the Combined Equipment as shown on
such appraisal. Upon the earlier of: (i) the occurrence of an Event of
Default, (ii) the occurrence of a Materials Business Sale, (iii) the
date of any refinancing of the Obligations by any lender other than the
Lenders or (iv) August 31, 2001, the Borrower shall immediately prepay
the Term Notes in the amount of such excess together with any
prepayment fee owed pursuant to Section 2.16.
3. Financial Covenants. Section 6.21 of the Credit Agreement
is amended to read as follows:
"Section 6.21 Minimum EBITDA. The Borrower will achieve during
the period described below, EBITDA, of not less than the amount set
forth opposite such period:
April 1, 2001 through July 31, 2001 $(5,000,000)
April 1, 2001 through August 31, 2001 $(6,000,000)
4. New Compliance Certificate. Exhibit F to the Credit
Agreement is hereby amended in its entirety and replaced by Exhibit A to this
Amendment.
5. New Subordinated Debt. Section 7.2 of the Credit Agreement
is amended to add the following new subsection (b-2) immediately following
subsection (b-1):
"(b-2) indebtedness to be used for general corporate purposes
and working capital only not exceeding an aggregate principal amount of
$5,000,000 and subordinated to the Obligations pursuant to
subordination agreements satisfactory to the Agent in its sole
discretion, with the Borrower's obligation to pay such indebtedness
being evidenced by instruments (which may be assigned) notifying any
holder thereof of such subordination."
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6. Events of Default. Subsection 8.1(w) of the Credit
Agreement is amended by replacing the final period with ";" and inserting the
following new subsections (x) and (y):
"(x) By August 31, 2001, the Agent, the Lenders and the
Borrower shall fail to establish, for the period from September 1, 2001
through December 31, 2001: (i) a new definition for Borrowing Base in
Section 1.1 and (ii) new financial covenants in Article 6; or
(y) Notwithstanding the letter of July 12, 2001 from
▇▇▇▇▇▇▇▇▇▇▇▇ and Ampersand, ▇▇▇▇▇▇▇▇▇▇▇▇ indicates an unwillingness or
inability to consummate a Materials Business Sale and the Borrower has
not provided the Agent with a written offer proposing a Materials
Business Sale from another bona fide purchaser."
7. No Other Changes. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.
8. Expressed Consent to New Subordinated Debt. Notwithstanding
any language in the Credit Agreement, including but not limited to Sections 7.2
and 7.9, the Agent and the Lenders hereby consent to the Borrower's incurring
indebtedness in the aggregate principal amount of $3,000,000, which indebtedness
shall be incurred on the Tenth Amendment Effective Date and which shall be owed
to ▇▇▇▇▇▇▇▇▇▇▇▇ and Molex, and which indebtedness shall be fully subordinated to
the Obligations pursuant to a subordination agreement of even date herewith by
▇▇▇▇▇▇▇▇▇▇▇▇ and Molex for the benefit of the Agent on behalf of the Lenders.
9. Amendment Fee. In consideration of the Lenders' execution
of this Amendment, the Borrower shall pay the Agent a fully earned,
non-refundable fee in the amount of $75,000, which fee shall be immediately due
and payable.
10. Conditions Precedent. This Amendment shall be effective
when the following conditions have been met to the satisfaction of the Agent:
(a) the Agent shall have received an executed original hereof;
(b) the Agent shall have received, in form and content
satisfactory to the Agent, a subordination agreement from ▇▇▇▇▇▇▇▇▇▇▇▇
and Molex with respect to a $3,000,000 loan to the Borrower, including
but not limited to a subordination and deferral of any fees to be
charged by ▇▇▇▇▇▇▇▇▇▇▇▇ and Molex.
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11. Representations and Warranties. The Borrower hereby
represents and warrants to the Lenders as follows:
(a) The Borrower has all requisite corporate power and
authority to execute this Amendment and to perform all of its
obligations hereunder, and this Amendment has been duly executed and
delivered by the Borrower and constitutes the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms.
(b) The execution, delivery and performance by the Borrower of
this Amendment have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or approval by
any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrower, or the
articles of incorporation or by-laws of the Borrower, or (iii) result
in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which
the Borrower is a party or by which it or its properties may be bound
or affected.
(c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct on and as of the date
hereof as though made on and as of such date, except to the extent that
such representations and warranties relate solely to an earlier date.
12. References. All references in the Credit Agreement to
"this Agreement" shall be deemed to refer to the Credit Agreement as amended
hereby; and any and all references in the Security Documents to the Credit
Agreement shall be deemed to refer to the Credit Agreement as amended hereby.
13. No Other Waiver. The execution of this Amendment and
acceptance of any documents related hereto shall not be deemed to be a waiver of
any Default or Event of Default under the Credit Agreement or breach, default or
event of default under any Security Document or other document held by the
Lenders, whether or not known to the Lenders and whether or not existing on the
date of this Amendment.
14. Release. The Borrower hereby absolutely and
unconditionally releases and forever discharges the Lenders, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrower has had, now has or has made claim to have against any such person for
or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.
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15. Costs and Expenses. The Borrower hereby reaffirms its
agreement under the Credit Agreement to pay or reimburse the Lenders on demand
for all costs and expenses incurred by the Lenders in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lenders
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lenders may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses, including
without limitation the fee owed under Paragraph 9.
16. Miscellaneous. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.
▇▇▇▇▇ FARGO BANK MINNESOTA, ▇▇▇▇▇▇▇▇, INC.
NATIONAL ASSOCIATION, as Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Its Vice President Its Vice President - Finance
▇▇▇▇▇ FARGO BANK MINNESOTA, THE CIT GROUP/EQUIPMENT
NATIONAL ASSOCIATION FINANCING, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice President Its Assistant Vice President
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Exhibit A to Tenth Amendment to
Credit and Security Agreement
COMPLIANCE CERTIFICATE
TO: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, National Association
DATE: ____________________, ______
SUBJECT: Financial Statements
Dear ▇▇. ▇▇▇▇▇▇:
I am the duly qualified and acting Chief Financial Officer of
▇▇▇▇▇▇▇▇, Inc. (the "Borrower") and I am familiar with the financial statements
and financial affairs of the Borrower. I am authorized to execute this
Compliance Certificate on behalf of the Borrower.
Pursuant to Section 6.1 of the Credit and Security Agreement
dated as of June 19, 1998, by and among the Borrower, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as agent ("▇▇▇▇▇ Fargo"; herein in such
capacity, together with any party which may become the successor Agent under
such Credit and Security Agreement, the "Agent"), and each of the financial
institutions which are now or may hereafter become parties to such Credit and
Security Agreement, as amended to date and as the same may be further amended,
supplemented or restated from time to time, the "Credit Agreement"), enclosed
are an unaudited balance sheet and statements of income and retained earnings of
the Borrower, as of ___________, ____ (the "Reporting Date"), and for the
year-to-date period ending on the Reporting Date. All terms used in this
Compliance Certificate shall have the meanings given in the Credit Agreement.
The balance sheet and statements of income and retained
earnings fairly present the financial condition of the Borrower as of the date
thereof. They have been prepared in accordance with GAAP.
I hereby certify to the Lenders as follows:
[ ] The undersigned does not have knowledge of the occurrence of a
Default or Event of Default under the Credit Agreement.
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[ ] The undersigned has knowledge of the occurrence of a Default
or Event of Default under the Credit Agreement and attached
hereto is a statement of the facts with respect thereto.
I further certify to the Lenders as follows:
1. Minimum EBITDA. Pursuant to Section 6.21 of the Credit
Agreement, as of the Reporting Date, the Borrower's Cash Flow Available
for Debt Service was $_____________, which |_| satisfies |_| does not
satisfy the requirement that such amount be no less than $(6,000,000).
2. Capital Expenditures. Pursuant to Section 7.12 of the
Credit Agreement, for the fiscal quarter ending on the Reporting Date,
the Borrower and its Subsidiaries have expended or contracted to expend
for Capital Expenditures, $__________________ in the aggregate,
excluding the conversion of any existing operating leases to capital
leases, which |_| satisfies |_| does not satisfy the requirement that
such expenditures not exceed in the aggregate the amount set forth
below for such fiscal quarter:
Fiscal Quarter Ending on or about Maximum Capital Expenditures
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March 31, 2001 $5,000,000
June 30, 2001 $10,000,000
September 30, 2001 $16,000,000
December 31, 2001 $16,000,000
Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.
▇▇▇▇▇▇▇▇, INC.
By
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Its Vice President - Finance
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