THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of November 22, 2000, is made by
and between OPEN SEA CORPORATION, d/b/a NEBO PRODUCTS, a Utah corporation (the
"Borrower" ), and ▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., a Minnesota corporation
(the "Lender").
Recitals
The Borrower and the Lender have entered into a Credit and
Security Agreement dated as of June 1, 2000, as previously 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 certain amendments be made to
the Credit Agreement, which the Lender is willing to make 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:
"Maximum Line" means $1,250,000, unless said amount is reduced pursuant
to Section 2.10, in which event it means the amount to which said amount is
reduced.
2. Subsection (b) of Section 2.6 of the Credit Agreement
is hereby amended to read in its entirety as follows:
"(b) Minimum Interest Charge. Notwithstanding the interest
payable pursuant to Section 2.6(a), the Borrower shall pay to the
Lender interest of not less than (i) during the month of January,
February, March and August of each year, $7,000 per calendar month and
(ii) at all other times, $9,000 per calendar month (the "Minimum
Interest Charge") during the Term of this Agreement, and the Borrower
shall pay any deficiency between the Minimum Interest Charge and the
amount of interest otherwise calculated under Sections 2.6(a) and
2.6(c) on the date and in the manner provided in Section 2.8."
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3. No Other Change . 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.
4. Amendment Fee. The Borrower agrees to pay to the Lender,
as of the date hereof, a fully earned, non-refundable fee in the amount of
$2,500 in consideration for the Lender's execution of this Amendment.
5. Conditions Precedent. This Amendment shall be effective
when the Lender shall have received an executed original hereof, together with
the following, each in substance and form acceptable to the Lender in its sole
discretion:
(a) The replacement note substantially in the form of Exhibit
A hereto, duly executed on behalf of the Borrower (the "Replacement
Note").
(b) The Acknowledgment and Agreement of Guarantors set forth
at the end of this Amendment, duly executed by the Guarantors.
(c) Payment of the fee described in Paragraph 4.
(d) Such other matters as the Lender may require.
6. Representations and Warranties. The Borrower hereby
represents and warrants to the Lender as follows:
(a) The Borrower has all requisite 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 has been duly authorized by all necessary corporate
action and does 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 (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.
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(c) All of the representations and warranties contained in
Article N./ 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.
7. References. All references in the Credit Agreement to
"this Agreement" shall be deemed to refer to the (credit 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.
8. No Waiver. The execution of this Amendment and acceptance
of the Replacement Note and 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 Lender, whether or not known to the Lender and whether or
not existing on the date of this Amendment.
9. Release. The Borrower, and each Guarantor by signing the
Acknowledgments and Agreements of Guarantors set forth below, each hereby
absolutely and unconditionally release and forever discharge the Lender, 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 or such Guarantor have had, now have or have claimed 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.
10. Costs and Expenses. The Borrower hereby reaffirms its
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses incurred by the Lender 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 Lender
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 Lender 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.
11. Miscellaneous. This Amendment and the Acknowledgments
and Agreements of Guarantors 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
▇▇▇▇▇ FARGO BUSINESS CREDIT. INC. OPEN SEA CORPORATION, d/b/a NEBO PRODUCTS
By: /s/ Tor ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Tor ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Its Commercial Banking Officer Its Chief Executive Officer
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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
Each of the undersigned, each a guarantor of the indebtedness
of Open Sea Corporation, d/b/a NEBO Products (the "Borrower") to ▇▇▇▇▇ Fargo
Business Credit, Inc. (the "Lender") pursuant to a separate Guaranty each dated
as of June 1, 2000 (each, a "Guaranty"), hereby (i) acknowledges receipt of the
foregoing Amendment; (ii) consents to the terms (including without limitation
the release set forth in Paragraph 9 of the Amendment) and execution thereof;
(iii) reaffimns his obligations to the Lender pursuant to the terms of his
Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend,
renew or otherwise modify the Credit Agreement and any indebtedness or agreement
of the Borrower, or enter into any agreement or extend additional or other
credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under his
Guaranty for all of the Borrower's present and future indebtedness to the
Lender.
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KC. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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