EXHIBIT 10.1

 

THIRD AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT

This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), made and entered into as of September 30, 2003, is by and between
MagStar Technologies, Inc. f/k/a Reuter Manufacturing, Inc., a Minnesota
corporation (the “Borrower”), and U.S. Bank National Association, a national
banking association (the “Lender”).

RECITALS

1.             The Lender and the Borrower entered into a Amended and Restated
Credit Agreement dated as of October 10, 2000, as amended by that First
Amendment to Amended and Restated Credit Agreement dated as of November 30, 2001
and as further amended by that Second Amendment to Amended and Restated Credit
Agreement dated as of August 7, 2003 (as amended the “Credit Agreement”); and

2.             The Borrower desires to amend certain provisions of the Credit
Agreement, and the Lender has agreed to make such amendments, subject to the
terms and conditions set forth in this Amendment.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby covenant and agree to
be bound as follows:

SECTION 1. CAPITALIZED TERMS.  CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE
DEFINED HEREIN SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE CREDIT AGREEMENT,
UNLESS THE CONTEXT SHALL OTHERWISE REQUIRE.

SECTION 2. AMENDMENTS.  THE CREDIT AGREEMENT IS HEREBY AMENDED AS FOLLOWS:

2.1          THE COMMITMENTS.  SECTION 2.1 OF THE CREDIT AGREEMENT IS AMENDED TO
READ IN ITS ENTIRETY AS FOLLOWS:

Section 2.1  The Commitments  On the terms and subject to the conditions hereof,
the Lender agrees to make the following lending facility available to the
Borrower:

2.1 (a) Revolving Credit.  A revolving loan (the “Revolving Loan”) to the
Borrower available as advances (“Advances”) at any time and from time to time
from the Closing Date to December 31, 2003 (the “Revolving Maturity Date”),
during which period the Borrower may borrow, repay and reborrow in accordance
with the provisions hereof, provided, that the unpaid principal amount of 
revolving Advances shall not at any time exceed One Million Seven Hundred Fifty
Thousand Dollars ($1,750,000) (the “Revolving Commitment Amount”); and provided,
further, that no revolving Advance will be made if,

 

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after giving effect thereto, the unpaid principal amount of the Advances would
exceed the Borrowing Base.

2.2          INTEREST RATES, INTEREST PAYMENTS AND DEFAULT INTEREST.  SECTION
2.4 OF THE CREDIT AGREEMENT IS AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

Section 2.4 Interest Rates, Interest Payments and Default Interest.  Interest
shall accrue and be payable on the unpaid balance of the Advances at a floating
rate per annum equal to the sum of the Reference Rate plus 2% (the latter being
the “Applicable Revolving Margin”); provided, however, that upon the happening
of any Event of Default, then, at the option of the Lender, the Advances shall
thereafter bear interest at a floating rate equal to the sum of (a) the
Reference Rate, plus (b) the Applicable Revolving Margin, plus (c) 4%.  Interest
shall be payable monthly in arrears on the first day of each month and upon
final payment of the Advances.

SECTION 3. EFFECTIVENESS OF AMENDMENTS.  THE AMENDMENTS CONTAINED IN THIS
AMENDMENT SHALL BECOME EFFECTIVE UPON DELIVERY BY THE BORROWER OF, AND
COMPLIANCE BY THE BORROWER WITH, THE FOLLOWING:

3.1          THIS AMENDMENT DULY EXECUTED BY THE BORROWER.

3.2          A COPY OF THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE BORROWER
AUTHORIZING THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AMENDMENT AND THE
NOTES CERTIFIED AS TRUE AND ACCURATE BY ITS SECRETARY OR ASSISTANT SECRETARY,
ALONG WITH A CERTIFICATION BY SUCH SECRETARY OR ASSISTANT SECRETARY
(I) CERTIFYING THAT THERE HAS BEEN NO AMENDMENT TO THE ARTICLES OF INCORPORATION
OR BYLAWS OF THE BORROWER SINCE TRUE AND ACCURATE COPIES OF THE SAME WERE
DELIVERED TO THE LENDER WITH A CERTIFICATE OF THE SECRETARY OF THE BORROWER
DATED OCTOBER 10, 2000, AND (II) IDENTIFYING EACH OFFICER OF THE BORROWER
AUTHORIZED TO EXECUTE THIS AMENDMENT AND ANY OTHER INSTRUMENT OR AGREEMENT
EXECUTED BY THE BORROWER IN CONNECTION WITH THIS AMENDMENT  (COLLECTIVELY, THE
“AMENDMENT DOCUMENTS”), AND CERTIFYING AS TO SPECIMENS OF SUCH OFFICER’S
SIGNATURE AND SUCH  OFFICER’S INCUMBENCY IN SUCH OFFICES AS SUCH OFFICER HOLDS.

3.3          CERTIFIED COPIES OF ALL DOCUMENTS EVIDENCING ANY NECESSARY
CORPORATE ACTION, CONSENT OR GOVERNMENTAL OR REGULATORY APPROVAL (IF ANY) WITH
RESPECT TO THIS AMENDMENT.

3.4          THE BORROWER SHALL HAVE SATISFIED SUCH OTHER CONDITIONS AS
SPECIFIED BY THE LENDER, INCLUDING PAYMENT OF ALL UNPAID LEGAL FEES AND EXPENSES
INCURRED BY THE LENDER THROUGH THE DATE OF THIS AMENDMENT IN CONNECTION WITH THE
CREDIT AGREEMENT AND THE AMENDMENT DOCUMENTS.

SECTION 4.  REPRESENTATIONS, WARRANTIES, AUTHORITY, NO ADVERSE CLAIM.

4.1          REASSERTION OF REPRESENTATIONS AND WARRANTIES, NO DEFAULT.  THE
BORROWER HEREBY REPRESENTS THAT ON AND AS OF THE DATE HEREOF AND AFTER GIVING
EFFECT TO THIS AMENDMENT (A) ALL OF THE REPRESENTATIONS AND WARRANTIES CONTAINED
IN THE CREDIT AGREEMENT ARE TRUE, CORRECT AND COMPLETE IN ALL RESPECTS AS OF THE
DATE HEREOF AS THOUGH MADE ON AND AS OF SUCH DATE, EXCEPT FOR CHANGES PERMITTED
BY THE TERMS OF THE CREDIT AGREEMENT, AND (B)

 

 

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THERE WILL EXIST NO DEFAULT OR EVENT OF DEFAULT UNDER THE CREDIT AGREEMENT AS
AMENDED BY THIS AMENDMENT ON SUCH DATE WHICH HAS NOT BEEN WAIVED BY THE LENDER.

4.2          AUTHORITY, NO CONFLICT, NO CONSENT REQUIRED. THE BORROWER
REPRESENTS AND WARRANTS THAT THE BORROWER HAS THE POWER AND LEGAL RIGHT AND
AUTHORITY TO ENTER INTO THE AMENDMENT DOCUMENTS AND HAS DULY AUTHORIZED AS
APPROPRIATE THE EXECUTION AND DELIVERY OF THE AMENDMENT DOCUMENTS AND OTHER
AGREEMENTS AND DOCUMENTS EXECUTED AND DELIVERED BY THE BORROWER IN CONNECTION
HEREWITH OR THEREWITH BY PROPER CORPORATE ACTION, AND NONE OF THE AMENDMENT
DOCUMENTS NOR THE AGREEMENTS CONTAINED HEREIN OR THEREIN CONTRAVENES OR
CONSTITUTES A DEFAULT UNDER ANY AGREEMENT, INSTRUMENT OR INDENTURE TO WHICH THE
BORROWER IS A PARTY OR A SIGNATORY OR A PROVISION OF THE BORROWER’S ARTICLES OF
INCORPORATION, BYLAWS OR ANY OTHER AGREEMENT OR REQUIREMENT OF LAW, OR RESULT IN
THE IMPOSITION OF ANY LIEN ON ANY OF ITS PROPERTY UNDER ANY AGREEMENT BINDING ON
OR APPLICABLE TO THE BORROWER OR ANY OF ITS PROPERTY EXCEPT, IF ANY, IN FAVOR OF
THE LENDER.  THE BORROWER REPRESENTS AND WARRANTS THAT NO CONSENT, APPROVAL OR
AUTHORIZATION OF OR REGISTRATION OR DECLARATION WITH ANY PERSON, INCLUDING BUT
NOT LIMITED TO ANY GOVERNMENTAL AUTHORITY, IS REQUIRED IN CONNECTION WITH THE
EXECUTION AND DELIVERY BY THE BORROWER OF THE AMENDMENT DOCUMENTS OR OTHER
AGREEMENTS AND DOCUMENTS EXECUTED AND DELIVERED BY THE BORROWER IN CONNECTION
THEREWITH OR THE PERFORMANCE OF OBLIGATIONS OF THE BORROWER THEREIN DESCRIBED,
EXCEPT FOR THOSE WHICH THE BORROWER HAS OBTAINED OR PROVIDED AND AS TO WHICH THE
BORROWER HAS DELIVERED CERTIFIED COPIES OF DOCUMENTS EVIDENCING EACH SUCH ACTION
TO THE LENDER.

4.3          NO ADVERSE CLAIM. THE BORROWER WARRANTS, ACKNOWLEDGES AND AGREES
THAT NO EVENTS HAVE BEEN TAKEN PLACE AND NO CIRCUMSTANCES EXIST AT THE DATE
HEREOF WHICH WOULD GIVE THE BORROWER A BASIS TO ASSERT A DEFENSE, OFFSET OR
COUNTERCLAIM TO ANY CLAIM OF THE LENDER WITH RESPECT TO THE OBLIGATIONS.

SECTION 5. AFFIRMATION OF CREDIT AGREEMENT, FURTHER REFERENCES, AFFIRMATION OF
SECURITY INTEREST.  THE LENDER AND THE BORROWER EACH ACKNOWLEDGE AND AFFIRM THAT
THE CREDIT AGREEMENT, AS HEREBY AMENDED, IS HEREBY RATIFIED AND CONFIRMED IN ALL
RESPECTS AND ALL TERMS, CONDITIONS AND PROVISIONS OF THE CREDIT AGREEMENT,
EXCEPT AS AMENDED BY THIS AMENDMENT, SHALL REMAIN UNMODIFIED AND IN FULL FORCE
AND EFFECT.  ALL REFERENCES IN ANY DOCUMENT OR INSTRUMENT TO THE CREDIT
AGREEMENT ARE HEREBY AMENDED AND SHALL REFER TO THE CREDIT AGREEMENT AS AMENDED
BY THIS AMENDMENT.   THE BORROWER CONFIRMS TO THE LENDER THAT THE OBLIGATIONS
ARE AND CONTINUE TO BE SECURED BY THE SECURITY INTEREST GRANTED BY THE BORROWER
IN FAVOR OF THE LENDER UNDER THE SECURITY AGREEMENT, AND ALL OF THE TERMS,
CONDITIONS, PROVISIONS, AGREEMENTS, REQUIREMENTS, PROMISES, OBLIGATIONS, DUTIES,
COVENANTS AND REPRESENTATIONS OF THE BORROWER UNDER SUCH DOCUMENTS AND ANY AND
ALL OTHER DOCUMENTS AND AGREEMENTS ENTERED INTO WITH RESPECT TO THE OBLIGATIONS
UNDER THE CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE AND ARE HEREBY
RATIFIED AND AFFIRMED IN ALL RESPECTS BY THE BORROWER.

SECTION 6. MERGER AND INTEGRATION, SUPERSEDING EFFECT.  THIS AMENDMENT, FROM AND
AFTER THE DATE HEREOF, EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN
THE PARTIES HERETO AND SUPERSEDES AND HAS MERGED INTO THIS AMENDMENT ALL PRIOR
ORAL AND WRITTEN AGREEMENTS ON THE SAME SUBJECTS BY AND BETWEEN THE PARTIES
HERETO WITH THE EFFECT THAT THIS AMENDMENT, SHALL CONTROL WITH RESPECT TO THE
SPECIFIC SUBJECTS HEREOF AND THEREOF.

 

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SECTION 7. SEVERABILITY.  WHENEVER POSSIBLE, EACH PROVISION OF THIS AMENDMENT
AND THE OTHER AMENDMENT DOCUMENTS AND ANY OTHER STATEMENT, INSTRUMENT OR
TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR RELATING HERETO OR THERETO SHALL
BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE, VALID AND ENFORCEABLE UNDER
THE APPLICABLE LAW OF ANY JURISDICTION, BUT, IF ANY PROVISION OF THIS AMENDMENT,
THE OTHER AMENDMENT DOCUMENTS OR ANY OTHER STATEMENT, INSTRUMENT OR TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR RELATING HERETO OR THERETO SHALL BE HELD TO BE
PROHIBITED, INVALID OR UNENFORCEABLE UNDER THE APPLICABLE LAW, SUCH PROVISION
SHALL BE INEFFECTIVE IN SUCH JURISDICTION ONLY TO THE EXTENT OF SUCH
PROHIBITION, INVALIDITY OR UNENFORCEABILITY, WITHOUT INVALIDATING OR RENDERING
UNENFORCEABLE THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF
THIS AMENDMENT, THE OTHER AMENDMENT DOCUMENTS OR ANY OTHER STATEMENT, INSTRUMENT
OR TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR RELATING HERETO OR THERETO IN
SUCH JURISDICTION, OR AFFECTING THE EFFECTIVENESS, VALIDITY OR ENFORCEABILITY OF
SUCH PROVISION IN ANY OTHER JURISDICTION.

SECTION 8. SUCCESSORS.  THE AMENDMENT DOCUMENTS SHALL BE BINDING UPON THE
BORROWER AND THE LENDER AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND SHALL
INURE TO THE BENEFIT OF THE BORROWER AND THE LENDER AND THE SUCCESSORS AND
ASSIGNS OF THE LENDER.

SECTION 9. LEGAL EXPENSES.  AS PROVIDED IN SECTION 8.2 OF THE CREDIT AGREEMENT,
THE BORROWER AGREES TO REIMBURSE THE LENDER, UPON EXECUTION OF THIS AMENDMENT,
FOR ALL REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY’ FEES AND LEGAL
EXPENSES OF DORSEY & WHITNEY LLP, COUNSEL FOR THE LENDER) INCURRED IN CONNECTION
WITH THE CREDIT AGREEMENT, INCLUDING IN CONNECTION WITH THE NEGOTIATION,
PREPARATION AND EXECUTION OF THE AMENDMENT DOCUMENTS AND ALL OTHER DOCUMENTS
NEGOTIATED, PREPARED AND EXECUTED IN CONNECTION WITH THE AMENDMENT DOCUMENTS,
AND IN ENFORCING THE OBLIGATIONS OF THE BORROWER UNDER THE AMENDMENT DOCUMENTS,
AND TO PAY AND SAVE THE LENDER HARMLESS FROM ALL LIABILITY FOR, ANY STAMP OR
OTHER TAXES WHICH MAY BE PAYABLE WITH RESPECT TO THE EXECUTION OR DELIVERY OF
THE AMENDMENT DOCUMENTS, WHICH OBLIGATIONS OF THE BORROWER SHALL SURVIVE ANY
TERMINATION OF THE CREDIT AGREEMENT.

SECTION 10. HEADINGS.  THE HEADINGS OF VARIOUS SECTIONS OF THIS AMENDMENT HAVE
BEEN INSERTED FOR REFERENCE ONLY AND SHALL NOT BE DEEMED TO BE A PART OF THIS
AMENDMENT.

SECTION 11. COUNTERPARTS.  THE AMENDMENT DOCUMENTS MAY BE EXECUTED IN SEVERAL
COUNTERPARTS AS DEEMED NECESSARY OR CONVENIENT, EACH OF WHICH, WHEN SO EXECUTED,
SHALL BE DEEMED AN ORIGINAL, PROVIDED THAT ALL SUCH COUNTERPARTS SHALL BE
REGARDED AS ONE AND THE SAME DOCUMENT, AND EITHER PARTY TO THE AMENDMENT
DOCUMENTS MAY EXECUTE ANY SUCH AGREEMENT BY EXECUTING A COUNTERPART OF SUCH
AGREEMENT.

SECTION 12. GOVERNING LAW.  THE AMENDMENT DOCUMENTS SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF
LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date and year first above written.

BORROWER:

MAGSTAR TECHNOLOGIES, INC.

F/K/A REUTER MANUFACTURING, INC.

 

 

 

By:

/s/ J. L. Reissner

 

Title:

CEO

 

 

 

LENDER:

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

 

 

By:

/s / W. Sweeney

 

Title:

VP

 

 

 

 

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