Document:

EXHIBIT 10.2

 

WAIVER AND FIRST AMENDMENT TO 
 AMENDED AND RESTATED CREDIT AGREEMENT

 

This WAIVER AND FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 4, 2013 (this “Amendment”), is by and among Granite City Food & Brewery Ltd., a Minnesota corporation (the “Borrower”), the various institutions party to the Credit Agreement described below as Lenders, and Fifth Third Bank, an Ohio banking corporation, as Administrative Agent.

 

WITNESSETH:

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered into that certain Amended and Restated Credit Agreement dated as of May 31, 2013 (as the same has been and hereafter may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”; capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Credit Agreement);

 

WHEREAS, the Borrower has advised the Administrative Agent and the Lenders that it will receive an equity infusion from Michael Staenberg, as Trustee of the MHS Trust dated January 13, 1986, in an amount not more than $2,000,000 (the “Equity Infusion”) on or about the date hereof;

 

WHEREAS, the Borrower has requested that, solely in connection with the Equity Infusion, the Administrative Agent and the Lenders waive certain prepayment conditions contained in the Credit Agreement and amend the Credit Agreement in certain respects, in each case in accordance with the terms and subject to the conditions herein set forth; and

 

WHEREAS, the Administrative Agent and the Lenders party hereto agree to accommodate such request of the Borrower on the terms and subject to the conditions herein set forth.

 

NOW, THEREFORE, in consideration of the foregoing, the covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.                                           Waiver.  Subject to the terms and conditions of this Amendment and in reliance upon the representations and warranties of the Borrower set forth in Section 4 below, the Administrative Agent and the Lenders hereby waive, solely with respect to the Equity Issuance, the requirement set forth in Section 2.8(b)(ii) of the Credit Agreement that twenty-five (25%) percent of any Net Cash Proceeds received as a result of any issuance of new equity securities be used to prepay the Obligations.  This is a limited, one time waiver and, except as expressly set forth herein, shall not be deemed to establish a custom or course of dealing or conduct between the Administrative Agent and the Lenders, on the one hand, and the Borrower on the other hand.  The foregoing waiver shall not be deemed to constitute a consent of any other act, omission or any breach of the Credit Agreement or any of the other Loan Documents

 

Section 2.                                           Amendments to Credit Agreement.  Subject to the satisfaction of the conditions set forth herein, the Loan Documents are hereby amended as follows:

 

 

(a)                                 The definitions of “CapEx Loan Funding Amount” appearing in Section 1.1 of the Credit Agreement are hereby deleted in their entireties and the following language is hereby substituted therefor, respectively:

 

“CapEx Loan Funding Amount” means the lesser of (i) the total aggregate purchase price required to be paid in connection with all Approved Property Acquisitions and fees and expenses incurred in connection therewith and (ii) (x) from the Restatement Effective Date through December 4, 2013, $10,000,000, (y) from December 4, 2013 until December 31, 2014, $13,000,000, and (z) thereafter, $10,000,000.

 

“Delayed Draw Term Loan Commitment Termination Date” means March 1, 2014.

 

(b)                                 Section 2.1(c) of the Credit Agreement is hereby deleted in its entirety and the following language is hereby substituted therefor:

 

(c)                      Each Lender with a CapEx Loan Commitment severally and not jointly agrees, subject to the terms and conditions hereof, to make a loan (each individually a “CapEx Loan” and, collectively, the “CapEx Loans”) in Dollars to the Borrower, at any time prior to the CapEx Loan Commitment Termination Date, in an amount equal to the CapEx Loan Funding Amount.  As provided in Section 2.5(a), and subject to the terms hereof, the Borrower may elect that all or any part of the CapEx Loans be outstanding as Base Rate Loans, Fixed Rate Loans or Eurodollar Loans.  No amount of any CapEx Loan may be reborrowed once it is repaid.  Notwithstanding the preceding sentence or any other provisions contained in this Agreement to the contrary, any CapEx Loans prepaid pursuant to and in accordance with Section 2.8(b)(v) may be reborrowed.

 

(c)                                  Section 2.8(b) of the Credit Agreement is hereby amended by adding the following clause (v) thereto:

 

(v)                     The Borrower shall, on December 31, 2013, prepay the CapEx Loans by the amount, if any, necessary to reduce the sum of the aggregate principal amount of CapEx Loans then outstanding to be equal to or less than $2,500,000.

 

(d)                                 Section 6.20(c) of the Credit Agreement is hereby is hereby deleted in its entirety and the following language is hereby substituted therefor:

 

(c)                      Fixed Charge Coverage Ratio.  As of the last day of each fiscal quarter of the Borrower, the Borrower shall maintain (i) with respect all restaurant locations operated by the Borrower and its Subsidiaries, a ratio of (A) Adjusted EBITDA for the four (4) fiscal quarters of the Borrower attributable to such restaurant locations then ended to (B) Fixed Charges attributable to such restaurant locations for the same four fiscal (4) quarters then ended of not less than 1.20 and (ii) with respect to the restaurant locations operated by Borrower

 

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and its Subsidiaries that have been open for more than twelve (12) months at the time of testing of this Fixed Charge Coverage Ratio only, a ratio of (A) Adjusted EBITDA for the four (4) fiscal quarters of the Borrower attributable to such restaurant locations then ended to (B) Fixed Charges attributable to such restaurant locations for the same four (4) fiscal quarters then ended of not less than 1.25.

 

(e)                                  The Credit Agreement is hereby amended by deleting the references to “Closing Date” in Sections 2.8(b)(ii), 2.13(c), 2.13(d) and 6.22 and replacing such references with “Restatement Effective Date”.

 

(f)                                   Schedule 1 to the Credit Agreement is hereby deleted in its entirety and Schedule 1 attached hereto is substituted therefor.

 

Section 3.                                           Conditions to Effectiveness of this Amendment.  Notwithstanding anything to the contrary set forth herein, this Amendment shall become effective upon satisfaction in a manner reasonably satisfactory to the Administrative Agent of each of the following conditions (the date of satisfaction of all such conditions precedent shall be referred to herein as the “Effective Date”):

 

(a)                                 the delivery to the Administrative Agent of a counterpart of this Amendment executed by Borrower, the Administrative Agent and the Lenders;

 

(b)                                 Borrower has received the Equity Infusion, the proceeds of which shall be used to fund Capital Expenditures and for fees and expenses incurred in connection with such Capital Expenditures;

 

(c)                                  the accuracy of the representations and warranties contained in Section 4 hereof;

 

(d)                                 receipt by the Administrative Agent of a copy of the acknowledgment attached hereto duly executed and delivered by each Subsidiary of the Borrower signatory thereto;

 

(e)                                  receipt by the Administrative Agent, in immediately available funds, a fully-earned, non-refundable amendment fee in an amount equal to $10,000; and

 

(f)                                   no Default or Event of Default shall have occurred and be continuing.

 

Section 4.                                           Representations and Warranties.

 

To induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, as of the date hereof:

 

(a)                                 each of the representations and warranties made by such Person contained in the Loan Documents are true and correct in all material respects as of such date (except to the extent any such representations or warranties are already qualified by

 

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materiality, in which event they shall be true and correct in all respects, and except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects (except to the extent any such representations or warranties are already qualified by materiality, in which event they shall be true and correct in all respects) as of such date));

 

(b)                                 the Borrower has full right and authority to enter to execute, deliver and perform its obligations under this Amendment and the Credit Agreement, as amended hereby;

 

(c)                                  the execution, delivery and performance by the Borrower of this Amendment and the Credit Agreement, as amended hereby, have been duly authorized by all necessary action by the Borrower;

 

(d)                                 the execution, delivery and performance by such Person of this Amendment and the Credit Agreement, as amended hereby, and the consummation of the transactions contemplated by this Amendment and the Credit Agreement, as amended hereby, do not and will not (i) contravene or constitute a default under (A) any provision of law or any judgment, injunction, order or decree binding upon the Borrower or any Subsidiary, if any, in each case where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (B) any provision of the organizational documents (e.g., charter, articles of incorporation, by-laws, articles of association, operating agreement, partnership agreement or other similar document) of the Borrower or any Subsidiary, (C) contravene or constitute a default under any covenant, indenture or agreement of or affecting the Borrower or any Subsidiary or any of its Property, in each case, where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (ii) result in the creation or imposition of any Lien on any Property of the Borrower or any Subsidiary other than the Liens granted in favor of the Administrative Agent pursuant to the Collateral Documents;

 

(e)                                  this Amendment and the Credit Agreement, as amended hereby, each constitute, the legal, valid and binding obligation of the Borrower, enforceable against such Person in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability; and

 

(f)                                   no Default or Event of Default presently exists.

 

Section 5.                                           Reference and Effect on the Credit Documents.

 

(a)                                 On and after the date hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement,” shall mean and be a reference to the Credit Agreement, as amended or otherwise modified hereby.

 

(b)                                 The Credit Agreement and each of the other Loan Documents, as specifically amended or otherwise modified by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified, confirmed and reaffirmed.

 

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(c)                                  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender, any L/C Issuer or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.  The Credit Agreement and the other Loan Documents are in full force and effect and are hereby in all respects ratified and confirmed.

 

(d)                                 Except as expressly set forth herein, nothing contained in this Amendment and no action by, or inaction on the part of, any Lender, any L/C Issuer or the Administrative Agent shall, or shall be deemed to, directly or indirectly constitute a consent to or waiver of any past, present or future violation of any provisions of the Credit Agreement or any other Loan Document.

 

(e)                                  This Amendment is a Loan Document.

 

Section 6.                                           GOVERNING LAW AND JURISDICTION.

 

(a)                                 GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.

 

(b)                                 SUBMISSION TO JURISDICTION.  Each party hereto hereby submits to the nonexclusive jurisdiction of the United States District Court for the Northern District of Illinois and of any State of Illinois court located in the City of Chicago for purposes of all legal proceedings arising out of or relating to this Amendment or the transactions contemplated hereby.  Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

Section 7.                                           Miscellaneous.

 

(a)                                 No Waiver, Etc.  Except as otherwise expressly set forth herein, nothing in this Amendment is intended or shall be deemed or construed to extend to or affect in any way any of the Obligations or any of the rights and remedies of the Administrative Agent, any Lender or any L/C Issuer arising under the Credit Agreement, any of the other Loan Documents or applicable law. The failure of the Administrative Agent, any Lender or any L/C Issuer at any time or times hereafter to require strict performance by the Borrower, any of its Subsidiaries or any other Person obligated under any Loan Document of any of the respective provisions, warranties, terms and conditions contained herein or therein shall not waive, affect or diminish any right of such Person at any time or times thereafter to demand strict performance thereof; and no rights of the Administrative Agent, any Lender or any L/C Issuer hereunder shall be deemed to have been waived by any act or knowledge of such Person, or

 

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any of its agents, attorneys, officers or employees, unless such waiver is contained in an instrument in writing signed by an authorized officer of such Person and specifying such waiver.  Except as otherwise expressly set forth herein, no waiver by the Administrative Agent, any Lender or any L/C Issuer of any of its rights or remedies shall operate as a waiver of any other of its rights or remedies or any of its rights or remedies on a future occasion at any time and from time to time.  All terms and provisions of the Credit Agreement and each of the other Loan Documents remain in full force and effect, except to the extent expressly modified by this Amendment.

 

(b)                                 Execution in Counterparts.  This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Any party hereto may execute and deliver a counterpart of this Amendment by delivering by facsimile transmission or electronic mail in portable document format a signature page of this Amendment signed by such party, and such signature shall be treated in all respects as having the same effect as an original signature.

 

(c)                                  Severability.  The invalidity, illegality or unenforceability of any provision in or obligation under this Amendment in any jurisdiction shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Amendment or of such provision or obligation in any other jurisdiction.

 

(d)                                 No Third Party Beneficiaries.  This Amendment shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns.  No Person other than the parties hereto, their respective successors and assigns and any other Lender shall have rights hereunder or be entitled to rely on this Amendment, and all third-party beneficiary rights are hereby expressly disclaimed.

 

(e)                                  Section Titles.  The section and subsection titles contained in this Amendment are included for convenience only, shall be without substantive meaning or content of any kind whatsoever, and are not a part of the agreement between the Administrative Agent, the Lenders and the L/C Issuers, on the one hand, and the Borrower and Holdings on the other hand.  Any reference in this Amendment to any “Section” refers, unless the context otherwise indicates, to a section of this Amendment.

 

- Remainder of page intentionally blank -

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the day and year first above written.

 

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
GRANITE   CITY FOOD & BREWERY LTD., a Minnesota corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   James G. Gilbertson
    
	
 
    	
Name:
    	
James   G. Gilbertson
    
	
 
    	
Title:
    	
Chief   Financial Officer
    

 

Waiver and First Amendment to Amended and Restated Credit Agreement

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the day and year first above written.

 

	
 
    	
AGENT AND LENDERS:
    
	
 
    	
 
    
	
 
    	
FIFTH   THIRD BANK, an Ohio banking corporation, as Administrative   Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Aaron Markos
    
	
 
    	
Name:
    	
Aaron   Markos
    
	
 
    	
Title:
    	
Vice   President
    

 

Waiver and First Amendment to Amended and Restated Credit Agreement

 

 

ACKNOWLEDGMENT

 

Reference is hereby made to the foregoing Waiver and First Amendment to Amended and Restated Credit Agreement dated as of December 4, 2013 (the “Amendment”) by and among Granite City Food & Brewery Ltd., a Minnesota corporation (the “Borrower”), the various institutions from time to time party to the Credit Agreement described therein as Lenders which are also party thereto, and Fifth Third Bank, an Ohio banking corporation, as Administrative Agent. Capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Credit Agreement referred to in the Amendment.

 

Each of the undersigned hereby (a) acknowledges receipt of a copy of the Amendment, and (b) agrees the Security Agreement remains in full in force and effect with respect to such Person and that the terms and provisions of the Amendment do not modify or otherwise affect in any way any of such Person’s obligations and liabilities under the Security Agreement or any of the other Loan Documents, all of which obligations and liabilities are hereby ratified, confirmed and reaffirmed.

 

- Remainder of page intentionally blank -

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the day and year first above written.

 

	
GRANITE   CITY OF INDIANA, INC., an Indiana corporation,   as a Guarantor 
    	
 
    	
GRANITE   CITY RESTAURANT OPERATIONS, INC., a Minnesota corporation,   as a Guarantor 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Monica A. Underwood 
    	
 
    	
By:   
    	
/s/   James G. Gilbertson 
    
	
Name:   
    	
Monica   A. Underwood
    	
 
    	
Name:   
    	
James   G. Gilbertson 
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
GRANITE   CITY — ARKANSAS, INC., an Arkansas corporation,   as a Guarantor 
    	
 
    	
GRANITE   CITY — PEORIA, INC., an Illinois corporation,   as a Guarantor 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Monica A. Underwood 
    	
 
    	
By:   
    	
/s/   Monica A. Underwood 
    
	
Name:   
    	
Monica   A. Underwood 
    	
 
    	
Name:   
    	
Monica   A. Underwood 
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
GRANITE   CITY — ORLAND PARK, INC., an Illinois corporation,   as a Guarantor 
    	
 
    	
GRANITE   CITY OF KANSAS LTD., a Kansas corporation, as a Guarantor 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Monica A. Underwood 
    	
 
    	
By:   
    	
/s/   James G. Gilbertson 
    
	
Name:   
    	
Monica   A. Underwood 
    	
 
    	
Name:   
    	
James   G. Gilbertson 
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    

 

Waiver and First Amendment to Amended and Restated Credit Agreemen

 

 

	
GRANITE   CITY — CREVE COEUR, INC., a Missouri corporation,   as a Guarantor 
    	
 
    	
GRANITE   CITY OF OHIO, INC., an Ohio corporation, as a Guarantor 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Monica A. Underwood
    	
 
    	
By:   
    	
/s/   Monica A. Underwood
    
	
Name:   
    	
Monica   A. Underwood 
    	
 
    	
Name:   
    	
Monica   A. Underwood
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
GRANITE   CITY — ROCKFORD, INC., an Illinois corporation,   as a Guarantor 
    	
 
    	
GRANITE   CITY OF MARYLAND, INC., a Minnesota corporation 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Monica A. Underwood
    	
 
    	
By:   
    	
/s/   James G. Gilbertson 
    
	
Name:   
    	
Monica   A. Underwood 
    	
 
    	
Name:   
    	
James   G. Gilbertson 
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Office
    

 

Waiver and First Amendment to Amended and Restated Credit Agreemen

 

 

SCHEDULE 1

 

COMMITMENTS

 

Term A Loan Commitment

 

	
Lender
    	
 
    	
Amount
    	
 
    
	
Fifth Third Bank
    	
 
    	
$
    	
16,000,000
    	
 
    
					

 

Delayed Draw Term Loan Commitment

 

	
Lender
    	
 
    	
Amount
    	
 
    
	
Fifth Third Bank
    	
 
    	
$
    	
4,000,000
    	
 
    
					

 

CapEx Loan Commitment

 

	
Lender
    	
 
    	
Amount
    	
 
    
	
Fifth Third Bank
    	
 
    	
(a) from   the Restatement Effective Date through December 4, 2013, $10,000,000;

 

(b) from   December 4, 2013 until December 31, 2014, $13,000,000; and

 

(c) thereafter,   $10,000,000.
    	
 
    

 

Line of Credit Commitment

 

	
Lender
    	
 
    	
Amount
    	
 
    
	
Fifth Third Bank
    	
 
    	
$
    	
100,000Exhibit 10.1

 

	

    	
AMENDED AND RESTATED WHOLESALE FINANCING PLAN
    
	
Agricredit Acceptance LLC
    
	
8001 Birchwood Court | PO Box 2000 |   Johnston, IA 50131-0020
    
	
PH: 800 873 2474 FAX: 515-334-5862
    
	
www.agricredit.com
    

 

	
Debtor   Name:
    	
Titan   Machinery, Inc.
    	
(the   “Debtor”)
    
	
 
    	
 
    
	
Date   of this Wholesale Financing Plan:
    	
October 31, 2013
    
	
 
    	
 
    
	
Address   of Principal Place of Business and Chief Executive Office:
    	
644 East Beaton Drive

West Fargo, ND 58078-2648
    
	
 
    	
 
    
	
Additional   approved locations where the Collateral will be kept and stored:
    	
See   Exhibit A to the Amended and Restated Inventory Security   Agreement
    
	
 
    	
 
    	
 
    
	
Organization   Type:
    	
o Sole Proprietorship
    	
o Partnership
    	
o Limited Liability Company
    	
x Corporation
    
	
 
    	
 
    
	
Total   Amount of Uncommitted Credit Facility at Approval:
    	
$225,000,000.00, which is subject   to change in Secured Party’s sole discretion without the necessity of   entering into a new agreement. The parties acknowledge this amount includes   Secured Party’s related parties, affiliates and any participants in the   facility. Please see below for additional terms and conditions.
    
										

 

THIS AMENDED AND RESTATED WHOLESALE FINANCING PLAN (this “Agreement”) is made by and between the Debtor and AGRICREDIT ACCEPTANCE LLC having an office at 8001 Birchwood Court, P. O. Box 2000, Johnston, Iowa, 50131-0020 (“Secured Party”). This Agreement expressly amends, restates and supersedes that certain Wholesale Financing Plan with Rental dated July 10, 2010 entered into between Debtor and Secured Party, together with any and all amendments thereto. Debtor acquires equipment for sale, lease or rental at retail and desires that Secured Party finance the acquisition of such equipment on the terms and conditions of this Agreement. In consideration of the mutual promises, covenants and conditions of this Agreement, the parties hereto hereby agree as follows:

 

1.  CONSTRUCTION; INTEGRATION.  The parties have entered into an Amended and Restated Inventory Security Agreement (the “ISA”), the terms and conditions of which are incorporated by reference. Except as modified herein and in the Wholesale Advance Rates and Curtailment Rates on Eligible Inventory attached hereto as Exhibit A and incorporated by reference (the “Terms Schedule”), the terms and conditions of the ISA shall remain unchanged and in full force and effect. In the event of a conflict between the terms of this Agreement and the ISA, the terms of this Agreement shall prevail. Except as otherwise expressly provided, all capitalized terms used and not defined elsewhere in this Agreement shall have the meanings assigned to them in the ISA.

 

2.  ELIGIBLE INVENTORY.  “New Inventory” is defined as Inventory eligible for financing which shall include wholegoods agricultural equipment and other new wholegoods inventory items, with an individual original manufacturer’s invoice price to the Debtor of $5,000.00 and greater, agreed to from time to time by Secured Party in its sole discretion and on which Secured Party can obtain a first priority security interest. “Used Inventory” is defined as Inventory items eligible for financing which shall be trade-in machines accepted by Debtor in connection with the retail sale of New Inventory items financed by Secured Party, Inventory purchased through farm liquidations and auction sales, and such other used inventory items, with an individual Net Cost of $5,000 and greater, agreed to by Secured Party in its sole discretion and on which Secured Party can obtain a first security interest. As used herein, “Net Cost” for Used Inventory shall be the lesser of:   (a) Debtor’s actual cost; (b) wholesale guide book value, with no adjustment for hours on eligible equipment over 10 years old; (c) if previously floor planned, the lesser of: (i) a percentage of Debtor’s previous original invoice as shown in the Terms Schedule attached hereto, or (ii) the remaining balance transferred from the previous floor plan. The age of such Used Inventory is to be less than 15 years for tractors, combines, or grain heads and less than 10 years for all other agricultural equipment. Forestry, construction and industrial equipment will not be included without specific approval by Secured Party. In the event Debtor receives notice from Secured Party or a third party creditor regarding a conflicting security interest with respect to advances made under this Agreement, Debtor agrees, within two (2) days of such notice, to either make a principal payment by the amount advanced on the conflicting security interest or provide additional free and clear collateral in a form and amount acceptable to Secured Party. For the avoidance of doubt, the terms of this Agreement shall apply to Inventory approved as eligible even if such Inventory does not expressly fit the requirements described herein (e.g., inventory with an invoice price of under $5,000.00) and Secured Party may modify its requirements for inventory eligible for financing at any time in its sole discretion upon notice to Debtor.

 

3.  AMOUNT FINANCED.  The total amount of the credit facility shall not exceed the amount indicated above for all New Inventory and Used Inventory; provided, however, that Secured Party may in its sole discretion extend credit in excess of such limit. In any case, Debtor hereby agrees that all extensions of credit shall constitute Obligations of Debtor and shall be paid as provided herein. All extensions of credit are within the sole discretion of Secured Party. The credit facility may be reviewed by Secured Party and increased, decreased, or terminated in its sole discretion upon ninety (90) days prior written notice to Debtor. Upon reduction of the wholesale credit facility to a new amount (“New Credit Amount”) which is not caused by Debtor’s default and which reduction is below the then-existing total of Debtor’s Obligations, Debtor shall, in Secured Party’s sole discretion, either make payments pursuant to a payment schedule under the terms and conditions offered by Secured Party, if any, to reduce the credit facility to the New Credit Amount or immediately pay to Secured party all principal, interest and other amounts in excess of the New Credit Amount.

 

4.  PROCEDURE FOR REQUESTING FINANCING.  Upon Secured Party’s receipt of request for financing an item of Inventory from Debtor, (in writing, facsimile, orally or otherwise), and upon receipt of required documentation, if any, as requested by Secured Party, which documentation may include, but is not limited to, an invoice from the manufacturer or distributor for New Inventory items or a purchase order for Used Inventory items, Secured Party shall, in its sole discretion, determine whether to extend credit to Debtor. Debtor shall execute a Dealer Wholesale Funding Request or other documentation to evidence the Obligation of Debtor. The Dealer Wholesale Funding Request may be executed prior to, contemporaneously with, or subsequent to the extension of credit. Upon the retail sale, lease or other disposition of any Inventory items financed by Secured Party, Debtor shall promptly notify Secured Party in writing and pay all principal and interest outstanding relating to said Inventory items and complete and send to Secured Party a Dealer Wholesale Invoice or similar form as modified, supplemented or retitled by Secured Party relating to such Inventory items.

 

5. ADVANCE RATES ON ELIGIBLE INVENTORY.  Items of New Inventory eligible for financing will be financed at an amount not to exceed the lesser of:  (a) the remaining balance transferred from the manufacturer’s free floor plan program, if any; or (b) a percentage of  the original manufacturer’s invoice price to the Debtor of such New Inventory items as shown in the Terms Schedule. Items of Used Inventory eligible for financing will be financed at an amount not to exceed the percent of Debtor’s Net Cost of such Used Inventory item as shown in the Terms Schedule. For Used Inventory comprised of tillage, planting, and other eligible items, designated by Secured Party from time to time in its sole discretion, and not listed in the dealer association official equipment guide or similar publication, the amount of advance shall not exceed the lesser of: (a) 60% of the trade in allowance; or (b) Debtor’s actual cost.

 

 

6.  PAYMENT TERMS.  The Debtor promises to pay to the order of Secured Party all Obligations including all principal, interest and other charges related to financed New Inventory or Used Inventory items on the earlier of the date of sale, lease, other disposition, acceleration or as follows:

 

(a)                                 Principal - New Inventory and Used Inventory Items. All principal shall be due on New Inventory and Used Inventory items as follows:

1.              Ninety (90) days following receipt of written demand from Secured Party; or

2.              If not meanwhile demanded, in curtailments, due in various months following the original invoice date as shown in the Terms Schedule. Curtailment payments shall continue until the earlier of (i) payment in full of the amount advanced on a particular item of New or Used Inventory, or (ii) the month indicated in the Terms Schedule, at which time the unpaid principal shall be due and payable in full.

 

(b)                                 Interest.  All interest shall be due on New Inventory and Used Inventory items as follows:

 

1.              Standard Rate. All accrued and unpaid interest is due and payable on the 25th of each month according to the following schedule:  Unless otherwise announced by Secured Party, interest will accrue on the principal balance of all outstanding balances due hereunder from the date of the Dealer Wholesale Funding Request applicable to such Inventory and shall thereafter accrue on the unpaid balance at an annual rate (the “Standard Rate”), which for any particular month, shall be equal to the “LIBOR Rate” in effect for the first day of such month, plus:

 

a.              If the average daily outstanding principal balance for the prior month is less than $35,000,000, then 4.25%;

 

b.              If the average daily outstanding principal balance for the prior month is equal to $35,000,000 but less than $55,000,000, then 4.00%; or

 

c.               If the average daily outstanding principal balance for the prior month is equal to or more than $55,000,000, then 3.75%.

 

The Standard Rate above does not include the additional 1.00% charged to fund the marketing pool as described in Section 9. The average daily outstanding principal balance is calculated by dividing the sum of the end of the day balances during the month by the number of days in the month, all as determined by Secured Party. For the avoidance of doubt, the calculation of average daily outstanding principal balance shall exclude all vendor program lines by which Secured Party finances Debtor’s acquisition of inventory under the terms of program agreements between such vendors and Secured Party.

 

Secured Party reserves the right to adjust the interest rate upon notice to Debtor, including, without limitation, in the event the use of the LIBOR Rate is suspended as provided herein. As used herein, the LIBOR Rate for any particular month means the highest per annum rate of interest described as the “30 Day” or “One month”, “London interbank offered rate” as published in the “Money Rates” section of the Wall Street Journal - Central Edition or its successor, in effect on the 25th day of the previous calendar month (if it is a Business Day, if not the next Business Day), which rate shall apply throughout the applicable calendar month. For example, if on July 25th (assuming it is a Business Day), the LIBOR Rate is 3%, 3% will be used as the LIBOR Rate for the entire month of August. Secured Party may, but shall not be obligated to, make a change from the “30 Day” LIBOR Rate to the “90 Day” LIBOR Rate and vice versa upon sixty (60) days prior written notice from Debtor requesting such change.

 

2.              Alternative Standard Rate. If Secured Party determines (which determination shall be final and conclusive) that, by reason of circumstances affecting the eurodollar market generally, deposits in dollars (in the applicable amounts) are not being offered to banks in the eurodollar market for the selected term, or adequate means do not exist for ascertaining the LIBOR Rate, then Secured Party shall give notice thereof to the Debtor. Thereafter, until the Secured Party notifies the Debtor that the circumstances giving rise to such suspension no longer exist, (a) the use of the LIBOR Rate under this Agreement shall be suspended, and (b) the Standard Rate shall be converted at the expiration of the then current LIBOR Rate interest period to the higher of the PRIME Rate or the Federal Funds Effective Rate plus 50 basis points. In addition, if, after the date of this Agreement, Secured Party shall determine (which determination shall be final and conclusive) that any enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Secured Party with any guideline, request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency or Secured Party’s Affiliates shall make it unlawful, unacceptable or impossible for the Secured Party to make or maintain or fund loans based on the LIBOR Rate, the Secured Party shall notify Debtor. Upon receipt of such notice, until Secured Party notifies Debtor that the circumstances giving rise to such determination no longer apply, (a) the use of the LIBOR Rate under this Agreement shall be suspended, and (b) the Standard Rate shall be converted to the higher of the PRIME Rate or the Federal Funds Effective Rate plus 50 basis points either (i) on the last day of the then current LIBOR interest period(s) if the Secured Party may lawfully continue to maintain advances based on the LIBOR Rate to such day, or (ii) immediately if the Secured Party may not lawfully continue to maintain advances based on the LIBOR Rate.

 

3.              Default Rate. When any interest or principal hereof is not paid when due, either at the indicated date herein, by acceleration, sale, lease, other disposition or otherwise, the full amounts due shall bear interest from the date when due until such amounts are paid in full at the Standard Rate plus three percentage points (3.0%). All interest hereunder shall be calculated on a year of 360 days and the actual number of days elapsed. Secured Party reserves the right to adjust the interest rate upon notice to Debtor. Notwithstanding anything to the contrary herein, the rate of interest hereunder shall at no time exceed the maximum rate, if any, permitted by applicable law. If any such rate does exceed the maximum lawful rate, any excess interest shall be returned to Debtor once that determination has been made.

 

4.              Definitions. For purposes of this Section, the following terms shall have the following definitions: “PRIME Rate,” for any particular month means the highest per annum interest rate most recently announced as the “prime rate” in the “Money Rates” section of the Wall Street Journal — Central Edition, or successor edition, from time to time, in effect on the 25th day of the previous calendar month (if it is a Business Day, if not the next Business Day), which rate shall apply throughout the applicable calendar month. For example, if on July 25th (assuming it is a Business Day), the PRIME Rate is 3%, 3% will be used as the PRIME Rate for the entire month of August. “Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Central Time) on such day on such transactions received by Secured Party from three (3) Federal funds brokers of recognized standing selected by Secured Party in its sole discretion. “Business Day” means any day other than (i) a Saturday or Sunday; (ii) a day on which the offices of Secured party are closed; or a federal banking holiday as recognized by the United States Federal Reserve Bank.

 

7.  REMEDIES UPON DEFAULT.  Debtor shall be in default hereunder if it breaches any of its obligations contained herein or in the ISA.  In the event of default, Secured Party shall have all remedies available to Secured Party as provided in the ISA.

 

8.  RENTAL AND RENTAL FOR PURCHASE.  In its sole discretion, Secured Party may agree to allow Debtor to rent eligible inventory financed hereunder. In such event, notwithstanding anything to the contrary contained in the ISA, so long as Debtor complies with the provisions of this Section and utilizes written leases in a form approved by Secured Party, Debtor, as lessor, may engage in the business of renting any unit financed by Secured

 

2

 

Party under this Agreement. Unless Secured Party gives its prior written consent, Debtor agrees not to rent a unit to a particular end user for a term of more than six (6) months, taking into account renewal clauses or other covenants to the same effect.  Upon Secured Party’s request, Debtor shall inform Secured Party of the details of any rental hereunder, including a description thereof, the name and address of the renter, as well as details concerning the rented units and the rentals and proceeds thereof. The minimum amount of Rents (“Minimum Rents”) to be paid every month by Debtor to Secured Party derived from any lease of said unit during any single rental period shall be an amount which is equal to 2% of the original amount financed by the Debtor with respect to said unit. All Rents paid to the Secured Party pursuant to this section are intended to be applied to the principal amount of indebtedness owed by Debtor to Secured Party under this Agreement but may be applied, in the Secured Party’s sole discretion, to interest or curtailments due or to come due. Notwithstanding anything to the contrary contained in this Agreement, all principal and interest due on units rented under this Section shall be due and payable to Secured Party in full in the 24th month following the original date of the manufacturer invoice to the dealer. In the event such payments as applied to any such curtailment are in an amount which is less than the amount required to prepay such curtailment in full, then the balance of said curtailment shall be due and payable as originally scheduled.

 

9.     MARKETING POOL.  Debtor and Secured Party agree to establish a marketing pool (the “Pool”) in order to subsidize interest rates charged to Debtor’s retail customers.

 

(a)   Establishing the Pool. Secured Party shall establish an accounting marketing pool (the “Pool”) to assist Secured Party and Debtor in increasing retail financing penetration and marketing retail programs offered by Secured Party to the customers of Debtor.  The Pool will not be a separate deposit account and may be accounted for by Secured Party in its sole discretion.  Secured Party shall provide a quarterly report (which may be electronic) to Debtor showing the amount of credit in the Pool.  The Pool will not be interest bearing.

(b)   Funding of the Pool. Secured Party shall, on a monthly basis, credit the Pool an amount equal to 1/12 of 1.00% of the average daily outstanding principal balance. For example, if the average daily outstanding principal balance for the applicable period is $25,000,000, the Pool shall be credited $20,833.33.  In the event Debtor is in default under the terms of any agreement with Secured Party or Debtor’s payment is not sufficient to cover the then applicable amounts due to Secured Party, at Secured Party’s discretion, no amounts may be credited to the Pool.

(c)   Withdrawals from the Pool. Debtor and Secured Party agree to use the credits from the Pool to (i) buy down Secured Party’s retail rates for use with Debtor’s retail customers who finance retail transactions with Secured Party, as agreed between the parties; and/or (ii) to create leasing and retail programs for Debtor’s retail customers who finance retail transactions with Secured Party, as agreed between the parties.

(d)   Termination of the Pool. Secured Party may, at its discretion, discontinue accounting for the Pool and use the credits remaining in the Pool as it determines in its discretion in the event this Agreement, the ISA and/or the Retail Finance Agreement between the parties are terminated by either party.

 

MISCELLANEOUS.  Debtor agrees the terms and conditions contained in the ISA, as modified by this Agreement and the Terms Schedule, make up the entire agreement between Debtor and Secured Party. This Agreement may be assigned by Secured Party but Debtor may not assign this Agreement without the prior written consent of Secured Party. Secured Party may modify the Terms Schedule at any time upon notice to Debtor. No agreements or understandings shall be binding upon Secured Party unless set forth in writing and signed by Secured Party. Any waiver of a remedy, term or condition or change to the terms and conditions of this Agreement or any Schedule must be in writing and signed by Secured Party. If Secured Party delays or fails to enforce any of its rights under this Agreement, Secured Party will still be entitled to enforce those rights at a later time and such rights shall not be waived. Any waiver by Secured Party of any breach or default will not constitute a waiver by Secured Party of any additional or subsequent breach of default nor shall it be a waiver of any rights. All of Secured Party’s rights shall survive the termination of this Agreement and shall be enforceable by Secured Party and its successors and assignees. Payments received may be applied at Secured Party’s discretion to Obligations hereunder or to any other indebtedness owed by Debtor to Secured Party despite directions, if any, appearing on the remittance or communicated to Secured Party. In the event any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the parties hereto agree such provision shall be ineffective without invalidating the remaining provisions hereof or thereof. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns. Debtor shall promptly execute and deliver to Secured Party such further documents and take such further action as Secured Party may request to more effectively carry out the intent and purpose of this Agreement. Words importing the singular include the plural and vice versa and words importing gender include all genders. If more than one Debtor has signed this Agreement, each Debtor agrees that liability is joint and several.

 

IN WITNESS WHEREOF, the parties hereto have caused their name to be signed by their proper officers or representatives and their seals (if applicable) to be affixed. This Agreement may be executed in counterparts, including facsimile counterparts, each of which will constitute an original, but which collectively will form one and the same instrument. This  Agreement  is  executed  and  accepted  in  Johnston,  Iowa  on  behalf  of  Agricredit  Acceptance  LLC  by  its  duly authorized representative and is effective upon execution by both parties. The earliest date of execution provided below shall constitute the effective date of this Agreement.

 

	
DEBTOR  SIGNATURE
    	
 
    	
SECURED PARTY SIGNATURE
    
	
 
    	
 
    	
 
    
	
Titan Machinery, Inc.
    	
 
    	
Agricredit Acceptance LLC,

At:   8001 Birchwood Court, Johnston, IA 50131
    
	
Debtor
    	
 
    	
 
    
	
/s/   Ted Christianson
    	
 
    	
 
    	
/s/   Todd P. Cate
    	
 
    
	
Authorized   Signature
    	
 
    	
Authorized   Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ted   Christianson, Treasurer 
    	
 
    	
10/31/13
    	
 
    	
Todd   P. Cate, VP Operations 
    	
 
    	
10/31/13
    
	
Print   Name & Title
    	
 
    	
Date
    	
 
    	
Print   Name & Title
    	
 
    	
Date
    

 

3

 

EXHIBIT A

 

Wholesale Advance Rates and Curtailment Rates on Eligible Inventory

(“Terms Schedule”)

 

AAC Wholesale Advance Rates and Curtailment Rates on Eligible Inventory

(“Terms Schedule”)

 

New

 

	
Month
    	
 
    	
0 to
   3
    	
 
    	
4 to
   6
    	
 
    	
7 to
   9
    	
 
    	
10 to
   12
    	
 
    	
13 to
   15
    	
 
    	
16 to
   18
    	
 
    	
19 to
   21
    	
 
    	
22 to
   24
    	
 
    	
> 24
    	
 
    
	
Advance rate
    	
 
    	
100
    	
%
    	
100
    	
%
    	
100
    	
%
    	
100
    	
%
    	
95
    	
%
    	
90
    	
%
    	
80
    	
%
    	
70
    	
%
    	
0
    	
%
    
	
End of period curtailments
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
5
    	
%
    	
5
    	
%
    	
10
    	
%
    	
10
    	
%
    	
DUE
    	
 
    	
 
    	
 
    

 

Used

 

	
Month
    	
 
    	
0 to
   3
    	
 
    	
4 to
   6
    	
 
    	
7 to
   9
    	
 
    	
10 to
   12
    	
 
    	
13 to
   15
    	
 
    	
16 to
   18
    	
 
    	
19 to
   21
    	
 
    	
22 to
   24
    	
 
    	
> 24
    	
 
    
	
Advance rate
    	
 
    	
100
    	
%
    	
100
    	
%
    	
100
    	
%
    	
95
    	
%
    	
90
    	
%
    	
80
    	
%
    	
70
    	
%
    	
60
    	
%
    	
0
    	
%
    
	
End of period curtailments
    	
 
    	
0
    	
%
    	
0
    	
%
    	
5
    	
%
    	
5
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
DUE
    	
 
    	
 
    	
 
    

 

4

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