Document:

Exhibit 10.1

 

AMENDMENT NUMBER ONE TO

SECURITIES PURCHASE AGREEMENT

 

This AMENDMENT NUMBER ONE TO SECURITIES
PURCHASE AGREEMENT (this “Amendment”) is made and entered into as of
April 4, 2006, by and between Winmark Corporation, a Minnesota corporation (the
“Purchaser”), and BridgeFunds Limited, a Nevada corporation (the “Company”).

 

WHEREAS, the Purchaser and the Company
entered into that certain Securities Purchase Agreement, dated as of October
13, 2004 (the “Purchase Agreement”) (capitalized terms used but
not defined herein shall have the meanings assigned to them in the Purchase
Agreement);

 

WHEREAS, pursuant to the Purchase Agreement,
among other things, (a) the Purchaser purchased from the Company (i) the
Initial Note on October 13, 2004, (ii) the Second Note on February 8, 2005 and
(iii) the Third Note on May 20, 2005, and (b) the Purchaser may purchase from
the Company the Fourth Note on or after the date of this Amendment;

 

WHEREAS, Section 7.7 of the Purchase
Agreement provides that the Purchase Agreement may be amended, modified or
supplemented only to the extent expressly set forth in a writing that is signed
by the Party to be charged therewith and that sets forth therein that its
purpose is to amend, modify or supplement the Purchase Agreement or some term,
condition or provision thereof; and

 

WHEREAS, the Purchaser and the Company hereby
agree and acknowledge that the purpose of this writing is to amend and restate
in its entirety Section 1.2(c) of the Purchase Agreement.

 

NOW THEREFORE, in consideration of the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Purchaser and the
Company hereby agree as follows:

 

1.             Recitals.  The recitals set forth above are hereby
incorporated in their entirety.

 

2.             Purchase
and Sale of Fourth Note.  Section
1.2(c) of the Purchase Agreement shall hereby be amended and restated in its
entirety as set forth below:

 

“(c)         If,
during the period from the date hereof through July 14, 2006, the Company shall
have provided the Purchaser with evidence reasonably satisfactory to the
Purchaser that the Company has originated, in the aggregate, One Million Three
Hundred Fifty Thousand Dollars ($1,350,000.00) of Customer Claimant Funding
(the “Fourth Funding Threshold”), then as soon as practicable after the
Company’s provision of such evidence to the Purchaser, at an Additional
Closing, and subject to the terms and conditions contained herein, the Company
shall issue and sell to the Purchaser, and the Purchaser shall purchase from
the Company, a Note having an aggregate face value of Five Hundred Thousand
Dollars ($500,000.00) (the “Fourth Note”).”

 

 

3.             Ratifications.    Except as specifically herein amended, all
terms, provisions, conditions and exhibits contained in the Purchase Agreement
are hereby confirmed, ratified and restated and shall remain unmodified and in
full force and effect.  In the event that
any provision of this Amendment shall conflict with the terms, provisions, conditions
and exhibits of the Purchase Agreement, the terms, provisions, conditions and
exhibits of this Amendment shall govern and control.

 

4.             Counterparts.   This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and
the same instrument.

 

 

[SIGNATURE
PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, each of Winmark Corporation and
BridgeFunds Limited has caused this Amendment to be executed on the date first
written above by its respective officer or other representative thereunder duly
authorized.

 

 

	
   

  	
   

  	
  WINMARK CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Brett D. Heffes

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Brett D. Heffes

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BRIDGEFUNDS LIMITED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ A. Mark Berlin, Jr.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  A. Mark Berlin, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and Chief Executive OfficerExhibit 10.2

 

EXECUTION VERSION

 

SECOND AMENDMENT TO
CREDIT AGREEMENT

 

This SECOND
AMENDMENT TO 364-DAY REVOLVING CREDIT AGREEMENT dated as of March 31, 2006 (the
“Second Amendment”), is executed by and among WINMARK CORPORATION, a Minnesota corporation (the “Company”), WINMARK
CAPITAL CORPORATION, a Minnesota corporation (“WCC”), WIRTH BUSINESS
CREDIT, INC., (formerly known as Winmark Business Solutions, Inc.), a Minnesota
corporation (“WBC”), GROW BIZ GAMES, INC., a Minnesota corporation (“Grow-Biz”
and, together with the Company, WCC and WBC, the “Loan Parties” and
individually and without distinction, a “Loan Party”), and LASALLE BANK
NATIONAL ASSOCIATION, a national banking association (the “Lender”).

 

RECITALS

 

A.            The Loan Parties and the Lender are
parties to that certain 364-Day Revolving Credit  Agreement dated as of September 30, 2004, as amended by that certain First Amendment to 364-Day
Revolving Credit Agreement dated as of August 26, 2005 (as amended,
supplemented or modified, the “Credit Agreement”).

 

B.            The Loan Parties and the Lender wish
to amend the Credit Agreement pursuant to the terms and conditions hereinafter
set forth.

 

NOW THEREFORE, in
consideration of the premises and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Loan Parties and the
Lender hereby agree as follows:

 

AGREEMENTS

 

1.             DEFINITIONS.  Capitalized words and phrases used herein
without definition shall have the respective meanings ascribed to such words
and phrases in the Credit Agreement.

 

2.             AMENDMENTS.

 

2.1.          Amended
Definitions.  Section 1.1 of the
Credit Agreement is hereby amended as follows:

 

2.1.1        Applicable Margin.  The definition of “Applicable Margin” is
hereby amended in its entirety to read as follows:

 

“Applicable Margin”:  For
any day, a rate per annum of (i) for LIBOR Loans, 2.00%, (ii) for Base Rate
Loans, 0.00% or (iii) for Fixed Rate Loans, 2.00%.

 

 

2.1.2        Borrowing Base.  The definition of “Borrowing Base” is hereby
amended in its entirety to read as follows:

 

“Borrowing Base”:  (a) 90%
of the net book value of the Eligible Leased Assets of the Loan Parties, plus
(b) as of the end of any month, an amount equal to EBITDA of the Company’s
franchising and corporate segments for the twelve consecutive months ended or
most recently ended on such month times two (2).

 

2.1.3        Commitment.  The definition of “Commitment” is hereby
amended in its entirety to read as follows:

 

“Commitment”:  The Lender’s
commitment to make Loans, and to issue Letters of Credit, under this Agreement,
as reduced or increased from time to time pursuant to Section 6.3 or Section
6.4, respectively.  The initial
amount of the Lender’s commitment to make Loans is $15,000,000.

 

2.1.4      Interest Expense.  The definition of “Interest Expense” is hereby
deleted in its entirety.

 

2.1.5      Interest Period.  The definition of “Interest Period” is hereby
amended (i) to include as to any LIBOR Loan, in addition to periods of one, two
or three months, a period of six months, and (ii) by adding the following new
sentence to the beginning of such definition: 
“As to any Fixed Rate Loan, the period commencing on the date such Loan
is borrowed or continued as, or converted into, a Fixed Rate Loan and ending on
a date one, two, three or four years thereafter as selected in writing by the
Company.”

 

2.1.6      Termination Date.  The definition of “Termination Date” is
hereby amended to read in its entirety as follows:

 

“Termination Date”:  The
earlier to occur of (a) March 31, 2010, and (b) such other date on which the Commitment
terminates pursuant to Section 13.

 

2.2           New Definitions.  The following definitions are hereby added in
the proper alphabetical order to Section 1.1 of the Credit Agreement:

 

“Account Debtor”:  As
defined in the UCC.

 

“Capitalized Lease Obligations”: 
As to any Person, all rental obligations of such Person, as lessee under
a Capital Lease which are or will be required to be capitalized on the books of
such Person.

 

“Cost of Funds Rate”:  The
rate per annum provided from time to time by the Lender in its sole discretion
as its “cost of funds” and made available by the

 

2

 

Lender at the
Company’s request, which rate shall be fixed for a period equal to the relevant
Interest Period.

 

“Depreciation”:  The total
amounts added to depreciation, amortization, obsolescence, valuation and other
proper reserves, as reflected on the Company’s financial statements and
determined in accordance with GAAP.

 

“Eligible
Leased Assets”:  Each Account and all
such Accounts (exclusive of sales, excise or other similar taxes) owing to a
Loan Party that arises solely from the leasing of Equipment by such Loan Party
and that meets each of the following requirements:

 

(a)           it
is genuine in all respects and has arisen in the ordinary course of the Loan
Party’s business from the sale or lease of
Equipment by such Loan Party;

 

(b)           it
is subject to a perfected, first priority Lien in favor of the Lender and is
not subject to any other assignment, claim or Lien;

 

(c)           it
is the valid, legally enforceable and unconditional obligation of the Account
Debtor with respect thereto, and is not subject to the fulfillment of any
condition whatsoever or any counterclaim, credit (except as provided in
subsection (h) of this definition), trade or volume discount, allowance,
discount, rebate or adjustment by the Account Debtor with respect thereto, or
to any claim by such Account Debtor denying liability thereunder in whole or in
part and the Account Debtor has not refused to accept and/or has not returned
or offered to return any of the Equipment or services which are the subject of
such Account;

 

(d)           the
Account Debtor with respect thereto is a resident or citizen of, and is located
within, the United States, unless the lease of Equipment giving rise to such
Account is on letter of credit, banker’s acceptance or other credit support
terms reasonably satisfactory to the Lender;

 

(e)           it
is not an Account with respect to which possession and/or control of the
Equipment leased giving rise thereto is held, maintained or retained by the
Loan Party (or by any agent or custodian of such Loan Party) for the account
of, or subject to, further and/or future direction from the Account Debtor with
respect thereto;

 

(f)            it
has not arisen out of contracts with the United States or any department,
agency or instrumentality thereof, unless the Loan Party has
assigned its right to payment of such Account to the Lender pursuant to the
Assignment of Claims Act of 1940, and evidence (satisfactory to the Lender) of
such assignment has been delivered to the Lender, or any state, county, city or
other governmental body, or any department, agency or instrumentality thereof;

 

3

 

(g)           if
the Loan Party maintains a credit limit for an Account Debtor, the aggregate
dollar amount of Accounts due from such Account Debtor, including such Account,
does not exceed such credit limit;

 

(h)           if
the Account is evidenced by chattel paper or an instrument, the originals of
such chattel paper or instrument shall have been endorsed and/or assigned and
delivered to the Lender or, in the case of electronic chattel paper, shall be
in the control of the Lender, in each case in a manner satisfactory to the
Lender;

 

(i)            such
Account is evidenced by an invoice delivered to the related Account Debtor and
is not more than ninety (90) days past the due date thereof;

 

(j)            it
is not an Account with respect to an Account Debtor that is located in any
jurisdiction which has adopted a statute or other requirement with respect to
which any Person that obtains business from within such jurisdiction must file
a notice of business activities report or make any other required filings in a
timely manner in order to enforce its claims in such jurisdiction’s courts
unless (i) such notice of business activities report has been duly and timely
filed or the Loan Party is exempt from filing such report and has provided the
Lender with satisfactory evidence of such exemption or (ii) the failure to make
such filings may be cured retroactively by such Loan Party for a nominal fee;

 

(k)           the
Account Debtor with respect thereto is not an Affiliate of the Loan Party;

 

(l)            such
Account does not arise out of a contract or order which, by its terms, forbids
or makes void or unenforceable the assignment thereof by the Loan Party to the
Lender and is not unassignable to the Lender for any other reason;

 

(m)          there
is no bankruptcy, insolvency or liquidation proceeding pending by or against
the Account Debtor with respect thereto, nor has the Account Debtor suspended
business, made a general assignment for the benefit of creditors or failed to
pay its debts generally as they come due,
and/or no condition or event has occurred
having a Material Adverse Effect on the Account Debtor which would require the
Accounts of such Account Debtor to be deemed uncollectible in accordance with
GAAP;

 

(n)           it
is not owed by an Account Debtor with respect to which twenty five percent
(25.00%) or more of the aggregate amount of outstanding Accounts owed at such time
by such Account Debtor is classified as ineligible under clause (j) of this
definition;

 

(o)           if
the aggregate amount of all Accounts owed by the Account Debtor thereon exceeds
twenty five percent (25.00%) of the aggregate amount of

 

4

 

all Accounts at such time, then all Accounts owed by such Account
Debtor in excess of such amount shall be deemed ineligible; and

 

(p)           it
does not violate the negative covenants and does satisfy the affirmative
covenants of the Loan Party contained in this Agreement, and it is otherwise
not unacceptable to the Lender for any other reason;

 

provided, an Account which is at any
time an Eligible Leased Asset, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be an Eligible Leased Asset,
until such time that such Account meets all of the foregoing requirements; provided
further, that, with respect to any Account, if the Lender at any time
hereafter determine in its discretion that the prospect of payment or
performance by the Account Debtor with respect thereto is materially impaired
for any reason whatsoever, such Account shall cease to be an Eligible Leased
Asset after notice of such determination is given to the relevant Loan Party;
and provided  further, that the Lender shall, notwithstanding the
foregoing, have the right, in the reasonable exercise of its discretion, to
establish reserves against the aggregate amount of the Eligible Leased Assets.

 

“Eligible Leases”:  Leases
of Equipment that generate Eligible Leased Assets.

 

“Equipment”:  As defined in the UCC.

 

“Fixed Rate Loan”:  A Loan
which bears interest at or by reference to the Cost of Funds Rate.

 

“Interest Charges”:  For
any period, the sum of:  (a) all
interest, charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the deferred purchase
price of assets that are treated as interest in accordance with GAAP, plus
(b) the portion of Capitalized Lease Obligations with respect to that fiscal
period that should be treated as interest in accordance with GAAP, plus
(c) all charges paid or payable (without duplication) during that period with
respect to any Hedging Agreements.

 

 

2.3           Loan Commitment.  The proviso to Section 2.1.1 is hereby
amended in its entirety to read as follows: 
“provided that the Outstandings will not at any time exceed Loan
Availability.”

 

2.4           Various Types of
Loans.  Section 2.2.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:

 

2.2.1        Various Types of
Loans.  Each Loan shall be divided
into tranches which are either a Base Rate Loan, a LIBOR Loan or a Fixed Rate
Loan (each, a “type” of Loan), as the Company shall specify in the
related notice of borrower

 

5

 

(with respect to
Base Rate Loans or LIBOR Loans) or conversion (with respect to all types of
Loans) pursuant to Section 2.2.2 or 2.2.3.  LIBOR Loans and Fixed Rate Loans having the
same Interest Period are sometimes called a “Group” or, collectively, “Groups”.  Base Rate Loans, LIBOR Loans and Fixed Rate
Loans may be outstanding at the same time, provided that no more than
eight (8) different Groups of LIBOR Loans shall be outstanding at any one time
and no more than twenty four (24) different Groups of Fixed Rate Loans may be
outstanding at any one time.

 

2.5           Borrowing
Procedures.  Section 2.2.2 of the
Credit Agreement is hereby amended in its entirety to read as follows:

 

2.2.2        Borrowing
Procedures.  The Company shall give
written notice (each such written notice, a “Notice of Borrowing”)
substantially in the form of Exhibit E or telephonic notice (followed
immediately by a Notice of Borrowing) to the Lender of each proposed borrowing
not later than (a) in the case of a Base Rate borrowing, 11:00 A.M.,
Minneapolis time, on the proposed date of such borrowing, and (b) in the
case of a LIBOR borrowing or a Cost of Funds Rate borrowing, 11:00 A.M.,
Minneapolis time, at least two Business Days prior to the proposed date of such
borrowing.  Each such notice shall be
effective upon receipt by the Lender, shall be irrevocable, and shall specify
the date, amount and type of borrowing and, in the case of a LIBOR borrowing or
a Cost of Funds Rate borrowing, the initial Interest Period therefor.  So long as the Lender has not received
written notice that the conditions precedent set forth in Section 11
with respect to such borrowing have not been satisfied, the Lender shall pay
over to the Company, in immediately available funds the amount of the proposed
borrowing on the requested borrowing date. 
Each borrowing shall be on a Business Day.  Each Base Rate borrowing shall be in an
aggregate amount of at least $100,000 or a higher integral multiple of
$100,000.  Each LIBOR borrowing shall be
in an aggregate amount of at least $100,000 or a higher integral multiple of
$100,000.  Each Cost of Funds Rate
borrowing shall be in an aggregate amount of at least $200,000 or a higher
integral multiple of $100,000; provided, however, that the Loan
Parties may not borrow, convert to, or continue, more than six (6) Fixed Rate
Loans, in the aggregate, in any calendar year.

 

2.6           Conversion and
Continuation Procedures.

 

(a)           The proviso to
Section 2.2.3(a) of the Credit Agreement is hereby amended in its entirety to
read as follows:

 

provided that (i) the Loan Parties
may not borrow, convert to, or continue, more than six (6) Fixed Rate Loans, in
the aggregate, in any calendar year, and (ii) after giving effect to any
prepayment, conversion or continuation, the aggregate principal amount of each
Group of LIBOR Loans shall be at least $100,000 or a higher integral multiple
of $100,000,

 

6

 

and the aggregate
principal amount of each Group of Fixed Rate Loans shall be at least $200,000
or a higher integral multiple of $100,000.

 

(b)           Section 2.2.3(c) is
hereby amended in its entirety to read as follows:

 

(c)           If upon the
expiration of any Interest Period applicable to LIBOR Loans or Fixed Rate
Loans, the Company has failed to select timely a new Interest Period to be
applicable to such LIBOR Loans or the Lender has failed to approve a new
Interest Period to be applicable to such Fixed Rate Loans, the Company shall be
deemed to have elected to convert such LIBOR Loans or Fixed Rate Loans, as
applicable, into Base Rate Loans effective on the last day of such Interest
Period.

 

(c)           Section 2.2.3(d) is
hereby amended in its entirety to read as follows:

 

(d)           Any conversion of a
LIBOR Loan on a day other than the last date of an Interest Period therefore
shall be subject to Section 8.4 and any conversion of a Fixed Rate Loan
on a day other than the last date of an Interest Period therefore shall be
subject to Section 5.2(b).

 

2.7           Interest Rates.  Section 4.1 is hereby amended by adding the
following  new subsection (c) thereto:

 

(c)           at all times while
such Loan is a Fixed Rate Loan, at a rate per annum equal to the sum of the
Fixed Rate applicable to each Interest Period for such Loan plus the
Applicable Margin;

 

2.8            Payment Dates.  Section 4.2 of the Credit Agreement is hereby
amended in its entirety to read as follows:

 

4.2           Interest Payment
Dates.  Accrued interest on each Base
Rate Loan shall be payable in arrears on the first day of each calendar month
and at maturity.  Accrued interest on
each LIBOR Loan and each Fixed Rate Loan shall be payable on the last day of
each Interest Period relating to such Loan (and, in the case of a LIBOR Loan
having a six-month Interest Period or a Fixed Rate Loan having an Interest
Period in excess of three months, on the three month anniversary of the first
day of such Interest Period), upon a prepayment of such Loan, and at
maturity.  After maturity, and at any
time an Event of Default exists, accrued interest on all Loans shall be payable
on demand.

 

2.9           Fees.  Section 5.2 of the Credit Agreement is hereby
amended in its entirety to read as follows:

 

5.2           Other Fees.

 

7

 

(a)           Non-Utilization
Fee.  The Loan Parties, jointly and
severally, agree to pay to the Lender a non-utilization fee equal to 0.25% of
the total of (i) the Commitment, minus (ii) the daily average of the
aggregate principal amount of the Outstandings, which non-utilization fee shall
be (X) calculated on the basis of a year consisting of 360 days, (Y) paid for
the actual number of days elapsed, and (Z) payable monthly in arrears on the
last day of each calendar month and on the Termination Date.

 

(b)           Fixed Rate Loan
Prepayment Fee.  The Loan Parties,
jointly and severally, agree to pay to the Lender, with respect to any
prepayment made on a Fixed Rate Loan prior to the last day of the Interest
Period therefore, a prepayment fee equal to 1.0% of the principal amount of
such Fixed Rate Loan.

 

(c)           Increase Fee.  The Loan Parties, jointly and severally,
agree to pay to the Lender a fee equal to 0.30% of the amount by which the
Commitment is increased pursuant to Section 6.4.  Such fee shall be payable with respect to
each such increase and shall be fully earned when paid and shall not be
refundable for any reason whatsoever.

 

(d)           Lender’s Fees.  The Loan Parties, jointly and severally,
agree to pay to the Lender such other reasonable fees and expenses as are
mutually agreed to from time to time by the Company and the Lender, including the
fees required to be paid in accordance with Section 15.5.

 

2.10         Prepayments.  Section 6.1.3 of the Credit Agreement is
hereby amended in its entirety to read as follows:

 

6.1.3        Manner of
Prepayments.  Each voluntary partial
prepayment shall be in a principal amount of $25,000 or a higher integral
multiple of $5,000.  Any partial
prepayment of a Group of LIBOR Loans shall be subject to the proviso to Section
2.2.3(a).  Any prepayment of a LIBOR Loan
or a Fixed Rate Loan on a day other than the last day of an Interest Period
therefore shall include interest on the principal amount being repaid and shall
be subject to Section 8.4 or Section 5.2(b), as applicable.  Except as otherwise provided by this
Agreement, all principal payments in respect of the Loans shall be applied
first to repay outstanding Base Rate Loans, then to repay outstanding Fixed
Rate Loans in direct order of Interest Period maturities and then to repay
outstanding LIBOR Rate Loans in direct order of Interest Period maturities.

 

2.11         Reduction and
Increase of Commitment.  Section 6 of
the Credit Agreement is hereby amended by adding thereto the following new
Sections 6.3 and 6.4:

 

8

 

6.3           Reduction of
Commitment.  The Loan Parties may, at
any time, upon not less than 30 days’ prior written notice from the Company to
the Lender, reduce the Commitment, with any such reduction in a minimum amount
of $1,000,000, or, if more, in an integral multiple of $500,000; provided,
however, that the Loan Parties may not at any time reduce the Commitment
below the Outstandings.

 

6.4           Increase of
Commitment.

 

(a)           Provided no
Unmatured Event of Default or Event of Default has occurred and is continuing,
upon written notice from the Company to the Lender, the Loan Parties may from
time to time request an increase in the Commitment by an amount (for all such
requests) not exceeding $10,000,000; provided that any such request for
an increase shall be in a minimum integral amounts of $5,000,000.

 

(b)           The Company shall specify
the time period within which the Lender is requested to respond (which shall in
no event be less than ten (10) Business Days from the date of delivery of such
notice to the Lender).  The Lender shall
notify the Company within such period whether or not it agrees to increase the
Commitment by the requested amount.  If
the Lender has not responded within such period, it shall be deemed to have
declined such request to increase the Commitment.

 

(c)           In the event the
Lender agrees to increase the Commitment by the requested amount, such increase
shall become effective upon  (i) the
delivery by the Company to the Lender of a new Note duly executed by the Loan
Parties reflecting the increased Commitment, (ii) the delivery by the Company
to the Lender of evidence reasonably satisfactory to the Lender that the Loan
Parties have duly authorized such increase by all appropriate corporate action,
and (iii) the payment by the Company to the Lender of the fee specified in
Section 5.2(c).

 

2.12         Inspections.  The proviso to the last sentence of Section
10.2 of the Credit Agreement is hereby amended in its entirety to read as
follows:

 

provided that so long as no Event of
Default or Unmatured Event of Default exists, the Company shall not be required
to reimburse the Lender for inspections or audits more frequently than once
each Fiscal Year, except that, in addition to any such annual inspection or
audit at the Company’s expense, upon the earlier to occur of (i) an increase in
the Commitment pursuant to Section 6.4 and (ii) the date on which the
consolidated investments of the Loan Parties in leasing operations is greater
than $15,000,000, the Lender shall be entitled at its option to perform a
collateral examination at the Company’s expense.

 

9

 

2.13         Use of Proceeds.  Section 10.6 of the Credit Agreement is
hereby amended in its entirety to read as follows:

 

10.6         Use of Proceeds.  Use the proceeds of the Loans and the Letters
of Credit solely for working capital purposes, for Acquisitions permitted by Section
11.5, for Capital Expenditures, for stock repurchases and for other general
business purposes; and not use or permit any proceeds of any Loan to be used,
either directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of “purchasing or carrying” any Margin Stock.

 

2.14         Banking
Relationship.  Section 10.11 of the
Credit Agreement is hereby amended in its entirety to read as follows:

 

10.11       Banking
Relationship.  Not later than
September 30, 2006, utilize the Lender as its primary bank of account and
depository for certain financial services, including the majority of receipts,
disbursements and cash management.

 

2.15         Financial
Covenants.  Section 11 of the Credit
Agreement is hereby amended by amending and restating Section 11.13 to read as
follows, and by adding thereto the following new Sections 11.15, 11.16 and
11.17:

 

11.13       Tangible Net Worth.  Not permit the Tangible Net Worth of the
Company and the Subsidiaries to be:

 

(a)           as of March 31, 2006,
less than Six Million Dollars ($6,000,000); and

 

(b)           as of the last
Business Day of each month subsequent to March 31, 2006, the sum of the minimum
Tangible Net Worth from the immediately preceding month plus fifty
percent (50%) of the net income of the month then ended, if positive.

 

11.15       Debt Service
Coverage.  As of the end of each
Fiscal Quarter,  not fail to maintain a
ratio of (i)(a) EBITDA, (b) minus capital expenditures, and (c) minus cash
taxes, divided by (ii) cash interest, of not less than 2.00 to 1.00.

 

11.16       Maximum Leverage.  As of the end of each Fiscal Quarter, not
fail to maintain a ratio of (i) Debt of the Loan Parties minus
consolidated Subordinated Debt minus non-recourse Debt of the Loan Parties in
connection with discounting activities of the Loan Parties to (ii) consolidated
Tangible Net Worth that shall not exceed 3.00 to 1.00.

 

11.17  Eligible Leases.  Not permit the product of (i) the net book
value of the Eligible Leased Assets times (ii) ninety percent (90%) to exceed,
at any time, the Equipment cost with respect to the Eligible Leases.

 

10

 

2.16         Exhibits.

 

2.14.1      Compliance
Certificate.  Exhibit B to the Credit
Agreement is hereby replaced with Exhibit B attached hereto.

 

2.14.2      Borrowing Base
Certificate.  Exhibit C to the Credit
Agreement is hereby replaced with Exhibit C attached hereto.

 

2.14.3      Form of Notice of
Borrowing.  Exhibit E to the Credit
Agreement is hereby replaced with Exhibit E attached hereto.

 

2.14.4      Notice of Conversion/Continuance.  Exhibit F to the Credit Agreement is hereby
replaced with Exhibit F attached hereto.

 

3.             CONDITIONS PRECEDENT.  This Second Amendment shall become effective
as of the date above first written after receipt by the Lender of, or compliance
by the Loan Parties with, the following:

 

3.1.          Second Amendment.  This Second Amendment duly executed by each
Loan Party.

 

3.2.          Authorization
Documents.  For each Loan Party, (a)
charter (or similar formation document), certified by the appropriate governmental
authority; (b) good standing certificates in its state of incorporation (or
formation) and in each other state requested by the Lender; (c) bylaws (or
similar governing document), (d) resolutions of its board of directors (or
similar governing body) approving and authorizing each Loan Party’s execution,
delivery and performance of this Second Amendment and the related Loan
Documents to which it is a party and the transactions contemplated hereby, (e)
signature and incumbency certificates of its officers executing this Second
Amendment and the related Loan Documents, all certified by its secretary or an
assistant secretary or similar officer as being in full force and effect
without modification; provided that in the event the materials delivered
to the Lender in accordance with Section 12.1.2 of the Credit Agreement are
sufficient (in the reasonable discretion of the Lender) to satisfy the
requirements of Section 3.2(a) and 3.2(c) hereof, the Loan Party shall deliver
a certification of the secretary or an assistant secretary that such materials
remain unmodified and in full force and effect as of the date hereof.

 

3.3           WBC Collateral.  An amendment to the UCC-1 Financing Statement
filed in respect of Winmark Business Solutions, Inc. pursuant to the Security
Agreement to reflect such Person’s name change to WBC (or, if reasonably
requested by the Lender, a new UCC-1 Financing Statement with respect to the
Collateral (as defined in the Security Agreement)).

 

3.4           Opinions of
Counsel.  Opinions of counsel for
each Loan Party, satisfactory in form and substance to the Lender.

 

11

 

3.5           Payment of Fees.  (a) Payment by the Company of a closing fee
equal to 0.30% of the Commitment, which fee shall be fully earned when paid and
shall not be refundable for any reason whatsoever, and (b) evidence of payment
by the Company of all other accrued and unpaid fees, costs and expenses to the
extent then due and payable, together with all reasonable Attorney Costs of the
Lender to the extent invoiced prior to the date hereof, plus such
additional amounts of reasonable Attorney Costs as shall constitute the Lender’s
reasonable estimate of Attorney Costs incurred or to be incurred by the Lender
through the closing of this Amendment.

 

3.6           Other Conditions.  The Loan Parties shall have satisfied such
other conditions as specified by the Lender, including the delivery of such
other documents, certificates and resolutions as the Lender may request.

 

4.             POST CLOSING CONDITIONS.  Not later than thirty (30) days after the
date hereof, the Loan Parties shall take such actions as reasonably requested
by the Lender in connection with the replacement of Capital Securities issued
to the Company by Winmark Business Solutions, Inc., and pledged to the Lender
pursuant to the Pledge Agreement.  The
failure of the Loan Parties to comply with this covenant shall be an Event of
Default under the Credit Agreement.

 

5.             REPRESENTATIONS AND WARRANTIES.  Each Loan Party hereby certifies, represents
and warrants to the Lender on the date hereof after giving effect to this
Amendment that:

 

5.1           Authorization.  Each Loan Party is duly authorized to execute
and deliver this Second Amendment and each other Loan Document executed by such
Loan Party in connection herewith (the “Amendment Documents”), and is
and will continue to be duly authorized to borrow monies under the Credit
Agreement and to perform its obligations under the Credit Agreement and each
other Loan Document.

 

5.2           No Conflicts; No
Consent.  The execution and delivery
of this Second Amendment and the performance by any Loan Party of its
obligations hereunder and the Amendment Documents to which it is a party do not
and will not (a) require any consent or approval of any governmental agency or
authority (other than any consent or approval which has been obtained and is in
full force and effect), (b) conflict with (i) any provision of law,  (ii) the charter, by-laws or other
organizational documents of such Loan Party, or (iii) any agreement, indenture,
instrument or other document, or any judgment, order or decree, which is
binding upon such Loan Party or any of its properties, or (c) require, or
result in, the creation or imposition of any Lien on any asset of any Loan
Party (other than Liens in favor of the Lender created pursuant to the
Collateral Documents).

 

5.3           Validity and
Binding Effect.  Each of the Second
Amendment and each Amendment Document is a legal, valid and binding obligation
of each Loan Party, enforceable against such Loan Party in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
other similar laws of general application

 

12

 

affecting the
enforcement of creditors’ rights or by general principles of equity limiting
the availability of equitable remedies.

 

5.4           Compliance with
Credit Agreement.  The representation
and warranties set forth in Section 9 of the Credit Agreement are true and
correct with the same effect as if such representations and warranties had been
made on the date hereof, with the exception that all references to the
financial statements shall mean the financial statements most recently
delivered to the Lender and except for such changes as are specifically
permitted under the Credit Agreement.

 

5.5           No Event of
Default.  No Unmatured Event of
Default or Event of Default has occurred and is continuing.

 

6.             AFFIRMATION OF CREDIT AGREEMENT;
FURTHER REFERENCES; AFFIRMATION OF SECURITY INTEREST.  The Lender and each Loan Party 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.  Each Loan Party confirms to
the Lender that the Obligations are and continue to be secured by the security
interest granted by the Loan Parties in favor of the Lender under the
Collateral Documents, and all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of
the Company or any other Loan Party 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 each Loan Party.

 

13

 

7.             GENERAL.

 

7.1           Governing Law;
Severability.  This Second Amendment
and each Amendment Document shall be a contract made under and governed by the
internal laws of the State of Minnesota applicable to contracts made and to be
performed entirely within such state, without regard to conflict of laws
principles.  The provisions of Section
15.17 and 15.18 of the Credit Agreement are hereby incorporated herein by
reference.  Wherever possible each
provision of this Second Amendment and each Amendment Document shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Second Amendment or any Amendment Document shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Second
Amendment or such Amendment Document.

 

7.2           Successors and
Assigns.  This Second Amendment shall
be binding upon each Loan Party, the Lender, and their respective successors
and assigns, and shall inure to the benefit of each Loan Party and the Lender,
and the successors and assigns of the Lender.

 

7.3           Expenses.  The Loan Parties, jointly and severally,
shall pay all reasonable costs and expenses in connection with the preparation
of this Second Amendment and the Amendment Documents including, without
limitation, reasonable attorneys’ fees and time charges of attorneys who may be
employees of the Lender or any affiliate or parent of the Lender.  The Loan Parties shall pay any and all stamp
and other taxes, UCC search fees, filing fees and other reasonable costs and
expenses in connection with the execution and delivery of this Second Amendment
and the Amendment Documents, and agrees to save the Lender harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such costs and expenses.

 

7.4           Counterparts.  This Second Amendment may be executed in any
number of counterparts, all of which shall constitute one and the same
agreement.

 

[The next page is the
signature page.]

 

14

 

IN WITNESS WHEREOF,
the parties hereto have executed this Second Amendment as of the date first
above written.

 

	
   

  	
  WINMARK CORPORATION,

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett D. Heffes

  	
   

  
	
   

  	
  Name: Brett D. Heffes

  
	
   

  	
  Title: Chief Financial
  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WIRTH BUSINESS CREDIT, INC.,

  
	
   

  	
  formerly known as
  Winmark Business Solutions,

  Inc., a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett D. Heffes

  	
   

  
	
   

  	
  Name: Brett D. Heffes

  
	
   

  	
  Title: Chief Financial
  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WINMARK CAPITAL CORPORATION,

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett D. Heffes

  	
   

  
	
   

  	
  Name: Brett D. Heffes

  
	
   

  	
  Title: Chief Financial
  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GROW BIZ GAMES, INC.,

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark T. Hooley

  	
   

  
	
   

  	
  Name: Mark T. Hooley

  
	
   

  	
  Title: Vice President and
  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL
  ASSOCIATION,

  
	
   

  	
  a national banking
  association

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Peter N. Pricco

  	
   

  
	
   

  	
  Name:

  	
  Peter N. Pricco

  
	
   

  	
  Title:

  	
  Vice President

  
							

 

 

EXHIBIT B

 

FORM OF COMPLIANCE CERTIFICATE

 

To:                                  LaSalle
Bank National Association (the “Lender”)

 

Please refer to the Credit Agreement dated as of
September 30, 2004, as amended by that certain First Amendment dated as of
August 26, 2005 and that certain Second Amendment dated as of March 31, 2006
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”) among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”) and
the Lender.  Terms used but not otherwise
defined herein are used herein as defined in the Credit Agreement.

 

I.                                                         Reports.  Enclosed herewith is a copy of the monthly
report of the Company as at                          ,
            
(the “Computation Date”), which report fairly presents in all material
respects the financial condition and results of operations of the Company as of
the Computation Date and has been prepared in accordance with GAAP consistently
applied.

 

II.                                                     Tangible Net Worth.  The Company hereby certifies and warrants to
you that the following is a true and correct computation of the Tangible Net
Worth requirement set forth in Section 11.13 of the Credit Agreement, which is
equal to or greater than the sum of the minimum Tangible Net Worth from the
immediately preceding month plus fifty percent (50%) of the net income
of the month then ended, if positive:

 

Section 11.13 – Tangible Net
Worth

 

	
  A.

  	
   

  	
  Shareholders’ Equity:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Common stock

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Other comprehensive
  income

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Retained earnings

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Shareholders’
  Equity

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Subordinated Debt

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Intangible Items:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Goodwill

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Trademarks

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Trade names

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Service marks

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Copyrights

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Patents

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Licenses

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Deferred items

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Unamortized Debt
  discount

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Prepaid Expenses(1)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Other intangible items

  	
   

  	
  $

  	
   

  	
   

  

 

(1)           Excludes Income Tax
Refund Receivable

 

 

	
   

  	
   

  	
  Total Intangible Items

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Investments:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Investment in Tomsten,
  Inc.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Investment in Bridge
  Funds Limited

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Investment in
  Commercial Credit Group

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Additional Investments

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Investments

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Tangible Net Worth
  [(A+B) – (C + D)]

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Minimum Tangible Net
  Worth from prior month end

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  plus 50%
  of positive current month end net income

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  New Minimum Tangible
  Net Worth

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Covenant Ratio [E/F]

  	
   

  	
  $

  	
   

  	
   

  

 

III.                                                 Debt Service Coverage.  The Company hereby certifies and warrants to
you that the following is a true and correct computation of the Debt Service
Coverage requirement set forth in Section 11.15 of the Credit Agreement, which
is not less than 2.00 to 1.00:

 

	
  A.

  	
   

  	
  TTM EBITDA:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TTM Income from
  Operations

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  TTM Depreciation

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  TTM Amortization

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  TTM Compensation
  Related to Stock Options

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TTM EBITDA

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Cash Flow Available for
  Debt Service:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) TTM EBITDA

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) TTM Capital
  Expenditures

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (iii) TTM Cash Taxes

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cash Flow Available for
  Debt Service (i –(ii + iii))

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Debt Service:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TTM Interest Expense

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Debt Service Coverage
  Ratio [B/C]:

  	
   

  	
   

  	
   

  	
   

  
	
  Covenant Level

  	
   

  	
   

  	
   

  	
  2.00x

  	
   

  
									

 

B-2

 

IV.                                                 Maximum Senior Leverage.  The Company hereby certifies and warrants to
you that the following is a true and correct computation of the Total Leverage
requirement set forth in Section 11.16 of the Credit Agreement, which is not
less greater than 3.00 to 1.00:

 

	
  A.

  	
   

  	
  Recourse Senior Debt:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Tangible Net Worth:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Leverage Ratio
  [A/B]:

  	
   

  	
   

  	
   

  	
   

  
	
  Covenant Level

  	
   

  	
   

  	
  3.00x

  	
   

  
								

 

The Company further certifies to you that no Event of
Default or Unmatured Event of Default has occurred and is continuing.

 

The Company has caused this Certificate to be executed
and delivered by its duly authorized officer on                  ,
      .

 

	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

B-3

 

EXHIBIT C

 

FORM OF
BORROWING BASE CERTIFICATE

 

To:          LaSalle Bank National Association (the
“Lender”)

 

Please refer to the Credit Agreement dated as of
September 30, 2004, as amended by that certain First Amendment dated as of
August 26, 2005 and that certain Second Amendment dated as of March 31, 2006
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”) among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”) and
the Lender.  This certificate (this “Certificate”),
together with supporting calculations attached hereto, is delivered to you
pursuant to the terms of the Credit Agreement. 
Capitalized terms used but not otherwise defined herein shall have the
same meanings herein as in the Credit Agreement.

 

The Company hereby certifies and warrants to the
Lender that at the close of business on                           ,
             
(the “Calculation Date”), the Borrowing Base was $                    ,
computed as set forth on the schedule attached hereto.

 

The Company has caused this Certificate to be executed
and delivered by its officer thereunto duly authorized on                 ,             .

 

	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

SCHEDULE TO BORROWING
BASE CERTIFICATE

 

Dated as of [                   ]

 

	
  A.

  	
   

  	
  Availability
  Created by Eligible Equipment Leases

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net book value
  of Eligible Leased Assets

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Advance Rate

  	
   

  	
  0.90

  	
   

  	
   

  
	
   

  	
   

  	
  Availability created by
  Eligible Leased Assets

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Availability
  created by Eligible Equipment Leases

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Availability
  Created by Income from Operation of Franchising and Corporate Segments

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TTM EBITDA of
  Franchising Segment

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  TTM EBITDA of
  Corporate Segment

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Advance Rate

  	
   

  	
  2.00

  	
   

  	
   

  
	
   

  	
   

  	
  Availability created by
  EBITDA of Franchising and Corporate Segments

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Availability: Lesser of
  (A+B) and $15,000,000

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Outstandings

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Issued Letters of
  Credit

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Excess Availability

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

C-2

 

EXHIBIT E

 

FORM OF NOTICE OF
BORROWING

 

To:                          LaSalle
Bank National Association (the “Lender”)

 

Please refer to the Credit Agreement dated as of
September 30, 2004 as amended by that certain First Amendment dated as of
August 26, 2005 and that certain Second Amendment dated as of March 31, 2006
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”) among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”) and
the Lender.  Capitalized terms used but
not otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.

 

The undersigned hereby gives irrevocable notice,
pursuant to Section 2.2.2 of the Credit Agreement, of a request
hereby for a borrowing as follows:

 

(i)            The
requested borrowing date for the proposed borrowing (which is a Business Day)
is                        ,
          .

 

(ii)           The
aggregate amount of the proposed borrowing is $                       .

 

(iii)          The
type of Revolving Loans comprising the proposed borrowing are [Base Rate]
[LIBOR] [Fixed Rate] Loans.

 

(iv)          The
duration of the Interest Period for each LIBOR Loan made as part of the
proposed borrowing, if applicable, is                        
month(s) (which shall be 1, 2, 3 or 6 months).

 

(v)           The
duration of the Interest Period for each Fixed Rate Loan made as part of the
proposed borrowing, if applicable, is                     
year(s) (which shall be 1, 2, 3 or 4 years).

 

The undersigned hereby certifies that on the date
hereof and on the date of borrowing set forth above, and immediately after
giving effect to the borrowing requested hereby: (i) there exists and there
shall exist no Unmatured Event of Default or Event of Default under the Credit
Agreement; and (ii) each of the representations and warranties contained in the
Credit Agreement and the other Loan Documents is true and correct as of the
date hereof, except to the extent that such representation or warranty
expressly relates to another date and except for changes therein expressly
permitted or expressly contemplated by the Credit Agreement, and (iii) no more
than six (6) borrowings or continuations of, or conversions to, Fixed Rate
Loans have been made in the current calendar year.

 

The Company has caused this Notice of Borrowing to be
executed and delivered by its officer thereunto duly authorized on                ,
            .

 

	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

EXHIBIT F

 

FORM OF NOTICE OF
CONVERSION/CONTINUATION

 

To:                          LaSalle
Bank National Association (the “Lender”)

 

Please refer to the Credit Agreement dated as of
September 30, 2004, as amended by that certain First Amendment dated as of
August 26, 2005 and that certain Second Amendment dated as of March 31, 2006
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”) among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”) and
the Lender.  Capitalized terms used but
not otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.

 

The undersigned hereby gives irrevocable notice, pursuant
to Section 2.2.3 of the Credit Agreement, of its request to:

 

(a)           on [date] convert $[                 ]
of the aggregate outstanding principal amount of the [              ]
Loan, into a(n) [                  ]
Loan [and, in the case of a LIBOR Loan, having an Interest Period of [       ]
month(s)][and, in the case of a Fixed Rate Loan, having an Interest Period of [           ]
years(s)];

 

[(b)          on [date] continue $[             ]
of the aggregate outstanding principal amount of the [LIBOR Loan, as a LIBOR
Loan having an Interest Period of [             ]
month(s)][Fixed Rate Loan, as a Fixed Rate Loan having an Interest Period of [               ]
year(s)].

 

The undersigned
hereby represents and warrants that all of the conditions contained in Section
12.2 of the Credit Agreement have been satisfied on and as of the date
hereof, and will continue to be satisfied on and as of the date of the
conversion/continuation requested hereby, before and after giving effect
thereto[and, with respect to the conversion or continuance of any LIBOR Loan,
after giving effect to such conversion or continuance, no more than eight (8)
different Groups of LIBOR Loans are outstanding and the aggregate principal
amount of each Group of LIBOR Loans is at least $100,000 or a higher integral
multiple of $100,000][, and, with respect to the conversion or continuance of
any Fixed Rate Loan, after giving effect to such conversion or continuance,(i)
no more than six (6) borrowings of, conversions to or continuances of Fixed
Rate Loans have been made this calendar year, (ii) no more than twenty four
(24) different Groups of Fixed Rate Loans are currently outstanding and (iii)
the aggregate principal amount of each Group of Fixed Rate Loans is at least
$200,000 or a higher integral multiple of $100,000].

 

 

The Company has caused this Notice of
Conversion/Continuation to be executed and delivered by its officer thereunto
duly authorized on                    ,
          .

 

	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]