EIGHTH AMENDMENT AND MODIFICATION
OF
REVOLVING LINE OF CREDIT PROMISSORY NOTE,
LOAN AGREEMENT AND REAFFIRMATION OF GUARANTIES
This Eighth Amendment and Modification of
Revolving Line of Credit Promissory Note, Loan Agreement and
Reaffirmation of Guaranties (“Amendment”) is made
effective the 1 st day of February, 2009 (“Effective
Date”) by and among WSI Industries, Inc., a Minnesota
corporation, having an address of 213 Chelsea Road, Monticello, MN
55362 (“Borrower”), Taurus Numeric Tool, Inc., having
an address of 213 Chelsea Road, Monticello, MN 55362 and WSI
Rochester, Inc., having an address of 213 Chelsea Road, Monticello,
MN 55362 (jointly “Guarantor”) and M&I Marshall
& Ilsley Bank, having an address of 11455 Viking Drive, Eden
Prairie, Minnesota 55344 (“Bank”).
WHEREAS, on or about December 4, 2002, (the
“Loan Date”) Borrower executed a Revolving Line of
Credit Promissory Note in favor of Excel Bank Minnesota
(“Excel”) in the original principal amount of One
Million and no/100 Dollars ($1,000,000.00) (“Note”);
and
WHEREAS, on or about the Loan Date, Borrower and Excel
executed that certain Loan Agreement (“Loan Agreement”)
which Loan Agreement, among other things, described the terms and
conditions under which the Borrower would borrow money from and
repay the money to Excel; and
WHEREAS, to secure the sums due and payable to Excel
pursuant to the Note and the Loan Agreement, Borrower also executed
that certain Security Agreement, also dated as of the Loan Date,
whereby Excel took a security interest in all assets of Borrower
(“Security Agreement); and
WHEREAS, to further secure the sums due and payable to
Excel pursuant to the Note and the Loan Agreement, to perform the
covenants and conditions thereof and of certain documents executed
in conjunction therewith, each Guarantor executed an unconditional
and unlimited guaranty (“Guaranty”), also dated as of
the Loan Date, whereby each Guarantor unconditionally guaranteed
the Borrower’s performance of the Note and the Loan Agreement
and the other loan documents executed therewith; and
WHEREAS, the Note, the Loan Agreement and the Security
Agreement were amended and extended pursuant to those certain
Amendments and Modifications of Revolving Line of Credit Promissory
Note, Loan Agreement and Reaffirmation of Guaranties dated
effective December 31, 2003, May 3, 2004, January 1,
2005, January 1, 2006, January 1, 2007, January 1,
2008, August 31, 2008 and by a Waiver Letter dated
April 23, 2007 (the “Amendments”); and
WHEREAS, the Note, the Loan Agreement, the Security
Agreement, the Amendments and all of the documents executed in
conjunction therewith are sometimes jointly referred to herein as
the “Loan Documents”; and
WHEREAS, effective on August 1, 2007, Excel was acquired
by merger with the Bank; and
WHEREAS, the Borrower has requested that the Bank again
amend and extend the maturity date of the Note and modify the terms
of the Loan Agreement; and
WHEREAS, the Bank and the Borrower and each Guarantor
desire that the Note and the Loan Agreement be amended and modified
as hereinafter described and each Guarantor wishes to acknowledge
and reaffirm the terms and conditions of such Guarantor’s
Guaranty.
NOW, THEREFORE , in consideration of the above recitals, and in
consideration of credit given or to be given by the Bank to the
Borrower and for other good and valuable consideration, all of
which consideration is hereby acknowledged, the parties hereto
agree as follows:
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1.
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Each of the above recitals is true
and correct and is incorporated herein by this
reference.
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2.
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The Note is hereby amended,
modified and extended as follows:
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“On and
after the Effective Date hereof the Note shall bear interest at the
variable rate of equal to the LIBOR Rate, plus two and
three-fourths percent (2.75%); provided, however, that the
interest rate shall never be less than four and one half percent
(4.50%) and if the foregoing calculation results in a rate of less
than four and one half percent (4.50%) the interest rate shall be
four and one half percent (4.50%). As used herein, “LIBOR
Rate” means the “London Interbank Offered Rates
(LIBOR)” for one mont
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