Wells Fargo Bank Waiver of Default Agreement with Young America Corporation (November 2, 2000)

Summary

Wells Fargo Bank, as assignee of Norwest Bank, agrees to waive certain financial covenant defaults by Young America Corporation under their April 7, 1998 Credit Agreement. Specifically, the bank waives defaults related to the company's current ratio and minimum cumulative EBITDA for the period ending September 30, 2000, in exchange for a $5,000 nonrefundable fee. This waiver applies only to these specific defaults and does not affect any other terms or rights under the original agreement.

EX-10.1 3 y42321ex10-1.txt BANK WAIVER 1 [WELLS FARGO LETTERHEAD] November 2, 2000 Mary Beth Fong Young America Corporation 717 Faxon Road Young America, MN 55397 RE: Waiver of Default Dear Mary Beth: Wells Fargo Bank, National Association, assignee of Norwest Bank Minnesota, National Association, (the "Bank") and Young America Corporation (the "Borrower") are parties to a certain Credit Agreement dated as of April 7, 1998 (the "Agreement") as amended. Section 5.10 of the Agreement states that the Borrower will maintain a Current Ratio at not less than 1.00 to 1.00 for the Covenant Computation Date as of September 30, 2000. For the Covenant Computation Date as of September 30, 2000, the Borrower's Current Ratio was 0.95 to 1.00, thereby creating an Event of Default under the Agreement. Section 5.11 of the Agreement states that the Borrower will maintain a minimum cumulative EBITDA of not less than $7,500,000 for the Covenant Computation Date as of September 30, 2000. For the Covenant Computation Date as of September 30, 2000, the Borrower's cumulative EBITDA was $6,252,197, thereby creating an Event of Default under the Agreement. Pursuant to your request and subject to receipt of a nonrefundable $5,000.00 fee for waiving the Events of Default and for other valuable consideration, the Bank hereby waives the violations of Section 5.10 and 5.11 for the period ending September 30, 2000 as noted in the paragraphs above. This waiver is unique and specific. The Bank does not waive any other portions of the Agreement, nor do they give up any of the rights and remedies granted to them thereunder. Very truly yours, /s/ Jeffrey H. Morsman - --------------------------- Jeffrey H. Morsman Assistant Vice President