EXHIBIT 10.12
FOURTH AMENDMENT TO REVOLVING
CREDIT AND TERM LOAN AGREEMENT
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This Fourth Amendment to Revolving Credit and Term Loan Agreement ("Fourth
Amendment") is made by and among TANDYCRAFTS, INC., a Delaware corporation
("Company"), CASUAL CONCEPTS, INC., a Texas corporation, THE DEVELOPMENT
ASSOCIATION, INC., a Texas corporation, SAV-ON, INC., a Texas corporation,
NOCONA BELT COMPANY, a Texas corporation, DAVID JAMES MANUFACTURING, INC., a
Texas corporation, BRAND NAME APPAREL, INC., a Texas corporation, ART IMAGE,
INC., a California corporation, PLC LEATHER COMPANY, a Nevada corporation,
TANDYARTS, INC., a Nevada corporation, and COLLEGE FLAGS AND MANUFACTURING,
INC., a South Carolina corporation, (hereinafter collectively referred to as the
"Guarantors"), and FIRST INTERSTATE BANK OF TEXAS, N.A., THE DAIWA BANK, LTD.
and NBD BANK (collectively, the "Banks") and FIRST INTERSTATE BANK OF TEXAS, N.
A., as agent for the Banks ("Agent"); and
WHEREAS, the Company, certain of Guarantors and Agent entered into that
certain Revolving Credit and Term Loan Agreement dated September 29, 1993 (the
"Loan Agreement"); and
WHEREAS, the Company, certain of Guarantors, Banks and Agent entered into
that certain First Amendment to Revolving Credit and Term Loan Agreement dated
December 3, 1993; and
WHEREAS, the Company, the Guarantors, Banks and Agent entered into that
certain Second Amendment To Revolving Credit and Term Loan Agreement dated
September 26, 1994; and
WHEREAS, the Company, Guarantors, Banks and Agent entered into that certain
Third Amendment to Revolving Credit and Term Loan Agreement dated December 31,
1994; and
WHEREAS, the Company, Guarantors, Banks and Agent desire to amend the Loan
Agreement in certain respects; and
WHEREAS, capitalized terms used herein shall have the meaning assigned to
them in the Loan Agreement unless the context otherwise requires or provides.
NOW, THEREFORE, it is agreed by and among the Company, Guarantors, Banks
and Agent as follows:
1.
New Section 1.09A and Section 1.74A are added to the Loan Agreement which
shall read in their entirety as follows:
1.09A "Capital Expenditures" shall mean any expenditure by a Person
for an asset which will be used in a year or years subsequent to the year
in which the expenditure is made and which asset is properly classified in
the relevant financial statements of such Person as property, equipment,
improvements, fixed assets or a similar type of capitalized assets in
accordance with Generally Accepted Accounting Principles.
* * *
1.74A Short Term Credit Agreement shall mean that certain Revolving
Credit Agreement dated as of July 6, 1995 by and among Company, the
Guarantors, First Interstate Bank of Texas, N.A. and NBD Bank, as the same
may be amended, modified, supplemented or restated.
2.
Section 1.16 and Section 1.59 of the Loan Agreement are amended to read in
their entirety as follows:
1.16. "Consolidated Current Liabilities" shall mean without
duplication, as of any date, the sum of (a) current liabilities which would
be reflected on a Consolidated balance sheet of the Company and its
Subsidiaries prepared as of such date in accordance with GAAP, (b) all
liabilities and obligations of Company to Banks under the Loan Documents,
and (c) all liabilities and obligations of Company under the Short Term
Credit Agreement.
* * *
1.59. "Non-Cash Charges" shall mean the sum of depreciation and
amortization (including amortization of good will) plus the net increase in
deferred tax liability, if any, less the net decrease in deferred tax
liability, if any, plus contributions of common stock of Company by Company
to the Tandycrafts, Inc. Employee Stock Ownership Plan during such period,
all as reflected in the Consolidated financial statements of Company and
its Subsidiaries in accordance with GAAP in an amount not to exceed the
aggregate amount deducted by Company for such period for Federal income tax
purposes with respect to Company's contribution to the Tandycrafts, Inc.
Employee Stock Ownership Plan.
3.
Section 2.03 of the Loan Agreement is amended to read in its entirety as
follows:
2.03. Interest Rate. The unpaid principal of each Floating Prime
Advance shall bear interest from the date of advance until paid at a rate
per annum which shall from day to day be equal to the lesser of: (a) the
Floating Prime Rate in effect from day to day or (b) the Maximum Rate. The
unpaid principal of each Eurodollar Advance shall bear interest from the
date of advance until paid at a rate per annum which shall be equal to the
lesser of (a) the sum of the Adjusted Interbank Rate for the applicable
Interest Period, plus five-eighths percent (0.625%) or (b) the Maximum Rate
if as of the end of the most recent fiscal quarter the ratio of the sum of
(i) Consolidated Net Income and (ii) Non-Cash Charges for the preceding
four fiscal quarters to Senior Funded Debt as of the end of the most recent
fiscal quarter is equal to or greater than .40 to 1.0. The unpaid principal
of each Eurodollar Advance shall bear interest from the date of advance
until paid at a rate per annum which shall be equal to the lesser of (a)
the sum of the Adjusted Interbank Rate for the applicable Interest Period,
plus three-quarters percent (0.75%) or (b) the Maximum Rate if as of the
end of the most recent fiscal quarter the ratio of the sum of (i)
Consolidated Net Income and (ii) Non-Cash Charges for the preceding four
fiscal quarters to Senior Funded Debt as of the end of the most recent
fiscal quarter is less than .40 to 1.0 but equal to or greater than .30 to
1.0. The unpaid principal of each Eurodollar Advance shall bear interest
from the date of advance until paid at a rate per annum which shall be
equal to the lesser of (a) the sum of the Adjusted Interbank Rate for the
applicable Interest Period, plus seven-eighths percent (0.875%) or (b) the
Maximum Rate if as of the end of the most recent fiscal quarter the ratio
of the sum of (i) Consolidated Net Income and (ii) Non-Cash Charges for the
preceding four fiscal quarters to Senior Funded Debt as of the end of the
most recent fiscal quarter is less than .30 to 1.0 but equal to or greater
than .20 to 1.0. The unpaid principal of each Eurodollar Advance shall bear
interest at the lesser of (a) the Floating Prime Rate in effect from day to
day plus five percent (5%) or (b) the Maximum Rate if as of the end of the
most recent fiscal quarter the ratio of the sum of (i) Consolidated Net
Income and (ii) Non-Cash Charges for the preceding four fiscal quarters to
Senior Funded Debt as of the end of the most recent fiscal quarter is less
than .20 to 1.0. The unpaid principal balance of the Swing Line Note shall
bear interest at the lesser of (a) the Floating Prime Rate in effect from
day to day or (b) the Maximum Rate. All past due principal of, and to the
extent permitted by applicable law, interest on the Notes shall bear
interest at the Past Due Rate. If converted to Term Loans pursuant to
Section 3.01 hereof, the converted principal amount of the Notes shall
continue to bear interest as provided in this Section 2.03. Notwithstanding
the foregoing, the unpaid principal balance of the Notes shall bear
interest as provided in Section 4.05(c) hereof, upon the occurrence of the
circumstances described in such section.
4.
Section 9.07 of the Loan Agreement is amended to read in its entirety as
follows:
9.07. Limitations on Acquisitions. Acquire or commit or agree to
acquire the stock or assets of any Person prior to the termination of the
Short Term Credit Agreement.
Section 9.14 of the Loan Agreement is amended to read in its entirety as
follows:
9.14 Limitation on Additional Indebtedness. Incur or assume or permit
any subsidiary to incur or assume any Indebtedness for borrowed money,
except for (i) the Indebtedness evidenced by the Notes and the indebtedness
under the Short Term Credit Agreement, (ii) Consolidated indebtedness
(excluding the Indebtedness evidenced by the Notes and the indebtedness
under the Short Term Credit Agreement) not to exceed five million dollars
($5,000,000) in the aggregate at any one time, and (iii) trade indebtedness
incurred in the ordinary course of business.
6.
A new Section 9.18 is added to the Loan Agreement which shall read in its
entirety as follows:
9.18 Capital Expenditures. Permit the aggregate amount of Capital
Expenditures to exceed six million dollars ($6,000,000) during any fiscal
year beginning with the fiscal year ending June 30, 1996.
7.
A new Section 10.01(h) is added to the Loan Agreement which shall read in
its entirety as follows:
(h) The occurrence of an event of default under the terms of the Short Term
Credit Agreement.
8.
Company and Guarantors warrant and represent to Banks that no Event of
Default exists. By the execution hereof, each of the Guarantors ratify and
confirm the terms of the Guaranty Agreement dated August 17, 1994, agree that
the Guaranty Agreement shall remain in full force and effect and unconditionally
agree that the Guaranty Agreement is enforceable against each of them in
accordance with its terms.
9.
Except as amended by the First Amendment, the Second Amendment, the Third
Amendment and this Fourth Amendment, the Loan Agreement is ratified and
confirmed and shall remain in full force and effect.
10.
This Fourth Amendment shall be governed by and construed in accordance with
the laws of the State of Texas.
11.
Company agrees to pay all expenses incurred by Agent and Banks in
connection with the negotiation and preparation of this Fourth Amendment,
including reasonable attorney's fees.
12.
This Fourth Amendment may be executed in any number of multiple
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement.
13.
Banks, Company, and Guarantors agree to be bound by the current Arbitration
Program of Agent which is incorporated by reference herein and is acknowledged
as received by the parties pursuant to which any and all disputes shall be
resolved by mandatory binding arbitration upon the request of any party.
14.
This Fourth Amendment shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
15.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
Executed to be effective as of July 6, 1995.
TANDYCRAFTS, INC., a Delaware corporation
By: /s/ Jerry L. Roy
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Jerry L. Roy, President
COMPANY
CASUAL CONCEPTS, INC., a Texas
corporation
By: /s/ Michael J. Walsh
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Michael J. Walsh, Vice President
SAV-ON, INC., a Texas corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
NOCONA BELT COMPANY, a Texas corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
J-MAR ASSOCIATES, INC., a Texas
corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
DAVID JAMES MANUFACTURING, INC., a Texas
corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
BRAND NAME APPAREL, INC., a Texas
corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
THE DEVELOPMENT ASSOCIATION, INC., a Texas
corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
ART IMAGE, INC., a California corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
PLC LEATHER COMPANY, a Nevada
corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
TANDYARTS, INC., a Nevada corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
COLLEGE FLAGS AND MANUFACTURING, INC., a
South Carolina corporation
By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh, Vice President
LORD'S VINEYARD, INC., a Colorado
corporation
By: /s/ Michael J. Walsh
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Michael J. Walsh, Vice President
GUARANTORS
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ Steve Wood
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Steve Wood, Senior Vice President
By: /s/ Todd Robichaux
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Todd Robichaux, Vice President
THE DAIWA BANK, LTD.
By: /s/ James T. Wang
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James T. Wang, Vice President
By: /s/ Kirk L. Stites
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Kirk L. Stites, Vice President
NBD BANK, N.A.
By: /s/ James D. Heinz
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James D. Heinz, Vice President
BANKS