EXHIBIT 10.13
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FIFTH AMENDMENT TO REVOLVING
CREDIT AND TERM LOAN AGREEMENT
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This Fifth Amendment to Revolving Credit and Term Loan Agreement ("Fifth
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, 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 SUMITOMO BANK, LTD., CHICAGO BRANCH 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 entered into that certain
Fourth Amendment to Revolving Credit and Term Loan Agreement dated July 6, 1995;
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.
A new Section 1.00 is added to the Loan Agreement which shall read in its
entirety as follows:
1.00 Accounts Payable Turndays shall mean 365 divided by the quotient
of the aggregate amount of the cost of goods of Company and its
Subsidiaries during the preceding twelve (12) month period divided by the
aggregate amount of accounts payable of Company and its Subsidiaries.
2.
Section 1.59 and Section 1.73 of the Loan Agreement are amended to read in
their entirety as follows:
1.59. "Non-Cash Charges" shall mean the sum of depreciation and
amortization (including amortization of good will) and those charges
identified as non-cash charges in the quarter ended December 31, 1995
relating to the restructuring program of Company 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.
* * *
1.73 "Termination Date" shall mean October 1, 1997.
3.
The first paragraph of Section 2.01(a) of the Loan Agreement is
amended to read in its entirety as follows:
2.01 Revolving Credit Commitment
(a) Revolving Loan Commitments. Subject to the terms and conditions
of this Loan Agreement, each Bank severally agrees to extend to Company,
from the date hereof through the Termination Date (the "Revolving Credit
Period"), a revolving line of credit which shall not exceed at any one time
outstanding the amount set forth opposite its name on Exhibit "A" (for each
Bank, such amount is hereinafter referred to as its "Commitment"). No Bank
shall be obligated to make any Advance hereunder if, immediately after
giving effect thereto, the aggregate amount of all indebtedness and
obligation of Company to such Bank hereunder exceeds such Bank's
Commitment. If at any time the aggregate amount of all indebtedness and
obligations of Company to any Bank hereunder exceeds such Bank's
Commitment, Company shall promptly pay to Agent for application to the
unpaid principal balance of such Bank's Note in an amount such that the
aggregate amount of all indebtedness and obligations of Company to such
Bank (after giving effect to such payment and reduction in the unpaid
principal balance of such Bank's Note) shall not exceed such Bank's
Commitment.
4.
The Total Commitment shall be reduced to fifty million dollars
($50,000,000) and Exhibit A of the Loan Agreement shall be amended to read in
the form attached hereto effective as of October 31, 1996.
5.
Article III of the Loan Agreement is hereby deleted in its entirety.
6.
A new Section 8.19 is added to the Loan Agreement which shall read in its
entirety as follows:
8.19 Pledge of Stock. Company agrees to promptly pledge to Agent for
the benefit of Banks all of the capital stock of its Subsidiaries in the
event of the occurrence of any of the following on or after March 31, 1996:
(1) the ratio of the sum of Consolidated Net Income, Non- ash Charges and
Approved Additional Income for the preceding four quarters to Senior Funded
Debt as of the end of the most recent fiscal quarter is at any time less
than .275 to 1.0, (2) Company's after tax loss for the fiscal year ended
June 30, 1996 is greater than eleven million two hundred thousand dollars
($11,200,000), (3) Company's Account Payable Turndays is greater than
forty-five (45) days, or (4) Company fails to comply with Section 9.17 of
this Loan Agreement at any time on or after June 30, 1996.
7.
Section 9.04, Section 9.10 and Section 9.18 of the Loan Agreement is
amended to read in its entirety as follows:
9.04. EBITDA to Interest Expense. Permit the ratio of the sum of
EBITDA for the four preceding fiscal quarters to interest expense incurred
during the four preceding fiscal quarters to be less than 3.0 to 1.0.
9.10. Disposition of Assets. Sell or otherwise dispose of more
than four million dollars ($4,000,000) in assets other than in the ordinary
course of business except for the fiscal year ended June 30, 1996 during
which Company shall not sell or otherwise dispose of more than thirty
million dollars ($30,000,000) in assets other than in the ordinary course
of business.
* * *
9.18 Capital Expenditures. Permit the aggregate amount of Capital
Expenditures to exceed four million five hundred thousand dollars
($4,500,000) during the fiscal year ending June 30, 1996 or to exceed six
million dollars ($6,000,000) during any other fiscal year.
8.
Section 12.12 of the Loan Agreement is amended to read in its entirety as
follows:
12.12. Amendments, Waivers, etc. Agent may enter into any
amendment or modification of, or may waive compliance with the terms of,
any of the Loan Documents with the written direction of the Majority Banks;
provided that the consent of all Banks shall be required before Agent may
take or omit to take any action under any of the Loan Documents directly
affecting (a) the extension of the maturity of or the postponement of the
payment of any portion of the principal of or interest on a Revolving
Credit Loan or any fees relating thereto, (b) a reduction of or increase in
the principal amount of or rate of interest payable on Revolving Credit
Loans or any fees related thereto, or (c) the release of Company. Nor
shall any of the following occur without the consent of all Banks: (a) any
amendment to the definition of Majority Banks, (b) any amendment to this
Section 12.12, or (c) any waiver of compliance with Section 8.19 of this
Loan Agreement. The Commitment of a Bank shall not be increased without
the consent of such Bank. If any Bank is unwilling to consent to any
amendment or modification of, or waiver of compliance with, the Loan
Agreement (where the consent of such Bank is required), the consenting
Majority Banks shall have the right, but not the obligation, to repurchase
such Bank's Percentage of the Obligation at such time for a purchase price
equal to Bank's Percentage of any and all unpaid Advances made by Agent to
the Company under the Loan Agreement, any and all unpaid interest thereon
and unpaid accrued fees or other amounts owing to such Bank.
9.
Company and Guarantors warrant and represent to Banks that no Event of
Default exists. By their 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.
10.
Except as amended by the First Amendment, the Second Amendment, the Third
Amendment the Fourth Amendment and this Fifth Amendment, the Loan Agreement is
ratified and confirmed and shall remain in full force and effect.
11.
This Fifth Amendment shall be governed by and construed in accordance with
the laws of the State of Texas.
12.
Company agrees to pay all expenses incurred by Agent and Banks in
connection with the negotiation and preparation of this Fifth Amendment,
including reasonable attorney's fees.
13.
This Fifth 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.
14.
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.
15.
This Fifth Amendment shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
16.
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 December 31, 1995.
TANDYCRAFTS, INC., a Delaware
corporation
By:
--------------------------------
Jerry L. Roy, President
COMPANY
CASUAL CONCEPTS, INC., a Texas
corporation
By:
--------------------------------
Michael J. Walsh, Vice President
SAV-ON, INC., a Texas corporation
By:
--------------------------------
Michael J. Walsh, Vice President
NOCONA BELT COMPANY, a Texas
corporation
By:
--------------------------------
Michael J. Walsh, Vice President
DAVID JAMES MANUFACTURING,
INC., a Texas corporation
By:
--------------------------------
Michael J. Walsh, Vice President
BRAND NAME APPAREL, INC.,
a Texas corporation
By:
--------------------------------
Michael J. Walsh, Vice President
THE DEVELOPMENT ASSOCIATION,
INC., a Texas corporation
By:
--------------------------------
Michael J. Walsh, Vice President
PLC LEATHER COMPANY,
a Nevada corporation
By:
--------------------------------
Michael J. Walsh, Vice President
TANDYARTS, INC., a Nevada
corporation
By:
--------------------------------
Michael J. Walsh, Vice President
COLLEGE FLAGS AND
MANUFACTURING, INC.,
a South Carolina corporation,
By:
--------------------------------
Michael J. Walsh, Vice President
GUARANTORS
FIRST INTERSTATE BANK OF
TEXAS, N.A.
By:
---------------------------------
Steve Wood, Senior Vice President
By:
---------------------------------
John Peloubet, Vice President
THE SUMITOMO BANK, LTD.,
CHICAGO BRANCH
By:
---------------------------------
Name:
--------------------------------
Title:
-------------------------------
NBD BANK
By:
---------------------------------
Name:
--------------------------------
Title:
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BANKS
EXHIBIT A
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Commitment
Percentage
Banks Commitment (Rounded)
------ ---------- ----------
First Interstate Bank
of Texas, N.A. $25,000,000 50%
The Sumitomo Bank, Ltd., $12,500,000 25%
Chicago Branch
NBD Bank, N.A. $12,500,000 25%
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Total Commitment $50,000,000 100%
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