SIXTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT ------------------------------ This Sixth Amendment to Revolving Credit and Term Loan Agreement ("Sixth 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 WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION (formerly First Interstate Bank of Texas, N.A.), THE SUMITOMO BANK, LTD., CHICAGO BRANCH and NBD BANK (collectively, the "Banks") and WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, 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 entered into that certain Fifth Amendment to Revolving Credit and Term Loan Agreement dated December 31, 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. 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 January 2, 1997. 2. 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. 3. Except as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and this Sixth Amendment, the Loan Agreement is ratified and confirmed and shall remain in full force and effect. 4. This Sixth Amendment shall be governed by and construed in accordance with the laws of the State of Texas. 5. Company agrees to pay all expenses incurred by Agent and Banks in connection with the negotiation and preparation of this Sixth Amendment, including reasonable attorney's fees. 6. This Sixth 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. 7. 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. 8. This Sixth Amendment shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 9. 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 October 31, 1996. TANDYCRAFTS, INC., a Delaware corporation By: --------------------------- Michael J. Walsh, President COMPANY CASUAL CONCEPTS, INC., a Texas corporation By: --------------------------- Russell Price, Secretary SAV-ON, INC., a Texas corporation By: --------------------------- Russell Price, Secretary NOCONA BELT COMPANY, a Texas corporation By: --------------------------- Russell Price, Secretary DAVID JAMES MANUFACTURING, INC., a Texas corporation By: --------------------------- Russell Price, Secretary BRAND NAME APPAREL, INC. a Texas corporation By: --------------------------- Russell Price, Secretary THE DEVELOPMENT ASSOCIATION, INC., a Texas corporation By: --------------------------- Russell Price, Secretary PLC LEATHER COMPANY, a Nevada corporation By: --------------------------- Russell Price, Secretary TANDYARTS, INC., a Nevada corporation By: --------------------------- Russell Price, Secretary COLLEGE FLAGS AND MANUFACTURING, INC., a South Carolina corporation, By: --------------------------- Russell Price, Secretary GUARANTORS WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION (formerly 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: --------------------------- By: --------------------------- Name: --------------------------- Title: --------------------------- NBD BANK By: --------------------------- Name: --------------------------- Title: --------------------------- BANKS EXHIBIT A --------- Commitment Percentage Banks Commitment (Rounded) - ------- ---------- ---------- Wells Fargo Bank (Texas), National Association $25,000,000 50% The Sumitomo Bank, Ltd., $12,500,000 25% Chicago Branch NBD Bank, N.A. $12,500,000 25% ----------- ---- Total Commitment $50,000,000 100% =========== ====