Exhibit 10.19
-------------
TENTH AMENDMENT TO REVOLVING
CREDIT AND TERM LOAN AGREEMENT
------------------------------
This Tenth Amendment To Revolving Credit And Term Loan Agreement ("Tenth
Amendment") is made by and among TANDYCRAFTS, INC., a Delaware corporation
("Company"), THE DEVELOPMENT ASSOCIATION, INC., a Texas corporation, SAV-ON,
INC., a Texas corporation, DAVID JAMES MANUFACTURING, INC., a Texas corporation,
PLC LEATHER COMPANY, a Nevada corporation, TANDYARTS, INC., a Nevada
corporation, and LICENSED LIFESTYLES, INC., a Nevada corporation (hereinafter
collectively referred to as the "Guarantors"), and WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION (formerly First Interstate Bank of Texas, N.A.), BANK ONE,
TEXAS, N.A. and THE FIRST NATIONAL BANK OF CHICAGO (formerly 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, certain of Banks and Agent
entered into that certain First Amendment to Revolving Credit and Term Loan
Agreement dated December 3, 1993 ("First Amendment"); and
WHEREAS, the Company, the Guarantors, certain of Banks and Agent entered
into that certain Second Amendment To Revolving Credit and Term Loan Agreement
dated September 26, 1994 ("Second Amendment"); and
WHEREAS, the Company, Guarantors, certain of Banks and Agent entered into
that certain Third Amendment to Revolving Credit and Term Loan Agreement dated
December 31, 1994 ("Third Amendment"); and
WHEREAS, the Company, Guarantors, certain of Banks and Agent entered into
that certain Fourth Amendment to Revolving Credit and Term Loan Agreement dated
July 6, 1995 ("Fourth Amendment"); and
WHEREAS, the Company, Guarantors, certain of Banks and Agent entered into
that certain Fifth Amendment to Revolving Credit and Term Loan Agreement dated
December 31, 1995 ("Fifth Amendment"); and
WHEREAS, the Company, Guarantors, certain of Banks and Agent entered into
that certain Sixth Amendment to Revolving Credit and Term Loan Agreement dated
October 31, 1996 ("Sixth Amendment"); and
WHEREAS, the Company, Guarantors, certain of Banks and Agent entered into
that certain Seventh Amendment to Revolving Credit and Term Loan Agreement dated
December 31, 1996 ("Seventh Amendment"); and
WHEREAS, the Company, Guarantors and Banks entered into that certain Eighth
Amendment to Revolving Credit and Term Loan Agreement dated March 31, 1997
("Eighth Amendment"); and
WHEREAS, the Company, Guarantors and banks entered into that certain Ninth
Amendment to Revolving Credit and Term Loan Agreement dated September 30, 1997
("Ninth Amendment"); and
WHEREAS, the Company, Guarantors, certain of 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,for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, it is agreed by and among the Company,
Guarantors, Banks and Agent as follows:
1.
Banks waive the violation by Company of Section 8.19 of the Loan Agreement
for the quarter ended December 31, 1997.
2.
Section 8.15 of the Loan Agreement is amended to read as follows:
8.15. Sale of Accounts Receivable. Sell or permit any Subsidiary to
sell any of its accounts receivable, with or without recourse except for
(1) the sale of accounts receivable of Venture Stores, Inc. in the
approximate amount of $129,000 at a sale price of approximately $52,000 and
(2) the sale of accounts receivable from Wal-Mart, Inc.; provided, however,
that the maximum face amount of sold accounts receivable of Wal-Mart, Inc.
which may be outstanding at any time is twelve million dollars
($12,000,000); or
3.
New section 8.20 is added to the Loan Agreement which shall read in its
entirety as follows:
8.20 Year 2000 Compliant. Borrower shall perform all acts reasonably
necessary to ensure that Borrower and any business in which Borrower holds
a substantial interest become Year 2000 Compliant in a timely manner. Such
acts shall include, without limitaiton, performing a comprehensive review
and assessment of all of Borrower's systems and adopting a detailed plan,
with itemized budget, for the remediation, monitoring and testing of such
systems. As used in this paragraph, "Year 2000 Compliant" shall mean, in
regard to any entity, that all software, hardware, firmware, equipment,
goods or systems utilized by or material to the business operations or
financial condition of such entity, will properly perform date sensitive
functions before, during and after the year 2000. Borrower shall,
immediately upon request, provide to Bank such certifications or other
evidence of Borrower's compliance with the terms of this Section 8.20 as
Bank may from time to time require.
4.
Section 9.10 of the Loan Agreement is amended to read in its entirety as
follows:
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 during the Revolving Credit Period except for the sale
of accounts receivable from Wal-Mart, Inc.; provided, however, that the
maximum face amount of sold accounts receivable of Wal-Mart, Inc. which may
be outstanding at any time is twelve million dollars ($12,000,000).
5.
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.
6.
Except as amended by the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the
Seventh Amendment, the Eighth Amendment, the Ninth Amendment and this Tenth
Amendment, the Loan Agreement is ratified and confirmed and shall remain in full
force and effect.
7.
This Tenth Amendment shall be governed by and construed in accordance with
the laws of the State of Texas.
8.
Company agrees to pay all expenses incurred by Agent and Banks in
connection with the negotiation and preparation of this Tenth Amendment,
including reasonable attorney's fees.
9.
This Tenth 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.
10.
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.
11.
This Tenth Amendment shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
12.
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, 1997.
TANDYCRAFTS, INC., a Delaware
corporation
By: /s/ James D. Allen
--------------------------------
James D. Allen, Executive
Vice President
COMPANY
SAV-ON, INC., a Texas corporation
By: /s/ Russell Price
--------------------------------
Russell Price, Secretary
DAVID JAMES MANUFACTURING,
INC., a Texas corporation
By: /s/ Russell Price
--------------------------------
THE DEVELOPMENT ASSOCIATION,
INC., a Texas corporation
By: /s/ Russell Price
--------------------------------
Russell Price, Secretary
PLC LEATHER COMPANY,
a Nevada corporation
By: /s/ Russell Price
--------------------------------
Russell Price, Secretary
TANDYARTS, INC., a Nevada
corporation
By: /s/ Russell Price
--------------------------------
Russell Price, Secretary
LICENSED LIFESTYLES, INC. a Nevada corporation
(successor by merger to College Flags and
Manufacturing, Inc., a South Carolina
corporation)
By: /s/ Russell Price
--------------------------------
Russell Price, Secretary
GUARANTORS
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
(formerly First Interstate Bank of Texas, N.A.)
By: /s/ Susan Sheffield
--------------------------------
Susan Sheffield, Vice President
BANK ONE, TEXAS, N.A.
By: /s/ Michael Wilson
--------------------------------
Michael Wilson, Senior
Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Jenny Gilpin
--------------------------------
Jenny Gilpin, Vice President
BANKS