EXHIBIT 10.21 TWELFTH AMENDMENT TO REVOLVING ------------------------------ CREDIT AND TERM LOAN AGREEMENT ------------------------------ This Twelfth Amendment To Revolving Credit And Term Loan Agreement ("Twelfth 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 and Banks entered into that certain Tenth Amendment to Revolving Credit and Term Loan Agreement dated December 31, 1997 ("Tenth Amendment"); and WHEREAS, the Company, Guarantors and Banks entered into that one certain Eleventh Amendment to Revolving Credit and Term Loan Agreement dated August 10, 1998 ("Eleventh 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. Section 1.77 of the Loan Agreement is amended to read as follows: 1.77. "Termination Date" shall mean November 30, 1999. ---------------- 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, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, the Ninth Amendment, the Tenth Amendment, the Eleventh Amendment and this Twelfth Amendment, the Loan Agreement is ratified and confirmed and shall remain in full force and effect. 4. This Twelfth Amendment shall be governed by and construed in accordance with the laws of the State of Texas. 5. At the time of execution of this Twelfth Amendment, Company agrees to pay Agent for the pro-rata benefit of Banks an amendment fee in the amount of six thousand dollars ($6,000). Company agrees to pay all expenses incurred by Agent and Banks in connection with the negotiation and preparation of this Twelfth Amendment, including reasonable attorney's fees. 6. This Twelfth 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 Twelfth 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 November 9, 1998. 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 -------------------------------- Russell Price, Secretary 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