EXHIBIT 10(a)
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February 24, 1998
InterTAN Canada Ltd.
InterTAN U.K. Limited
InterTAN, Inc.
c/o 201 Main Street, Suite 1805
Fort Worth, Texas
U.S.A. 76102
Attention: Mr. David Goldberg
and to: The Security Trustee and Lenders
Dear Sirs/Mesdames:
RE: RECTIFICATION AND AMENDMENT NO. 1
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Reference is hereby made to the Loan Agreement (the "Loan Agreement"),
dated as of December 22, 1997, among, inter alia, InterTAN Canada Ltd., as
Canadian Borrower, InterTAN U.K. Limited, as U.K. Borrower, InterTAN, Inc., as
the Parent, Bank of America Canada, as Agent and as a Canadian Lender, and the
other Lenders party thereto. Capitalized terms used herein and not otherwise
defined shall have the meanings specified in the Loan Agreement.
The Agent has been advised that, through inadvertence, Congress Financial
Corporation's U.K. affiliate was incorrectly stated to be "Burdale Acceptances
Limited", when in fact that entity had changed its name and should have appeared
in all Loan Documents as "Burdale Financial Limited". Certain additional
matters requiring rectification and/or amendment have been brought to the
Agent's attention, as hereinbelow described. The Agent is hereby requesting all
parties agreement, by signing back a copy of this agreement, to hereby rectify
and amend the Loan Documents, with effect from the respective dates of each of
the Loan Documents, as follows:
(a) each reference to "Burdale Acceptances Limited" in the Loan Documents,
including for greater certainty, the Loan Agreement, the Hypothec of
Moveable Property (General) and the Security Trust Deed, is deleted
and "Burdale Financial Limited" is substituted therefor such that each
reference to "Burdale Acceptances Limited" in the Loan Documents shall
be construed as being and as always having been "Burdale Financial
Limited";
(b) the definition of "U.K. Availability" in Section 1.1 of the Loan
Agreement is amended by adding the following phrase after subclause
(B) of clause (a)(ii):
"plus (C) one hundred percent (100%) of cash amounts held on deposit
at Bank of America International Limited secured in favour of the
Security Trustee;"
and by deleting reference to "(C)" in the fourth line and substituting
"(D)" therefor.
(c) the reference to "writing" in Section 2.2(c) of the Loan Agreement is
deleted and "written notice" is substituted therefor;
(d) the reference to "first day" in Section 2.3(g)(i) of the Loan
Agreement is deleted and "first Business Day" is substituted therefor;
(e) the reference to "30, 60, 90 or 180 days" in Section 2.9 of the Loan
Agreement is deleted and "1, 2, 3 or 6 months" is substituted
therefor;
(f) the reference to "mutandus" in Section 2.4(a) of the Loan Agreement is
deleted and "mutandis" is substituted therefor;
(g) the reference to "14.5" in Section 14.1 of the Loan Agreement is
deleted and "14.15" is substituted therefor;
(h) Section 3.3(a) of the Loan Agreement is amended by adding the phrase
", in U.S. Dollars;" after the word "Agent" in the 8th line thereof
and by deleting the word "day" and substituting "Business Day"
therefor;
(i) Section 3.3(b) of the Loan Agreement is amended by adding the phrase
",in BPS," after the word "Agent" in the 7th line thereof and by
deleting the word "day" and substituting "Business Day" therefor;
(j) the phrase "the second paragraph of" in the third and fourth lines of
Section 3.7 of the Loan Agreement is deleted;
(k) Section 6.10 of the Loan Agreement is deleted and the following is
substituted therefor:
"6.10 Collection of Accounts; Payments. (a) (i) Each Borrower,
jointly and severally, agrees to establish, within 60 days after the
Closing Date (or such later date as may from time to time be consented
to by the Agent, the "Deadline"), a system (the "Cash Dominion
System") of depository accounts (together with accounts opened from
time to time pursuant to clause (ii) hereof "Deposit Accounts") into
which each such Borrower shall promptly deposit or cause to be
deposited all cash proceeds, store receipts, collections of Accounts
and other moneys that it receives from whatever source but excepting
(x) advances of Loans, (y) petty cash in an amount not exceeding
$1,000 in the aggregate at any time at the RadioShack head office plus
(Pounds)1,000 in the aggregate at any time at the U.K. Borrower's head
office in the United Kingdom and (z) up to (Pounds)400 in the
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case of U.K. stores or Cdn.$400 in the case of Canadian stores in the
aggregate outstanding at any time at any store, held back from store
receipts to operate cash registers (collectively, "Cash Proceeds")
received by it or any other Person on its behalf. Each Borrower
represents that on or prior to the Closing Date it has provided to the
Agent a true and complete list of all depository accounts and all
concentration accounts maintained by it with any banks or financial
institutions as of the Closing Date into which Cash Proceeds are
deposited. Each Borrower further agrees (I) not less frequently than
daily (on each Business Day) in the case of the U.K. Borrower and
monthly until the occurrence of an Event or Event of Default and daily
(on each Business Day) following the occurrence and during the
continuance of an Event or Event of Default in the case of the
Canadian Borrower, to cause all cleared moneys in the Deposit Accounts
to be transferred to concentration accounts maintained by it (the
"Payment Accounts"), (II) to execute and deliver to the Agent with
respect to each such Payment Account maintained by it on or prior to
the Deadline, a blocked account agreement or lockbox agreement in form
satisfactory to the Agent (collectively, the "Collection Account
Agreements"), and (III) to use reasonable efforts, with the co-
operation of the Agent, to cause the banks ("Depository Banks") with
which the Payment Accounts are maintained to execute and deliver to
the Agent on or prior to the Deadline, a Collection Account Agreement.
In the event that, notwithstanding the efforts of the Borrowers
pursuant to the preceding sentence, a Depository Bank does not execute
a Collection Account Agreement with respect to the relevant Payment
Account on or prior to the Deadline, such Borrower shall cease to
deposit and/or transfer Cash Proceeds in such Payment Account unless
and until such Depository Bank executes a Collection Account
Agreement.
(ii) Each Borrower agrees that it shall not, without giving prior written
notice to the Agent, open or maintain any Deposit Account or similar
account after the Closing Date into which Cash Proceeds are deposited
except for those disclosed to the Agent as provided in clause (i)
above and provided that the Agent is and continues to be satisfied in
its discretion that all cleared funds in each such account can and
will be transferred to Payment Accounts subject to the Collection
Account Agreements on a daily (on each Business Day) basis immediately
in the case of the U.K. Borrower and following the occurrence and
during the continuance of an Event of Default in the case of the
Canadian Borrower.
(iii) Notwithstanding the establishment of the Cash Dominion System, until
the Agent or, as appropriate, Security Trustee, notifies either
Borrower to the contrary, each Borrower shall make collection of its
Accounts and other Collateral for the benefit of the Agent or, as
appropriate, Security Trustee, and whether or not an Event of Default
has occurred, any Cash Proceeds (including, without limitation, in
payment of any Account or in payment for any Inventory or otherwise)
that are not received and deposited directly into a Deposit Account,
when collected by any Borrower, shall be promptly deposited by such
Borrower in a Deposit Account, in precisely the form received, except
for its endorsement when required, and transferred to Payment Accounts
as hereinabove provided. All such accounts shall be deemed to be held
in trust by such Borrower for and as the Agent's or, as appropriate,
Security Trustee's property, and shall be held separately from such
Borrower's other funds.
(iv) Notwithstanding anything to the contrary herein, the terms of the
Collection Account Agreements shall provide (I) in the case of the
U.K. Borrower, that the Agent or Security Trustee has exclusive
control over the Payment Accounts of the U.K. Borrower and all funds
are to be wire transferred to the Agent or Security Trustee daily (on
each Business
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Day) and (II) in the case of the Canadian Borrower, (A) upon the
occurrence and during the continuance of any Event or Event of
Default, the Agent has exclusive control over the Payment Accounts of
the Canadian Borrower and all cleared funds in the Payment Accounts
are to be wire transferred to the Agent daily (on each Business Day)
and, (B) until the occurrence of any Event or Event of Default, the
Borrower shall be entitled to utilize funds in the Payment Accounts
for its working capital purposes subject to the terms and conditions
of this Agreement.
(v) The Agent or the Agent's designee or, in the case of the U.K.
Borrower, the Security Trustee may, at any time after the occurrence
of any Event of Default, publish notice of the Security Interest of
the Agent or, in the case of the U.K. Borrower, the Security Trustee
and/or Lenders, signify Accounts or otherwise notify obligors that the
Accounts have been hypothecated or assigned to the Agent and/or
Lenders or, in the case of the U.K. Borrower, the Security Trustee and
of the Security Interest therein, and may collect them directly and
charge the reasonable collection costs and expenses to the applicable
Borrower's loan account as a Canadian Revolving Loan or U.K. Revolving
Loan, as the case may be. At the Agent's or, in the case of the U.K.
Borrower, the Security Trustee's request, each Borrower shall execute
and deliver to the Agent or, in the case of the U.K. Borrower, the
Security Trustee such documents as the Agent or, in the case of the
U.K. Borrower, the Security Trustee shall require to grant the Agent
or, in the case of the U.K. Borrower, the Security Trustee access to
any post office box in which collections of Accounts are received.
(b) All Payments received by the Agent or, in the case of the U.K.
Borrower, the Security Trustee on account of Accounts or as Proceeds of other
Collateral will be the Agent's or, in the case of the U.K. Borrower, the
Security Trustee's (for the Agent and the other applicable Lenders) sole
property and will be credited promptly to the applicable Borrower's loan account
(conditional upon final collection) upon receipt."
By signing back this rectification agreement, the parties further agree as
follows:
1. The requirement in the definition of "Letter of Credit" in Section 1.1
of the Loan Agreement that no letter of credit have an expiry date
later than 365 days from the Issue Date thereof is hereby waived in
connection with Letter of Credit No. 7114SB 10114498, issued on behalf
of the Canadian Borrower in favour of Societe Generale Paris, in the
face amount of FF 6,803,448, having an expiration date of January 15,
2000 (the "French L/C") and, for all purposes of the Loan Agreement,
the French L/C shall be deemed to be a "Letter of Credit".
2. All reasonable expenses of the Agent incurred in connection with this
rectification agreement and any and all matters incidental thereto
including, without limitation, fees and out-of-pocket expenses of
Agent's legal counsel are for the account of the Canadian Borrower and
shall be payable upon demand.
3. This agreement shall be deemed to have been made in the Province of
Ontario and shall be governed by and interpreted in accordance with
the laws of such Province and the laws of Canada applicable therein,
except that no doctrine of choice of law shall be used to apply the
laws of any other jurisdiction.
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4. This agreement may be executed in counterparts, each of which shall be
an original but all of which shall together constitute one and the
same agreement, binding on the parties.
5. Each of the Lenders irrevocably constitutes and appoints each vice
president of the Agent and each partner of Meighen Demers, of Barlow
Lyde & Gilbert and of Mendelsohn, Rosentzveig & Shacter its true and
lawful attorney, with full power of substitution, to sign, execute,
deliver, register, do and perform all acts, things, filings and
registrations considered by him or her necessary or appropriate to
give effect to the rectification herein described and/or to continue,
preserve, register or perfect the Liens in favour of the Agent,
Security Trustee and/or Lenders created or intended to be created by
the Loan Documents, including by signing financing change statements,
filing documents under the RDPRM of Quebec and filing documents with
the Companies Branch in England.
6. Except to the extent rectified hereby, the Loan Agreement and each of
the other Loan Documents remains in full force and effect and is
hereby ratified and confirmed.
Please evidence your agreement with the terms of this agreement by signing
in the space below. This agreement shall become effective in accordance with
its terms upon its execution by the Lenders, the Borrowers and the Parent.
Sincerely,
BANK OF AMERICA CANADA, AS AGENT AND AS A LENDER
By:
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Name: Robert Kizell
Title: Vice-President
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AGREED AS OF THE DATE FIRST-ABOVE PROVIDED:
INTERTAN CANADA LTD. BANKBOSTON RETAIL FINANCE INC.
By: By:
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Name: Name:
Title: Title:
INTERTAN U.K. LIMITED CONGRESS FINANCIAL CORPORATION
By: By:
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Name: Name:
Title: Title:
INTERTAN, INC. BANKBOSTON, N.A.
By: By:
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Name: Name:
Title: Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
(LONDON, ENGLAND BRANCH), AS
SECURITY TRUSTEE AND A U.K. LENDER
By:
Name:
Title:
AGREED AT THIS DAY OF
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, 1998.
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BURDALE FINANCIAL LIMITED
By:
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Name:
Title:
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