EXHIBIT 10(f)
INTERTAN CANADA LTD.
INTERTAN, INC.
FIFTH AMENDMENT TO LOAN AGREEMENT
The Fifth Amendment to Loan Agreement (this "Amendment") is dated as
of October 1, 1999 and entered into by and among, inter alia, InterTAN Canada
Ltd., as Canadian Borrower, InterTAN, Inc., as the Parent, the financial
institutions listed on the signature pages hereof (the "Lenders"), and Bank of
America Canada, a Canadian chartered bank, as agent for the Lenders (the
"Agent"), and is made with reference to that certain Loan Agreement dated as of
December 22, 1997 (as amended and in effect the "Loan Agreement"), by and among
the Borrower, the Lenders and the Agent, as amended by the Rectification and
Amendment No. 1 dated as of February 24, 1998, the Second Amendment to Loan
Agreement dated as of January, 1999, the Third Amendment to Loan Agreement dated
as of April 12, 1999 and the Fourth Amendment to Loan Agreement dated as of July
31, 1999. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Loan Agreement.
Section 1 AMENDMENTS
1.1 The first preamble to the Loan Agreement is amended by deleting
the reference to "U.S.$50,000,000 (or the Equivalent Amount thereof in Cdn.$)"
and substituting "Cdn. $67,000,000" therefor.
1.2 Section 1.1 of the Loan Agreement is amended as follows:
(a) The definition of "BA Rate Margin" is deleted and the
--------------
following is substituted therefor:
" "BA Rate Margin" means one and one half percent (1 1/2%)
--------------
per annum.".
(b) The definition of "Base Rate Margin" is deleted and the
----------------
following is substituted therefor:
" "Base Rate Margin" means zero percent (0%) per annum.".
----------------
(c) The definition of "BAUK" is deleted and the following is
----
substituted therefor:
" "BAUK" means Bank of America National Association and its
----
successors and assigns.".
(d) The definition of "Canadian Availability" is amended by
---------------------
deleting the phrase "(the foregoing amount calculated by
deducting (b) from (a)
being hereinafter referred to as the "Canadian Borrowing
------------------
Base"), less (c)" and substituting the following:
----
"plus (c) up to sixty percent (60%) of the appraised (on a
----
basis and with appraisers's satisfactory to the Agent and
Lenders) "as is" market value of Real Estate of the Canadian
Borrower, provided, however, that this amount will only be
-------- -------
available to the extent that there are, and in a maximum
amount not exceeding, outstanding and unreimbursed Permitted
Parent Loans and further, provided, that the addition of
------- --------
availability against the Real Estate can never result in the
Maximum Revolving Credit Line being exceeded (the foregoing
amount calculated by deducting (b) from (a) and then adding
(c) being hereinafter referred to as the "Canadian Borrowing
------------------
Base"), less (d)".
---- ----
(e) The definition of "Dilution Reserve" is amended by deleting
----------------
the phrase "five percent (5%) of the Net Amount of Eligible
Canadian Accounts or the Net Amount of Eligible U.K.
Accounts, as applicable" and substituting "zero percent
(0%)" therefor.
(f) The definition of "LIBOR Rate Margin" is deleted and the
-----------------
following is substituted therefor:
" "LIBOR Rate Margin" means one and one half percent
-----------------
(1 1/2%) per annum.".
(g) The definition of "Material Agreements" is amended to delete
-------------------
everything after the semicolon in the sixth line.
(h) The definition of "Maximum Canadian Revolving Credit Line"
--------------------------------------
is deleted and the following substituted therefor:
""Maximum Canadian Revolving Credit Line" means
--------------------------------------
Cdn.$67,000,000.".
(i) The definition of "Prime Rate Margin" is deleted and the
-----------------
following is substituted therefor:
" "Prime Rate Margin" means zero percent (0%) per annum.".
-----------------
(j) The definition of "Real Estate" is amended to delete
-----------
everything after "279 Bayview Drive, Barrie, Ontario, L4M
4W5".
(k) The definition of "Total Commitments" is deleted and the
-----------------
following substituted therefor:
-3-
" "Total Commitments" means the aggregate of the Lenders'
-----------------
Commitments from time to time and which shall be, initially,
Cdn.$67,000,000.".
(l) the definition of "Tangible Net Worth" is amended by
------------------
deleting paragraph (b) thereof and substituting therefor the
following:
"(b) an amount equal to the lesser of Cdn.$30,000,000 and
the amount of outstanding and unreimbursed Permitted Parent
Loans,",
by deleting the references in paragraph (c) to "the Closing
Date" and substituting therefor "July 1, 1999", and by
adding the following sentence at the end thereof:
"Notwithstanding the foregoing, the foregoing amount may
in the sole discretion of the Lenders be adjusted for non-
cash adjustments after September 30, 1999.".
(m) The following definition is added (in correct alphabetical
placement):
" "Permitted Parent Loans" means demand loans and/or
----------------------
Distributions made by the Canadian Borrower to the Parent on
or after September 30, 1999 which may be used by the Parent
for such purposes as it shall see fit (including stock buy
backs and/or dividends) provided that:
-------- ----
(a) no such loan or Distribution shall be made or permitted
to be outstanding and unrepaid or unreimbursed if an
Event has occurred and is continuing or if an Event
could reasonably be expected to occur in consequence
thereof; and
(b) all loans (if any) shall be on a demand basis and
evidenced by promissory notes (in form and substance
satisfactory to the Agent) duly endorsed in favour of
and delivered to the Agent.".
1.3 Section 2.1(a) of the Loan Agreement is amended by deleting the
reference to "$50,000,000" and substituting "Cdn.$67,000,000" therefor.
1.4 Section 2.1(b) of the Loan Agreement is, for greater certainty,
amended by deleting the reference to "$25,000,000" and substituting "$nil"
therefor.
-4-
1.5 Section 2.3 of the Loan Agreement is amended by deleting the
reference to "$25,000,000" and substituting "Cdn.$20,000,000" therefore and by
deleting the reference to "$15,000,000" and substituting "$nil" therefor.
1.6 Section 2.4(b) of the Loan Agreement is amended, for greater
certainty, by deleting the references to "$7,500,000" and "$750,000" and
substituting "$nil" therefor.
1.7 Section 3.6 of the Loan Agreement is amended by deleting the
reference to "$10,000" and substituting "U.S. $7,500" therefor.
1.8 Section 4.9 of the Loan Agreement is amended by deleting
everything after the phrase "in respect of any payments to it" in the second to
last line.
1.9 Section 9.8 of the Loan Agreement is amended to add the following
at the end of the first full paragraph:
"and (C) the Borrower may make and shall be permitted to have
outstanding, and the Parent shall be entitled to make repayments
or reimbursements of, the Permitted Parent Loans",
and the reference to "clauses (A) or (B)" is deleted and "clauses (A), (B) or
(C)" is substituted therefor.
1.10 Section 9.22 is deleted and the following is substituted
therefor:
"9.22 Minimum Availability. The sum of (a) Canadian
--------------------
Availability plus, (b) between January 1 and April 30, up to
----
Cdn.$10,000,000 to the extent of cash of the Borrower on hand,
shall be not less than Cdn.$25,000,000 at any time when any loans
are outstanding or there are any unreimbursed/unrepaid
Distributions to the Parent which in either case are Permitted
Parent Loans.".
1.11 Section 9.23 is amended by deleting the reference to
"U.S.$96,000,000" and substituting "Cdn.$116,000,000" therefor.
1.12 Section 14.15 of the Loan Agreement is deleted and "Deliberately
Left Blank" is substituted therefor.
1.13 Section 15.3 of the Loan Agreement is amended by deleting the
reference to "25,000,000" and substituting "Cdn.$10,000,000" therefor.
Section 2. CONDITIONS TO EFFECTIVENESS
-5-
This Amendment shall become effective as of October 1, 1999 (the
"Fifth Amendment Effective Date") but only upon each of the Borrower and the
- -------------------------------
Parent delivering to the Agent (for the Lenders) two originally executed copies
of each of the following:
(a) this Agreement;
(b) a certified resolution of each of the Borrower's and the Parent's
directors authorizing its entering into and performance of this
Agreement;
(c) certified copies of the articles and by-laws of the Borrower and
Parent, as currently in effect; and
(d) a certificate of the Borrower as to the truth and accuracy of all
representations and warranties in Section 3 hereof.
Section 3. BORROWERS' AND PARENT'S REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment and to
amend the Loan Agreement in the manner provided herein, each of the Borrower and
Parent represents and warrants to the Agent and each Lender that the following
statements are true, correct and complete:
A. Authorization, Validity, and Enforceability of this Amendment.
The Borrower or the Parent, as applicable, has the corporate power and authority
to execute and deliver this Amendment and to perform the Loan Agreement as
amended by this Amendment (the "Amended Agreement"). The Borrower or the
-------------------
Parent, as applicable, has taken all necessary corporate action (including,
without limitation, obtaining approval of its stockholders if necessary) to
authorize its execution and delivery of this Amendment and the performance of
the Amended Agreement. This Amendment has been duly executed and delivered by
the Borrower or the Parent, as applicable, and this Amendment and the Amended
Agreement constitute the legal, valid and binding obligations of the Borrower or
the Parent, as applicable, enforceable against it in accordance with their
respective terms without defence, setoff or counterclaim. The Borrower's or the
Parent's, as applicable, execution and delivery of this Amendment and the
performance by the Borrower or the Parent, as applicable, of the Amended
Agreement do not and will not conflict with, or constitute a violation or breach
of, or constitute a default under, or result in the creation or imposition of
any Lien upon the property of the Borrower or the Parent, as applicable, or any
of its Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which the Borrower or the Parent,
as applicable, is a party or which is binding on it, (b) any Requirement of Law
applicable to the Borrower or the Parent, as applicable, or any of its
Subsidiaries, or (c) the certificate or articles of incorporation or
amalgamation or bylaws of the Borrower or the Parent, as applicable, or any of
its Subsidiaries.
-6-
B. Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Borrower or the Parent, as applicable, or any of its Subsidiaries of this
Amendment or the Amended Agreement except for such as have been obtained or made
and filings required in order to perfect the Agent's security interests.
C. Incorporation of Representations and Warranties From Loan
Agreement. The representations and warranties contained in Section 8 of the
Loan Agreement except to the extent applicable to the U.K. Borrower or the U.K.
Collateral (and, in the case of Section 8.10, except as herein provided and
consented to) are and will be true, correct and complete in all material
respects on and as of the Fifth Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date or incorporate by
reference information disclosed or contained in the Exhibits to the Loan
Agreement, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
D. Absence of Default. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event or an Event of Default.
Section 4. MISCELLANEOUS
A. Reference to and Effect on the Loan Agreement and the Other Loan
Documents.
(1) On and after the Fifth Amendment Effective Date, each
reference in the Loan Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Loan
Agreement, and each reference in the other Loan Documents to the "Loan
Agreement", "thereunder", "thereof" or words of like import referring
to the Loan Agreement shall mean and be a reference to the Amended
Agreement.
(2) Except as specifically amended by this Amendment, the Loan
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(3) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of the Agent or any Lender under, the Loan Agreement or any of the
other Loan Documents.
-7-
B. Fees and Expenses. The Borrower agrees to pay to the Agent and
Lender an amendment fee in the amount of U.S.$10,000 for entering into this
Amendment. The Borrower further agrees to pay and indemnify and save harmless
BACAN for and in respect of all fees paid or payable in connection with
assignments by Congress Financial Corporation and/or BankBoston Retail Finance
Inc. to BACAN of its and/or their Participations in the Canadian Revolving
Credit Facility, it being acknowledged by the Borrower that Congress Financial
Corporation and BankBoston Retail Finance Inc. will, as a condition of assigning
their interests, charge a fee equivalent in amount to the fee provided for in
Section 12 of the Loan Agreement upon a termination and repayment by the
Borrower of the Canadian Revolving Credit Facility plus U.S.$6,667 (in the
----
aggregate for both of them) relating to the prior termination of the U.K.
Revolving Credit Facility. The Agent is authorized and directed to collect the
foregoing fees by debiting the Borrower's account(s). The Borrower acknowledges
that all costs, fees and expenses as described in Section 16.9 of the Loan
------------
Agreement incurred by the Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrower.
C. Captions. The captions contained in this Amendment are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge or restrict any provision.
D. Governing Law. THIS AMENDMENT SHALL BE INTERPRETED AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF
THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
E. Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts, and by the Agent, each Lender, the Parent and the
Borrower in separate counterparts, each of which shall be an original, but all
of which shall together constitute one and the same amendment; signature pages
may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Amendment (other than the provisions of Section 1 hereof, the
effectiveness of which is governed by Section 2 hereof) shall become effective
upon the execution of a counterpart hereof by the Borrower, the Parent, the
Agent and the Lenders and receipt by the Borrower and the Agent of written or
telephonic notification of such execution and authorization of delivery thereof.
-8-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
INTERTAN CANADA LTD.
By: /s/ James G. Gingerich
Name: James G. Gingerich
Title: Vice President
INTERTAN, INC.
By: /s/ James G. Gingerich
Name: James G. Gingerich
Title: Executive Vice President & CFO
BANK OF AMERICA CANADA,
as Agent and as the Lender
By: /s/ Robert Kizell
Name: Robert Kizell
Title: Vice-President