CONSENT AND AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
THIS CONSENT AND AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this
"Amendment") is dated as of June 17, 1998 and is entered into by and among
BankAmerica Business Credit, Inc. (the "Lender"), The Great Train Store
Partners, L.P. (the "Borrower"), and The Great Train Store Company, GTS Partner,
Inc. and GTS Limited Partner, Inc. as members of the GTS Consolidated Group. All
capitalized terms used herein but not otherwise defined shall have the meanings
ascribed to them in the Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS, the Borrower, the members of the GTS Consolidated Group and
the Lender have entered into that certain Amended and Restated Loan and Security
Agreement dated as of January 27, 1998, as amended and supplemented (the
"Agreement");
WHEREAS, the Borrower and the members of the GTS Consolidated Group
desire to enter into a certain Debenture Purchase Agreement dated as of June 17,
1998 (the "Debenture Purchase Agreement") with Sirrom Capital Corporation d/b/a
Tandem Capital (the "Creditor") and to execute and deliver certain documents
related thereto; and
WHEREAS, the Borrower and the members of the GTS Consolidated Group
desire to have the Lender consent to their entering into and performing the
Debenture Purchase Agreement and certain documents related thereto and also to
amend the Agreement in certain respects, and the Lender is willing to do so,
subject to the terms and conditions stated herein;
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Borrower, the members of the GTS Consolidated Group and
the Lender hereby agree as follows:
Section 1. Consent. The Lender hereby consents to the Borrower and the
members of the GTS Consolidated Group entering into and performing the Debenture
Purchase Agreement and certain related documents with the Creditor in the forms
previously delivered to the Lender, provided, however, that the parties hereto
and the Creditor shall have entered into a Subordination Agreement satisfactory
in form and substance to the Lender. This consent is only applicable and shall
only be effective for the specific instance and for the specific purpose for
which given. Such consent is expressly limited to the facts and circumstances
referred to herein and shall not operate (a) as a waiver of or consent to
non-compliance with any other section of the Agreement or any other Loan
Document, (b) as a waiver of or a restriction on or prejudice with respect to,
any right, power or remedy of the Lender under the Agreement or any other Loan
Document, or (c) as a waiver of or consent to any Event of Default or Event
under the Agreement or any other Loan Document.
Section 2. Amendment to the Agreement. The Lender, the Borrower and the
members of the GTS Consolidated Group agree that the Agreement shall be amended
as follows:
(a) The definition of "Distribution" contained in Section 1 of
the Agreement is hereby amended and restated to read in its entirety as
follows:
"`Distribution' means, in respect of any
corporation: (a) the payment or making of any dividend or
other distribution of Property in respect of capital stock of
such corporation or warrants to buy capital stock of such
corporation, other than distributions in capital stock or
warrants of the same class; or (b) the redemption or other
acquisition of any capital stock of such corporation or any
warrants to buy capital stock of such corporation."
(b) The definition of "Loan Documents" contained in Section 1
of the Agreement is hereby amended and restated to read in its entirety
as follows:
"`Loan Documents' means this Agreement, the
Patent and Trademark Assignments, the Parent Guaranty, the
Affiliate Guaranties, the Subordination Agreement dated as of
June 17, 1998 with Sirrom Capital Corporation d/b/a Tandem
Corporation, and all other agreements, instruments, and
documents heretofore, now or hereafter evidencing, securing,
guaranteeing or otherwise relating to the Obligations, the
Collateral, the Security Interest, or any other aspect of the
transactions contemplated by this Agreement."
(c) The definition of "Permitted Debt" contained in Section 1
of the Agreement is hereby amended and restated to read in its entirety
as follows:
"`Permitted Debt' means (a) the New Store
Equipment Financing consented to by Lender in accordance with
Section 10.16, (b) the Debt described on Schedule 10.11, and
(c) the Debt arising under that certain Debenture Purchase
Agreement dated as of June 17, 1998 with Sirrom Capital
Corporation d/b/a Tandem Capital, provided that said Debt
shall be subject to the terms of a Subordination Agreement
dated as of June 17, 1998 among the Borrower, the members of
the GTS Consolidated Group, the Lender and Sirrom Capital
Corporation d/b/a Tandem Capital."
(d) The definition of "Permitted Liens" contained in Section 1
of the Agreement is hereby amended by the addition thereto of a new
clause (j), which new clause (j) shall immediately follow clause (i) in
said definition and which new clause (j) shall read in its entirety as
follows:
"and (j) Liens in favor of Sirrom Capital Corporation
d/b/a Tandem Capital arising under on in connection with that
certain Debenture Purchase Agreement dated as of June 17,
1998, provided that said Liens shall be subject to the terms
of a Subordination Agreement dated as of June 17, 1998 among
the Borrower, the members of the GTS Consolidated Group, the
Lender and Sirrom Capital Corporation d/b/a Tandem Capital."
(e) Section 8.2 of the Agreement is hereby amended by the
addition thereto of a new clause (k), which new clause (k) shall
immediately follow clause (j) of Section 8.2 and which new clause (k)
shall read in its entirety as follows:
"(k) Promptly after their preparation,
copies of any and all materials which the Borrower or any
member of the GTS Consolidated Group makes available to Sirrom
Capital Corporation d/b/a Tandem Capital under that certain
Debenture Purchase Agreement dated as of June 17, 1998."
(f) Section 12.1(d) of the Agreement is hereby amended and
restated to read in its entirety as follows:
"(d) (i) default shall occur with respect to
the payment of any principal or interest on any indebtedness
for borrowed money (other than the Obligations) of the
Borrower or any member of the GTS Consolidated Group beyond
any period of grace provided with respect thereto; or (ii)
default shall occur under that certain Debenture Purchase
Agreement dated as of June 17, 1998 with Sirrom Capital
Corporation d/b/a Tandem Corporation, and such default shall
continue for more than the period of grace, if any, therein
specified, if the effect thereof (with or without the giving
of notice or further lapse of time or both) is to accelerate,
or to permit the holders of any such indebtedness to
accelerate, the maturity of any such indebtedness; or (iii)
any indebtedness for borrowed money (other than the
Obligations) of the Borrower or any member of the GTS
Consolidated Group shall be declared due and payable or be
required to be prepaid (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof;"
(g) Exhibit B to the Agreement is hereby amended and restated
to read in its entirety as provided in Exhibit B attached to this
Amendment.
Section 3. Consents and Reaffirmations. The members of the GTS
Consolidated Group hereby consent to the terms and conditions of this Amendment
and reaffirm their obligations under the Parent Guaranty and the Affiliate
Guaranties dated as of January 27, 1998 made by such members in favor of the
Lender, and acknowledge and agree that the Parent Guaranty and the Affiliate
Guaranties remain in full force and effect.
Section 4. Conditions. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:
(a) Amendment. Fully executed copies of this Amendment signed
by the Borrower and the members of the GTS Consolidated Group shall be
delivered to the Lender.
(b) Subordination Agreement. Fully executed copies of that
certain Subordination Agreement dated as of June 17, 1998 among the
parties hereto and the Creditor signed by all parties thereto shall be
delivered to the Lender.
(c) Debenture Purchase Agreement. Copies of the fully executed
Debenture Purchase Agreement and all documents relating thereto shall
be delivered to the Lender.
(d) Other Documents. The Borrower and the members of the GTS
Consolidated Group shall have executed and delivered to the Lender such
other documents and instruments as the Lender may require.
Section 5. Agreement. The Borrower and the members of the GTS
Consolidated Group agree to deliver to the Lender, within thirty (30) days of
the date hereof, a certificate executed by the Secretary or Assistant Secretary
of the Borrower and each member of the GTS Consolidated Group certifying that
each such Person's Board of Directors has adopted resolutions authorizing or
ratifying the execution, delivery and performance by such Person of this
Amendment, and attaching copies of all such resolutions.
Section 6. Miscellaneous.
(a) Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other
document or documents relating thereto, including, without limitation,
any Loan Document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by the Lender or any closing shall
affect the representations and warranties or the right of the Lender to
rely thereon.
(b) Reference to Agreement. The Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof,
or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference therein to the Agreement shall mean a
reference to the Agreement as amended hereby.
(c) Agreement Remains in Effect. The Agreement and the Loan
Documents remain in full force and effect, and each of the Borrower and
the members of the GTS Consolidated Group ratifies and confirms its
agreements and covenants contained therein. The Borrower hereby
confirms that, after giving effect to this Amendment, no Event of
Default or Event exists as of such date.
(d) Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Amendment and the effect
thereof shall be confined to the provision so held to be invalid or
unenforceable.
(e) APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE
AND TO BE PERFORMABLE IN THE STATE OF MISSOURI AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MISSOURI.
(f) Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrower and the
members of the GTS Consolidated Group may not assign or transfer any of
their respective rights or obligations hereunder without the prior
written consent of the Lender.
(g) Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be
an original, but all of which when taken together shall constitute one
and the same instrument.
(h) Headings. The headings, captions and arrangements used in
this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
(i) Expenses of the Lender. The Borrower agrees to pay on
demand (i) all costs and expenses reasonably incurred by the Lender in
connection with the preparation, negotiation and execution of this
Amendment and the other Loan Documents executed pursuant hereto and any
and all subsequent amendments, modifications, and supplements hereto or
thereto, including, without limitation, the costs and fees of the
Lender's legal counsel and the allocated cost of the Lender's in-house
counsel, and (ii) all costs and expenses reasonably incurred by the
Lender in connection with the enforcement or preservation of any rights
under the Agreement, this Amendment and/or the other Loan Documents,
including, without limitation, the costs and fees of the Lender's legal
counsel and the allocated cost of the Lender's in-house counsel.
(j) NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AND ENTIRE
AGREEMENT AMONG THE PARTIES HERETO 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
HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first written above.
THE GREAT TRAIN STORE PARTNERS, L.P.
By: GTS PARTNER, INC., its General Partner
By:
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Name:
Title:
THE GREAT TRAIN STORE COMPANY
By:
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Name:
Title:
GTS PARTNER, INC.
By:
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Name:
Title:
GTS LIMITED PARTNER, INC.
By:
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Name:
Title:
BANKAMERICA BUSINESS CREDIT, INC.
By:
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Name:
Title:
EXHIBIT B
NOTICE OF BORROWING
Date: ______________, _____
To: BankAmerica Business Credit, Inc. as Lender under the Amended and
Restated Loan and Security Agreement dated as of January 27, 1998 (as
extended, renewed, amended or restated from time to time, the "Loan and
Security Agreement") between the Great Train Store Partners, L.P. and
BankAmerica Business Credit, Inc.
Ladies and Gentlemen:
The undersigned, The Great Train Store Partners, L.P. (the "Borrower"),
refers to the Loan and Security Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice irrevocably of the
Borrowing specified below:
1. The Business Day of the proposed Borrowing is
_________________, ____.
2. The aggregate amount of the proposed Borrowing is
$__________________.
3. The Borrowing is to be comprised of $________________ of
Reference Rate Revolving Loans and $______________ of LIBOR
Revolving Loans.
4. The duration of the Interest Period for the LIBOR Revolving
Loans, if any, included in the Borrowing shall be __________
months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained in the
Loan and Security Agreement are true and correct as though made on and as of
such date;
(b) No Event or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing;
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount available
for drawing under all outstanding Letters of Credit, to exceed the Availability;
and
(d) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount available
for drawing under all outstanding Letters of Credit, to exceed the sum of (i)
the greater of (A) $15,000,000, or (B) eighty-five percent (85%) of the
Borrower's Inventory as reflected in the most recent borrowing base certificate
delivered by the Borrower to the Lender plus (ii) $1,000,000.
THE GREAT TRAIN STORE PARTNERS, L.P.
By: GTS PARTNER, INC.,
its General Partner
By:
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Name: Cheryl A. Taylor
Title: Vice President