EXHIBIT 10.5
Private Client Group
MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.
33 West Monroe Street
22nd Floor
[LOGO OF MERRILL LYNCH APPEARS HERE] Chicago, Illinois 60603
312/845-1020
FAX 312/845-9093
January 20, 1998
Barbeques Galore, Inc.
15041bake Parkway, Suite A
Irvine, CA 92618
RE: AMENDMENT TO LOAN DOCUMENTS
Ladies And Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Merrill Lynch
Business Financial Services Inc. ("MLBFS") and Barbeques Galore, Inc.
("Customer") with respect to: (i) that certain WCMA NOTE, LOAN AND SECURITY
AGREEMENT NO. 231-07T10 between MLBFS and Customer (including any previous
amendments and extensions thereof), and (ii) all other agreements between MLBFS
and Customer or any party who has guaranteed or provided collateral for
Customer's obligations to MLBFS ("Guarantor") in connection therewith
(collectively, the "Loan Documents"). Capitalized terms used herein and not
defined herein shall have the meaning set forth in the Loan Documents.
Subject to the terms hereof, effective as of the "Effective Date", the Loan
Documents are hereby amended as follows:
1. The term "Maturity Date" shall mean February 28, 1998.
2. The "Line Fee" for the period ending shall be $2,083.33. Customer hereby
authorizes and directs MLBFS to charge said amount to the WCMA Account No.
231-07T10 on or at any time after the Effective Date.
3. The following locations are now additional "Locations of Tangible
Collateral":
1076 N. El Camino Real, Encinitas, CA 92024-1320
620 W. Francisco Blvd. San Rafael, CA 94901
4765 FM 1960 West, Suite H, Houston, TX 77069
25550 North The Old Road, Valencia, Ca 91381
2267 S. Stemmons Fwy, #604, Lewisville, TX 75067
Except as expressly amended hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their respective Unconditional Guaranty and/or
agreement providing collateral shall extend to and include the Obligations of
Customer under the Loan Documents, as amended hereby.
Barbeques Galore, Inc.
January 20, 1998
Page No. 2
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (i) no default or
Event of Default has occurred and is continuing under the Loan Documents; (ii)
each of the warranties of Customer in the Loan Documents are true and correct
as of the date hereof and shall be deemed remade as of the date hereof; (iii)
neither Customer nor any of said Guarantors has any claim against MLBFS or any
of its affiliates arising out of or in connection with the Loan Documents or
any other matter whatsoever; and (iv) neither Customer nor any of said
Guarantors has any defense to payment of any amounts owing, or any right of
counterclaim for any reason under, the Loan Documents.
Provided that no Event of Default, or event which with the giving of notice,
passage of time, or both, would constitute an Event of Default, shall then
have occurred and be continuing under the terms of the Loan Documents, the
amendments and agreements in this Letter Agreement will become effective on
the date (the "Effective Date") upon which: Customer and the Guarantors shall
have executed and returned the duplicate copy of this Letter Agreement
enclosed herewith; (ii) an officer of MLBFS shall have reviewed and approved
this Letter Agreement as being consistent in all respects with the original
internal authorization hereof; (iii) 11/30/97 store-by-store income
statements; (iv) updated UCC-1 filings on new stores; and (v) to the extent
applicable, MLBFS shall have entered such amendments and agreements in its
computer system (which MLBFS agrees to do promptly after the receipt of such
executed duplicate copy). Notwithstanding the foregoing, if for any reason
other than the sole fault of MLBFS the Effective Date shall not occur within
14 days from the date of this Letter Agreement, then all of said amendments
and agreements herein will, at the sole option of MLBFS, be void.
MLBFS requests that as soon as feasible Customer furnish to MLBFS the
following item (however, the Effective Date of this Letter Agreement is not
conditioned upon the receipt of the such item):
Final Copy of The Galore Group (U.S.A.), Inc.'s Audited Financial
Statements for FYE 1/31/97.
Very truly yours,
MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
By: /s/ Heather Wise
-----------------------------------------
Heather Wise
Credit Services Account Manager
Barbeques Galore, Inc.
January 20, 1998
Page No. 3
Accepted:
BARBEQUES GALORE, INC.
By: Kevin Ralphs
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Printed Name: Kevin Ralphs
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Title: C.F.O.
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Approved:
THE GALORE GROUP (U.S.A.), INC.
By: Kevin Ralphs
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Printed Name: Kevin Ralphs
-------------------------
Title: C.F.O.
--------------------------------
POOL PATIO'N THINGS, INC.
By: Kevin Ralphs
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Printed Name: Kevin Ralphs
-------------------------
Title: C.F.O.
--------------------------------
THIS STATEMENT IS PRESENTED TO A FILING
OFFICER FOR FILING PURSUANT TO THE
UNIFORM COMMERCIAL CODE.
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11. [_] CHECK TO REQUEST SAME DEBTOR
SEARCH CERTIFICATE (INSTRUCTION B.11)
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1. DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I 1A. PREFIX 1B. SUFFIX
Barbeques Galore, Inc.
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1C. MAILING ADDRESS 1D. CITY, STATE 1E. ZIP CODE
5041 Bake Parkway, Suite A Irvine, CA 92718
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2. ADDITIONAL DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I. 2A. PREFIX 2B. SUFFIX
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2C. MAILING ADDRESS 2D. CITY, STATE 2E. ZIP CODE
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3. SECURED PARTY (IF PERSONAL) LAST NAME FIRST NAME M.I.
Merrill Lynch Business Financial Services Inc.
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3A. MAILING ADDRESS 3B. CITY, STATE 3C. ZIP CODE
33 West Monroe, 22nd Floor Chicago, IL 60603
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4. ADDITIONAL SECURED PARTY (IF ANY)
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4A. MAILING ADDRESS 4B. CITY, STATE 4C. ZIP CODE
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5. ORIGINAL FINANCING STATEMENT NUMBER 5A. ORIGINAL DATE FILED 6. CHECK THIS FINANCING STATEMENT CHANGE
104243 5/29/97 IF IS TO BE FILED IN THE REAL ESTATE
APPLICABLE [ ] RECORDS. NO. OF ADDITIONAL SHEETS
PRESENTED 1
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7. A. [ X ] AMENDMENT - THE FINANCING STATEMENT IS AMENDED AS SET FORTH IN ITEM 8 BELOW. (INSTRUCTION 8.7(A))
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B. TOTAL ASSIGNMENT - ALL OF SECURED PARTY'S RIGHTS UNDER THE FINANCING STATEMENT HAVE BEEN ASSIGNED TO THE
[ ] ASSIGNEE WHOSE NAME AND ADDRESS ARE SET FORTH IN ITEM 8 BELOW. (INSTRUCTION 8.7(B))
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C. PARTIAL ASSIGNMENT - SOME OF SECURED PARTY'S RIGHTS HAVE BEEN ASSIGNED TO THE ASSIGNEE SHOWN IN ITEM 8 BELOW.
[ ] (INSTRUCTION 8.7(C))
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D. [ ] CONTINUATION - THE ORIGINAL STATEMENT IS STILL EFFECTIVE. (INSTRUCTION 8.7(D))
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E. [ ] TOTAL RELEASE - THE SECURED PARTY RELEASES ALL OF THEIR INTEREST IN THE COLLATERAL (INSTRUCTION 8.7(E))
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F. [ ] PARTIAL RELEASE - THE SECURED PARTY RELEASES THE FOLLOWING COLLATERAL DESCRIBED IN ITEM 8 BELOW.
(INSTRUCTION 8.7(F))
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G. [ ] TERMINATION - THE SECURED PARTY(IES) OR RECORD NO LONGER CLAIMS A SECURITY INTEREST AND THE FINANCING STATEMENT IS
TERMINATED. (INSTRUCTION 8.7(G))
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8. The collateral is hereby amended to include Exhibit A:
CSC#/M000023/98-000185/1/1 TX: Texas SOS
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9. SIGNATURE(S) Barbeques Galore, Inc. THIS SPACE FOR USE OF FILING OFFICER
OF By: /s/ K. Ralphs C.F.O. (DATE, TIME, NUMBER, FILING OFFICER)
DEBTOR(S)
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SIGNATURE(S) Merrill Lynch Business Financial Services Inc.
OF
SECURED PARTY(IES)
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10. Return copy to:
NAME CSC NETWORKS/PHL&FS
ADDRESS 1013 Centre Rd.
CITY Wilmington, DE 18905-1297
STATE
ZIP
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STANDARD FORM - FORM UCC-3 (REV. 9/1/92) COPYRIGHT 1992 OFFICE OF THE SECRETARY OF STATE OF TEXAS
REORDER FROM: CSC Networks, 500 Central Avenue, Albany, NY 12206
(1) Filing Officer Copy-Numerical
EXHIBIT A
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Locations of tangible collateral shall now mean:
Arlington Plano
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Coopers Street Plaza 1801 Preston Road, Suite A
4605 S. Cooper Street Plano, TX 75093
Arlington, TX 76017 (972) 735-8185
(817) 467-4900
University Park Westheimer
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4360 Lovers Lane Mariner Village/Miracle Mile
Dallas, TX 75205 6429 Westheimer
(214) 696-0030 Houston, TX 77057
(713) 953-7030
Grapevine Fountains
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1419 State Hwy. 114 West 11355 Fountain Lakes Drive
Suite 412 Stafford, TX 77477
Grapevine, TX 76051 (281) 494-9800
(817) 421-9052
Austin University Park
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9333 Rescarch Blvd. 4360 Lovers Lane
Bldg. C, Suite 200 Dallas, TX 75225
Austin, TX 78759 (214) 696-0030
(512) 345-1146
San Antonio Champions
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327 NW Loop 410, Suite 101 4765 FM 1960 West, Suite H
San Antonio, TX 78216 Houston, TX 77069
(210) 375-2070 (281) 880-9291
Lewisville
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2267 S. Stemmons Fwy, #604
Lewisville, TX 75067
(972) 315-3364
All Accounts, Chattel Paper, Contract Rights, Inventory, Equipment, Fixtures,
General Intangibles, Deposit Accounts, Documents and Instruments of Debtor,
howsoever arising, whether now owned or existing or hereafter acquired or
arising, and wherever located; together with all parts thereof (including
spare parts), all accessories and accessions thereto, all books and records
(including computer records) directly related thereto, and all proceeds
thereof (including, without limitation, proceeds in the form of Accounts and
insurance proceeds).
In accordance with the terms of a certain Loan Agreement between Debtor and
Secured Party, Debtor has agreed that except for certain "Permitted Liens" (as
defined in said Loan Agreement), Debtor will not further encumber any of the
above property without the prior written consent of Secured Party.