AMENDMENT No. 5, dated as of July 31, 1998, (this "Amendment"), to the
Loan and Security Agreement, dated as of July 3, 1996 (as heretofore
amended, supplemented or otherwise modified, the "Agreement") among
Trend-Lines, Inc. and Post Tool, Inc. (collectively, the "Borrowers") and
BankAmerica Business Credit, Inc. (the "Lender").
WITNESSETH:
WHEREAS, the Borrowers and the Lender are parties to the Agreement;
WHEREAS, Borrowers have requested that Lender modify certain provisions of
the Agreement and the Lender is willing to do so on the terms and conditions as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
herein have the respective meanings ascribed thereto in the Agreement.
2. Amendments to the Agreement. The agreement is hereby amended as
follows:
(a) The definition of Adjusted Net Worth in Section 1 of the
Agreement is amended in its entirety to read as follows:
"Adjusted Tangible Net Worth" means, at any date: (a) the book
value (after deducting related depreciation, obsolescence,
amortization, valuation, and other proper reserves as
determined in accordance with GAAP) at which the assets of
Trend-Lines and its Subsidiaries would be shown on a
consolidated balance sheet of Trend-Lines at such date prepared
in accordance with GAAP less (b) the amount at which
Trend-Lines consolidated liabilities would be shown on such
balance sheet, including as liabilities all reserves for
contingencies and other potential liabilities which in
accordance with GAAP would be shown on such balance sheet.
(b) The definition of Additional Availability Period in Section 1 of
the Agreement is amended in its entirety to read as follows:
"Additional Availability Period" means the period, if any, (a)
commencing on the fourth Business Day after the delivery to the
Lender of the certificate referred to in Section 8.2(c)
relating to the Interest Coverage Ratio which shows an Interest
Coverage Ratio of greater than 1.5 to 1.0 for the period ending
on the last day of the second fiscal quarter of 1998; 1.85 to
1.0 for the period ending on the last day of the third fiscal
quarter of 1998; 2.0 to 1.0 for the period ending on the last
day of the fourth fiscal quarter of 1998; 2.25 to 1.0 for the
period ending on the last day of the first fiscal quarter of
1999; and 2.5 to 1.0 for any subsequent period; and (b) ending
on the earlier of (i) the occurrence of an Event of Default,
(ii) the subsequent delivery to the Lender of the certificate
referred to in Section 8.2 (c) relating to the Interest
Coverage Ratio which shows an Interest Coverage Ratio of less
than or equal to the ratios set forth in clause (a) for the
periods specified therein, or (iii) the subsequent failure of
the Borrowers to deliver to Lender the certificate referred to
in Section 8.2(c) relating to the Interest Coverage Ratio
within the time required under such Section 8.2(c). At the end
of any Additional Availability Period, any Additional
Availability Loans outstanding shall be immediately repaid by
the applicable Borrower. No Additional Availability Period
shall commence during the continuance of an Event of Default.
3. Representations and Warranties. To induce Lender to enter into this
Amendment, Borrowers hereby represent and warrant as follows, with the same
effect as if such representations and warranties were set forth in the
Agreement:
(a) Each Borrower has the power and authority to enter into
this Amendment and has taken all corporate action required
to authorize its execution, delivery and performance of
this Amendment. This Amendment has been duly executed and
delivered by each Borrower and the Agreement, as amended
hereby, constitutes the valid and binding obligation of
Borrowers, enforceable against each Borrower in accordance
with its terms. The execution, delivery, and performance
of this Amendment and the Agreement, as amended hereby, by
each Borrower, will not violate its respective certificate
of incorporation or by-laws or any agreement or legal
requirement binding on such Borrower.
(b) On the date hereof and after giving effect to the terms of
this Amendment, (i) the Agreement and the other Loan
Documents are in full force and effect and, to the extent
that a Borrower is a party thereto, constitutes its binding
obligation, enforceable against it in accordance with their
respective terms; (ii) no Default or Event of Default has
occurred and is continuing; and (iii) no Borrower has any
defense to or setoff, counterclaim or claim against payment
of the Obligations and enforcement of the Loan Documents
based upon a fact or circumstance existing or occurring on
or prior to the date hereof.
4. Limited Effect. Except as expressly amended hereby, all of the
covenants and provisions of the Agreement are and shall continue to be in
full force and effect. Upon the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import and each reference in the other Loan
Documents to the Agreement shall mean and be a reference to the Agreement
as amended hereby.
5. Conditions of Effectiveness. This Amendment shall become effective when
and only when (i) this Amendment shall be executed by the Borrowers and (ii) the
Lender shall have received such other documents, as the Lender shall request.
6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF
LAWS PROVISIONS) OF THE STATE OF NEW YORK.
7. Counterparts. This Amendment may be executed by the parties hereto in
any number of separate counterparts, each of which shall be an original, and all
of which taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
TREND-LINES, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
POST TOOL, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Account Executive
