AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is dated as of January 19, 1999 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"); and
WHEREAS, the Borrower and the members of the GTS Consolidated Group
have requested the Lender 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. Amendment to the Agreement. The Lender, the Borrower and the
members of the GTS Consolidated Group agree that, effective as of February 1,
1999 (unless otherwise indicated), the Agreement shall be amended as follows:
(a) The definition of "Applicable Inventory Advance Rate"
contained in Section 1 of the Agreement is hereby amended and restated
to read in its entirety as follows:
"`Applicable Inventory Advance Rate' means:
(i) during the period beginning on February 1, 1999
through and including March 31, 1999, fifty-five percent
(55%); and
(ii) during the period beginning on April 1, 1999 and
thereafter, the lesser of (x) fifty percent (50%) and (y) a
percentage equal to eighty-five percent (85%) of the
going-out-of-business appraised value of the Borrower's
inventory, net of liquidating expenses, expressed as a
percentage of inventory cost, as reflected on the then most
recently completed appraisal delivered to the Lender. By way
of example, if the most recent appraisal delivered to the
Lender showed that the going-out-of-business appraised value
of the Borrower's inventory, net of liquidating expenses, was
seventy percent (70%) of the inventory cost, then the
percentage described in clause (y) above would be 85% times
70%, or 59.5%.
(b) The definition of "Availability" contained in Section 1 of
the Agreement is hereby amended and restated to read in its entirety as
follows:
"`Availability' means at any time the lesser of:
(a) The amount of Eight Million Dollars
($8,000,000) (the `Maximum Revolving Credit Line') or
(b) the value of Eligible Inventory
multiplied by the Applicable Inventory Advance Rate;
provided, however, that at all times
Availability shall be reduced by the sum of:
(a) the unpaid balance of Revolving Loans
at that time;
(b) the aggregate undrawn face amount of all
outstanding Letters of Credit which the Lender has caused to
be issued or obtained for the Borrower's account;
(c) reserves for accrued interest on the
Revolving Loans;
(d) the Environmental Compliance Reserve;
and
(e) all other reserves which the Lender in
its reasonable discretion deems necessary or desirable to
maintain with respect to the Borrower's account, including,
without limitation, any amounts which the Lender may be
obligated to pay in the future for the account of the
Borrower."
(c) Section 2.1 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"2.1 Total Facility. Subject to all of the terms and
conditions of this Agreement, the Lender shall make available
a total credit facility of up to $8,000,000 (the `Total
Facility') for Borrower's use from time to time during the
term of this Agreement. The Total Facility shall be comprised
of a revolving line of credit up to the limits of the
Availability, consisting of revolving loans and letters of
credit as described in Sections 2.2 and 2.3."
(d) Sections 3.1(a)(i) and 3.1(a)(ii) of the Agreement are
hereby amended and restated to read in their entirety as follows:
"(i) For all Obligations, other than LIBOR Revolving
Loans, then at a fluctuating per annum rate equal to one and
three-quarters percent (1.75%) (the `Reference Rate Margin')
plus the Reference Rate; and
(ii) If the Loans are LIBOR Revolving Loans, then at
a per annum rate equal to three and three-quarters percent
(3.75%) (the `LIBOR Margin') plus the LIBOR Rate determined
for the applicable Interest Period."
(e) Section 7.8 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"7.8 Collateral Reporting. The Borrower will provide
the Lender with the following documents at the following times
in form satisfactory to the Lender: (a) weekly perpetual
inventory reports by category and location, no later than
Tuesday of the following week; (b) weekly sales reports, no
later than Tuesday of the following week; (c) monthly agings
of accounts payable, no later than the 10th day of the
following month; (d) upon request, copies of purchase orders,
invoices, and delivery documents for Inventory acquired by the
Borrower; (e) such other reports as to the Collateral as the
Lender shall request from time to time; and (f) certificates
of an officer of the Borrower certifying as to the foregoing.
If any of the Borrower's records or reports of the Collateral
are prepared by an accounting service or other agent, the
Borrower hereby authorizes such service or agent to deliver
such records, reports, and related documents to the Lender."
(f) Section 10.19 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"10.19 Intentionally Omitted"
(g) Effective as of December 30, 1998, Section 10.20 of the
Agreement is hereby amended and restated to read in its entirety as
follows:
"10.20 Intentionally Omitted"
(h) Section 10.21 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"10.21 New Store Openings. The Borrower shall not
make any New Store Opening except for the following two New Store
Openings: Providence Place in Providence, Rhode Island, and Mall of
Georgia, near Atlanta, Georgia."
(i) Effective as of December 30, 1998, Section 10.22 of the
Agreement is hereby amended and restated to read in its entirety as
follows:
"10.22 Intentionally Omitted"
(j) Effective as of the date of the effectiveness of this
Amendment, Section 10 of the Agreement is hereby amended by the
addition of a new Section 10.24 immediately following Section 10.23,
which new Section 10.24 shall read in its entirety as follows:
"10.24 Minimum Availability. The Borrower shall not
permit Availability to be less than the following amounts as of any
day of each of the following periods:
Minimum Daily
Period Availability
------ -------------
January 1, 1999 through and
including February 28, 1999 $ 500,000
March 1, 1999 through and
including March 31, 1999 $ 500,000
April 1, 1999 and each
day thereafter $ 500,000"
(k) Section 14 of the Agreement is hereby amended by the
addition of a new sentence at the end of said Section 14, which new
sentence shall read in its entirety as follows:
"Notwithstanding anything to the contrary contained in this
Section 14, the fees described in clause (c) of this Section
14 (other than the fees required by Section 6.4) shall not be
payable if the effective date of termination of this Agreement
results from a refinancing of the Obligations on or before
March 31, 1999 on terms satisfactory to the Lender."
Section 2. Agreements. In consideration of the Lender's entering into
this Agreement, the Borrower and the members of the GTS Consolidated Group
hereby agree as follows:
(a) notwithstanding any provisions of Section 7.5 of the
Agreement to the contrary, the Borrower shall be liable for all
expenses relating to the updated inventory appraisal that is
concurrently herewith being ordered by the Lender;
(b) the Borrower agrees to cooperate fully with the Lender and
the appraiser in connection with the updated inventory appraisal that
is concurrently herewith being ordered by the Lender; and
(c) notwithstanding any provisions of Section 7.10 of the
Agreement to the contrary, effective immediately and for the remainder
of the term of the Agreement all funds deposited into a Payment Account
shall be wire transferred each day to the Lender for application
against the outstanding Revolving Loans in accordance with the other
provisions of Section 7.10 of the Agreement.
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) 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.
(c) Amendment Fee. The Borrower shall have paid to the Lender
an amendment fee in the amount of $10,000. The Lender and the Borrower
agree that this amendment fee shall be financed by the Lender as a
Reference Rate Revolving Loan.
(d) Documentation Fee. The Borrower shall have paid to the
Lender a documentation fee (for this Amendment and for Amendment No. 2
to the Agreement) in the amount of $1,000. The Lender and the Borrower
agree that this documentation fee shall be financed by the Lender as a
Reference Rate Revolving Loan.
Section 5. 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.
[signatures continued on following page]
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:
