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Exhibit 4.4
WAIVER AND AMENDMENT NO. 4
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 4 ("Amendment No. 4") is entered into as
of July 19, 1996, by and between NATIONAL RECORD MART, INC. ("Borrower") and
FLEET CAPITAL CORPORATION ("Lender").
BACKGROUND
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Borrower and Barclays Business Credit, Inc. ("Barclays") entered into a
Loan and Security Agreement dated June 11, 1993 which has been amended by letter
agreements (a) dated January 12, 1995, which deleted certain covenants and
events of default, (b) dated February 24, 1995, which increased the Maximum
Revolving Amount from $17,000,000 to $22,000,000, and (c) dated September 8,
1995, which added a provision regarding the charging of interest with respect to
Prime Loans (as same has been further amended, supplemented or otherwise
modified from time to time, collectively, the "Loan Agreement"). Subsequent to
the date that Borrower and Barclays originally entered into the Loan Agreement,
Barclays assigned all of its rights and interest in and to the Loan Agreement to
Shawmut Capital Corp. ("Shawmut"). Shawmut subsequently assigned all of its
rights and interest to Lender. Pursuant to the Loan Agreement, Lender provides
Borrower with certain financial accommodations.
Borrower has requested that Lender amend the Loan Agreement to provide
for a special overadvance facility and Lender is willing to do so on the terms
and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrower by Lender,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.
2. AMENDMENT TO LOAN AGREEMENT
a) Section 1.1 of the Loan Agreement is hereby amended as
follows:
(i) the following definition is hereby added in its
appropriate alphabetical order:
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"SPECIAL OVERADVANCE AMOUNT" - an amount equal to
(a) $1,400,000 from July 19, 1996 through September 30,
1996 and (b) $0 at all times thereafter, which amount
shall be permanently reduced in accordance with the
provisions of Section 2.1(C).
(ii) subsection (b) of the definition of "Borrowing Base"
is hereby amended by (A) re-lettering subparagraphs "(ii)", "(iii)" and "(iv)"
to read as "(iii)", "(iv)" and "(v)", respectively and (B) inserting the
following new subparagraph "(ii)":
"PLUS (ii) up to 100%, in Lender's sole discretion, subject
to the provisions of Section 2.1(C) hereof, of the Special
Overadvance Amount;"
(b) Section 2.1 of the Loan Agreement is hereby amended by
re-lettering subparagraph "C" as subparagraph "(D)" and inserting the
following subparagraph "(C)" in its place and stead:
"2.1(C) In the event the Borrower shall receive federal and
state tax refunds as described on EXHIBIT 2.1(C) attached
hereto (the "Refund"), Borrower shall (i) notify Lender of
the receipt of such Refund and (ii) repay the Revolving
Credit Loans in an amount equal to 100% of such Refund by
depositing same in the Dominion Account, such repayment to
be made promptly but in no event more than one (1) Business
Day after receipt thereof. Until the date of payment such
proceeds shall be held in trust for Lender. The Special
Overadvance Amount shall be automatically and permanently
reduced, without notice, in an amount equal to such
repayment. Such repayments shall be applied to Revolving
Credit Loans."
3. WAIVER. Subject to satisfaction of the conditions precedent
set forth in SECTION 4 below, Lender hereby waives the Event of Default that
otherwise would have occurred as a result of Borrower's non-compliance with
Section 9.2(L) of the Loan Agreement to the extent that such Event of Default
arose solely as a result of Borrower having an Aggregate Adjusted Availability
of less than $2,000,000 prior to making Capital Expenditures in excess of
$200,000 for the fiscal quarter ended June 29, 1996.
4. CONDITIONS OF EFFECTIVENESS. This Amendment No. 4 shall become
effective upon satisfaction of the following conditions precedent: (i) Lender
shall have received (a) four (4) copies of this Amendment No. 4 executed by
Borrower and (b) such other certificates, instruments, documents and agreements
as may be required by Lender or its
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counsel, each of which shall be in form and substance satisfactory to Lender and
its counsel, (ii) Lender shall have received payment of a $14,000 special
overadvance fee from Borrower and (iii) all legal fees and expenses incurred by
Lender in connection with the preparation of this Amendment No. 4 shall have
been paid in full.
5. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants as follows:
(a) This Amendment No. 4 and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrower and
are enforceable against Borrower in accordance with their respective
terms.
(b) Upon the effectiveness of this Amendment No. 4, Borrower
hereby reaffirms all covenants, representations and warranties made in
the Loan Agreement to the extent the same are not waived hereby and
agree that all such covenants, representations and warranties shall be
deemed to have been remade as of the effective date of this Amendment
No. 4.
(c) Borrower has no defense, counterclaim or offset with
respect to the Loan Agreement.
6. EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of SECTION 2 hereof, each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof, "herein" or words
of like import shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except as specifically waived herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
No. 4. shall not operate as a waiver of any other right, power or remedy of
Lender, nor constitute a waiver of any other provision of the Loan Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.
7. GOVERNING LAW. This Amendment No. 4 shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns and shall be governed by and construed in accordance with the laws of
the State of New York.
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8. HEADINGS. Section headings in this Amendment No. 4 are included
herein for convenience of reference only and shall not constitute a part of
this Amendment No. 4 for any other purpose.
9. COUNTERPARTS. This Amendment No. 4 may be executed by the parties
hereto in one or more counterparts, each of which taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, this Amendment No. 4 has been duly executed as of
the day and year first written above.
NATIONAL RECORD MART, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Sr. Vice President/CFO
FLEET CAPITAL CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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