AMENDMENT No. 2, dated as of January 28, 1997 (this "Amendment"), to the
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Loan and Security Agreement, dated as of July 3, 1996 (as heretofore amended,
supplemented and otherwise modified, the "Agreement"), among Trend-Lines, Inc.
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and Post Tool, Inc. (collectively the "Borrowers") and BankAmerica Business
Credit, Inc. (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrowers and the Lender are parties to the Agreement;
WHEREAS, the Borrowers have requested that the 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
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used herein have the respective meanings ascribed thereto in the Agreement.
2. Amendments to the Agreement. The Agreement is hereby amended as
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follows:
(a) Paragraph (b) of the definition of "Availability" in Section 1 of the
Agreement is amended in its entirety to read as follows:
(b) the sum of (i) Outstanding Credit to such Borrower at such
time, (ii) reserves for accrued interest on the Obligations of such
Borrower, (iii) the Environmental Compliance Reserve for such
Borrower, (iv) the Rental Reserve for such Borrower, (v) in the case
of Trend-Lines, a reserve of $550,000 in connection with the
Indemnification Agreement, and (vi) all other reserves which the
Lender deems necessary in the exercise of its reasonable credit
judgment to maintain with respect to such Borrower's account,
including, without limitation, reserves for any amounts which the
Lender may be obligated to pay in the future for the account of such
Borrower.
(b) Two new definitions are added after the definition of "Barn:" in
such Section to read as follows:
"Bank of Boston" means First National Bank of Boston, N.A.
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"Bank of Boston Letter of Credit" means a Letter of Credit issued
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by Bank of Boston and referred to in the Indemnification Agreement.
(c) A new definition is added after the definition of "Guaranty" in
such Section to read as follows:
"Indemnification Agreement" means the Indemnification Agreement
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made and entered into the 28th day of January, 1997 by and among
Trend-Lines, the Lender and Bank of Boston.
(d) The definition of "Loan Documents" in such Section is amended by adding
the phrase "the Indemnification Agreement," after the phrase "the Stock Pledge
Agreement" in such Section.
(e) The phrase "or the Indemnification Agreement" is added at the end of
the last sentence of the definition of "Obligations" in such Section.
(f) Section 2.3(a) is amended in its entirety to read as follows:
2.3. Letters of Credit. (a) Subject to the terms and conditions of
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this Agreement, the Lender shall, upon a Borrower's request from time to
time, cause merchandise or standby letters of credit to be issued for such
Borrower's account by the Bank or another issuer reasonably acceptable to
such Borrower and the Lender (the "Letters of Credit"). The Lender will not
cause to be issued any Letter of Credit if: (i) the maximum face amount of
the requested Letter of Credit, plus the aggregate undrawn face amount of
all outstanding Letters of Credit and the maximum claim (matured or
unmatured) of Bank of Boston under the Indemnification Agreement, would
exceed $2,500,000; (ii) the maximum face amount of the requested Letter of
Credit, and all commissions, fees, and charges due from such Borrower to
the Lender in connection with the opening thereof, would cause the
Availability to be exceeded at such time; or (iii) the expiration date of
the Letter of Credit would exceed the Stated Termination Date or any
renewal term or be greater than (A) 12 months from the date of issuance if
such Letter of Credit is a standby Letter of Credit or (B) 180 days from
the date of issuance if such Letter of Credit is a merchandise Letter of
Credit. All payments made and expenses incurred by the Lender pursuant to
or in connection with the Letters of Credit or the Indemnification
Agreement will be charged to such Borrower's loan account as Reference Rate
Loans.
(g) Section 2.3(d) is amended in its entirety to read as follows:
(d) Payments Pursuant to Letters of Credit and Bank of Boston Letters
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of Credit.
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(1) Payment of Letter of Credit and Bank of Boston Letter of Credit
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Obligations. The Borrowers agree to reimburse the issuer for any draw
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under any Letter of Credit or Bank of Boston Letter of Credit immediately
upon demand and to pay the issuer of such Letter of Credit or the Bank of
Boston, respectively, the amount of all other obligations and other amounts
payable to such issuer or such Bank under or in connection with such Letter
of Credit or Bank of Boston Letter of Credit immediately when due,
irrespective of any claim, setoff, defense or other right which either
Borrower may have at any time against such issuer, such Bank or any other
Person.
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(2) Reference Rate Loans to Satisfy Reimbursement Obligations. In the
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event that the issuer of any Letter of Credit or the Bank of Boston honors
a draw under such Letter of Credit or a Bank of Boston Letter of Credit,
respectively, and the relevant Borrower shall not have repaid such amount
to such issuer or such Bank, respectively, pursuant to Section 2. 3(d)(1),
the Lender shall pay such issuer or such Bank, respectively, and such
amount when paid shall constitute a Reference Rate Loan which shall be
deemed to have been requested by such Borrower.
(h) The first sentence of Section 2.3(fl(1) is amended in its entirety to
read as follows: "In addition to amounts payable as elsewhere provided in this
Section 2.3, the Borrowers hereby agree to protect, indemnify, pay and save the
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including, without limitation,
reasonable attorneys' fees) which the Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of Credit or
the provision of any credit support or enhancement in connection therewith or
(B) the Indemnification Agreement.".
(i) The phrase "or Bank of Boston Letters of Credit" is inserted after the
word "Credit" in each of Sections 2.3(f)(4) and 2.3(f)(6).
(j) The phrase "or Bank of Boston Letter of Credit" is inserted after the
word "Credit" each time such word appears in Section 2.3(g).
(k) Section 9.9 is amended by adding the phrase "(other than those arising
under or in connection with the Indemnification Agreement)" after the word
"Obligations" in clause (a) of such Section, deleting the word "and" before
clause (d), and inserting the following phrase after the word "hereby": "and
(e) Indebtedness, as such term is defined in the Indemnification Agreement
(without giving effect to any amendment to such definition after January 28,
1997), in an amount not greater than $550,000".
(l) Section 10.11 is amended by adding the phrase "(other than those
arising under or in connection with the Indemnification Agreement)" after the
word "Obligations" in clause (a) of such Section, deleting the word "and" before
clause (c), and inserting the following phrase after the number "B-1":"; and (d)
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Indebtedness, as such term is defined in the Indemnification Agreement (without
giving effect to any amendment to such definition after January 28, 1997), in an
amount not greater than $550,000".
(m) The phrase "and Bank of Boston Letters of Credit" is inserted after the
word "Credit" in the penultimate sentence of Section 14.
(n) Section 15.11 is amended by changing the address for notices to
"Xxxxxxxx & Xxxxxx" to read as follows:
Xxxxxxxx & Xxxxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
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3. Representations and Warranties. To induce the Lender to enter into
this Amendment, the Borrowers hereby represent and warrant as follows, with the
same effect as if such representations and warranties were set forth in the
Agreement:
(i) Each Borrower has the power and authority to enter into this
Amendment and has taken all corporate action required to
authorize such Borrower's 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 the 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.
(ii) On the date hereof and after giving effect to the terms of
this Amendment, (A) 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; (B) no Default or Event of Default has
occurred and is continuing; and (C) 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.
(iii) The Collateral is entirely free and clear of all security
interests, liens, pledges and other charges and
encumbrances, except those (A) created by the Agreement as
amended hereby, or (B) permitted pursuant to the terms of
the Agreement as so amended, and the Borrowers have not
entered into any agreement pursuant to which any security
interests, liens, pledges, or other charges or encumbrances
will be imposed or created directly, or as a result of any
act or event, upon any of the Collateral. Without limiting
the generality of the foregoing, the Collateral does and
shall continue to secure the payment of all Obligations.
4. Limited Effect. Except as expressly amended hereby, all of the
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covenants and provisions of the Agreement are and shall continue to be in full
force and effect.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
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AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED
TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
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6. Counterparts. This Amendment may be executed by the parties
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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.
7. Amendment. No modification or waiver of any provision
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of this Amendment, or any consent to any departure by the Borrowers therefrom,
shall in any event be effective unless the same shall be in writing, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
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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. BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxxx
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Name: Xxxxxxx X. Xxxxx Name: Xxxx Xxxxxxxx
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Title: Chairman of the Board Title: Sr. Account Executive
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POST TOOL, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: President
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