AMENDMENT No. 3, dated as of June 16, 1997 (this "Amendment"), to the Loan
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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").
WITNESSETH:
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 used
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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) The definition of Borrowing Base in Section I of the Agreement is
amended in its entirety to read as follows:
"Borrowing Base" means, with respect to either Borrower, (a)(i)
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from January 1 - August 31 and December 16 - December 31 of any year,
55% of the value, at the lower of cost (on a first-in, first-out
basis) or market, of all Eligible Inventory of such Borrower and (ii)
from September 1 - December 15 of any year, 65% of such value, in
either case, (b) without duplication, 50% of the undrawn face amount
of Letters of Credit issued or caused to be issued by the Lender for
the account of such Borrower for the purchase of goods which will
become Eligible Inventory.
(b) The definition of Fixed Charges Ratio in such Section is amended by
adding the following language to the end thereof: "provided that, for the
purposes of this definition, Capital Expenditures shall not include the first
$1.1 million expended by the Borrowers for Warehouse MIS on and after the
Closing Date".
(c) The definition of Interest Adjustment Date in such Section is amended
in its entirety to read as follows:
"Interest Adjustment Date" means, with respect to any Rolling
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Period in connection with the adjustment of the Applicable Margin:
(i) In the case of any Reference Rate Loan outstanding during
the Interest Adjustment Period immediately following such
Rolling Period:
(A) the first day of the calendar month in which the
certificate relating to Fixed Charges Ratio referred to in
Section 8.2(c) is delivered to the Lender with respect to
such Rolling Period, provided that such certificate is
delivered no later than four Business Days prior to the last
day of the month following such Rolling Period; or
(B) the first day of the calendar month following the month
in which such certificate is delivered if it is delivered
later than four Business Days prior to, but no later than,
the last day of such month following such Rolling Period; or
(C) if such certificate is not delivered until after the end
of the month following such Rolling Period, the first day of
such month but the Applicable Margin shall be three-quarters
of one percent (0.75 %),
provided, that, in the event that, with respect to any
calendar month, there would be a conflict between the
provisions of (A) and the provisions of (B) above, the
provisions of (A) shall prevail with respect to such month;
and
(ii) In the case of any LIBOR Rate Loan:
(A) the day such certificate is delivered to the Lender, if
such certificate is delivered within 30 days after the end
of such Rolling Period; or
(B) if such certificate is not delivered within such 30
days, the previous Interest Adjustment Date (that is, there
is no change in Applicable Margin based on Fixed Charges
Ratio for such Rolling Period).
(d) The definition of Unused Line Amount in such Section is amended in its
entirety to read as follows:
"Unused Line Amount" means (a) during the period beginning on the
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Closing Date and ending on June 16,1997, $30,000,000, (b)during the
period beginning on June 17, 1997 and ending on the day before the
first Anniversary Date, $40,000,000, (c) during the period beginning
on the first Anniversary Date and ending on the day before the second
Anniversary Date, $45,000,000, and (d) during the period beginning on
the second Anniversary Date and ending on the third Anniversary Date,
$50,000,000.
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(e) A new definition entitled "Warehouse MIS" is added to the end of such
Section to read as follows:
"Warehouse MIS" means management information systems to be used
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with respect to one or more warehouses; whether an expenditure
constitutes an expenditure for such a system shall be determined by
the Lender in its reasonable commercial discretion.
(f) Section 2.1 is amended by changing the Total Facility from $40,000,000
to $50,000,000.
(g) The following language is added to the end of Section 2. 2(b)(i)(C):
"provided that, to the extent a Revolving Loan is based on the
increase in the Borrowing Base factor from 55% to 65% that occurs from
September 1 to December 15 in any year, only the portion of such
Revolving Loan that is provided as a result of such increase shall be
a Reference Rate Loan and may not be converted into a LIBOR Rate Loan
pursuant to Section 3.2 at anytime."
(h) The number $1,000,000 that appears in Section 10.17 shall be amended to
read "$6,000,000".
(i) The number $5,250,000 that appears in Section 10.20(b) shall be amended
to read "$7,500,000".
(j) Section 12.1(n) shall be amended to read in its entirety as follows:
"Trend-Lines shall cease to own 100% of the voting stock of Post Tool
or any person other than Xxxxxxx Xxxxx, Xxxxxx X. Xxxxx, his spouse,
and his or her respective Affiliates shall own more than 50% of the
voting stock of Trend-Lines or have the power to control (such term
having the meaning given to it in the definition of Affiliate herein)
the Board of Directors of Trend-Lines."
(k) Section 15.11 is amended by inserting:
"Xxxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-00
Attention: Xxxxx Xxxxxx"
in place of the following:
Brown, Rudnick, Freed & Gesmer, PC
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
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3. Representations and Warranties. To induce the Lender to enter into
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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) neither 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
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covenants, representations and warranties (including, without limitation, those
found in Section 9.2), 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
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when and only when (i) this Amendment shall be executed by the Borrower and (ii)
the Lender shall have received such opinions of counsel, such other documents
(including, without limitation, certified resolutions), and such evidence of
filings, as the Lender shall request.
6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
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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
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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.
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8. Amendment. No modification or waiver of any provision of this
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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.
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: Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: President
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