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EXHIBIT 10.1
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT entered into as of
May 14, 1999, between ▇▇▇▇▇▇▇, INC., an Ohio corporation with its principal
executive offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"BORROWER") and BANKBOSTON RETAIL FINANCE INC., a Delaware corporation with an
address of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (the "AGENT") as agent for the ratable
benefit of "LENDERS", who are, at present, those financial institutions
identified on the signature pages of this First Amendment to Loan and Security
Agreement ("Agreement") and who in the future are those Persons (if any) who
become "Lenders" in accordance with the provisions of Section 2.21 of that
certain Loan and Security Agreement by and between the Lenders and the Borrower
dated as of March 3, 1999 (the "Loan Agreement").
WHEREAS, the Lenders established a revolving line of credit pursuant to the Loan
Agreement for Borrower respecting which Lenders agreed to lend to Borrower upon
Borrower' request, but subject to the terms and conditions set forth in the Loan
Agreement, up to Thirty Million Dollars and Zero Cents ($30,000,000.00).
WHEREAS, the Borrower has requested the Lenders to amend the Borrowing Base to
permit advances against credit card receivables as set forth herein; and
WHEREAS, subject to the terms, and conditions in this Agreement, the Lenders are
willing to modify the terms of the Loan Agreement as set forth herein. NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Lenders and the Borrower mutually agree as
follows:
1. DEFINITIONS. All capitalized terms used herein shall have the same
meaning as set forth in the Loan Agreement, unless otherwise defined herein.
2. EFFECTIVE DATE. This Agreement shall be effective upon receipt by the Agent
of an original executed copy of this Agreement signed by the Borrower and
Lenders and a fully executed Notice and Account Settlement Agreement with GE
Capital Consumer Card Co. in form and substance satisfactory to Agent in its
sole discretion.
3. MODIFICATIONS TO LOAN AGREEMENT.
(a) The definition of "ACCEPTABLE FEDERAL TAX REFUND" shall
be deleted from Article 1 of the Loan Agreement.
(b) The definition of "FEDERAL TAX REFUND" shall be deleted
from Article 1 of the Loan Agreement.
(c) The definition of "IRS" shall be deleted from Article 1
of the Loan Agreement.
(d) The definition of "REFUND ADVANCE RATE" shall be
deleted from Article 1 of the Loan Agreement.
(e) The definition of "TRIPARTY AGREEMENT" shall be deleted
from Article 1 of the Loan Agreement.
(f) Section 2.1(e) of the Loan Agreement shall be deleted.
(g) The words "and the Federal Tax Refund" shall be deleted
from the end of the first sentence in Section 4.24(c)
of the Loan Agreement.
(h) The following definitions shall be inserted in Article
I of the Loan Agreement: "ACCEPTABLE CREDIT CARD
ACCOUNTS": Such of the Borrower's Accounts which are
receivables from credit card processors that are
outstanding no more than five (5) days from the date of
purchase by the retail consumer, as Lender in its sole
discretion from time to time determines to be
acceptable for borrowing, as to which Accounts, the
Agent has a perfected security interest which is prior
to and superior to all security interests, claims and
all Encumbrances." "CREDIT CARD ACCOUNTS ADVANCE RATE":
Seventy five Percent (75%).
(i) The text of Section 2.1(b)(ii)(B) of the Loan Agreement
shall be deleted and re-
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placed with the following:
"(B) is the result of the following:
(I) The Inventory Advance Rate of the Cost of Acceptable
Inventory (net of Inventory Reserves).
Plus
(II) The Credit Card Accounts Advance Rate of the Acceptable
Credit Card Accounts up to a maximum of Two Million Two
Hundred Thousand Dollars ($2,200,000.00).
Minus
(III) The then aggregate of the Availability Reserves."
(j) A new Section 5.5 shall be inserted into the Loan Agreement which
reads as follows:
"5.5 Accounts Receivable Aging Reports. As Agent may request from time
to time, Borrower shall provide the Agent with original counterparts
of an Accounts Receivable Aging certified as to the accuracy thereof
by any one of the following persons: President, Treasurer, Chief
Financial Officer, or Controller of Borrower."
(k) The text of Section 6.5 of the Loan Agreement shall be deleted and
replaced with the following: "6.5 NOTIFICATION TO ACCOUNT DEBTORS AND
OTHER ACCOUNTS COVENANTS.
(a) The Borrower shall notify the Agent promptly of any event or
circumstance which, to the Borrower's knowledge would cause the Agent
to consider any then existing Accounts as no longer constituting
Acceptable Credit Card Accounts.
(b) The Agent shall have the right at any time or times, in the
Agent's name or in the name of a nominee of the Agent, to verify the
validity, amount or any other matter relating to any Account or other
Collateral, by mail, telephone, facsimile transmission or otherwise.
(c) The Agent may, at any times that a Suspension Event exists or has
occurred and is continuing, take whatever action the Agent may deem
necessary or desirable for the protection of its interests.
4. AMENDMENT TO BORROWING BASE CERTIFICATE. Exhibit 5-4 to the Loan Agreement
shall be deleted and replaced with the form of Borrowing Base Certificate
attached hereto as EXHIBIT 5-4.
5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and warrants
to the Lenders as follows:
(a) REPRESENTATIONS AND WARRANTIES: NO EVENT OF DEFAULT. The
representations and warranties herein, in the Loan Agreement and in
each other Loan Document and certificate or other writing delivered to
Agent pursuant to the Loan Agreement on or prior to the Effective Date
of this Agreement shall be correct and accurate as to the Borrower on
and as of the Effective Date of this Agreement as though made on and
as of such date; and no Default or Event of Default shall have
occurred and be continuing as of the Effective Date of this Agreement
or would result from this Agreement becoming effective in accordance
with its terms.
(b) ORGANIZATION, GOOD STANDING, ETC. The Borrower (i) is a corporation,
duly organized, validly existing and in good standing under the laws
of its state of organization, (ii) has all requisite power and
authority to execute, deliver and perform this Agreement, and to
perform the Loan Agreement, as amended hereby, and (iii) is duly
qualified to do business and is in good standing in each jurisdiction
in which the character of the properties owned or leased by it or in
which the transaction of its business makes such qualification
necessary.
(c) AUTHORIZATION, ETC. The execution, delivery and performance by the
Borrower of this Agreement, and the performance by the Borrower of the
Loan Agreement, as amended hereby, (i) have been duly authorized by
all necessary action, (ii) do not
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and will not contravene the Borrower's charter or by-laws, any
applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties, (iii) do not and
will not result in or require the creation of any lien or other
encumbrance (other than pursuant to any Loan Documents) upon or
with respect to any of its properties, and (iv) do not and will
not result in any suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval
applicable to its operations or any of its properties.
(d) GOVERNMENTAL APPROVALS. No authorization or approval of other
action by, and no notice to or filing with, any governmental
authority or agency or other regulatory body is required in
connection with the due execution, delivery and performance by
the Borrower of this Agreement, or for the performance of the
Loan Agreement, as amended hereby.
(e) ENFORCEABILITY OF LOAN DOCUMENTS. This Agreement, the Loan
Agreement, as amended hereby, and each other Loan Document to
which the Borrower is a party is a legal, valid and binding
obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as such enforceability may be
limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally.
6. MISCELLANEOUS.
(a) CONTINUED EFFECTIVENESS OF THE LOAN DOCUMENTS. Except as
otherwise expressly provided herein, the Loan Agreement and the
other Loan Documents are, and shall continue to be, in full force
and effect and are hereby ratified and confirmed in all respects,
except that on and after the date hereof (i) all references in
the Loan Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Loan
Agreement shall mean the Loan Agreement as amended by this
Agreement and (ii) all references in the other Loan Documents to
the "Loan Agreement", "thereto", "thereof", "thereunder" or words
of like import referring to the Loan Agreement shall mean the
Loan Agreement as amended by this Agreement. Except as expressly
provided herein, the execution, delivery and effectiveness of
this Agreement shall not operate as an amendment of any right,
power or remedy of the Lenders under the Loan Agreement or any
other Loan Document, nor constitute an amendment of any provision
of the Loan Agreement or any other Loan Documents.
(b) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts (including, without limitation, by telecopy), each
of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
(c) HEADINGS. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement
for any other purpose.
(d) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the Commonwealth of Massachusetts.
(e) COSTS AND EXPENSES. The Borrower agrees to pay on demand all
fees, costs and expenses of the Lenders (including, without
limitation, the reasonable fees, costs and other client charges
of legal counsel to the Lenders) in connection with the
preparation, execution and delivery of this Agreement and the
other related agreements, instruments and documents.
(f) FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT AS LOAN DOCUMENT.
The Borrower hereby acknowledges and agrees that this First
Amendment to Loan and Security Agreement constitutes a "Loan
Document" under the Loan Agreement. Accordingly, it shall be an
Event of Default under the Loan Agreement if (i) any
representation or warranty made by the Borrower under or in
connection with this Agreement shall have been untrue, false or
misleading in any material respect when made, or (ii) the
Borrower shall fail to perform or observe any term, covenant or
agreement contained in this Agreement.
(g) WAIVER OF JURY TRIAL. BORROWER AND LENDERS EACH HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
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PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF THE LENDERS IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.
INTENTIONALLY LEFT BLANK
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Executed under seal as of the date written above.
▇▇▇▇▇▇▇, INC. ("BORROWER")
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
NATIONAL CITY COMMERCIAL FINANCE, INC.
("LENDER")
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
BANKBOSTON RETAIL FINANCE INC.
("AGENT" and "LENDER")
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
GUARANTOR ACKNOWLEDGMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned guarantor hereby irrevocably and
unconditionally acknowledges and confirms to the Lenders that its guaranty of
the liabilities pursuant to the Unlimited Guaranty dated as of March 3, 1999 of
the Borrower continues in full force and effect and is a valid and binding
obligation of the undersigned guarantor in accordance with its terms, and that
no defenses, offsets, claims, counterclaims exist with respect to such guaranty.
Executed under seal as of the date written above.
Guarantor:
ROBERD INSURANCE AGENCY, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President
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