EXHIBIT 10.115(a)
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
This Amendment No. 3 to Loan and Security Agreement (this "Amendment") is
entered into as of this ___ day of December, 1998, by and between FINOVA CAPITAL
CORPORATION, a Delaware corporation ("Lender"), and PLAY CO. TOYS &
ENTERTAINMENT CORP., a Delaware corporation ("Borrower").
W I T N E S S E T H :
WHEREAS, Borrower and Lender entered into a Loan and Security Agreement
dated as of January 21, 1998 which was amended pursuant to that certain
Amendment No. 1 to Loan and Security Agreement dated as of July 24, 1998 and
that certain Amendment No. 2 to Loan and Security Agreement dated as of
September 24, 1998 (the aforementioned Loan and Security Agreement as amended by
the aforementioned amendments, collectively the "Loan Agreement"), that
evidences a loan from Lender to Borrower; and
WHEREAS, Borrower has asked Lender to modify the Loan Agreement in
accordance with the terms of, and subject to the conditions contained in, this
Amendment and Lender is willing so to amend the Loan Agreement, upon the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of these recitals, the covenants contained
in this Amendment, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Lender and Borrower agree as
follows:
1. Definitions. Unless otherwise defined in this Amendment, all capitalized
terms used herein which are defined in the Loan Agreement have the same meaning
as set forth in the Loan Agreement.
2. Loan Agreement. The Loan Agreement is amended as follows:
2.1 Definitions. Section 1 is hereby amended by adding the following
definitions:
"Phoenix" means Phoenix Leasing Incorporated., a California
corporation and its successors and assigns.
"Phoenix Financing" means that Senior Loan and Security Agreement No.
4003 by and between Borrower and Phoenix (as Lender) dated as of October
19, 1998, whereby Phoenix, upon the terms and conditions set forth therein
has extended to Borrower a line of credit of up to $500,000 to be used for
the original acquisition cost of the Phoenix Equipment. A true and complete
copy of the aforesaid Loan Agreement is attached hereto as Schedule 1.
"Phoenix Equipment" means that certain equipment and fixtures
identified on Schedule 2 attached hereto and proceeds therefrom.
"Third Amendment" means that certain Amendment No. 3 to Loan and
Security Agreement between Lender and Borrower dated as of December ____,
1998.
"Third Amendment Effective Date" means December ___, 1998, the date
upon which the Third Amendment became effective pursuant to the terms and
upon the conditions thereof.
2.2 Permitted Encumbrances. The definition of Permitted Encumbrances
appearing in the Borrower Information section of the Schedule shall be
amended by adding the foregoing as subparagraph (e) thereof:
"(e) the lien in all of the Phoenix Equipment in favor of Phoenix
securing the Borrower's obligations under the Phoenix Financing."
3. Phoenix Financing.
(a) On the Third Amendment Effective Date, the Lender agrees to
subordinate the lien of the Loan upon only the Phoenix Equipment to
the Phoenix Financing. The Borrower agrees that, except for the
Permitted Encumbrances, it will not enter into any additional loans or
financings nor grant any additional security interests in the
Collateral, without the prior consent of the Lender. Further, the
Borrower agrees that it will not amend or modify the documents
evidencing Phoenix Financing and/or the terms of the Phoenix
Financing, without obtaining first, in each instance, the prior
consent of Lender.
(b) The Borrower agrees to promptly supply to Lender true and
complete copies of any notice sent by Phoenix to the Borrower alleging
either (i) a default by the Borrower under the Phoenix Financing or
(ii) the occurrence of an event which with notice or the passage of
time (or both) would constitute a default by the Borrower under the
Phoenix Financing.
(c) In connection with the Phoenix Financing, FINOVA hereby
establishes reserve equal to at least three (3) months principal and
interest due and payable by the Borrower under the Phoenix Financing
(the "Phoenix Reserve"). The Phoenix Reserve will be considered a part
of the Loan Reserves.
4. Effect as an Amendment. Other than as specifically set forth in this
Amendment, the remaining terms of the Loan Agreement and the other Loan
Documents shall remain in full force and effect and shall remain unaffected and
unchanged except as specifically amended hereby. In the event of any conflict
between the terms and conditions of this Amendment and any of the other Loan
Documents, the provisions of this Amendment shall control. Each reference to in
the Loan Agreement to "this Agreement" shall be deemed to refer to the Loan
Agreement as amended through and including the Second Amendment, and each
reference in any other Loan Document to the Loan Agreement as amended through
and including the Second Amendment.
5. No Waiver. This Amendment in no way acts as a waiver by Lender of any
breach, default, Event of Default or condition which, with the giving of notice
or passing of time or both, would constitute an Event of Default, of Borrower
(whether known or unknown to Lender) or as a release or relinquishment of any of
the liens, security interests, rights or remedies securing payment and
performance of the Obligations or the enforcement thereof. Nothing contained in
this Amendment is intended to or shall be construed as relieving any person or
entity, whether a party to this Amendment or not, of any of such person's or
entity's obligations to Lender.
6. Conditions Precedent. This Amendment will not be effective unless and
until each of the following conditions precedent have been satisfied, in form,
manner and substance satisfactory to Lender prior to the Third Amendment
Effective Date:
(a) Borrower shall have delivered or caused to be delivered to
Lender the following documents, all of which shall be properly
completed, executed and otherwise satisfactory to Lender:
(i) This Amendment;
(ii) Consent of Guarantor in the form attached hereto and
incorporated herein by this reference;
(iii) A corporate resolution of each of Borrower and
Guarantor, approving the transactions contemplated hereby to
which it is a party;
(iv) An Intercreditor-Subordination Agreement between Lender
and Phoenix in a form satisfactory to Lender;
(v) Such other items as Lender may reasonably require or
reasonably deem necessary.
(b) There shall not then exist an Event of Default or any act or
event which with notice, passage of time, or both would constitute an
Event of Default.
(c) All the representations and warranties of the Loan Parties in
the Loan Documents shall be true and correct, in all material
respects, before and after giving effect to the making of this
Amendment.
(d) Borrower shall have paid all closing costs, recording fees
and taxes, appraisal fees and expenses, travel expenses, fees and
expenses of Lender's counsel, and all other costs and expenses
incurred by Lender in connection with the preparation of, closing of
and disbursement of the advances pursuant to this Amendment, which
costs, fees and expenses may be payable from the first advance made
pursuant to this Amendment.
7. Indebtedness Acknowledged. Borrower acknowledges that the indebtedness
evidenced by the Loan Documents is just and owing and agrees to pay such
indebtedness in accordance with the terms of the Loan Documents. Borrower
further acknowledges and represents that no event has occurred and no condition
presently exists that would constitute a default or event of default by Lender
under the Loan Agreement or any of the other Loan Documents, with or without
notice or lapse of time.
8. Validity of Documents. Borrower hereby ratifies, reaffirms, acknowledges
and agrees that the Loan Agreement and the other Loan Documents represent valid,
enforceable and collectable obligations of Borrower, and that Borrower presently
has no existing claims, defenses (personal or otherwise) or rights of setoff
whatsoever with respect to the Obligations of Borrower under the Loan Agreement
or any of the other Loan Documents. Borrower furthermore agrees that it has no
defense, counterclaim, offset, cross-complaint, claim or demand of any nature
whatsoever which can be asserted as a basis to seek affirmative relief or
damages from Lender.
9. Reaffirmation of Warranties. Borrower hereby reaffirms to Lender each of
the representations, warranties, covenants and agreements of Borrower as set
forth in each of the Loan Documents with the same force and effect as if each
were separately stated herein and made as of the date hereof. Borrower
represents and warrants to Lender that with respect to the financing transaction
herein contemplated, no Person is entitled to any brokerage fee or other
commission and Borrower agrees to indemnify and hold Lender harmless against any
and all such claims.
10. Other Writings. Lender and Borrower will execute such other writings as
may be necessary to confirm or carry out the intentions of Lender and Borrower
evidenced by this Amendment.
11. Entire Agreement. The Loan Documents as modified by this Amendment
embody the entire agreement and understanding between Borrower and Lender, and
supersede all prior agreements and understandings between said parties relating
to the subject matter thereof.
12. Counterparts; Telefacsimile Execution. This Amendment (including the
consents attached hereto) may be executed in any number of separate
counterparts, all of which when taken together shall constitute one and the same
instrument, admissible into evidence, notwithstanding the fact that all parties
have not signed the same counterpart. Delivery of an executed counterpart of
this Amendment by telefacsimile shall be equally as effective as delivery of a
manually executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile shall also deliver a
manually executed counterpart of this Amendment, but the failure to deliver a
manually executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first written above.
FINOVA CAPITAL CORPORATION, a Delaware corporation
By:
Name:
Title:
PLAY CO. TOYS & ENTERTAINMENT CORP., a Delaware corporation
By:
Name:
Title:
90885-1
CONSENT OF GUARANTOR
The undersigned ("Guarantor") hereby executes this Consent for the purpose
of (i) evidencing Guarantor's consent to the execution and performance of the
foregoing Amendment No. 3 to Loan and Security Agreement (the "Third Amendment")
by Lender and Borrower, (ii) reaffirming the terms of the Continuing Guaranty
Agreement executed by Guarantor in favor of Lender, (iii) evidencing Guarantor's
agreement that the Liabilities as set forth and defined in the Continuing
Guaranty Agreement shall, for all purposes, include the Loan Documents, as
amended by the Third Amendment, and shall further include all additional amounts
which may be funded or advanced to Borrower pursuant to the Loan Agreement
described above as amended by the Third Amendment, and (iv) ratifying and
affirming all terms and provisions of the Continuing Guaranty Agreement. Except
to the extent otherwise indicated, terms used herein with initial capital
letters shall have the meanings set forth in the Loan Agreement, as amended by
the Third Amendment.
Guarantor agrees that it has no defense, counterclaim, offset,
cross-complaint, claim or demand of any nature whatsoever which can be asserted
as a basis to seek affirmative relief or damages from Lender.
IN WITNESS WHEREOF, the undersigned has hereunto executed this Consent as
of this ____ day of _____________, 1998.
UNITED TEXTILES & TOYS CORPORATION,
a Delaware corporation
By:
Name:
Title:
90885-1