Play Co has notified the Lender that the Play Co. has created TIC. As of the date that this Amendment was executed, the Play Co. owns approximately 94% of the issued and outstanding shares of stock in TIC. After the Sixth Amendment Effective Date, TIC intends to have an initial public offering (the "IPO") of its shares which will result in the Play Co.'s ownership interest in TIC being diluted to approximately 51% of the issued and outstanding shares in TIC. Play Co. agrees that after the IPO it will continue to own not less than 51% of the issued and outstanding shares in TIC. In connection with the TIC IPO, Play Co. intends to assign to TIC, subject to the rights and lien of Lender under the Loan Documents, the proceeds from six of Play Co.'s stores (the "TIC Stores") selected by Play Co. The Lender consents to the foregoing transaction and agrees that the foregoing transaction shall not constitute an Event of Default or Incipient Default under the Loan Agreement (including but not limiting the generality of the foregoing, the provisions of Section 3.8(a) of the Loan Agreement), provided the net proceeds of TIC IPO are used solely for New Equity. The Borrower acknowledges and agrees that the waiver of the Lender contained in the Section is limited solely to the matters and circumstances contained herein.
Play Co hereby expressly and fully transfers the Lease, as heretofore and hereby amended, over and unto Toys.
Play Co hereby expressly and fully transfers the Lease over and unto Toys, remaining liable thereunder to the extent provided under the terms of the Lease.
Play Co cannot obtain a stand-by letter of credit in the amount of $700,000 without collateral of an equal amount.
Play Co agrees to use the L/C to secure a loan to be made to it by a financial institution for the purpose of obtaining funds to assist it in purchasing merchandise to stock its stores and for general operating purposes.
Play Co hereby warrants and represents to ZD that:
Play Co is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to carry on its business as now conducted and as proposed to be conducted and is qualified as a foreign corporation in each jurisdiction where the failure to do so would have a material adverse effects on its business;
Play Co is not in material default under any other loan agreement with any third party lender which has been acted upon by such lender.
4.2. So long as the Guarantee Fee is due, ZD shall have the right to nominate and appoint one-third of Play Co.'s Board of Directors. Such nomination and appointment shall be made in writing by ZD addressed to Play Co. and the Chairman of its Board of Directors.
Play Co hereby represents and warrants to DIG Financial, as follows (it being acknowledged that DIG Financial is entering into this Agreement in material reliance upon each of the following representations and warranties, and that the truth and accuracy of each of which constitutes a condition precedent to the obligations of DIG Financial hereunder):
Play Co has full power, legal capacity and authority to enter into this Agreement, to execute all attendant documents and instruments necessary to consummate the transaction herein contemplated, and to issue and sell the Play Co. Common Stock to DIG Financial and to perform all of its obligations hereunder. This Agreement and all other agreements, documents and instruments to be executed in connection herewith have been effectively authorized by all necessary action, corporate or otherwise, on the part of Play Co., which authorizations remain in full force and effect, have been duly executed and delivered by Play Co., and no other corporate proceedings on the part of Play Co. are required to authorize this Agreement and the transactions contemplated hereby, except as specifically so forth herein. This Agreement constitutes the legal, valid and binding obligation of Play Co. and is enforceable with respect to Play Co. in accordance with its terms, except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, priority or other laws or court decisions relating to or affecting generally the enforcement of creditors' rights or affecting generally the availability of equitable remedies. Neither the execution and delivery of this Agreement, nor the consummation by Play Co. of any of the transactions contemplated hereby or compliance with any of the provisions hereof, will (i) conflict with or result in a breach of, violation of, or default under, any of the terms conditions or provision of any note, bond, mortgage, indenture, license, lease, credit agreement or other agreement, document, instrument or obligation (including without limitation, any of its charter documents) to which Play Co. is a party or by which Play Co. or any of its assets or properties may be bound, or (ii) violate any judgment, order, injunction, decree, statute, rule or properties of Play Co. No authorization, consent or approval of any public body or authority is necessary for the consummation by Play Co. of the transactions contemplated by this Agreement.
