Exhibit 10.82(a)
Amendment No. 4 to Loan and Security Agreement with Congress
FOURTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"),
dated as of July ____, 1997, is entered into by and between CONGRESS FINANCIAL
CORPORATION (WESTERN), a California corporation ("Lender"), with a place of
business at 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxx 00000, and
PLAY CO. TOYS & ENTERTAINMENT CORP., a Delaware corporation (formerly known as
"Play Co. Toys") ("Borrower"), with its chief executive office located at 000
Xxxxxxxxx Xxxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000.
RECITALS
Borrower and Lender have previously entered into that certain Loan and
Security Agreement dated as of February 1, 1996, as amended by that certain
First Amendment to Loan and Security Agreement dated as of August 16, 1996, that
certain Second Amendment to Loan and Security Agreement dated as of January 16,
1997, and that certain Third Amendment to Loan and Security Agreement dated as
of March 12, 1997 (collectively, the "Loan Agreement"), pursuant to which Lender
has made certain loans and financial accommodations available to Borrower. Terms
used herein without definition shall have the meanings ascribed to them in the
Loan Agreement.
Borrower has requested Lender to amend the Loan Agreement to (i)
eliminate the separate advance rates against Eligible Toys International
Inventory for Revolving Loans and (ii) confirm that the Loan Agreement shall not
be extended past February 2, 1998.
Lender is willing to further amend the Loan Agreement under the terms
and conditions set forth in this Amendment. Borrower is entering into this
Amendment with the understanding and agreement that, except as specifically
provided herein, none of the Lender's rights or remedies as set forth in the
Loan Agreement is being waived or modified by the terms of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
Amendment to Definitions of the Loan Agreement.
The definition of "Eligible Toys International Inventory" is hereby
deleted in its entirety from Section 1 of the Loan Agreement.
(b) The following definition is hereby inserted in Section 1 of
the Loan Agreement in proper alphabetical order:
"Termination Date" shall have the meaning set forth in Section 12.1(a)
hereof."
Amendment to Credit facilities Provision of the Loan Agreement.
Sub-paragraph (i) of paragraph (a) of Section 2.1 of the Loan Agreement
(entitled "Revolving Loans") is hereby amended in its entirety to read as
follows:
"(i) the lesser of the Maximum Credit (less any amounts advanced under the
Special Loan Facility) or (A) for Peak Period, the lowest of (1) sixty percent
(60%) of the Cost Value of Eligible Inventory or categories thereof for that
portion of the Peak Period from August 1 through December 15, such percentage
thereafter to decrease by two (2) percentage points per week commencing December
16, and for each seven (7) day period thereafter, through the end of the Peak
Period: (2) eighty-one (81%) of the Appraised Value of Eligible Inventory or
categories thereof; or (3) thirty-eight and one-half percent (38.5%) of the
Retail Value of Eligible Inventory or categories thereof for that portion of the
Peak Period from August 1 through December 15, such percentage thereafter to
decrease by one (1) percentage point per week commencing December 16, and for
each seven (7) day period thereafter, through the end of Peak Period; or (B) for
non-Peak Period, the lowest of (1) fifty percent (50%) of the Cost Value of
Eligible Inventory or categories thereof; (2) eighty-eight percent (88%) of the
Appraised Value of Eligible Inventory or categories thereof; or (3) thirty-three
percent (33%) of the Retail Value of Eligible Inventory or categories thereof,
plus"
3. Amendment to Collateral Reporting and Covenants Provision of the Loan
Agreement. Clause (b) of Section 7.3 of the Loan Agreement (entitled "Inventory
Covenants") is hereby amended in its entirety to read as follows:
"(b) Lender may conduct physical counts of the Inventory, no more than
twice in any twelve month period, but at any time as Lender may request on or
after an Event of Default, provided, however, notwithstanding the foregoing,
Lender may conduct (in addition to the physical counts of inventory described
above) a test count of the inventory for the second quarter ended for fiscal
year 1998 of Borrower, and Lender may engage Washington Inventory Service or
another outside inventory counting service acceptable to Lender to conduct a
periodic physical count of the Inventory in such manner as Lender shall
reasonably determine, the costs and expenses of such firm engaged to conduct the
physical count such firm shall supply Lender with a report in the form and with
such specificity as may be reasonably satisfactory to Lender concerning such
physical count,"
4. Amendment to Term of Agreement; Miscellaneous Provision of the Loan
Agreement.
(a) The first sentence of paragraph (a) of Section 12.1 of the Loan
Agreement (entitled "Term") is hereby amended in its entirety to read as
follows:
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"This Agreement and the other Financing Agreement shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on February 2, 1998 (the "Termination
Date"), unless sooner terminated pursuant to the terms hereof."
(b) Clause (iii) of paragraph c of Section 12.1 of the Loan Agreement
(entitled "Term") is hereby deleted in its entirety.
5. Effectiveness of this Amendment. Leader must have received the
following items, in form and content acceptable to Lender, before this Amendment
is effective and before Lender is required to extend any credit to Borrower as
provided for by this Amendment. The date on which all of the following
conditions have been satisfied is the "Closing Date".
(a) Amendment. This Amendment fully executed in a sufficient number of
counterparts for distribution to Lender and Borrower.
(b) Authorizations. Evidence that the execution, delivery and performance
by Borrower and each guarantor or subordinating creditor of this Amendment and
any instrument or agreement required under this Amendment have been duly
authorized.
(c) Representations and Warranties. The Representations and Warranties set
forth in the Loan Agreement must be true and correct.
(d) Consents. Lender has received counterparts of the Consent appended
hereto (the "Consent") executed by United Textiles & Toys Corporation, a
Delaware corporation, formerly known as Mister Xxx Fashions International, Inc.
("Guarantor") (together with the Borrower, each a "Loan Party" and,
collectively, the "Loan Parties").
(e) Other Required Documentation. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered or executed or recorded and shall be in form and substance
satisfactory to Lender.
(f) Payment of Modification Fee. Lender shall have charged a Modification
Fee of One Thousand Dollars ($1,000) to the loan account(s) of Borrower for the
processing and approval of this Amendment.
6. Representations and Warranties. The Borrower represents and warrants as:
(a) Authority. The Borrower and each other Loan Party has the requisite
corporate power and authority to execute and deliver this Amendment or the
Consent, as applicable, and to perform its obligations hereunder and under the
Financing Agreements (as amended or modified hereby) to which it is a party. The
execution, delivery and performance by the Borrower of this Amendment and by
each other Loan Party of the Consent, and the performance by each Loan Party of
each Financing Agreement (as amended or modified hereby) to which it is a party
have
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been duly approved by all necessary corporate action of such Loan Party and no
other corporate proceedings on the part of such Loan Party are necessary to
consummate such transactions.
(b) Enforceability. This Amendment has been duly executed and delivered by
the Borrower. The Consent has been duly executed and delivered by Guarantor.
This Amendment and each Financing Agreement (as amended or modified hereby) is
the legal, valid and binding obligation of each Loan Party hereto or thereto,
enforceable against such Loan Party in accordance with its terms, and is in full
force and effect.
(c) Representations and Warranties. The representations and warranties
contained in each Financing Agreement (other than any such representations or
warranties that, by their terms, are specifically made as of a date other than
the date hereof) are correct on and as of the date hereof as though made on and
as of the date hereof.
(d) No Default. No event has occurred and is continuing that constitutes an
Event of Default.
7. Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of California governing contracts only to be performed in that
State.
8. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment or the Consent by
telefacsimile shall be effective as delivery of a manually executed counterpart
of this Amendment of such Consent.
9. Due Execution. The execution, delivery and performance of this Amendment
are within the power of Borrower, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval, if any, and
do not contravene any law or contractual restrictions binding on Borrower.
10. Reference to and Effect on the Loan Documents. (a) Upon and after the
effectiveness of this Amendment, each reference in the Loan Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the Loan
Agreement, and each reference in the other Financing Agreements to "the Loan
Agreement", "thereof" or words of like import referring to the Loan Agreement,
shall mean and be a reference to the Loan Agreement as modified and amended
hereby.
(b) Except as specifically amended above, the Loan Agreement and all
other Financing Agreements, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed and shall
constitute the legal, valid, binding and enforceable obligations of Borrower to
Lender.
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(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Lender under any of the Financing Agreements, not constitute
a waiver of any provision of any of the Financing Agreements.
(d) To the extent that any terms and conditions in any of the Financing
Agreements shall contradict or by in conflict with any terms or conditions of
the Loan Agreement, after giving effect to this Amendment, such terms and
conditions are hereby deemed modified or amended accordingly to reflect the
terms and conditions of the Loan Agreement as modified or amended hereby.
11. Ratification. Borrower hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Loan Agreement, as amended hereby, and
the Financing Agreements effective as of the date hereof.
12. Estoppel. To induce Lender to enter into this Amendment and to continue
to make advances to Borrower under the Loan Agreement, Borrower hereby
acknowledges and agrees that, after giving effect to this Amendment, as of the
date hereof, there exists no Event of Default and no right of offset, defense,
counterclaim or objection in favor of Borrower as against Lender with respect to
the Obligations.
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
date first written above.
PLAY CO. TOYS & ENTERTAINMENT CORP.,
a Delaware corporation
By:_________________________________
Title:________________________________
CONGRESS FINANCIAL CORPORATION
(WESTERN), a California corporation
By:_________________________________
Title:________________________________
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