EXHIBIT 10.12
AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "AMENDMENT"), is
entered into on this 14th day of July, 2000, by and between SUNROCK CAPITAL
CORP., a Delaware corporation ("LENDER"), and DSI TOYS, INC., a Texas
corporation ("Borrower").
RECITALS
A. Borrower and Lender have entered into that certain Loan and Security
Agreement, dated as of February 2, 1999, as amended by that certain Amendment
No. 1 to Loan and Security Agreement, dated effective as of June 30, 1999, by
and between Lender and Borrower and that certain Amendment No. 2 to Loan and
Security Agreement, dated as of January 7, 2000, by and between Borrower and
Lender (as the same may be further amended, modified, supplemented or restated
from time to time, the "LOAN AGREEMENT").
B. The Borrower has requested a temporary extension of the seasonal
inventory advances provided for by SECTION 2.2 of the Loan Agreement, during the
month of July, 2000.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Capitalized terms used in this Amendment, to the extent not otherwise
defined herein, shall have the same meaning as in the Loan Agreement, as amended
hereby.
ARTICLE II
AMENDMENTS
2.01 SEASONAL INVENTORY ADVANCES. Effective as of the date hereof, SECTION
2.2(B)(III) of the Loan Agreement is hereby amended and restated to read in its
entirety as follows:
"(iii) during the period commencing July 1, 2000, and
extending through July 31, 2000, the sum of: (A) ten percent (10%) of the
Value of Eligible Inventory; and (B) ten percent (10%) of the Value of
Eligible In-Transit Inventory; or"
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ARTICLE III
RATIFICATIONS, REPRESENTATIONS, WARRANTIES AND COVENANTS
3.01 RATIFICATIONS. Except as expressly amended hereby, the terms and
provisions of the Loan Agreement are ratified and confirmed and shall continue
in full force and effect. Borrower and Lender agree that the Loan Agreement, as
amended hereby, and each agreement and instrument executed in connection
herewith, shall continue to be legal, valid, binding and enforceable in
accordance with their respective terms.
3.02 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that (a) the execution, delivery and performance of this
Amendment has been authorized by all requisite corporate action on the part of
Borrower and does not violate the Articles of Incorporation or Bylaws of
Borrower; (b) the representations and warranties contained in the Loan
Agreement, are true and correct on and as of the date hereof; (c) as of the date
hereof no Event of Default under the Loan Agreement is continuing and no event
or condition exists that with the giving of notice or the lapse of time, or
both, would be an Event of Default; and (d) Borrower is in full compliance with
all covenants and agreements contained in the Loan Agreement and each agreement
and instrument entered into in connection therewith.
3.03 FEE PAYABLE TO LENDER PAYMENT OF LEGAL AND OTHER EXPENSES. Upon the
execution of this Amendment by Lender, Borrower hereby agrees to pay to Lender a
fee in the amount of $5,000.00. In addition and as provided in the Loan
Agreement, Borrower agrees to pay on demand all costs and expenses incurred by
Lender in connection with the preparation, negotiation and execution of this
Amendment, including, without limitation, the costs and fees of Lender's legal
counsel, and all costs and expenses incurred by Lender in connection with the
enforcement or preservation of any rights under the Loan Agreement, as amended
hereby, or any agreement, document or instrument executed in connection
therewith.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made herein and in the Loan Agreement shall survive the execution and
delivery of this Amendment, and no investigation by Lender shall affect the
representations and warranties or the right of Lender to rely upon them.
4.02 REFERENCE TO LOAN AGREEMENT. The Loan Agreement, as amended hereby,
and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms thereof are hereby amended so that any reference
in the Loan Agreement or such other agreements, documents and instruments shall
mean a reference to the Loan Agreement, as amended hereby.
4.03 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this
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Amendment and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.
4.04 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Lender and Borrower and their respective successors and
assigns, except Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
4.05 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
4.06 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
4.07 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
4.08 FINAL AGREEMENT. THE FINANCING AGREEMENTS (INCLUDING THE LOAN
AGREEMENT AND THIS AMENDMENT), AS AMENDED HEREBY, REPRESENT THE ENTIRE
EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE
THIS AMENDMENT IS EXECUTED. THE FINANCING AGREEMENTS, AS AMENDED HEREBY, MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED
BY BORROWER AND LENDER.
4.09 RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE OBLIGATIONS (AS DEFINED IN THE LOAN AGREEMENT) OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING
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IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE
BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY LOANS (AS DEFINED IN THE LOAN AGREEMENT),
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR
ANY FINANCING AGREEMENT, DOCUMENT OR INSTRUMENT ENTERED INTO IN CONNECTION
THEREWITH.
[Signature Page Follows]
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Executed as of this 14th day of July, 2000.
DSI TOYS, INC.
By: /s/ X.X. Xxxxxxxxxx
-------------------------------------
Name: X. X. Xxxxxxxxxx
Title: Chief Financial Officer
SUNROCK CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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