FIFTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Fifth
Amendment") is entered into as of April 15, 2002 by and among F.A.O., Inc. (fka
The Right Start, Inc.), a California corporation ("Parent"), FAO Xxxxxxx, Inc.
(fka Toy Soldier, Inc.), a Delaware corporation and a wholly-owned subsidiary of
Parent ("Xxxxxxx" and, jointly, severally, and jointly and severally with
Parent, "Borrowers"), and Xxxxx Fargo Retail Finance, LLC (the "Lender").
RECITALS
Parent and the Lender are parties to a Loan and Security Agreement
dated as of January 23, 2001, as amended (as amended to the date hereof, further
amended hereby and as further amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement") pursuant to which the Lender
has agreed to make certain revolving credit advances and other financial
accommodations to Parent.
Borrowers have requested an amendment to the Loan Agreement increasing
the Credit Limit thereunder. The Lender is willing to amend the Loan Agreement
on the terms and conditions hereinafter set forth.
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 signatory
hereto agree as follows.
1. Amendment to the Loan Agreement. Exhibit 3 of the Loan Agreement is
hereby amended by deleting the definition of "Credit Limit" and inserting in
lieu thereof the following definition:
""Credit Limit": $17,500,000; provided, that during the period commencing
March 1, 2002 and ending May 15, 2002, the Credit Limit shall be $24,000,000."
2. Conditions Precedent to Fifth Amendment. The satisfaction of each of
the following, unless waived or deferred by the Lender, in its sole discretion,
shall constitute conditions precedent to the effectiveness of this Fifth
Amendment and each and every provision hereof:
(a) The Lender shall have received each of the following documents, each such
document in form and substance reasonably satisfactory to the Lender, duly
executed and in full force and effect:
(i) this Fifth Amendment, fully executed by each of the parties
hereto; and
(ii) such other instruments, certificates or documents as the
Lender shall reasonably request, each of which shall be in
form and substance satisfactory to the Lender, for the purpose
of implementing or effectuating the provisions of the Loan
Agreement and the other Loan Documents, each as amended
hereby.
(b) The representations and warranties in this Fifth Amendment, the Loan
Agreement as amended hereby and the other Loan Documents shall be true and
correct in all material respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate
solely to an earlier date);
(c) Except as expressly waived hereby, no Event of Default shall have occurred
and be continuing on the date hereof, nor shall result from the consummation of
the transactions contemplated herein;
(d) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any court or
other governmental authority against either Borrower or the Lender;; and
(e) The Lender shall have received payment in full of its out-of pocket expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
the Loan Agreement and this Fifth Amendment.
3. Representations and Warranties. Each Borrower hereby represents and
warrants to the Lender that (a) the execution, delivery, and performance of this
Fifth Amendment and the Loan Agreement are within such Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and are not
in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter or bylaws, or of any contract or
undertaking to which it is a party or by which any of its properties may be
bound or affected; (b) this Fifth Amendment and the Loan Agreement constitute
such Borrower's legal, valid, and binding obligation, enforceable against such
Borrower in accordance with its terms; (c) this Fifth Amendment has been duly
executed and delivered by such Borrower; (d) the Borrowers are in compliance
with all of the terms and provisions set forth in the Loan Agreement and each
of the other Loan Documents, as previously amended and as amended hereby, on
their part to be observed or performed on or prior to the date hereof; and (e)
except as expressly waived hereby, no Event of Default has occurred and is
continuing.
4. Reaffirmation. Each Borrower further reaffirms all of its obligations,
as amended hereby, under the Loan Agreement, as amended hereby, and the other
Loan Documents.
5. Effect on Loan Agreement. The Loan Agreement, as amended hereby, shall
be and remain in full force and effect in accordance with its respective terms
and hereby is ratified and confirmed in all respects. The execution, delivery,
and performance of this Fifth Amendment shall not operate as a waiver of or,
except as expressly set forth herein, as an amendment of, any right, power, or
remedy of the Lender under the Loan Agreement, as in effect prior to the date
hereof.
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6. Further Assurances. The Borrowers shall execute and deliver all
agreements, documents, and instruments, in form and substance satisfactory to
the Lender, and take all actions as the Lender may reasonably request from time
to time, to perfect and maintain the perfection and priority of the security
interest in the Collateral held by the Lender and to fully consummate the
transactions contemplated under this Fifth Amendment and the Loan Agreement, as
amended hereby.
7. No Novation; Entire Agreement. This Fifth Amendment evidences solely
the amendment of the terms and provisions of the Borrower's obligations under
the Loan Agreement and is not a novation or discharge thereof. There are no
other understandings, express or implied, between the Lender and the Borrowers
regarding the subject matter hereof.
8. Choice of Law. The validity of this Fifth Amendment, its construction,
interpretation and enforcement, and the rights of the parties hereunder, shall
be determined under, governed by, and construed in accordance with the laws of
The Commonwealth of Massachusetts without giving effect to conflicts of laws
principals.
9. Counterparts; Telefacsimile Execution. This Fifth 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
Fifth Amendment by telefacsimile shall be as effective as delivery of a manually
executed counterpart of this Fifth Amendment. Any party delivering an executed
counterpart of this Fifth Amendment by telefacsimile also shall deliver a
manually executed counterpart of this Fifth Amendment but the failure to deliver
a manually executed counterpart shall not affect the validity, enforceability,
and binding effect of this Fifth Amendment.
10. Definitions and Construction.
(a) Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Loan Agreement, as amended
hereby.
(b) This Fifth Amendment is a Loan Document. This Fifth Amendment and the Loan
Agreement shall be construed collectively and in the event that any term,
provision or condition of any of such documents is inconsistent with or
contradictory to any term, provision or condition of any other such document,
the terms, provisions and conditions of this Fifth Amendment shall supersede and
control the terms, provisions and conditions of the Loan Agreement. Upon and
after the effectiveness of this Fifth Amendment, each reference in the Loan
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to "the Loan Agreement", "thereunder", "therein", "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.
(c) Except to the extent expressly amended hereby, the Loan Agreement and all
other Loan Documents shall be unaffected hereby and shall continue in full force
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and effect and are hereby in all respects ratified and confirmed, and the Loan
Agreement and other Loan Documents, as amended hereby, constitute the legal,
valid, binding and enforceable obligations of the Borrowers to the Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to Loan and Security Agreement to be executed as of the date first above
written.
BORROWERS:
F.A.O., INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Executive Vice President
FAO XXXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Executive Vice President
LENDER:
XXXXX FARGO RETAIL FINANCE, LLC,
as Lender
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx,
Vice President
