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EXHIBIT 10.6
FIRST AMENDMENT
THIS FIRST AMENDMENT (this "FIRST AMENDMENT"), is made as of May 6, 1998,
by and among THE LEARNING COMPANY FUNDING, INC., a Delaware corporation (the
"SELLER"), LEXINGTON XXXXXX CAPITAL COMPANY, LLC, a Delaware limited liability
company, as purchaser (the "PURCHASER"), FLEET NATIONAL BANK, a national banking
association, as the agent (the "AGENT"), TLC MULTIMEDIA INC., a Minnesota
corporation, as servicer ("TLC MULTIMEDIA" or "SERVICER"), and THE LEARNING
COMPANY, INC., a Delaware corporation ("TLC").
WITNESSETH:
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WHEREAS, the Seller, the Purchaser, the Agent, the Servicer and TLC are
parties to a certain Receivables Purchase Agreement, dated as of June 30, 1997,
as amended (the "RECEIVABLES PURCHASE AGREEMENT"); and
WHEREAS, the parties hereto wish to amend the Receivables Purchase
Agreement pursuant to Section 9.2(b) thereof.
NOW THEREFORE, in consideration of the mutual promises and agreements
herein, the parties hereto agree as follows:
1. Clauses (ii) and (iii) of Section 4.1(b) of the Receivables Purchase
Agreement are hereby amended and restated in their entirety to read,
respectively, as follows:
"(ii) JUDGMENT. The entry of any judgment or decree against the
Seller, TLC or TLC Multimedia if the aggregate amount of all judgments
and decrees then outstanding against the Seller, TLC or TLC Multimedia
exceeds $10,000,000 (net of insurance proceeds)."
"(iii) DEFAULTS. Copies of any written notice of a default or
acceleration of any Indebtedness owed by Seller, TLC Multimedia or TLC
in the amount of more than $20,000,000."
2. Section 6.1(a) of the Receivables Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(a) Servicer shall fail (i) to make or remit any payment or deposit
required hereunder, or (ii) to perform or observe any term, covenant
or agreement hereunder (other than as referred
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to in clause (i) of this paragraph (a)) and any such failure under
clause (i) or clause (ii) shall remain unremedied for 20 days."
3. Section 6.1(c) of the Receivables Purchase Agreement is amended and
restated in its entirety as follows:
"(c) [Intentionally Omitted.]"
4. Clause (ii) of Section 6.1(d) of the Receivables Purchase Agreement is
hereby amended by deleting the phrase "sixty (60)" appearing therein and
inserting in lieu thereof the phrase "ninety (90)".
5. Section 6.1(e) of the Receivables Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(c) The Seller's, TLC or TLC Multimedia's receipt of written notice
that, with respect to Indebtedness of more than $20,000,000 in
principal amount, any such party has failed to pay when due any amount
payable under such Indebtedness, or failed to observe or perform any
term, covenant or agreement evidencing or securing such Indebtedness,
which if uncured or unwaived, permits the acceleration of such
Indebtedness, or declaration of any default or event of default under
any agreement relating to such Indebtedness; provided, however, a
Servicer Default shall not be deemed to have occurred if such
Indebtedness is the subject of a bona fide dispute and diligent
efforts are being made to resolve such dispute."
6. Section 6.2(e) of the Receivables Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(e) TLC, TLC Multimedia, Properties, Direct, Services, Skills Bank,
Microsystems or Mindscape shall be in default under any of the Deemed
Collection Guarantees or any of the Deemed Collection Security
Documents;"
7. Clause (B) of Section 6.2(f) of the Receivables Purchase Agreement is
hereby amended by deleting the phrase "sixty (60)" appearing therein and
inserting in lieu thereof the phrase "ninety (90)".
8. (a) Exhibit I of the Receivables Purchase Agreement is hereby amended
to add the following new definitions to be set forth in the appropriate places
in alphabetical order:
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"`DIRECT' means TEC Direct, Inc., a Colorado corporation.
`MICROSYSTEMS' means Microsystems Software, Inc., a Massachusetts
corporation.
`MINDSCAPE' means Mindscape, Inc., a Delaware corporation.
`PROPERTIES' means Learning Company Properties Inc., a Delaware
corporation.
`SERVICES' means Learning Services Inc., an Oregon corporation.
`SKILLS BANK' means Skills Bank Corporation, a Maryland corporation."
(b) Exhibit I of the Receivables Purchase Agreement is hereby further
amended by amending and restating the terms "Deemed Collection Guarantee" and
"Liquidity Agreement" in their entirety to read, respectively, as follows:
"`DEEMED COLLECTION GUARANTEE' means those certain guarantees of
Seller's obligation to pay Deemed Collection Amounts issued by TLC,
TLC Multimedia, Properties, Direct, Services, Skills Bank,
Microsystems and Mindscape.
`LIQUIDITY AGREEMENT' means the Liquidity Agreement of even date
herewith, as amended and in effect from time to time, among Purchaser,
the Liquidity Banks and Fleet as agent.
(c) Clause (xviii) of the term "ELIGIBLE RECEIVABLE" in Exhibit I of
the Receivables Purchase Agreement is hereby amended by deleting the phrase "two
percent (2%)" appearing therein and inserting in lieu thereof the phrase "five
percent (5%)".
9. Article IX of the Receivables Purchase Agreement is hereby amended by
adding the following at the end thereof:
9.13 NON-PETITION. Each party hereto other than the Purchaser hereby
covenants and agrees that, prior to the date which is one year and one day
after the payment in full of all indebtedness for borrowed money of the
Purchaser, such party will not institute against, or join any other Person
in instituting against, the Purchaser any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceeding
under the laws of the United States or any state of the United States.
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10. Except as specifically amended by this First Amendment, the
Receivables Purchase Agreement is hereby ratified, confirmed and approved. The
Receivables Purchase Agreement, as supplemented and amended by this First
Amendment shall be construed as one and the same instrument. This First
Amendment may be executed in any number of counterparts, each of which
counterpart, when so executed, shall be deemed to be an original and such
counterparts shall constitute one and the same instrument.
11. This First Amendment shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
[Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as an instrument under seal by their duly authorized
officers as of the date first above written.
SELLER:
THE LEARNING COMPANY FUNDING, INC.
By: /s/ R. Xxxxx Xxxxxx
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Name: R. Xxxxx Xxxxxx
Title: Chief Financial Officer
PURCHASER:
LEXINGTON XXXXXX CAPITAL COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Manager
AGENT:
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
SERVICER:
TLC MULTIMEDIA INC.
By: /s/ R. Xxxxx Xxxxxx
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Name: R. Xxxxx Xxxxxx
Title: Chief Financial Officer
THE LEARNING COMPANY, INC.
By: /s/ R. Xxxxx Xxxxxx
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Name: R. Xxxxx Xxxxxx
Title: Chief Financial Officer
