Northeast One Stop, Inc.
0 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
September 24, 1998
Congress Financial Corporation
(New England)
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Re: SECOND AMENDMENT TO FINANCING AGREEMENTS
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement dated April 20,
1995, as amended (the "Loan Agreement"), and all supplements, agreements,
documents and instruments entered into by Northeast One Stop, Inc. ("Borrower")
pursuant thereto, as such may have been amended from time to time (collectively,
the "Financing Agreements"). Capitalized terms used herein shall have the
meanings given them in the Financing Agreements. Congress Financial Corporation
(New England) is referred to herein as "Congress."
The Borrower has requested that the Financing Agreements be amended
as set forth herein relating to the acquisition of all of Borrower's common
stock (the "Stock Sale Transaction") by Planet Entertainment Corporation
("PEC"). Accordingly, effective as of the date set forth above, the Borrower and
Congress hereby agree as follows:
A. AMENDMENTS TO THE LOAN AGREEMENT
1. Section 9.6(a) of the Loan Agreement is amended by adding
the following at the end thereof:
"For purposes of this Agreement, Lender acknowledges that
the accounting firm of X.X. Xxxxxxx, P.C., of Denver, Colorado is reasonably
acceptable to Lender."
2. Subsection 10.1(j) of the Loan Agreement is deleted and the
following is inserted in its place thereof:
"(j) any change in the controlling ownership of PEC, any
change in the ownership of Borrower, or any termination, other than for Cause
(as defined in the
Congress Financial Corporation (New England)
September 24, 1998
Page 2
applicable employment agreements as in effect on the date hereof), of the
employment relationships with Xxxxx X. XxxXxxxxxx (at any time before September
24, 1999) or with Xxxxxx Xxxxx or Xxxxxxx Xxxxxx (in each case, at any time
before September 24, 2001);"
B. CONDITIONS PRECEDENT
Notwithstanding any other provisions of this Second Amendment or any
of the other Financing Agreements, and without affecting in any manner the
rights of Congress under the other Sections of this Second Amendment, this
Second Amendment shall not be effective as to Congress unless and until each of
the following conditions has been and continues to be satisfied:
1. DOCUMENTATION. Congress shall have received, in form and
substance satisfactory to Congress and its counsel, (a) a duly executed copy of
this Second Amendment, together with such additional documents, instruments and
certificates as Congress and its counsel shall require in connection therewith
from time to time; (b) duly executed copies of all documentation and amendments
thereto relating to the Stock Sale Transaction and evidence satisfactory to
Congress that all conditions to the effectiveness thereof have been satisfied
and not amended, modified or waived; (c) the Guarantee of PEC in the form of
Exhibit A hereto; and (d) evidence satisfactory to Lender that Borrower shall
have entered into customary employment contracts with Xxxxx X. XxxXxxxxxx for a
period of at least one year, with Xxxxxx Xxxxx for a period of at least three
years, and with Xxxxxxx Xxxxxx for a period of at least three years.
2. NO DEFAULT. No Default or Event of Default shall exist.
3. NO MATERIAL ADVERSE CHANGE. No material adverse change
shall have occurred in the assets, business or financial condition of Borrower
since the date of the Congress' latest field examination or in PEC since the
date of the latest financial statements for PEC furnished to Congress and no
change or event shall have occurred which would impair the ability of Borrower,
PEC or any other Guarantor to perform its obligations under any of the Financing
Agreements to which it is a party or of Congress to enforce the Obligations or
realize on the Collateral.
C. RELEASE OF XXXXXXXXXX GUARANTEES.
Effective upon the satisfaction of the conditions precedent set forth
in paragraph B above, Lender agrees to release the Guarantee dated April 20,
1995 of Xxxxx X.
Congress Financial Corporation (New England)
September 24, 1998
Page 3
XxxXxxxxxx and the Limited Guarantee dated April 7, 1995 of Xxxxxxxx X.
XxxXxxxxxx, subject in each case to the terms thereof.
D. ACKNOWLEDGMENT OF OBLIGATIONS
Borrower and Guarantors hereby (1) reaffirm and ratify all of the
promises, agreements, covenants and Obligations to Congress under or in respect
of the Financing Agreements as amended hereby and (2) acknowledge they are
unconditionally liable for the punctual and full payment of all Obligations,
including, without limitation, all charges, fees, expenses and costs (including
attorneys' fees and expenses) under the Financing Agreements, as amended hereby,
and that they have no defenses, counterclaims or setoffs with respect to full,
complete and timely payment and performance of all Obligations under the
Financing Agreements. Borrower further confirms and agrees to its obligation to
pay to Congress all fees and costs which have been incurred by Congress in
connection with the negotiation and preparation of this Second Amendment and all
other documents and agreements prepared in connection with this Second Amendment
including, without limitation, all reasonable attorneys' fees and disbursements.
E. CERTAIN CONSENTS
You have informed Congress that, absent a waiver, the Stock Sale
Transaction would constitute an Event of Default under Section 10.1(j) of the
Loan Agreement. Congress hereby consents to the Stock Sale Transaction and
waives the occurrence of any Event of Default under Section 10.1(j) caused by
the change in the controlling ownership of Borrower pursuant to the Stock Sale
Transaction. This consent and waiver is limited to this one occasion and the
facts described above. This consent and waiver shall not constitute a consent to
or waiver of any other term, covenant or provision of the Agreement or of any
other Financing Agreement or any of Congress's rights and remedies thereunder,
all of which are reserved.
F. MISCELLANEOUS
Except as set forth herein, the Borrower confirms that the Financing
Agreements remain in full force and effect without amendment or modification of
any kind. The Borrower further confirms that no Event of Default or events which
with notice or the passage of time or both could constitute an Event of Default
have occurred and are continuing. The execution and delivery of this Second
Amendment by Congress shall not be construed as a waiver by Congress of any
Event of Default under the Financing
Congress Financial Corporation (New England)
September 24, 1998
Page 4
Agreements. This Second Amendment, together with the Financing Agreements,
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior dealings, correspondence, conversations
or communications between the parties with respect to the subject matter hereof.
Executed under seal on the date set forth above.
ATTEST: NORTHEAST ONE STOP, INC.
---------------------- By:
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Name:
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Title:
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Congress Financial Corporation (New England)
September 24, 1998
Page 5
ATTEST: L & P FEED, INC.
---------------------- By:
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Name:
----------------------------
Title:
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ATTEST: PLANET ENTERTAINMENT CORPORATION
---------------------- By:
------------------------------
Name:
----------------------------
Title:
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Accepted in Boston, Massachusetts
on September ___, 1998
CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND)
By:
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Name:
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Title:
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