NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment") is dated as of June 9, 2000, and entered into by and between THE
RIGHT START, INC., a California corporation ("Borrower"), and HELLER FINANCIAL,
INC. ("Lender").
RECITALS
WHEREAS, Borrower and Lender have entered into that certain Loan and
Security Agreement dated as of November 14, 1996, as amended by that certain
First Amendment to Loan and Security Agreement and Limited Waiver and Consent
dated as of April 30, 1997, as further amended by that certain Second Amendment
to Loan and Security Agreement and Limited Waiver dated July 10, 1997, as
further amended by that certain Third Amendment to Loan and Security Agreement,
Limited Waiver and Consent dated September 3, 1997, as further amended by that
certain Fourth Amendment to Loan and Security Agreement and Limited Consent
effective as of January 30, 1998, as further amended by that certain Waiver and
Fifth Amendment to Loan and Security Agreement dated as of December 9, 1998, as
further amended by that certain Sixth Amendment to the Loan and Security
Agreement and First Amendment to Secured CAPEX Note dated as of November 8,
1999, as further amended by that certain Seventh Amendment to Loan and Security
Agreement and Second Amendment to Secured CAPEX Note dated as of January 18,
2000, as further amended by that certain Eighth Amendment to Loan and Security
Agreement and Waiver dated as of April 28, 2000 (as so amended, the "Loan
Agreement");
WHEREAS, Borrower has requested certain amendments to the Loan
Documents (as defined in the Loan Agreement), as set forth herein;
WHEREAS, Lender is willing to grant such amendments,
all upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of these premises, the agreements,
provisions and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
AGREEMENT
1. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings given in the Loan Agreement.
2. Amendment to Subsection 6.1 of the Loan Agreement. Subsection 6.1 of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:
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"6.1 Net Worth. Borrower shall maintain Net Worth of at least
(a) $6,500,000 as of April 30, 2000, (b) $6,500,000 as of May 31,
2000, (c) $6,500,000 as of June 30, 2000, (d) $6,500,000 as of July
31, 2000, and (e) $8,000,000 as of August 31, 2000, and as of the end
of each month thereafter."
3. Representations and Warranties. Borrower represents and warrants to
Lender as follows:
a. Borrower has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its incorporation, as well
as in each jurisdiction in which Borrower is required to be qualified to
transact business.
b. Borrower has full power and authority and legal right to execute and
deliver this Amendment and to perform its obligations under the Loan
Agreement and the other Loan Documents, each as amended hereby, and has
taken all necessary action to authorize such execution, delivery and
performance.
c. This Amendment has been duly executed and delivered by
Borrower and such Amendment, and each of the Loan Agreement
and the other Loan Documents as amended hereby, each
constitutes the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with
its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights
generally and subject to the availability of equitable
remedies.
4. Conditions to the Effectiveness of this Amendment. Each of the following
shall be conditions precedent to the effectiveness of this Amendment (the date
on which such conditions are met being the "Effective Date"):
a. Borrower shall have duly executed and delivered a counterpart of this
Amendment to Lender or its counsel.
b. Before and after giving effect to this Amendment, (a) no
Default or Event of Default has occurred and is continuing,
(b) all of the representations and warranties contained in
the Loan Documents shall be true and correct in all material
respects (except for any representation or warranty limited
by its terms to a specific date), (c) Borrower shall have
performed in all material respects all agreements and
satisfied all conditions which any Loan Document provides
shall be performed by it on or prior to such date, and (d)
Borrower shall have delivered to Lender a certificate to
such effect in the form attached hereto as Exhibit A.
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5. Effect of Amendment; Ratification. From and after the Effective Date,
all references in the Loan Documents to the Loan Agreement shall mean the Loan
Agreement as amended hereby. The terms and provisions set forth in this
Amendment shall amend and supersede all inconsistent terms and provisions set
forth in the Agreement and, except as expressly modified and superseded by this
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Amendment, the terms and provisions of the Agreement are hereby ratified and
confirmed and are and shall continue in full force and effect.
6. No Waiver. Nothing contained herein or in any other instrument or
document executed in connection herewith, nor any action taken by Lender in
connection with this Amendment or any other action contemplated hereby shall in
any event be construed or deemed to constitute a waiver of any past, present or
future Default or Event of Default or a waiver or an estoppel of any cause of
action Lender may have against Borrower for any reason whatsoever, and Lender
hereby reserves all rights and remedies under the Agreement or the other Loan
Documents.
7. Fees and Expenses. Borrower acknowledges that all fees and expenses
(including reasonable attorneys' fees) incurred by Lender in connection with
this Amendment are for the account of Borrower pursuant to the Loan Agreement.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. Delivery via facsimile of an executed counterpart of a
signature page of this Amendment shall be effective as delivery of a
manually-executed counterpart of this Amendment.
9. Severability. The illegality or unenforceability of any provision of
this Amendment, the Loan Agreement (including as amended hereby) or any other
document or any other instrument or agreement required hereunder or thereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Amendment, the Loan Agreement (including as amended
hereby) or such other document or any other instrument or agreement required
hereunder or thereunder.
10. Successors and Assigns. This Amendment shall be binding upon and shall
inure to the benefit of Lender and Borrower and their respective successors and
assigns.
11. Governing Law. This Amendment shall be governed by, and shall be
construed and enforced in accordance with, the internal laws of the State of
Illinois, without regard to conflicts of laws principles.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by a duly authorized officer as of the date first above written.
THE RIGHT START, INC.
By: /s/Gina M. Engelhard
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Name: Gina M. Engelhard
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Its: CFO
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HELLER FINANCIAL, INC.
By: /s/Barry S. O'Neall
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Name: Barry S. O'Neall
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Its: SVP
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Exhibit A
BORROWER'S CLOSING CERTIFICATE
This certificate is delivered pursuant to that certain Ninth
Amendment to Loan and Security Agreement dated as of June 9, 2000 (the
"Amendment") between The Right Start, Inc., a California corporation
("Borrower"), and Heller Financial, Inc. ("Lender"). Except as provided herein,
all capitalized terms used herein which are defined in the Loan Agreement shall
have the meanings given therein. The undersigned hereby certifies to Lender that
he or she, as applicable, is the duly elected, qualified and acting Chief
Executive Officer or Chief Financial Officer of Borrower, as applicable, and on
behalf of Borrower (and not individually), further certifies to Lender that:
1. Each representation and warranty made in Section 4 of the Loan
Agreement and in the other Loan Documents is true, correct and complete in all
material respects as of the Effective Date (as defined in the Amendment) to the
same extent as though made on and as of that date, except for any representation
and warranty limited by its terms to a specific date.
2. No event has occurred and is continuing or would result from the
consummation of the transactions contemplated under the Amendment on the
Effective Date which event would constitute a Default or Event of Default.
3. Borrower has performed in all material respects all agreements and
satisfied all conditions which any Loan Document provides shall be performed by
it on or before the Effective Date.
4. No order, judgment or decree of any court, arbitrator or
governmental authority purports to enjoin or restrain Lender from making any
Loans or issuing any Lender Letters of Credit to Borrower, or to extend the
maturity date of any Loans or Letters of Credit outstanding on the date hereof.
5. There is not pending, or to my knowledge threatened, any action,
charge, claim, demand, suit, proceeding, petition, governmental investigation or
arbitration against or affecting Borrower or any of its property that has not
been disclosed by Borrower in writing, and there has occurred no development in
any such action, charge, claim, demand, suit, proceeding, petition, governmental
investigation or arbitration so disclosed that could reasonably be expected to
have a Material Adverse Effect.
6. No event or condition has occurred since the fiscal quarter ending
on April 28, 2000, which constitutes or could reasonably be expected to
constitute a Material Adverse Effect or which has not been previously and fully
disclosed to Lender in writing.
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7. On the date hereof after giving effect to the transactions
contemplated by the Amendment on the date hereof and the payment by Borrower of
all costs, fees and expenses related thereto, Borrower (a) owns assets the fair
salable value of which are (i) greater than the total amount of its liabilities
(including contingent liabilities) and (ii) greater than the amount that will be
required to pay the probable liabilities of Borrower as they mature; (b) has
capital that is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (c) does not intend
to incur and does not believe that it will incur debts beyond its ability to pay
such debts as they become due.
8. The conditions precedent set forth in Section 4 of the Amendment
have been satisfied.
IN WITNESS WHEREOF, the undersigned has duly executed this Borrower's
Closing Certificate on behalf of Borrower this 9th day of June, 2000.
THE RIGHT START, INC.
By: /s/Jerry R. Welch
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Name: Jerry R. Welch
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Title: Chief Executive Officer
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By: /s/Gina M. Engelhard
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Name: Gina M. Engelhard
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Title: Chief Financial Officer
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