Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4/A Amendment to Form S-4, Registration Statement 177 1.12M
2: EX-3.1 Restated Certificate of Incorporation 53 195K
3: EX-3.2 Amended and Restated By-Laws 9 37K
5: EX-4.11 Security Agreement Dated as of July 17, 1988 71 397K
6: EX-4.12 Subsidiary Security Agreement Dated July 17, 1998 29 135K
7: EX-4.13 Collateral Assignment of Patents, Trademarks Etc. 24 84K
4: EX-4.5 Warrant Agreement 61 243K
8: EX-5.1 Opinion re: Legality 2 13K
9: EX-10.1 Series A Purchase Agreement 61 261K
10: EX-10.2 Series B Purchase Agmt 59 249K
11: EX-10.69 Amendment to Loan and Security Agreement 7 30K
12: EX-10.70 Material Contract 23 79K
13: EX-10.78 Consulting Agreement 6 25K
14: EX-12.1 Statement re: Computation of Ratios 1 13K
15: EX-21.1 List of Subsidiaries of the Registrant 1 7K
16: EX-23.1 Consent of Experts or Counsel 1 8K
17: EX-23.2 Consent of Pricewaterhousecoopers LLP 1 9K
18: EX-25.1 Statement of Eligibilty and Qualification 4 17K
19: EX-99.1 Letter of Transmittal 15 70K
20: EX-99.2 Notice of Guaranteed Delivery 3 17K
21: EX-99.3 Exchange Agent Agreement 10 40K
EX-10.69 — Amendment to Loan and Security Agreement
Exhibit Table of Contents
AMENDMENT NUMBER ONE TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), is entered into as of July 17, 1998, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), with a place of business
located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California
90025-3333, and DISCOVERY ZONE, INC., a Delaware corporation ("Borrower"), with
its chief executive office located at 565 Taxter Road, Fifth Floor, Elmsford,
New York 10523.
This Amendment is entered into with reference to the following facts:
A. Foothill and Borrower heretofore entered into that certain Loan and
Security Agreement, dated as of March 31, 1998 (herein the
"Agreement");
B. Borrower has requested Foothill to consent to Borrower's issuance of
new 13 1/2% Senior Collateralized Notes due 2002 in the original
principal amount not to exceed $20,000,000, and to amend the Agreement
to permit the foregoing transaction;
C. Foothill is willing to so amend the Agreement in accordance with the
terms and conditions hereof; and
D. All capitalized terms used herein and not defined herein shall have
the meanings ascribed to them in the Agreement, as amended hereby.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises contained herein, Foothill and Borrower hereby agree as follows:
1. Amendments to the Agreement.
a. Section 1.1 of the Agreement hereby is amended by adding or
modifying, as the case may be, the following definitions:
"First Amendment Date" means July 17, 1998.
"Loan Documents" means this Agreement, the Letters of Credit, the Stock
Pledge Agreement, the Trademark Security Agreement, the Guaranty, the Guarantor
Security Agreement, the Intercreditor Agreement, the Disbursement Letter, the
Concentration Account Agreements, the Collateralized Notes Intercreditor
Agreement, any note or notes executed by Borrower and payable to Foothill, and
any other agreement entered into, now or in the future, in connection with this
Agreement.
2
"Permitted Indebtedness" means:
(a) Indebtedness incurred by the Obligors in connection with or
arising out of Capital Lease Obligations or Purchase Money Obligations;
provided that the aggregate principal amount at any one time
outstanding of all such Capital Lease Obligations and Purchase Money
Obligations does not exceed $5,000,000;
(b) Indebtedness owed by Borrower to any Subsidiary of Borrower
for so long as (i) any such Indebtedness is held by a Subsidiary of
Borrower, (ii) any such Indebtedness shall not be secured by a Lien on
any asset of Borrower or its Subsidiaries, and (iii) any such
Indebtedness shall be subordinated, pursuant to a written agreement, to
Borrower's obligations under this Agreement; provided, however, that,
as of any date that (1) any Person other than a Subsidiary of Borrower
owns or holds any such Indebtedness of Borrower or (2) any such
Indebtedness of Borrower is secured by a Lien on any asset of Borrower
or its Subsidiaries, any such date shall be deemed the date of
incurrence of Indebtedness not constituting Permitted Indebtedness;
(c) Indebtedness of any Subsidiary of Borrower to Borrower or to
any other Subsidiary of Borrower for so long as (i) such Indebtedness
is held by Borrower or a Subsidiary of Borrower, (ii) any such
Indebtedness from any Subsidiary of Borrower to Borrower in excess of
$500,000 in aggregate principal amount shall be evidenced by a written
promissory note or other instrument in form and substance reasonably
satisfactory to Foothill, and (iii) any such Indebtedness shall not be
secured by a Lien on any asset of any Subsidiary of Borrower held by a
Person other than Borrower or a Subsidiary of Borrower; provided,
however, that, as of any date that (1) any Person other than Borrower
or a Subsidiary of Borrower owns or holds such Indebtedness or (2) any
such Indebtedness is secured by a Lien on any asset of Borrower or its
Subsidiaries held by any Person other than Borrower or a Subsidiary of
Borrower, any such date shall be deemed the date of incurrence of
Indebtedness not constituting Permitted Indebtedness;
(d) Interest Swap Obligations of Borrower covering Indebtedness
of Borrower or any of its Subsidiaries and Interest Swap Obligations of
any Subsidiary covering Indebtedness of such Subsidiary; provided,
however, that such Interest Swap Obligations are entered into to
protect Borrower and its Subsidiaries from fluctuations in interest
rates on Indebtedness incurred in accordance with this Agreement to the
extent the notional principal amount of such Interest Swap Obligation
does not exceed the principal amount of the Indebtedness to which such
Interest Swap Obligation relates;
(e) Indebtedness of Borrower outstanding on the Closing Date
pursuant to the McDonald's Secured Note, the McDonald's Rent Deferral
Secured Notes (including Indebtedness resulting from future rent
deferrals to the extent and in the manner contemplated by the
McDonald's Rent Deferral Secured Notes as in effect on the Closing
3
Date)and the Pre-petition Tax Payables, as reduced by the amount of any
prepayments permitted by this Agreement or scheduled amortization
payments when actually paid or by any permanent reductions thereof;
(f) Indebtedness of Borrower outstanding on the Closing Date
incurred under the Subordinated Creditor Indenture; and
(g) up to $20,000,000 of Indebtedness of Borrower outstanding on
the First Amendment Date incurred under the Collateralized Notes
Indenture.
"Collateralized Notes Intercreditor Agreement" means that certain
Intercreditor Agreement among Foothill and Collateralized Notes Subordinated
Creditor, and acknowledged by Borrower in form and substance satisfactory to
Foothill, in its sole discretion.
"Collateralized Notes Indenture" means that certain Indenture, dated as
of July 14, 1998 among Borrower, as issuer, the subsidiary guarantor's named
therein, and Firstar Bank of Minnesota, N.A., as trustee (as such agreement may
be amended, modified, supplemented, refinanced, or replaced from time to time in
accordance with the provisions of this Agreement and the Intercreditor
Agreement) in form and substance satisfactory to Foothill, in its sole
discretion.
"Collateralized Notes Subordinated Creditor" means Firstar Bank of
Minnesota, N.A. in its capacity as trustee and collateral agent.
2. Representations and Warranties. Borrower hereby represents and
warrants to Foothill that (a) the execution, delivery, and performance of this
Amendment and of the Agreement, as amended by this Amendment, are within its
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, and (b) this Amendment and the Agreement, as amended
by this Amendment, constitute Borrower's legal, valid, and binding obligation,
enforceable against Borrower in accordance with its terms.
3. Conditions Precedent to Amendment. The satisfaction of each of the
following, on or before July 31, 1998, unless waived or deferred by Foothill in
its sole discretion, shall constitute conditions precedent to the effectiveness
of this Amendment:
a. Foothill shall have received each of the following documents,
in form and substance satisfactory to Foothill and its counsel, duly executed,
and each such document shall be in full force and effect:
(1) this Amendment;
4
(2) the Reaffirmation and Consent (as hereinafter defined); and
(3) the Collateralized Notes Intercreditor Agreement.
b. Foothill shall have received a copy of the Collateralized
Notes Indenture, certified by the Secretary of Borrower as being true, correct,
and complete; which Collateralized Notes Indenture shall be in form and
substance satisfactory to Foothill in its sole discretion (it being understood
that the Indebtedness issued pursuant to the Collateralized Notes Indenture
shall (1) be on terms and conditions at least as favorable to Borrower as the
terms and conditions of the Subordinated Creditor Indenture, and (2) require the
establishment of an interest reserve for a period coterminus with the interest
reserve created pursuant to the Subordinated Creditor Indenture);
c. Borrower shall have received not less than $7,500,000 in Net
Issuance Proceeds from an issuance of equity securities of Borrower, which such
equity securities may be shares of Borrower's common Stock or preferred Stock,
the terms of any such preferred Stock to be satisfactory to Foothill.
d. Foothill shall have received an opinion of Borrower's counsel
with respect to Borrower's execution, delivery, and performance of this
Amendment and the Collateralized Notes Indenture, in form and substance
satisfactory to Foothill in its sole discretion;
e. The representations and warranties in this Amendment, the
Agreement as amended by this Amendment, and the other Loan Documents shall be
true and correct in all 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);
f. No Event of Default or event which with the giving of notice
or passage of time would constitute an Event of Default shall have occurred and
be continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein;
g. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance satisfactory to Foothill
and its counsel.
4. Reaffirmation and Consent. Concurrently herewith, Borrower shall
cause each current Guarantor to execute and deliver to Foothill the
Reaffirmation and Consent attached hereto as Exhibit "A" (the "Reaffirmation and
Consent").
5. Further Assurances. Borrower shall execute and deliver all
agreements, documents, and instruments, in form and substance satisfactory to
Foothill, and take all actions as
5
Foothill reasonably may request from time to time fully to consummate the
transactions contemplated under this Amendment and the Agreement, as amended by
this Amendment.
6. Effect on Agreement. The Agreement, as amended hereby, shall be and
remain in full force and effect in accordance with its terms and hereby is
ratified and confirmed in all respects. The execution, delivery, and performance
of this 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 Foothill under
the Agreement, as in effect prior to the date hereof.
7. Miscellaneous.
a. Upon the effectiveness of this Amendment, each reference in the
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Agreement shall mean and refer to the Agreement as
amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in the
Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or
words of like import referring to the Agreement shall mean and refer to the
Agreement as amended by this Amendment.
c. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York.
d. This Amendment may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument and any of
the parties hereto may execute this Amendment by signing any such counterpart.
Delivery of an executed counterpart of this Amendment by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Amendment. Any party delivering an executed counterpart of this Amendment by
telefacsimile also shall deliver a manually executed counterpart of this
Amendment but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
[Signature page to follow.]
6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
DISCOVERY ZONE, INC.,
a Delaware corporation
By:/s/ Scott W. Bernstein
--------------------------
Title: President and CEO
-----------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:/s/ Bruce Rivers
--------------------------
Title: Vice President
-----------------------
EXHIBIT A
Reaffirmation and Consent
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment Number One to
Loan and Security Agreement dated as of July 14, 1998 (the "Amendment"). Each of
the undersigned hereby (a) represents and warrants to Foothill that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its 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) consents to the amendment of the
Agreement by the Amendment; (c) acknowledges and reaffirms its obligations owing
to Foothill under the Guaranty and any other Loan Documents to which it is a
party; and (d) agrees that each of the Guaranty and any other Loan Documents to
which it is a party is and shall remain in full force and effect. Although each
of the undersigned has been informed of the matters set forth herein and has
acknowledged and agreed to same, it understands that Foothill has no obligations
to inform it of such matters in the future or to seek its acknowledgment or
agreement to future amendments, and nothing herein shall create such a duty.
This Reaffirmation and Consent may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Reaffirmation and Consent.
Delivery of an executed counterpart of this Reaffirmation and Consent by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Reaffirmation and Consent. Any party delivering an executed
counterpart of this Reaffirmation and Consent by telefacsimile also shall
deliver an original executed counterpart of this Reaffirmation and Consent but
the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Reaffirmation and Consent.
This Reaffirmation and Consent shall be governed by the laws of the State of New
York, as more fully set forth in Section 20 of the Guaranty.
DISCOVERY ZONE (CANADA) LIMITED
a corporation organized under the
laws of Canada
By: /s/ Scott W. Bernstein
-----------------------
Title: President and CEO
--------------------
Dates Referenced Herein and Documents Incorporated by Reference
↑Top
Filing Submission 0000947871-98-000450 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Wed., Apr. 24, 9:48:30.1pm ET 
