Amendment  No. 5 to Revolving Credit and Security Agreement



 Exhibit 10.111 
  
 AMENDMENT NO. 5 
  
 TO 
  
 REVOLVING CREDIT AND SECURITY AGREEMENT 
  
 THIS AMENDMENT NO. 5 (this “Amendment”) is entered into as of October 1, 2003, by and among DISCOVERY TOYS, INC., a California corporation (“Borrower”), PNC BANK, NATIONAL ASSOCIATION
(“PNC”), the undersigned financial institutions which are now or which hereafter become a party to the Loan Agreement (collectively, the “Lenders” and individually, a “Lender”), and PNC as agent for
Lenders (PNC, in such capacity, “Agent”). 
  
 BACKGROUND 
  
 Borrower, Agent and Lenders are parties to
a Revolving Credit and Security Agreement dated as of June 1, 1999 (as amended by Amendment No. 4 dated as of March 17, 2003, Amendment No. 3 dated as of July 29, 2002, Amendment No. 2 dated as of April 25, 2002, Amendment No. 1 dated as of June 1,
2001 and as same may be further amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Agent and Lenders provide Borrower with certain financial accommodations. 

 
 Borrower has requested that Agent and Lenders amend provisions of the Loan
Agreement as hereafter provided. Agent and Lenders are willing to do so on the terms and conditions hereafter set forth. 
  
 NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or hereafter made to or for the account of Borrower by Agent and
Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
  
 1. Definitions. All capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan
Agreement. 
  
 2. Amendment to Loan Agreement. Subject to
satisfaction of the conditions precedent set forth in Section 3, the Loan Agreement is hereby amended as follows: 
  
 (a) Section 1.2 of the Loan Agreement is amended as follows: 
  
 (i) the following defined terms are added in the appropriate alphabetical order: 
  
 “Amendment No. 5” shall mean Amendment No. 5 dated as of
October 1, 2003. 
  
 “Amendment No. 5 Effective
Date” shall mean the date when the conditions of effectiveness set forth in Amendment No. 5 have been met to Agent’s satisfaction. 







 (ii) the following defined terms are amended in their entirety to provide as follows:

  
 “Seasonal Overadvance Amount” shall mean
during the Seasonal Overadvance Period the amount set forth below opposite the period corresponding thereto: 
  

	 May 1, 2003 – May 31, 2003
	  	$	300,000
	 June 1, 2003 – June 30, 2003
	  	$	400,000
	 July 1, 2003 – July 31, 2003
	  	$	1,000,000
	 August 1, 2003 – August 31, 2003
	  	$	1,300,000
	 September 1, 2003 – September 30, 2003
	  	$	1,400,000
	 October 1, 2003 – October 31, 2003
	  	$	250,000

  
 “Seasonal
Overadvance Period” shall mean the period commencing on May 1, 2003 and ending on October 31, 2003. 
  
 (b) Section 9.2 of the Loan Agreement is hereby amended by amending the last sentence thereof to provide as follows: 
  
 “Additionally, on the fifteenth and last day of each month during the
Seasonal Overadvance Period (other than October, 2003), Borrower shall deliver to Agent an Inventory report that indicates how much Inventory is located on the water to be included in the calculation of the Formula Amount as Eligible On-Water
Inventory.” 
  
 3. Conditions of Effectiveness. This
Amendment shall become effective upon satisfaction of the following conditions precedent: Agent shall have received (i) four (4) copies of this Amendment executed by Borrower and Lender; (ii) an amendment fee in the amount of $25,000, which amount
shall be paid by Agent charging Borrower’s loan account with a Revolving Advance for such amount; and (iii) such other certificates, instruments, documents, agreements and opinions of counsel as may be required by Agent or its counsel, each of
which shall be in form and substance satisfactory to Agent and its counsel. 
  
 4. Representations and Warranties. Borrower hereby represents and warrants as follows: 
  
 (a) This Amendment and the Loan Agreement, as amended hereby, constitute legal, valid and binding obligations of Borrower and are enforceable against
Borrower in accordance with their respective terms. 
  
 (b) Upon
the effectiveness of this Amendment, Borrower hereby reaffirms all covenants, representations and warranties made in the Loan Agreement to the extent the same are not amended hereby and agrees that all such covenants, representations and warranties
shall be deemed to have been remade as of the effective date of this Amendment. 
  
 (c) Borrower has no defense, counterclaim or offset with respect to the Loan Agreement. 
  

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 5. Effect on the Loan Agreement. 
  
 (a) Upon the effectiveness of Section 2 hereof, each reference in the Loan Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Loan Agreement as amended hereby. 
  
 (b) Except as specifically amended herein, the Loan Agreement, and all other documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and confirmed. 
  
 (c) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or Lenders, nor constitute a waiver of any provision of the Loan Agreement, or any
other documents, instruments or agreements executed and/or delivered under or in connection therewith. 
  
 6. Governing Law. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State of New York. 
  
 7. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 
  
 8. Counterparts; Facsimile. This Amendment may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto. 
  
 IN WITNESS WHEREOF, this
Amendment has been duly executed as of the day and year first written above. 
  

	 DISCOVERY TOYS, INC., as Borrower

		
	 By:
	 	 /s/ Jack B. Hood


	 	 	 Name:
	 	 Jack B. Hood

	 	 	 Title:
	 	 CFO

	
	PNC BANK, NATIONAL ASSOCIATION, as Agent and Lender
		
	 By:
	 	 /s/ Robin L. Arriola


	 	 	 Name:
	 	 Robin L. Arriola

	 	 	 Title:
	 	 Vice President



  

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