EXHIBIT 10.7
EXECUTION COPY
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SECOND AMENDMENT TO CREDIT AGREEMENT
Dated as of March 14, 2001
Between
SPORT MASKA INC.
as Borrower
and
THE HOCKEY COMPANY and
THE OTHER CREDIT PARTIES SIGNATORY HERETO
as Credit Parties
and
THE LENDERS SIGNATORY HERETO
as Lenders
and
GENERAL ELECTRIC CAPITAL CANADA INC.
as Agent for the Lenders
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XxXXXXXX XXXXX
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BARRISTES & SOLICITORS
EXECUTION COPY
TABLE OF CONTENTS
Section 1 - INTERPRETATION............................................................2
1.1 Definitions.............................................................2
1.2 Incorporation into Existing Credit Agreement............................2
Section 2 - AMENDMENTS OF SECTION 1 - AMOUNT AND TERMS OF CREDIT......................2
2.1 Amendment of Section 1.3 - Prepayments..................................2
2.2 Amendments of Section 1.5 - Interest and Applicable Margins.............2
2.3 Amendments of Section 1.9 - Fees........................................3
2.4 Amendment of Section 1.14 - Access......................................4
Section 3 - AMENDMENTS OF SECTION 6 - NEGATIVE COVENANTS..............................4
3.1 Amendment of Section 6.3 - Indebtedness.................................4
3.2 Amendment of Section 6.4 - Employee Loans and Affiliate Transactions....5
3.3 Amendment of Section 6.5 - Capital Structure and Business...............5
3.4 Amendments of Section 6.14 - Restricted Payments........................6
3.5 Amendments of Section 6.18 - Changes Relating to Other Indebtedness.....6
Section 4 - AMENDMENTS OF SECTION 8 - EVENTS OF DEFAULT: RIGHTS AND
REMEDIES..............................................................................6
4.1 Amendments of Section 8.1 - Events of Default...........................6
Section 5 - AMENDMENTS OF ANNEXES.....................................................7
5.1 Amendment of Annex A - Definitions......................................7
5.2 Amendments of Annex G - Financial Covenants.............................9
Section 6 - WAIVERS OF EVENTS OF DEFAULT.............................................10
6.1 Waivers - Financial Covenants.........................................10
Section 7 - REPRESENTATIONS AND WARRANTIES...........................................10
7.1 Corporate Power, Authorization and Enforceable Obligations.............11
7.2 Representations and Warranties True and Correct........................11
7.3 No Default or Event of Default.........................................12
Section 8 - AMENDMENT FEE............................................................12
Section 9 - CONDITIONS PRECEDENT.....................................................12
9.1 Conditions Precedent to this Second Amendment Becoming Effective.......12
Section 10 - MISCELLANEOUS...........................................................13
10.1 Consent Supplement.....................................................13
10.2 Availability...........................................................13
10.3 Ratification and Confirmation of Loan Documents........................13
10.4 Reservation of Rights and Remedies.....................................13
10.5 References in Loan Documents to Credit Agreement.......................13
10.6 Headings...............................................................14
10.7 Reimbursement..........................................................14
10.8 Counterparts...........................................................14
10.9 Loan Document..........................................................14
(i)
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SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "SECOND AMENDMENT") is dated as
of March 14, 2001, between
SPORT MASKA INC., a New Brunswick corporation
("BORROWER" or "MASKA CANADA")
and
THE HOCKEY COMPANY and THE OTHER CREDIT PARTIES
SIGNATORY HERETO
("CREDIT PARTIES")
and
THE LENDERS SIGNATORY HERETO
("LENDERS")
and
GENERAL ELECTRIC CAPITAL CANADA INC., a Canada
corporation, as Agent for the Lenders
("AGENT")
RECITALS
A. Borrower (the corporation continuing from the amalgamation of Sport
Maska Inc. and Tropsport Acquisitions Inc.), Credit Parties, Agent and
Lenders are parties to a Credit Agreement made as of November 19, 1998 (as
amended, restated, supplemented and otherwise modified as of the date hereof,
the "EXISTING CREDIT AGREEMENT").
B. Borrower, Ultimate Parent, Caisse de depot et placement du Quebec, as
agent and lender and Montreal Trust Company, as paying agent, are parties to a
Credit Agreement dated as of November 19, 1998 (the "TERM LOAN AGREEMENT"), as
amended and restated by the Amended and Restated Credit Agreement entered into
on March 14, 2001 (the "AMENDED AND RESTATED TERM LOAN AGREEMENT").
C. Borrower has requested amendments to and waivers of certain provisions
of the Existing Credit Agreement.
D. Agent and Lenders have agreed to grant Borrower's request on the terms
and subject to the conditions contained in this Second Amendment.
(1)
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FOR VALUE RECEIVED, the parties agree as follows:
SECTION 1 - INTERPRETATION
1.1 DEFINITIONS
Capitalized terms used and not defined in this Second Amendment have the
meanings given to them in the Existing Credit Agreement and the term "EFFECTIVE
DATE" has the meaning given to that term in Section 9.1 of this Second
Amendment.
1.2 INCORPORATION INTO EXISTING CREDIT AGREEMENT
The Existing Credit Agreement and this Second Amendment shall henceforth
be read together and shall have the effect as if all the provisions of such
agreements were contained in one agreement.
SECTION 2 - AMENDMENTS OF SECTION 1 - AMOUNT AND TERMS OF CREDIT
2.1 AMENDMENT OF SECTION 1.3 - PREPAYMENTS
On and after the Effective Date, Section 1.3(2)(c) of the Existing Credit
Agreement is amended and restated as follows:
"(c) If Ultimate Parent issues Stock, subject to a requirement under the
Term Loan Agreement that the proceeds thereof be applied to reduce Term
Loan Facility 2 thereunder, no later than the Business Day following the
date of receipt of the proceeds thereof, Borrowers shall prepay the Loans,
to be applied rateably to all of the Loans owing by each Borrower, in an
amount equal to all such proceeds, net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in
connection therewith, multiplied by a fraction equal to the aggregate
outstanding amount of the Loans divided by the sum of the aggregate
outstanding amount of the Loans plus the revolving loans, swing line loans
and letter of credit obligations under the US Facility. Any such
prepayment shall be applied in accordance with CLAUSE (3) below.".
2.2 AMENDMENTS OF SECTION 1.5 - INTEREST AND APPLICABLE MARGINS
On and after the Effective Date:
(1) the "Level V" Applicable Margins, as set out in the Applicable Margins grid
in Section 1.5 of the Existing Credit Agreement, shall apply until the next
adjustment (if any) in the Applicable Margins provided for in the Existing
Credit Agreement; and
(2) the Applicable Margins grid in Section 1.5 of the Existing Credit Agreement
is amended and restated as follows:
(2)
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APPLICABLE MARGINS
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LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
------- -------- ------------------ -------
Applicable Cdn Index Margin 0.75% 0.75% 1.00% 1.25% 1.50%
Applicable US Index Margin 0.50% 0.50% 0.75% 1.00% 1.25%
Applicable BA Rate Margin 1.75% 2.00% 2.25% 2.50% 2.75%
Applicable LIBOR Margin 1.75% 2.00% 2.25% 2.50% 2.75%
2.3 AMENDMENTS OF SECTION 1.9 - FEES
On and after the Effective Date:
(1) Section 1.9(3) of the Existing Credit Agreement is amended and restated
as follows:
"(3) If Borrowers prepay the Revolving Loan and terminate the Revolving
Loan Commitment before October 17, 2002, whether voluntarily or
involuntarily and whether before or after acceleration of the Obligations,
Borrowers shall immediately pay to Agent, for the rateable benefit of
Lenders, as liquidated damages and compensation for the costs of being
prepared to make funds available hereunder and not as a penalty, an amount
equal to US$350,000. Notwithstanding the foregoing, for greater certainty,
no prepayment fee shall be payable by Borrowers upon a mandatory
prepayment made pursuant to SECTION 1.3(2), 1.16(3) or 5.4(3); PROVIDED,
that in the case of prepayments made pursuant to SECTION 1.3(2)(B) or
1.3(2)(C), the transaction giving rise to the applicable prepayment is
expressly permitted under SECTION 6."; and
(2) Section 1.9(4) is inserted into the Existing Credit Agreement immediately
following Section 1.9(3) as follows:
"(4) As additional compensation for Revolving Lenders, Borrowers agree to
pay to Agent, for the rateable benefit of Revolving Lenders, in arrears,
on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a fee in an
amount equal to one and one half percent (1.5%) per annum (calculated on
the basis of a 360 day year for actual days elapsed) of the Overadvance
Inventory Amount.".
(3)
2.4 AMENDMENT OF SECTION 1.14 - ACCESS
On and after the Effective Date, Section 1.14 of the Existing Credit
Agreement is amended by amending and restating the second to last sentence of
such Section as follows:
"Agent will give Lenders at least ten (10) days' prior written notice of
regularly scheduled audits, which audits shall be conducted no less
frequently than twice per annum and, after the occurrence of a Default, as
frequently as Agent determines necessary or advisable.".
SECTION 3 - AMENDMENTS OF SECTION 6 - NEGATIVE COVENANTS
3.1 AMENDMENT OF SECTION 6.3 - INDEBTEDNESS
On and after the Effective Date:
(1) Section 6.3(1)(d)(iii) of the Existing Credit Agreement is amended and
restated as follows:
"(iii) with respect to Ultimate Parent, Indebtedness under the Term Loan
not to exceed the Equivalent Amount in Canadian Dollars of US$47,500,000,
plus, Capitalized Interest (if any), less, at all times, the aggregate
amount thereof repaid and, with respect to Maska Canada, Indebtedness
under the Term Loan not to exceed the Equivalent Amount in Canadian
Dollars of US$40,000,000, plus, Capitalized Interest (if any), less, at
all times, the aggregate amount thereof repaid and, with respect to
Indebtedness permitted under each of the foregoing clauses (a) and (d)(i),
refinancings thereof or amendments or modifications thereto which do not
have the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are
otherwise on terms and conditions no less favourable to any Credit Party,
Agent or any Lender, as determined by Agent, acting reasonably, than the
terms of the Indebtedness being refinanced, amended or modified,"; and
(2) Section 6.3(1)(i) of the Existing Credit Agreement is amended and
restated as follows:
"(i) Indebtedness in the form of loans made by Maska US to Ultimate Parent
for the purpose of paying, to the extent otherwise expressly permitted in
this Agreement, up to ninety percent (90%) of fifty-four percent (54%) of
regularly scheduled interest payments on, and prepayments of principal of,
the Term Loan, an extension fee of up to C$1,000,000 paid to Term Lender
for extending the maturity of the Term Loan to February 19, 2001, a
restructuring fee in an aggregate amount that does not exceed C$2,716,000
paid to Term Lender for amending and restating the Term Loan Agreement on
March 14, 2001, regularly scheduled annual agency fees that do not exceed
C$30,000 per annum payable under the Term Loan and other charges in
respect of the Term Loan,".
(4)
3.2 AMENDMENT OF SECTION 6.4 - EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS
On and after the Effective Date, Section 6.4(1) of the Existing Credit
Agreement is amended by inserting the following sentence after the last sentence
thereof:
"Notwithstanding the foregoing and, for greater certainty, without
limiting any other provision of this Agreement, this SECTION 6.4(1) shall
not apply to (i) the transactions expressly provided for in the
Stockholders Agreement, the Registration Rights Agreement and the Sale
Agreement, as each such agreement exists on March 14, 2001, and any
exercise of the common Stock purchase warrants issued by Ultimate Parent
to Term Lender pursuant to the Warrant Agreement (as such agreement exists
on March 14, 2001 and recognizing that the number of common shares
issuable upon such exercise may be adjusted pursuant to the terms of such
agreement) if, and from and after, Term Lender becomes an Affiliate of the
Credit Parties, (ii) management fees paid by Continuing Borrower or
Ultimate Parent to Wellspring in an aggregate amount that do not exceed
US$200,000 in any Fiscal Year and (iii) industry standard fees for
services rendered by Wellspring upon the successful completion of any
refinancing of the Term Loan or a sale of all or a portion of Continuing
Borrower's or Ultimate Parent's assets permitted hereunder in an aggregate
amount which shall not at any time exceed one percent (1%) of the
aggregate amount of such refinancing or the gross value of the assets
sold; provided, that, with respect to clauses (ii) and (iii) above, no
Default or Event of Default has occurred and is continuing or would result
after giving effect to any such payment and; provided further, that in the
case of clause (ii) above, Continuing Borrower shall have adequate Net
Borrowing Availability for operating its business after giving effect to
any such payment, and, in the case of clause (iii) above, Continuing
Borrower shall have received the prior written consent of Agent to each
such payment (such consent not to be unreasonably withheld). With
reference to clause (iii) above, Agent may consider, without limitation,
in determining whether it will grant its consent whether Continuing
Borrower will have adequate Net Borrowing Availability for operating its
business after giving effect to each such payment.".
3.3 AMENDMENT OF SECTION 6.5 - CAPITAL STRUCTURE AND BUSINESS
On and after the Effective Date, clause (2) of Section 6.5 of the Existing
Credit Agreement is amended and restated as follows:
"(2) make any change in its capital structure as described on DISCLOSURE
SCHEDULE 3.8, including the issuance of any shares of Stock, Stock
purchase warrants or other securities convertible into Stock or any
revision of the terms of its outstanding Stock, except that Ultimate
Parent may (a) make a Public Offering of its common Stock or issue
employee stock options or warrants to purchase common Stock or issue Stock
pursuant to the exercise of warrants or as payments in kind in connection
the Phoenix Investment so long as (i) the proceeds thereof are applied in
prepayment of the Obligations as required by SECTION 1.3(2)(C), (ii) no
Change of Control occurs after giving effect thereto, and (iii) any
preferred Stock issued by Ultimate Parent, including in connection with
the Phoenix Investment, shall only contain rights to dividends payable in
kind and not cash, (b) issue
(5)
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common Stock purchase warrants and common Stock pursuant to the exercise
of such common Stock purchase warrants to the extent provided for in the
Term Lender Investment; provided, that no Change of Control occurs after
giving effect thereto and (c) cancel common Stock purchase warrants
surrendered by Term Lender in connection with a transaction that is not
prohibited hereunder,".
3.4 AMENDMENTS OF SECTION 6.14 - RESTRICTED PAYMENTS
On and after the Effective Date:
(1) Clause (6) of Section 6.14 of the Existing Credit Agreement is amended and
restated as follows:
"(6) payments by Ultimate Parent and Maska Canada of (a) an extension fee
of up to C$1,000,000 made to Term Lender for extending the maturity of the
Term Loan to February 19, 2001, (b) a restructuring fee in an aggregate
amount that does not exceed C$2,716,000 made to Term Lender for amending
and restating the Term Loan Agreement on March 14, 2001 and, (c) regularly
scheduled agency fees of up to C$30,000 per annum payable to Term Lender
under the Term Loan Agreement;";
(2) Clause (8) of Section 6.14 of the Existing Credit Agreement is amended by
deleting the word "and" immediately before clause (9) thereof and the word "and"
is inserted immediately after the semi-colon and before the proviso following
clause (9); and
(3) Clause (10) is inserted into Section 6.14 of the Existing Credit Agreement
immediately following clause (9) as follows:
"(10) Ultimate Parent and Maska Canada may prepay or repay the principal
amount of Term Loan Facility 2 with the proceeds of common Stock issuances
by Ultimate Parent;".
3.5 AMENDMENTS OF SECTION 6.18 - CHANGES RELATING TO OTHER INDEBTEDNESS
On and after the Effective Date, Section 6.18 of the Existing Credit
Agreement is amended and restated by replacing references to "the Closing Date"
with "March 14, 2001".
SECTION 4 - AMENDMENTS OF SECTION 8 - EVENTS OF DEFAULT: RIGHTS AND REMEDIES
4.1 AMENDMENTS OF SECTION 8.1 - EVENTS OF DEFAULT
On and after the Effective Date:
(1) Clause (12) of Section 8.1 of the Existing Credit Agreement is amended by
deleting the word "or" immediately before clause (13) thereof and the word "or"
is inserted immediately after the semi-colon following clause (13);
(6)
(2) Clause (14) is inserted into Section 8.1 of the Existing Credit Agreement
immediately following clause (13) as follows:
"(14) any Credit Party breaches any of its obligations under the
Intercreditor Confirmation.".
SECTION 5 - AMENDMENTS OF ANNEXES
5.1 AMENDMENT OF ANNEX A - DEFINITIONS
On and after the Effective Date:
(1) Clause (b) of the definition of "BORROWING BASE" in paragraph (25) of
Annex A of the Existing Credit Agreement is amended and restated as follows:
"(b) from the period (i) from and including September 1 to and including
April 30 of each year, fifty-five percent (55%) of the book value of
Continuing Borrower's Eligible Inventory valued on a first-in, first-out
basis (at the lower of cost and market), and (ii) from and including May 1
to and including August 31 of each year, sixty-five percent (65%) of the
book value of Continuing Borrower's Eligible Inventory valued on a
first-in, first-out basis (at the lower of cost and market; provided, that
with reference to clause (ii), Agent shall have received, prior to May 1
in each year, an appraisal of Continuing Borrower's Inventory conducted by
an appraiser acceptable to Agent and showing Inventory values acceptable
to Agent in its sole discretion; and provided further, that the additional
ten percent (10%) of such value of Continuing Borrower's Eligible
Inventory (relative to clause (i)) shall not exceed US$2,000,000 at any
time) less, in the case of each of (i) and (ii), any Reserves established
by Agent at such time in its reasonable credit judgment.".
(2) Paragraph (35.1) is inserted into Annex A of the Existing Credit Agreement
immediately following the term "(35) CAPITAL EXPENDITURES" as follows:
"(35.1) CAPITALIZED INTEREST shall have the meaning given to it in the
Term Loan Agreement, as such agreement exists on March 14, 2001.".
(4) Clauses (a) and (b) of the definition of "COMMITMENT TERMINATION DATE" in
paragraph (58) of Annex A of the Existing Credit Agreement are amended and
restated as follows:
"(a) fourteen (14) days prior to the date that either Term Loan Facility 1
or Term Loan Facility 2 under the Term Loan Agreement is terminated or
matures, (b) October 17, 2002,".
(5) Paragraph (122.1) is inserted into Annex A of the Existing Credit
Agreement immediately following the term "(122) INTERCREDITOR AGREEMENT" as
follows:
(7)
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"(122.1) INTERCREDITOR CONFIRMATION shall mean the Intercreditor
Confirmation dated as of March 14, 2001 between Agent, US Agent, Term
Lender and Credit Parties confirming, among other things, the rights and
obligations of each party under the Intercreditor Agreement and Agent's
and US Agent's rights to receive reports of any consultant that may be
appointed pursuant to the Term Loan Agreement if such reports are received
by any Credit Party."
(6) Paragraph (175.1) is inserted into Annex A of the Existing Credit
Agreement immediately following the term "(175) OTHER LENDER" as follows:
"(175.1) OVERADVANCE INVENTORY AMOUNT shall mean, for any period of
calculation, the average for such period of the daily closing balances of
the amounts of the Revolving Loan and the Swing Line Loan outstanding
during such period and borrowed in reliance on the additional borrowing
availability (IE., 10%) in respect of the value of Continuing Borrower's
Eligible Inventory, as provided in clause (b)(ii) of the term "Borrowing
Base" contained in Annex A of the Agreement.".
(7) Paragraph (200.1) is inserted into Annex A of the Existing Credit
Agreement immediately following the term "(200) REFUNDED SWING LINE LOAN" as
follows:
"(200.1) REGISTRATION RIGHTS AGREEMENT shall mean the Registration Rights
Agreement dated as of March 14, 2001 between Ultimate Parent and Caisse de
depot et placement du Quebec.".
(8) Paragraph (215.1) is inserted into Annex A of the Existing Credit
Agreement immediately following the term "(215) REVOLVING NOTE" as follows:
"(215.1) SALE AGREEMENT shall mean the agreement entered into on March 14,
2001 between WS Acquisition, LLC, The Equitable Life Insurance Society of
the United States, The Northwestern Mutual Life Insurance Company, Phoenix
Home Life Mutual Insurance Company, Business Men's Assurance Company,
Indianapolis Life Insurance Company, GE Capital Assurance Company, Caisse
de depot et placement du Quebec and Ultimate Parent pursuant to which,
among other things and subject to the Intercreditor Agreement, this
Agreement and the US Facility Agreement, Term Lender is granted certain
indebtedness conversion rights and drag along rights in connection with
the extension of the Term Loan.".
(9) Paragraph (226.1) is inserted into Annex A of the Existing Credit
Agreement immediately following the term "(226) STOCK" as follows:
"(226.1) STOCKHOLDERS AGREEMENT shall mean the agreement dated March 14,
2001 between WS Acquisition, LLC, Caisse de depot et placement du Quebec
and Ultimate Parent pursuant to which, among other things and subject to
the Intercreditor Agreement, this Agreement and the US Facility Agreement,
Term Lender is given pre-emptive rights, tag along rights and rights with
respect to representation on the Board of Directors of Ultimate Parent in
connection with the Term Lender Investment.".
(8)
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(10) Paragraph (236.1) is inserted into Annex A of the Existing Credit
Agreement immediately following the term "(236) TAX AND TAXES" as follows:
"(236.1) TERM LENDER INVESTMENT shall mean the common Stock purchase
warrants issued by Ultimate Parent to Term Lender pursuant to the Warrant
Agreement which entitle Term Lender to purchase up to 1,533,382 shares of
common Stock of Ultimate Parent, as such amount may be adjusted, from time
to time, pursuant to the Warrant Agreement.".
(11) Paragraphs (239.1) and (239.2) are inserted into Annex A of the Existing
Credit Agree immediately following the term "(239) TERM LOAN AGREEMENT" as
follows:
"(239.1) TERM LOAN FACILITY 1 shall mean a term loan in an amount of up to
C$90,000,000 with a maturity date of June 30, 2004 made available by Term
Lender pursuant to the terms of the Term Loan Agreement."; and
"(239.2) TERM LOAN FACILITY 2 shall mean a term loan in an amount of up to
C$45,800,000 with a maturity date of October 31, 2002 made available by
Term Lender pursuant to the terms of the Term Loan Agreement.".
(12) Paragraphs (273.1) and (273.2) are inserted into Annex A of the Existing
Credit Agreement immediately following the term "(273) WAP ":
"(273.1) WARRANT AGREEMENT means the Warrant Agreement dated as of March
14, 2001 between Caisse de depot et placement du Quebec and
Ultimate Parent pursuant to which the Term Lender Investment is made.".
"(273.2) WELLSPRING shall mean WS Acquisition, LLC and its Associates (as
defined in Section 13.1.11 of the Term Loan Agreement, as such agreement
exists on March 14, 2001).".
5.2 AMENDMENTS OF ANNEX G - FINANCIAL COVENANTS
On and after the Effective Date, Annex G of the Existing Credit Agreement
is amended as follows:
(1) Section 1 of Annex G is amended by replacing the specific periods and the
specific amounts set out opposite each such period with the following:
"PERIOD MAXIMUM CAPITAL EXPENDITURES PER PERIOD
------- ---------------------------------------
Fiscal Year ending December 31, 2001 US$3,500,000
Fiscal Year ending after December 31, 2001 US$4,000,000
and each Fiscal Year ending thereafter.".
(9)
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(2) Section 2 of Annex G is amended by replacing the specific minimum Fixed
Charge Coverage Ratios set out therein with the following:
"0.85 to 1.0 for the four consecutive Fiscal Quarters ending March 31, 2001;
0.85 to 1.0 for the four consecutive Fiscal Quarters ending June 30, 2001;
0.9 to 1.0 for the four consecutive Fiscal Quarters ending September 30, 2001; and
1.1 to 1.0 for the four consecutive Fiscal Quarters ending December 31, 2001 and for the
four consecutive Fiscal Quarters ending on the last day of each Fiscal Quarter
thereafter.".
(3) Section 3 of Annex G is amended by replacing the specific minimum Interest
Coverage Ratios set out therein with the following:
"1.25 to 1.0 for the four consecutive Fiscal Quarters ending March 31, 2001;
1.25 to 1.0 for the four consecutive Fiscal Quarters ending June 30, 2001;
1.3 to 1.0 for the four consecutive Fiscal Quarters ending September 30, 2001;
1.5 to 1.0 for the four consecutive Fiscal Quarters ending December 31, 2001;
1.5 to 1.0 for the four consecutive Fiscal Quarters ending March 31, 2002;
1.7 to 1.0 for the four consecutive Fiscal Quarters ending June 30, 2002; and
1.7 to 1.0 for the four consecutive Fiscal Quarters ending September 30, 2002 and for the
four consecutive Fiscal Quarters ending on the last day of each Fiscal Quarter
thereafter.".
SECTION 6 - WAIVERS OF EVENTS OF DEFAULT
6.1 WAIVERS - FINANCIAL COVENANTS
Agent and Requisite Lenders hereby waive the Events of Default:
(1) occurring under Section 8.1(2) of the Existing Credit Agreement as a
result of Ultimate Parent and its Subsidiaries failing to comply with the
"Minimum Fixed Charge Coverage Ratio" and the "Minimum Interest Coverage Ratio"
covenants in Sections 2 and 3 of Annex G to the Existing Credit Agreement for
the four Fiscal Quarters ended December 31, 2000; and
(2) that may result from Borrower failing to comply with the minimum Net
Borrowing Availability covenant contained in Section 4 of Annex G to the
Existing Credit Agreement at any time during the period from and including March
15, 2001 to and including September 15, 2001.
SECTION 7 - REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into this Second Amendment, Borrower
makes the following representations and warranties to Agent and each Lender,
each of which shall survive the execution and delivery of this Second Amendment:
(10)
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7.1 CORPORATE POWER, AUTHORIZATION AND ENFORCEABLE OBLIGATIONS
(1) The execution and delivery by each Credit Party of this Second Amendment,
and the performance by each Credit Party of its obligations under this Second
Amendment and the Existing Credit Agreement, as amended by this Second
Amendment:
(a) are within such Credit Party's corporate power;
(b) have been duly authorized by all necessary or proper corporate and
shareholder action of such Credit Party;
(c) do not contravene any provision of such Credit Party's constating
documents or by-laws or any shareholder's agreement to which such
Credit Party is a party;
(d) do not violate any law or regulation, or any order or decree of any
court or Governmental Authority;
(e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration
of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Credit
Party is a party or by which such Credit Party or any of its
property is bound;
(f) do not result in the creation or imposition of any Lien upon any of
the property of such Credit Party; and
(g) do not require the consent or approval of any Governmental Authority
or any other Person.
(2) This Second Amendment has been duly executed and delivered by each Credit
Party and this Second Amendment and the Existing Credit Agreement, as amended by
this Second Amendment, constitute legal, valid and binding obligations of each
Credit Party and are enforceable against it in accordance with their respective
terms.
(3) Borrower has delivered to Agent a true and complete photocopy of the
Amended and Restated Term Loan Agreement and each of the documents and
instruments (collectively, the "AMENDED AND RESTATED TERM LOAN DOCUMENTS")
required to be delivered thereunder as conditions precedent to the Amended and
Restated Term Loan Agreement becoming effective.
7.2 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT
After giving effect to this Second Amendment on the Effective Date, each
of the representations and warranties of every Credit Party contained in the
Existing Credit Agreement and each of the other Loan Documents is true and
correct on and as of the Effective Date as if made on such date, except to the
extent any such representation or warranty expressly relates to
(11)
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an earlier date and except for changes expressly permitted or expressly
contemplated by the Existing Credit Agreement.
7.3 NO DEFAULT OR EVENT OF DEFAULT
After giving effect to this Second Amendment on the Effective Date, no
Default or Event of Default shall be continuing.
SECTION 8 - AMENDMENT FEE
To induce Agent and Lenders to enter into this Second Amendment, Borrower
agrees to pay to Agent, for the ratable benefit of Lenders, an amendment fee of
US$128,333.25 (the "AMENDMENT FEE"). The Amendment Fee is inclusive of the fee
of US$58,333.25 that was payable to Agent on March 8, 2001.
SECTION 9 - CONDITIONS PRECEDENT
9.1 CONDITIONS PRECEDENT TO THIS SECOND AMENDMENT BECOMING EFFECTIVE
This Second Amendment shall become effective as of the date on which the
following conditions shall have been satisfied in a manner satisfactory to Agent
or waived in writing by Agent and Requisite Lenders (such date is referred to
herein as the "EFFECTIVE DATE"):
(1) SECOND AMENDMENT. This Second Amendment or counterparts hereof shall
have been duly executed by, and delivered to, Borrower, Agent and Requisite
Lenders.
(2) INTERCREDITOR CONFIRMATION. The Intercreditor Confirmation shall have
been duly executed by, and delivered to, the parties thereto.
(3) AMENDED AND RESTATED TERM LOAN DOCUMENTS. The Amended and Restated Term
Loan Documents shall be in form and substance satisfactory to Agent and Lenders.
The Amended and Restated Term Loan Documents also shall be in full force and
effect.
(4) OFFICER'S CERTIFICATE. Agent shall have received (in sufficient number of
copies for distribution to Lenders) a certificate of an officer of Borrower
certifying that the Amended and Restated Term Loan Documents are in full force
and effect and that attached to such certificate are accurate and complete
copies thereof.
(5) CFO CERTIFICATE. Agent shall have received (in sufficient number of copies
for distribution to Lenders) a certificate of the Chief Financial Officer of
Ultimate Parent that the consolidated EBITDA of Ultimate Parent for the Fiscal
Year ended December 30, 2000 was not less than US$18,000,000.
(6) FEES. Agent shall have received, for its and/or Lenders' accounts, as
applicable, all fees due and payable to Agent and/or Lenders, including, without
limitation, the Amendment Fee.
(12)
EXECUTION COPY
(7) OPINIONS. Agent and Lenders shall have received legal opinions from
counsel to the Credit Parties in respect of this Second Amendment and the
Existing Credit Agreement, as amended by this Second Amendment, in form and
substance satisfactory to Agent, acting reasonably.
SECTION 10 - MISCELLANEOUS
10.1 CONSENT SUPPLEMENT.
Maska Canada agrees to deliver to Agent on or before March 23, 2001 a
supplement (in form and substance satisfactory to Agent acting reasonably) to
the Consent Agreement dated November, 1998 between NHL Enterprises, L.P. and NHL
Enterprises Canada, L.P. (collectively, "NHLE"), the Credit Parties named
therein and Agent pursuant to which Schedule B thereto is supplemented to add
Licence Agreements to which one or more Credit Parties and NHLE are party and
that are described in such supplement.
10.2 AVAILABILITY
With reference to the "Summary of Proposed Amendment Terms" prepared by
Agent and distributed to Borrower and Lenders, Borrower, the other Credit
Parties and Lenders hereby confirm their agreement with the amendments in the
calculation of the Borrowing Base set out opposite "Availability" therein that
are not specifically addressed by other provisions of this Second Amendment.
10.3 RATIFICATION AND CONFIRMATION OF LOAN DOCUMENTS
Except as specifically amended by this Second Amendment, the Existing
Credit Agreement and all other Loan Documents (including all Guarantees) shall
remain in full force and effect and are hereby ratified and confirmed.
10.4 RESERVATION OF RIGHTS AND REMEDIES
This Second Amendment shall not, except as expressly provided herein,
operate as a waiver of any right or remedy of Agent or Lenders under any of the
Loan Documents, nor constitute a waiver of any provision of the Loan Documents.
Agent and Lenders reserve all of their rights to proceed to enforce their rights
and remedies at any time and from time to time in connection with any and all
Defaults or Events of Default now existing or hereafter arising.
10.5 REFERENCES IN LOAN DOCUMENTS TO CREDIT AGREEMENT
On and after the Effective Date, each reference in the Loan Documents to
the Credit Agreement shall mean and be a reference to the Existing Credit
Agreement, as amended hereby.
(13)
EXECUTION COPY
10.6 HEADINGS
The headings used herein are for convenience only and do not constitute
matters to be considered in interpreting this Second Amendment.
10.7 REIMBURSEMENT
Without limiting any provisions of the Existing Credit Agreement, Borrower
agrees to reimburse Agent for all reasonable out-of-pocket fees and expenses,
including the reasonable fees and expenses of legal counsel, in connection with
the preparation, negotiation, execution and delivery of this Second Amendment
and the documents contemplated hereby.
10.8 COUNTERPARTS
This Second Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which shall together
constitute one agreement. Delivery of an executed counterpart of a signature
page of this Second Amendment by facsimile shall be as effective as delivery of
a manually executed counterpart of this Second Amendment.
10.9 LOAN DOCUMENT
Each of this Second Amendment and the Intercreditor Confirmation
constitute a Loan Document.
[INTENTIONALLY LEFT BLANK]
(14)
EXECUTION COPY
The parties have executed this Agreement.
SPORT MASKA INC., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
THE HOCKEY COMPANY, as Credit Party
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
SLM TRADEMARK ACQUISITION
CANADA CORPORATION, as Credit Party
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
SPORTS HOLDINGS CORP., as Credit Party
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
MASKA U.S., INC., as Credit Party
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
EXECUTION COPY
SLM TRADEMARK ACQUISITION CORP., as
Credit Party
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
WAP HOLDINGS INC., as Credit Party
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Operating Officer
GENERAL ELECTRIC CAPITAL CANADA
INC., as Agent and Lender
By: /s/ LM Junior Del Xxxxxx
-----------------------------------
Name: LM Junior Del Xxxxxx
Title: Vice President
CONGRESS FINANCIAL CORPORATION
(CANADA), as Lender
By: /s/ X. Xxxxxxxxx
-----------------------------------
Name: X. Xxxxxxxxx
Title: Senior Vice President
Congress Financial
