FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Amendment") is made as of
this 9th day of January, 1998 among TEARDROP GOLF COMPANY ("TearDrop"), XXXXX
XXXXXX GOLF COMPANY (formerly known as TEARDROP ACQUISITION CORP.) ("TAC"),
TEARDROP RAM GOLF COMPANY ("Ram"; TearDrop, TAC and Ram shall be referred to
individually herein as a "Borrower" and collectively as "Borrowers") and
CORESTATES BANK, N.A. ("Lender"). All terms capitalized but not defined herein
shall have the meanings given to such terms in the Agreement (as such term is
hereinafter defined).
BACKGROUND
A. The Borrowers (excluding Ram) and Lender entered into a certain Loan and
Security Agreement dated as of November 10, 1997 (as amended herein and from
time to time hereafter, the "Agreement") pursuant to which Lender made available
to the Borrowers the revolving credit facility described therein. Pursuant to a
Consent and Joinder Agreement dated December 29, 1997 (the "Consent Agreement"),
Ram became a Borrower under and in accordance with the Agreement.
B. The Borrowers have requested that Lender increase the maximum amount
available under the Revolving Credit from Eighteen Million Dollars
($18,000,000.00) to Twenty-Five Million Dollars ($25,000,000.00). Subject to the
terms and conditions set forth herein, Lender is willing to increase the
maximum amount available under the Revolving Credit.
NOW, THEREFORE, the parties agree as follows, intending to be legally
bound.
1. The Agreement is hereby amended as follows:
(a) The following definition in Section 1.1 of the Agreement is
hereby amended to read as follows:
"Credit Limit" at any time means the lesser of (A) the Borrowing
Base, or (B) from the date of this Agreement through and
including January 8, 1998, Eighteen Million Dollars
($18,000,000.00) and, from and after January 9, 1998, Twenty-Five
Million Dollars ($25,000,000.00).
(b) Section 2.1(d) of the Agreement is hereby amended in its
entirety to read as follows:
(d) The joint and several obligation of Borrowers to repay the
Advances outstanding under the Revolving Credit shall be
evidenced, from the date of this Agreement through and including
January 8, 1998 by a promissory note, dated the date of this
Agreement, payable to the order of Lender, in the principal
amount
of Eighteen Million Dollars ($18,000,000.00) and, from and after
January 9, 1998, by a promissory note, dated January 9, 1998,
payable to the order of Lender, in the principal amount of
Twenty-Five Million Dollars ($25,000,000.00), and otherwise
substantially in the form of Exhibit 2.1(D) attached hereto (the
"Note").
2. The obligations of Lender hereunder and the effectiveness of this
Amendment are subject to the satisfaction of each of the following conditions
precedent:
(a) The Borrowers shall have delivered or caused to be delivered
to Lender the following documents:
(1) this Amendment duly executed by the Borrowers;
(2) the amended and restated Revolving Credit Note
reflecting the new amount of the Revolving Credit duly
executed by the Borrowers;
(3) a copy, certified in writing as of a recent date by the
Secretary or an Assistant Secretary of each Borrower, of (i)
resolutions of the Board of Directors of such Borrower
evidencing approval of this Amendment and the other
documents to be executed by such Borrower pursuant to the
terms hereof, and other matters contemplated hereby and
thereby, and (ii) each document evidencing other necessary
action and governmental approvals, if any, with respect to
this Amendment and the other documents contemplated hereby;
(4) a certificate dated as of a recent date by the Secretary
or an Assistant Secretary of each Borrower stating that the
Articles and by-laws of have not been amended since November
10, 1997 (with respect to TAC and TearDrop) and December 29,
1997 (with respect to Ram);
(5) a written certificate by the Secretary or an Assistant
Secretary of each Borrower as to the names and signatures of
the officers of such Borrower authorized to sign this
Amendment and the other documents or certificates of such
Borrower to be executed and delivered pursuant thereto;
(6) evidence satisfactory to Lender and its counsel that the
holders of TearDrop's Class A Convertible Preferred Stock
have waived their right of Mandatory Redemption under
Section VI.(B) of the Certificate of Designation in
connection
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with TearDrop's borrowings in excess of $20,000,000 from
Lender; and
(7) such other documentation as Lender may reasonably
request, including without limitation, and documentation
required to be delivered in connection with the Consent
Agreement.
(b) The representations and warranties set forth in Article V of
the Agreement are true and correct in all material respects as of the date
hereof;
(c) No Default or Event of Default has occurred or is continuing;
and
(d) The Borrowers shall pay all costs and out-of-pocket expenses
(including, without limitation reasonable attorneys' fees and costs) of Lender
in connection with the Loan Agreement (including without limitation this
Amendment), and the transactions contemplated thereby, which includes, among
other things, the preparation, review and negotiation of this Amendment, and all
costs and expenses incurred in connection with the above.
3. Borrowers represent and warrant to Lender that:
(a) The representations and warranties set forth in Article V of
the Agreement are true and correct in all material respects as of the date
hereof; and
(b) No Default or Event of Default has occurred or is continuing.
4. The indebtedness evidenced by the Agreement and the Note shall continue
to be secured as set forth in the Agreement. The Borrowers acknowledge that the
Loan Documents continue in full force and effect and that Borrowers have no
charge, lien, claim or offset against Lender, or defenses to enforcement of the
Loan Documents by Lender.
5. This Amendment contains all of the modifications to the Agreement. No
further modifications shall be deemed effective, unless in writing executed by
the parties hereto.
6. The executions, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Lender under the Agreement,
nor constitute a waiver of any Default or Event of Default or any provision of
the Agreement, except as specifically set forth herein.
7. This Amendment shall be construed and enforced in accordance with the
laws of the State of New Jersey.
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8. 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.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Amendment to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
TEARDROP GOLF COMPANY
BY: /s/ XXXX X. XXXXXXX
-------------------------
Name: Xxxx X. Xxxxxxx
Title: President
XXXXX XXXXXX GOLF COMPANY
BY: /s/ XXXX X. XXXXXXX
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
TEARDROP RAM GOLF COMPANY
BY: /s/ XXXX X. XXXXXXX
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
CORESTATES BANK, N.A.
BY: /s/ XXXX X. XXXXXX
--------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
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