SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement, dated as of May ___, 1998 (this
"Agreement"), is among JumboSports Inc., a Florida corporation (the "Borrower"),
each of the Lenders (as defined below) signatories hereto, Xxxxxxx Bank, N.A.,
as Administrative Agent and Collateral Agent (the "Collateral Agent"), and
NationsBank, N.A. f/k/a NationsBank, N.A. (South), as Documentation Agent (the
"Documentation Agent").
RECITALS:
A. Pursuant to that certain Amended and Restated Credit Agreement, dated as
of May 28, 1997, among the Borrower, each of the Borrower's Subsidiaries, as
Guarantors, the lending and financial institutions party thereto (the
"Lenders"), the Collateral Agent and the Documentation Agent, the Lenders agreed
to make revolving loan and letter of credit facilities available to the
Borrower, such Amended and Restated Credit Agreement being amended by inter alia
(i) that Amendment and Forbearance Agreement, dated as of December 15, 1997,
among the Required Lenders, the Borrower and the Guarantors, and (ii) that
certain Amendment Agreement, dated as of January 30, 1998 among the Borrower,
the Guarantors, and each of the Lenders (as amended, the "Existing Credit
Agreement").
B. The Borrower has requested the Lenders to make certain further
amendments to the Existing Credit Agreement and to consent to the Borrower's
sale or other disposition of certain assets.
C. The Lenders are willing to amend the Existing Credit Agreement and
provide such consent based upon and subject to the terms and conditions
specified in this Agreement.
NOW, THEREFORE, based upon the foregoing, and for good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged, the
parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as amended
hereby.
"First Amendment Agreement" has the meaning set forth in the Recitals
hereto.
"First Amendment Fee" means the amendment fee of $1,800,000, previously
earned by the Lenders, as provided in Subpart 4.1.4 of the First Amendment
Agreement, of which two installment payments of $450,000 each were deferred
under the First Amendment Agreement until May 2, 1998 and August 1, 1998.
"Second Amendment Effective Date" shall have the meaning ascribed to such
term in Subpart 4.1.
SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Existing Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Second Amendment
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II. Except as so amended, the Existing Credit Agreement shall
continue in full force and effect.
SUBPART 2.1 Amendment to Existing Definitions. Article I of the Existing
Credit Agreement is amended by deleting in its entirety the existing definitions
of the following terms and replacing such terms, in the appropriate alphabetical
places, with the following new definitions:
"Revolving Committed Amount" means (a) from January 30, 1998 through
and including April 3, 1998, ONE HUNDRED EIGHTY MILLION DOLLARS
($180,000,000), (b) from April 4, 1998 through and including August 28,
1998, ONE HUNDRED SIXTY MILLION DOLLARS ($160,000,000), (c) from August 29,
1998 through and including January 1, 1999, ONE HUNDRED FORTY-FIVE MILLION
DOLLARS ($145,000,000), and (d) from and after January 2, 1999, ONE HUNDRED
TWENTY-FIVE MILLION DOLLARS ($125,000,000), or, in each instance and for
any period, such lesser amount as the Revolving Committed Amount may be
reduced pursuant to Section 2.1(d) or Section 3.3(c) hereof, giving effect
for each calculation of the Revolving Committed Amount to the cumulative
amounts of such Net Cash Proceeds (other than those amounts received in
connection with the sale of inventory) received by the Lenders from and
after January 30, 1998 on account of Asset Dispositions.
SUBPART 2.2 Amendment to Section 3.1. Section 3.1 of the Existing Credit
Agreement shall be amended by adding a new section 3.1(d), which reads in its
entirety as follows:
(d) Elimination of Option for Eurodollar Loans. Notwithstanding any
other term or condition of this Credit Agreement, from and after July 31,
1998 all outstanding Revolving Loans shall accrue interest at the Adjusted
Base Rate and the Borrower shall not have the option to designate any
Revolving Loan (made before, on or after such date) as a Eurodollar Loan.
Each Notice of Borrowing submitted by the Borrower on or after such date
shall be deemed to request a Base Rate Loan. Any Eurodollar Loans
outstanding on July 31, 1998 shall automatically be converted to Base Rate
Loans on July 31, 1998, and the Borrower shall pay to the Lenders all
breakage, redeployment costs, and other costs, charges, and amounts arising
on account of the prepayment of Eurodolloar Loans on a day which is not the
last day of the applicable Interest Period(s).
SUBPART 2.3 Amendment to Section 3.4. Section 3.4 of the Existing Credit
Agreement shall be amended by adding a new section 3.4(e), which reads in its
entirety as follows:
(e) Incentive Fee. The Borrower shall pay to the Administrative Agent,
for the pro rata benefit of each Lender (based on each Lender's Revolving
Commitment Percentage of the Revolving Committed Amount) a fee (the
"Incentive Fee") equal to 1.0% of the Revolving Committed Amount existing
as of August 1, 1998; provided, however, in the event that, on or before
July 31, 1998, the Borrower has repaid in full the Loans and the
Commitments have been terminated, then the Borrower shall have no
obligation to pay such Incentive Fee, or any portion thereof, to the
Lenders. To the extent that the Loans have not been repaid and the
Commitments terminated as of July 31, 1998, then such Incentive Fee shall
have been fully earned by the Lenders and immediately due and payable. The
Incentive Fee shall constitute part of the Credit Party Obligations for all
purposes under the Credit Documents.
SUBPART 2.4 Amendment of Section 7.15. Section 7.15 of the Existing Credit
Agreement shall be amended to read in its entirety as follows:
7.15 Retention of Financial Consultant. The Borrower shall retain on or
before January 30, 1998, either as an officer or as an independent
financial consultant, an individual or firm reasonably satisfactory to the
Agents (the "Consultant"). The Borrower shall engage the Consultant to
investigate, evaluate and advise the Borrower concerning a wide range of
financial and operational issues relating to the Borrower's business plan.
The exact scope of the Consultant's services shall be agreed upon by the
Borrower and the Consultant, but must be reasonably satisfactory to the
Agents. The Borrower shall cause the Consultant (i) to meet periodically
with the Agents at their reasonable request to report upon the Consultant's
findings and recommendations, and (ii) to meet with the Lenders no less
frequently than once per quarter to report on the Consultant's findings and
recommendations. The Borrower shall pay all costs associated with its
retention of the Consultant. The Borrower shall not terminate the
Consultant's services, or deny the Consultant access to information
necessary to perform its services within the scope of its engagement, prior
to the repayment in full of the Revolving Loans and the termination of the
Commitments. All reports and information provided by the Consultant to the
Agents or the Lenders shall be subject to the confidentiality provisions of
Section 11.17 hereof.
SUBPART 2.5 Amendment of Section 8.5. Section 8.5 of the Existing Credit
Agreement shall be amended by striking the amount "$24,000,000" appearing in
section 8.5(d) and replacing such amount with "$100,000,000." The remainder of
section 8.5 shall remain unchanged.
SUBPART 2.6 Amendment of Section 8.6. Section 8.6 of the Existing Credit
Agreement shall be amended by striking the amount "$50 million" appearing in
proviso (ii) and replacing such amount with "$60 million." The remainder of
section 8.6 shall remain unchanged.
SUBPART 2.7 Amendment of Section 11.3(b). Section 11.3(b) of the Existing
Credit Agreement shall be amended by striking the amount "$5,000,000" appearing
in proviso (i) and replacing it with "$2,000,000," such amount becoming the new
aggregate minimum amount of Commitments which may be assigned by any Lender. The
remainder of section 11.3(b) shall remain unchanged.
PART III
CONSENTS
SUBPART 3.1 Additional GOB Sales. Subject to the satisfaction of each of
the conditions precedent specified in Part IV of this Agreement, the Lenders
hereby consent to the Borrower's sale, out of the ordinary course of its
business, of inventory located at its retail stores in San Antonio, Texas (store
#26), El Paso, Texas (store #81), Ft. Xxxxx, Indiana (store #66), Boca Raton,
Florida (store #45), and Xxxxxx, Xxxxxxxx (xxxxx # 00) (collectively, the "New
GOB Sales"); provided, that (i) any agreement executed by the Borrower with any
agent or liquidator shall be reasonably satisfactory in form and substance to
the Agents, (ii) all Net Cash Proceeds from such New GOB Sales shall be paid to
the Lenders as a prepayment of the Loans as required by Section 3.3(b)(ii) of
the Existing Credit Agreement, and (iii) the Borrower provide the Agents with
written notice prior to the commencement of any such sales. The Lenders' consent
herein is a one-time consent to the Borrower's sale of inventory outside of the
ordinary course of its business and shall not be construed as a consent to any
other sale of inventory outside of the ordinary course of its business, now or
in the future, at any other locations.
SUBPART 3.2 NationsBank Assignment. The Borrower and each of the Lenders
hereby consent to the assignment by NationsBank, N.A. of 3.50877% of the
Revolving Committed Amount, such amount not being in an integral multiple of
$1,000,000 and not representing the assignment of the remaining Commitments held
by NationsBank, N.A. Such assignment represents the sale by NationsBank, N.A. of
the entire interest in the Loans and Commitments which it previously purchased
from The Sakura Bank, Limited. Section 11.3(b) of the Existing Credit Agreement
requires the consent of the Borrower and the Required Lenders to assignments of
interests in the Loans and Commitments which are not in integral multiples of
$1,000,000 or representing such assigning Lender's entire remaining Commitment
amount.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1 Effective Date. This Agreement shall be and become effective as
of the date hereof (the "Second Amendment Effective Date") when all of the
conditions set forth in this Subpart 4.1 shall have been satisfied.
SUBPART 4.1.1. Execution of Agreement. The Collateral Agent shall have
received original duly executed counterparts of this Agreement from the Borrower
and each of the Lenders.
SUBPART 4.1.2. Closing Certificate. The Collateral Agent shall have
received a certificate from the Borrower certifying that (i) no Default or Event
of Default exists as of the Second Amendment Effective Date (after giving effect
to the provisions hereof), and (ii) the representations and warranties of the
Borrower made in or pursuant to the Credit Documents are true in all material
respects on and as of the Effective Date.
SUBPART 4.1.3. Guarantors Consent. Each of the Guarantors shall have
executed the Consent included in the signature pages of this Agreement, and the
Collateral Agent shall have received such Consent executed by each Guarantor.
SUBPART 4.1.4. Payment of Deferred Amendment Fee. The Collateral Agent
shall have received, for the ratable benefit of the Lenders according to their
respective Revolving Loan Commitment Percentages, on or before the Borrower's
execution and delivery of this Agreement, the Borrower's full payment of the
aggregate unpaid balance of the First Amendment Fee.
SUBPART 4.1.5. Payment of Agents' Expenses. The Borrower shall reimburse
the Agents for their reasonable out-of-pocket expenses incurred in connection
with (i) their attendance at any meeting with the Borrower, (ii) the negotiation
and preparation of this Agreement, and (iii) all other costs and expenses
heretofore incurred by the Agents, including without limitation legal fees and
expenses, in connection with the negotiation, administration, amendment and
enforcement of any of the Credit Documents. Failure of either Agent to invoice
the Borrower by the date hereof for any such amounts shall not relieve the
Borrower of its obligation to pay promptly such reasonable expenses, but the
payment of any such expenses not invoiced to the Borrower by the date hereof
shall not constitute a condition precedent to the effectiveness of this
Agreement.
SUBPART 4.1.6. Corporate Action. The Borrower shall deliver to the Agents
certified copies of all corporate action taken by each Credit Party approving
this Agreement and each of the documents executed and delivered in connection
herewith (including, without limitation, a certificate setting forth the
resolutions of the Board of Directors of each Credit Party adopted in respect of
the transactions contemplated by this Agreement.)
SUBPART 4.1.7. Documentation. The Lenders and the Collateral Agent shall
have received all information and documentation, and such counterpart originals
or such certified or other copies of such originals, as they may reasonably
request (including without limitation, if requested by the Agents, an opinion of
legal counsel to the Credit Parties, opining as to inter alia the due
authorization, validity and enforceability of this Agreement), and all legal
matters incident to the transactions contemplated by this Agreement shall be
satisfactory to the counsel for the Lenders.
PART V
MISCELLANEOUS
SUBPART 5.1 Cross-References. References in this Agreement to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Agreement.
SUBPART 5.2 Instrument Pursuant to Existing Credit Agreement. This
Agreement is a document executed pursuant to the Existing Credit Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered
and applied in accordance with the terms and provisions of the Existing Credit
Agreement.
SUBPART 5.3 Credit Documents. The Borrower hereby confirms and agrees that
the Credit Documents are, and shall continue to be, in full force and effect,
except as amended hereby, except that, on and after the Effective Date,
references in each Credit Document to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Existing Credit Agreement
shall mean the Amended Credit Agreement.
SUBPART 5.4. Representations and Warranties. The Borrower hereby represents
and warrants that (i) it has the requisite corporate power and authority to
execute, deliver and perform this Agreement, (ii) it is duly authorized to, and
has been authorized by all necessary corporate action, to execute, deliver and
perform this Agreement, (iii) it has no claims, counterclaims, offsets, or
defenses to the Credit Documents and the performance of its obligations
thereunder, or if the Borrower has any such claims, counterclaims, offsets, or
defenses to the Credit Documents or any transaction related to the Credit
Documents, the same are hereby waived, relinquished and released in
consideration of the Lenders' execution and delivery of this Agreement, (iv) the
representations and warranties contained in Section 6 of the Existing Credit
Agreement are, subject to the limitations set forth therein, true and correct in
all material respects on and as of the date hereof as though made on and as of
such date (except for those which expressly relate to an earlier date or those
which relate to specific schedules, the changes to which do not represent a
Material Adverse Effect), (v) no event of default under any other agreement,
document or instrument to which the Borrower is a party will occur as a result
of the transactions contemplated hereby, and (vi) as of the date of this
Agreement, no Event of Default (or any event or condition which, but for the
lapse of time or the giving of notice, would constitute an "event of default"
under Section 9.1 of the Existing Credit Agreement or the Amended Credit
Agreement) exists.
SUBPART 5.5. Costs and Expenses. The Borrower hereby agrees to pay on
demand all costs and expenses (including without limitation the reasonable fees
and expenses of counsel to the Agents) incurred by the Agents in connection with
the negotiation, preparation, execution, and delivery of this Agreement and the
enforcement or preservation of any rights and remedies of the Lenders and the
Collateral Agent hereunder (including without limitation any such fees and
expenses subsequently incurred by the Lenders and/or the Collateral Agent in any
bankruptcy or insolvency proceeding involving the Borrower).
SUBPART 5.6. Counterparts, Effectiveness, Etc. This Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SUBPART 5.7. Captions. The captions in this Agreement are inserted only as
a matter of convenience and for reference and in no way define, limit or
describe the scope of this Agreement or any provision hereof.
SUBPART 5.8 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF FLORIDA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SUBPART 5.9. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the day and year
first above written.
THE BORROWER: JUMBOSPORTS INC.,
a Florida corporation
/S/ X. X. Xxxxxxxx
Executive Vice President
THE LENDERS: XXXXXXX BANK, N.A.,
individually in its capacity as a
Lender and in its capacity as
Administrative Agent and
Collateral Agent
/S/ XxXxxx X. Xxxx III
Senior Vice President
NATIONSBANK, N.A. f/k/a
NationsBank, N.A. (South),
individually in its capacity as a
Lender and in its capacity as
Documentation Agent
/S/ XxXxxx X. Xxxx III
Senior Vice President
[Signatures Continued]
HIBERNIA NATIONAL BANK
/S/ Xxxxx X. Xxxxxxx
Vice President
U.S. BANK NATIONAL
ASSOCIATION (f/k/a United States
National Bank of Oregon)
/S/ Xxxxxx X. XxXxxxxxx
Vice President
THE SUMITOMO BANK, LIMITED
/S/ X. X. Xxxxxxxx
Vice President
/S/ Xxxxx X. Xxxxx
Senior Vice President
NATIONAL BANK OF CANADA
/S/ E. Xxxx Xxxxxxx
Group Vice President
/S/ X. Xxxxxx
Vice President
[Signatures Continued]
LTCB TRUST COMPANY
/S/ Xxxxxx Xxxxx
Senior Vice President
FIRST AMERICAN NATIONAL BANK
/S/ Xxxxxx X. Xxxxxxxxxxx
Senior Vice President
SUNTRUST BANK, TAMPA BAY
/S/ Xxxxx Xxxxx
Vice President
PNC BANK, N.A.
/S/ Xxxxxx X. XxXxxx
Senior Vice President
CONSENT TO AGREEMENT
Each of the undersigned, as a party to one or more of the Credit Documents,
hereby acknowledges the execution and delivery of the Second Amendment Agreement
dated as of May ___, 1998, hereby confirms and agrees that each Credit Document
to which it is a party is, and shall continue to be, in full force and effect,
and hereby ratifies and confirms in all respects its obligations thereunder.
This Consent may be executed by the parties hereto in counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same instrument.
SPORTS & RECREATION HOLDINGS OF PA, INC.
/S/ X. X. Xxxxxxxx
Vice President
GUIDE SERIES, INC.
/S/ X. X. Xxxxxxxx
Vice President
CONSTRUCTION RESOLUTION, INC.
/S/ X. X. Xxxxxxxx
Vice President
SPORTS & RECREATION, INC.
/S/ X. X. Xxxxxxxx
Executive Vice President
