EXHIBIT 10.42
CONSENT AND FIRST AMENDMENT TO CREDIT AGREEMENT
THIS CONSENT AND FIRST AMENDMENT to Credit Agreement (the
"Amendment") is made as of this 21st day of November, 1996, by and
among Sportmart, Inc. ("Borrower"), BT Commercial Corporation, as
agent (in such capacity as agent, "Agent") and BT Commercial
Corporation, as lender (in such capacity as lender, "Lender").
W I T N E S S E T H:
WHEREAS, Borrower, Agent and Lender are parties to that certain
Credit Agreement dated as of September 6, 1996 (the "Credit
Agreement"); and
WHEREAS, Borrower has requested that Agent and Lender provide for
certain amendments to the Credit Agreement and consent to the
establishment of a new Subsidiary or Subsidiaries, as more fully set
forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and subject to the terms and conditions
hereof, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all
capitalized terms shall have the meaning given to them in the Credit
Agreement.
SECTION 2. WAIVER AND CONSENT. Subject to the conditions herein
stated, the Agent and Lender hereby consent to Borrower's formation of
one or more new subsidiaries (the "New Subsidiaries") for the ultimate
purpose of amalgamating SportDepot with and into a Nova Scotia
unlimited liability company (the "New SportDepot") and hereby waive
any Default that would otherwise occur pursuant to the terms of
Section 8.15 of the Credit Agreement upon the formation thereof. This
consent and waiver shall not be construed as a waiver and consent with
respect to the formation of any other Subsidiary or a consent or
waiver with respect to the breach of Section 8.15 on any other
occasion. This consent and waiver is subject to the conditions that
(i) not less than 5 Business Days prior to the formation of the New
Subsidiaries, Borrower gives Agent advanced written notice thereof,
and (ii) Borrower hereby agrees to cause such New Subsidiaries
(including New SportDepot) to execute and deliver to Agent, for the
benefit of the Lenders, such guarantees, security agreements, pledge
agreements, financing statements and the like as Agent and its counsel
(including Canadian counsel) shall reasonably request. The foregoing
consent constitutes a consent in writing to the foregoing amalgation
by the Agent pursuant to Section 8.10(e) of the Credit Agreement.
SECTION 3. AMENDMENTS TO CREDIT AGREEMENT.
3.1 The Section 1.1 of the Credit Agreement is hereby
amended by deleting the definition of Inter-Company Loan in its
entirety and inserting the following in lieu thereof:
"Inter-Company Loan means the following loans and
financial accommodations by Borrower to
SportDepot, the aggregate total of the outstanding
principal balance and total face amount of which
shall in no event exceed $50,000,000: (i) the
Support Letter of Credit or other credit support
provided by or on behalf of Borrower to a Canadian
financial institution acceptable to Agent in the
exercise of its Permitted Discretion, which credit
support shall be evidenced by one or more Letters
of Credit or other documents acceptable to Agent
in the exercise of its Permitted Discretion; and
( ii) the revolving credit facility made by
Borrower to SportDepot, which (a) shall be
evidenced by loan documents acceptable to Agent in
the exercise of its Permitted Discretion, (b)
secured by a first priority, perfected security
interest (other than Permitted Liens) in all
personal property of SportDepot whether now owned
or hereafter credited or acquired, and (c)
assigned to Agent as Collateral for the
Obligation."
3.2 Section 1.1 of the Credit Agreement is hereby further
amended by deleting the definition of "Letters of Credit" in its
entirety and inserting the following in lieu thereof:
"Letters of Credit means the Support Letter of
Credit and all other letters of credit or
guarantees with respect to foreign exchange
contracts issued for the account of the Borrower
under Article 3 and all amendments, renewals or
replacements thereof."
3.3 Section 1.1 of the Credit Agreement is hereby further
amended by deleting the definition of "SportDepot" in its
entirety and inserting the following in lieu thereof:
"SportDepot means SportDepot Stores, Inc. an
Ontario corporation, a wholly owned Subsidiary of
Borrower and any successor thereto, by merger or
amalgamation, it being understood that SportDepot
Stores Inc. proposes to amalgamate with and into a
Nova Scotia unlimited liability company."
3.4 Section 1.1 is hereby further amended by inserting the
following definition immediately before the definition of
"Termination Event":
"Support Letter of Credit means one or more
Letters of Credit in form and substance acceptable
to Agent in its Permitted Discretion, issued on
behalf of Borrower for the benefit of a Canadian
financial institution acceptable to Agent, in its
Permitted Discretion, which is making or
committing to make loans and other financial
accommodations directly to SportDepot, on terms
and conditions acceptable to Agent, in its
Permitted Discretion."
3.5 Section 3.1 of the Credit Agreement is hereby amended
by inserting immediately after word "outstanding" in the second
line of subsection 3.1(a) the parenthetical phrase, "(exclusive
of the Support Letter of Credit)".
3.6 Subsection 4.3(a) of the Credit Agreement is hereby
amended by deleting all of the text following immediately after
the definition "Letter of Credit Fee" in the first sentence
thereof, and inserting the following in lieu thereof:
"for the Support Letter of Credit in an amount
equal to two and one-half percent (2-1/2%) per
annum of the daily weighted average undrawn amount
of the Support Letter of Credit outstanding during
the immediately preceding month and for all other
Letters of Credit in an amount equal to one and
one half percent (1.5) per annum of the daily
weighted average undrawn amount of all other
Letters of Credit out-standing during the
immediately preceding month."
3.7 Subsection 4.3(a) of the Credit Agreement is hereby
further amended by inserting immediately after the word
"contract", in the parenthetical phase in the second complete
sentence thereof, the phrase "or the Support Letter of Credit".
3.8 Subsection 8.5 of the Credit Agreement is hereby
amended by deleting the "and" at the end of clause (f), deleting
clause (g), and inserting the following clauses in lieu thereof:
"(g) Unsecured Indebtedness incurred by SportDepot
in lieu of or in addition to the
Inter-Company Loan which Indebtedness shall
be to a Canadian financial institution
acceptable to Agent in its Permitted
Discretion which Indebtedness, when
aggregated with the principal amount
outstanding under the Inter-Company Loan,
shall not exceed $50,000,000; and
(h) Additional unsecured Indebtedness not
otherwise set forth in subsections (a)
through (g) above in an amount not to exceed
$1,000,000 in the aggregate outstanding at
any one time."
SECTION 4. REAFFIRMATION BY BORROWER. Borrower hereby
represents and warrants to Agent and Lender that (i) the
representations and warranties set forth in Section 6 of the Credit
Agreement are true and correct on and as of the date hereof, except to
the extent (a) that any such representations or warranties relate to a
specific date, or (b) of changes thereto as a result of transactions
for which Agent and Lenders have granted their consent; (ii) Borrower
is on the date hereof in compliance with all of the terms and
provisions set forth in the Credit Agreement as hereby amended; and
(iii) upon execution hereof no Default or Event of Default has
occurred and is continuing or has not previously been waived.
SECTION 5. FULL FORCE AND EFFECT. Except as herein amended, the
Credit Agreement and all other Credit Documents shall remain in full
force and effect.
SECTION 6. COUNTERPARTS. This Amendment may be executed in two
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment on the day and year specified above.
BORROWER:
SPORTMART, INC.
By: /S/XXXXXX XXXXXXXXXXX
Name: XXXXXX XXXXXXXXXXX
Title: EXECUTIVE VICE PRESIDENT -
CHIEF FINANCIAL OFFICER
AGENT:
BT COMMERCIAL CORPORATION
By: /S/ XXXXX XXXXX
Name: XXXXX XXXXX
Title: VICE PRESIDENT
LENDERS:
BT COMMERCIAL CORPORATION
By: /S/ XXXXX XXXXX
Name: XXXXX XXXXX
Title: VICE PRESIDENT
