EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made and entered into as of the 27th day of June, 2003, by and among
CONGRESS FINANCIAL CORPORATION (SOUTHWEST), a Texas corporation ("Lender"),
SPORT SUPPLY GROUP, INC., a Delaware corporation ("SSG"), and ATHLETIC
TRAINING EQUIPMENT COMPANY, INC., a Delaware corporation ("ATEC") (SSG and
ATEC, individually and/or collectively, jointly and severally, "Borrower").
PRELIMINARY STATEMENTS
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A. Lender and Borrower have entered into that certain Loan and
Security Agreement, dated March 27, 2001, as amended by that certain First
Amendment to Loan and Security Agreement dated October 1, 2002 (the "Loan
Agreement"), pursuant to which Lender has entered into certain financing
arrangements with Borrower.
B. The parties hereto have agreed to amend the Loan Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties, intending to be legally bound, agree
as follows:
AGREEMENT
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ARTICLE I
Definitions
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1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.
ARTICLE II
Amendments
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2.01 Amendments to Section 12.1. (a) The first sentence of Paragraph
(a) of Section 12.1 of the Loan Agreement is hereby amended and restated to
read as follows:
"This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and
shall continue in full force and effect for a term ending on the
earlier of (i) August 1, 2004 (the "Renewal Date"), and from year
to year thereafter, unless sooner terminated pursuant to the terms
hereof or (ii) at Lender's option, the date on which any Person or
group of Persons (as used within the context of the definition of
beneficial ownership described below), other than Xxxxxxx and its
shareholders, officers and directors, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities Exchange Commission under the Securities
Exchange Act of 1934, as amended) of and having voting control
over shares of capital stock of SSG in amount sufficient to allow
them to elect a majority of the board of directors of SSG (in
which case, no renewals or extensions shall apply)."
(b) Paragraph (c) of Section 12.1 of the Loan Agreement is hereby
amended by deleting the reference to "March 26, 2004" set forth in said
Paragraph and inserting "July 31, 2004" in lieu thereof.
2.02 Addition of New Section 3.6. Section 3 of the Agreement is hereby
amended by adding the following Section 3.6 thereto:
"3.6 Second Amendment Fee. Borrower shall pay to Lender on
September 1, 2003, a fee in respect of the Second Amendment to
Loan and Security Agreement dated as of June 27, 2003, in an
amount equal to $5,000, which fee shall be fully earned and non-
refundable as of such date, provided, however, that (i) if before
September 1, 2003, Borrower and Lender have agreed in writing to
extend the Renewal Date to April 1, 2006 or later, payment of such
fee shall be automatically waived, and (ii) if Borrower pays such
fee in full when due and Borrower and Lender thereafter agree in
writing to so extend the Renewal Date to April 1, 2006 or later,
any fee charged by Lender to Borrower in connection with such
extension shall be reduced by $5,000."
ARTICLE III
Conditions Precedent
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3.01 Conditions to Effectiveness. The effectiveness of this Amendment
is subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:
(a) Lender shall have received, in form and substance satisfactory to
Lender and its legal counsel:
(i) this Amendment, duly executed by Borrower;
(ii) a certificate of the Secretary of Borrower dated as of
the date of this Amendment, in form and substance
satisfactory to Lender, certifying among other things,
(i) that Borrower's Board of Directors has met and has
adopted, approved, consented to and ratified resolutions
which authorize the execution, delivery and performance
by Borrower of this Amendment and all such other
Financing Agreements to which Borrower is or is to be a
party, and (ii) the names of the officers of Borrower
authorized to sign this Amendment and each of such other
Financing Agreements to which Borrower is or is to be a
party hereunder (including the certificates contemplated
herein) together with specimen signatures of such
officers; and
(iii) such additional documents, instruments and information
as Lender or its legal counsel may request.
(b) The representations and warranties contained herein, in the Loan
Agreement and in the other Financing Agreements, shall be true and
correct as of the date hereof, as if made on the date hereof.
(c) No Event of Default or event or condition which, with notice or
passage of time or both, would constitute an Event of Default,
shall have occurred and be continuing, unless such event,
condition or Event of Default has been specifically waived in
writing by Lender.
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to Lender and its legal counsel.
ARTICLE IV
No Waiver
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Nothing contained in this Amendment shall be construed as a waiver by
Lender of any covenant or provision of the Loan Agreement or the other
Financing Agreements or of any other contract or instrument among Borrower
and Lender, and the failure of Lender at any time or times hereafter to
require strict performance by Borrower of any provision thereof shall not
waive, affect or diminish any right of Lender to thereafter demand strict
compliance therewith. Lender hereby reserves all rights granted under the
Loan Agreement, the other Financing Agreements and any other contract or
instrument among Borrower and Lender.
ARTICLE V
Ratifications, Representations and Warranties
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5.01 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Loan Agreement and the other Financing Agreements, and,
except as expressly modified and superseded by this Amendment, the terms and
provisions of the Loan Agreement and the other Financing Agreements are
ratified and confirmed and shall continue in full force and effect.
Borrower and Lender agree that (a) the Loan Agreement, as amended hereby,
and the other Financing Agreements shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms, and
(b) the security interests in the Collateral are in full force and effect.
5.02 Representations and Warranties of Borrower. Borrower hereby
represents and warrants to Lender that (a) the execution, delivery and
performance of this Amendment and any and all other Financing Agreements
executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and will not violate the
Certificate of Incorporation or Bylaws of Borrower; (b) the representations
and warranties contained in the Loan Agreement, as amended hereby, and any
other Financing Agreement are true and correct on and as of the date hereof
and on and as of the date of execution hereof as though made on and as of
each such date; (c) no Event of Default or event or condition which, with
notice or passage of time or both, would constitute an Event of Default
under the Loan Agreement, as amended hereby, has occurred and is continuing;
(d) Borrower is in full compliance with all covenants and agreements
contained in the Loan Agreement and the other Financing Agreements, as
amended hereby; and (e) Borrower has not amended, modified or in any way
altered its Certificate of Incorporation or Bylaws since March 27, 2001.
ARTICLE VI
Miscellaneous Provisions
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6.01 Survival of Representations and Warranties. All representations
and warranties made in the Loan Agreement or any other Financing Agreement,
including, without limitation, any document furnished in connection with
this Amendment, shall survive the execution and delivery of this Amendment
and the other Financing Agreements, and no investigation by Lender or any
closing shall affect the representations and warranties or the right of
Lender to rely upon them.
6.02 Reference to Loan Agreement. Each of the Loan Agreement and the
other Financing Agreements, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Loan Agreement, as amended hereby,
are hereby amended so that any reference in the Loan Agreement and such
other Financing Agreements to the Loan Agreement shall mean a reference to
the Loan Agreement and the other Financing Agreements as amended hereby.
6.03 Expenses of Lender. As provided in Section 9.16 of the Loan
Agreement, Borrower agrees to pay on demand all costs and expenses incurred
by Lender in connection with the preparation, negotiation and execution of
this Amendment and the other Financing Agreements executed pursuant hereto,
and any and all amendments, modifications, and supplements thereto,
including, without limitation, all costs and expenses of filing or recording
and the reasonable costs and fees of Lender's legal counsel (including legal
assistants).
6.04 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6.05 Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of Lender and Borrower and their respective successors
and assigns, except that Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
6.06 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument.
6.07 Effect of Waiver. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant or condition
by Borrower shall be deemed a consent to or waiver of any other breach of
the same or any other covenant, condition or duty.
6.08 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
6.09 Applicable Law. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW).
6.10 Final Agreement. THE LOAN AGREEMENT AND THE OTHER FINANCING
AGREEMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT
IS EXECUTED. THE LOAN AGREEMENT AND THE OTHER FINANCING AGREEMENTS, AS
AMENDED, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER,
RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE,
EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND LENDER.
6.11 Release. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF
ITS LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR
DAMAGES OF ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS,
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL
POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL,
AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE
THIS AMENDMENT IS EXECUTED, WHICH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST
LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS
AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT
OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING
FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN
EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER FINANCING AGREEMENTS, AND
NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
IN WITNESS WHEREOF, this Amendment has been executed and is effective
as of the date first above-written.
LENDER:
CONGRESS FINANCIAL CORPORATION
(SOUTHWEST)
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Vice President
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BORROWERS:
SPORT SUPPLY GROUP, INC.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: Vice President - Corp. Development
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ATHLETIC TRAINING EQUIPMENT
COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President - Finance
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