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EXHIBIT 10.1
FIRST AMENDMENT TO
CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
March 31, 1998, is entered into among XXXXXXX SPORTS INC., a Delaware
corporation (the "Borrower"), each of the Borrower s Material Subsidiaries
(individually a "Guarantor" and collectively the "Guarantors"), the Lenders
party to the Credit Agreement defined below (the "Lenders"), NBD BANK, as
Administrative Agent (the "Administrative Agent") for the Lenders and
NATIONSBANK, N.A., as Documentation Agent (the "Documentation Agent") for the
Lenders (the Documentation Agent, together with the Administrative Agent,
collectively the "Agents"). Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings given to them in the Credit
Agreement.
RECITALS
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WHEREAS, the Borrower, the Guarantors, the Administrative Agent, the
Documentation Agent and the Lenders are parties to that certain Credit
Agreement dated as of June 19, 1997 (as may be amended, modified, supplemented,
extended or restated from time to time, the "Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders amend the terms of
the Credit Agreement; and
WHEREAS, the Agents and the Lenders have agreed to amend the terms of the
Credit Agreement, as more fully set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 AMENDMENTS TO CREDIT AGREEMENT.
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1.1 The following new definitions are added to Section 1.1 of the
Credit Agreement to read as follows:
"Adjusted Leverage Ratio" means, as of the end of each fiscal quarter of
the Borrower, the ratio of (a) Funded Debt on such date (provided that in
calculating the Funded Debt incurred under this Credit Agreement, the
amount of such Funded Debt shall be equal to the lowest average 30 day
outstanding balance during the most recent prior twelve month period) less
cash and Cash Equivalents of the Credit Parties and their Subsidiaries on
such date to (b) EBITDA for the twelve month period ending on such date
"chief financial officer" means the chief financial officer or the chief
accounting officer of the Borrower.
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"Senior Debt Leverage Ratio" means, as of the end of each fiscal quarter,
the ratio of (a) the principal balance of all amounts outstanding under
this Credit Agreement on such date to (b) EBITDA for the twelve month
period ending on such date.
1.2 Exhibit 7.1(d) to the Credit Agreement is amended and restated
in its entirety in the form attached hereto.
1.3 Sections 7.2(a) and 7.2(b) of the Credit Agreement are amended
and restated in their entirety to read as follows:
(a) As of the end of each fiscal quarter of the Borrower set
forth below, the Adjusted Leverage Ratio, the Senior Debt Leverage
Ratio and the Coverage Ratio shall satisfy the following minimum and
maximum requirements:
Fiscal Quarter Maximum Maximum Minimum
Ending Adjusted Senior Debt Coverage
Leverage Ratio Leverage Ratio Ratio
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March 31, 1998 7.50 to 1.0 1.50 to 1.0 1.15 to 1.0
June 30, 1998 7.50 to 1.0 2.00 to 1.0 1.10 to 1.0
September 30, 1998 6.50 to 1.0 1.00 to 1.0 1.15 to 1.0
December 31, 1998 6.50 to 1.0 .50 to 1.0 1.15 to 1.0
March 31, 1999 6.00 to 1.0 1.50 to 1.0 1.15 to 1.0
June 30, 1999 6.00 to 1.0 2.00 to 1.0 1.15 to 1.0
September 30, 1999 6.00 to 1.0 1.00 to 1.0 1.15 to 1.0
December 31, 1999 6.00 to 1.0 .50 to 1.0 1.15 to 1.0
March 31, 2000 6.00 to 1.0 1.50 to 1.0 1.25 to 1.0
June 30, 2000 5.75 to 1.0 2.00 to 1.0 1.25 to 1.0
September 30, 2000 5.50 to 1.0 1.00 to 1.0 1.25 to 1.0
December 31, 2000 5.50 to 1.0 .50 to 1.0 1.25 to 1.0
March 31, 2001 5.50 to 1.0 1.50 to 1.0 1.25 to 1.0
June 30, 2001 5.50 to 1.0 2.00 to 1.0 1.50 to 1.0
September 30, 2001 5.00 to 1.0 1.00 to 1.0 1.50 to 1.0
December 31, 2001 5.00 to 1.0 .50 to 1.0 1.50 to 1.0
March 31, 2002 5.00 to 1.0 1.50 to 1.0 1.50 to 1.0
June 30, 2002 5.00 to 1.0 2.00 to 1.0 1.50 to 1.0
(b) intentionally omitted
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1.4 A new Section 7.17 is added to the Credit Agreement to read as
follows:
7.17 Clean Down Period, The Credit Parties shall cause the average
maximum amount outstanding under this Credit Agreement to be less than or
equal to $5,000,000 during at least one 30 day consecutive period within
any twelve month period ending on the last day of each fiscal quarter of
the Borrower. Notwithstanding the above, the Credit Parties shall not
have to adhere to this covenant if for two consecutive fiscal quarters
they can satisfy the following Leverage Ratio maximum requirements:
Fiscal Quarter Maximum
Ending Leverage Ratio
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March 31, 1998 6.50 to 1.0
June 30, 1998 6.50 to 1.0
September 30, 1998 5.50 to 1.0
December 31, 1998 5.50 to 1.0
March 31, 1999 5.50 to 1.0
June 30, 1999 5.50 to 1.0
September 30, 1999 5.50 to 1.0
December 31, 1999 4.50 to 1.0
March 31, 2000 4.50 to 1.0
June 30, 2000 4.50 to 1.0
September 30, 2000 4.50 to 1.0
December 31, 2000 3.50 to 1.0
March 31, 2001 3.50 to 1.0
June 30, 2001 3.50 to 1.0
September 30, 2001 3.50 to 1.0
December 31, 2001 3.50 to 1.0
March 31, 2002 3.50 to 1.0
June 30, 2002 3.50 to 1.0
September 30, 2002 3.50 to 1.0
December 31, 2002 3.50 to 1.0
SECTION 2 AUDIT/INSPECTIONS.
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It is understood and agreed by the Credit Parties
that the Agents plan to conduct a field audit of the Credit Parties' inventory
and accounts receivable, at the expense of the Credit Parties, in conformance
with the terms of Section 7.12 of the Credit Agreement.
SECTION 3 CONDITIONS PRECEDENT.
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3.1 The effectiveness of this Amendment is subject to the satisfaction of
each of the following conditions:
(a) The Agents shall have received copies of this Amendment duly
executed by the Credit Parties, the Agents and the Lenders.
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(b) The Agents shall have received copies of resolutions of
the
Board of Directors of each Credit Party approving and adopting this
Amendment, the transactions contemplated herein and authorizing execution
and delivery hereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and effect as of the
date hereof.
(c) The Agents shall have received an opinion, reasonably
satisfactory to the Agents, from legal counsel to the Credit Parties.
(d) The Agents shall have received such other documents and
information as either deems reasonably necessary.
SECTION 4 MISCELLANEOUS.
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4.1 The term "Credit Agreement" as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as herein specifically agreed, the Credit Agreement,
and the obligations of the Credit Parties thereunder and under the other
Credit Documents, are hereby ratified and confirmed and shall remain in
full force and effect according to their terms.
4.2 The Borrower and the Guarantors, as applicable, affirm the liens
and security interests created and granted in the Credit Agreement and the
Credit Documents and agree that this Amendment shall in no manner
adversely affect or impair such liens and security interests.
4.3 The Borrower hereby represents and warrants to the Lenders and
the Agents that (a) no Default or Event of Default exists and is
continuing under the Credit Agreement; (b) all of the representations and
warranties made in the Credit Documents are true and correct in all
material respects as of the date hereof (noting that Cheer Acquisition
Corporation has merged with Varsity Spirit Corporation and changed its
name to Varsity Spirit Corporation); and (c) the Borrower has no claims,
counterclaims, offsets, credits or defenses to the Credit Documents and
the performance of its obligations thereunder, or if the Borrower has any
such claims, counterclaims, offsets, credits or defenses to the Credit
Documents or any transaction related to the Credit Documents, same are
hereby waived, relinquished and released in consideration of the Lenders'
execution and delivery of this Amendment.
4.4 The Guarantors (a) acknowledge and consent to all of the terms
and conditions of this Amendment, (b) affirm all of their obligations
under the Credit Documents and (c) agree that this Amendment and all
documents executed in connection herewith do not operate to reduce or
discharge the Guarantors' obligations under the Credit Agreement or the
other Credit Documents. The Guarantors acknowledge and agree that the
Guarantors have no claims, counterclaims, offsets, credits or defenses to
the Credit Documents and the performance of the Guarantors' obligations
thereunder, or if a Guarantor
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did have any such claims, counterclaims, offsets, credits 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 Amendment.
4.5 Each of the Borrower, the Guarantors, the Agents and the Lenders
party hereto represents and warrants as follows:
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by such
party and constitutes such party's legal, valid and binding obligations,
enforceable in accordance with its terms, except as such enforceability
may be subject to (a) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by such party of this Amendment.
4.6 This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all
of which shall constitute one and the same instrument.
4.7 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
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Each of the parties hereto has caused a counterpart of this Amendment to
be duly executed and delivered as of the date first above written.
BORROWER:
XXXXXXX SPORTS INC.,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
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Title: EVP
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GUARANTORS:
XXXXXXX, INC.,
a Illinois corporation
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
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Title: EVP
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EQUILINK LICENSING CORPORATION,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
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Title: EVP
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RHC LICENSING CORPORATION,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
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Title: EVP
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RIDMARK CORPORATION,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
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Title: EVP
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ALL AMERICAN SPORTS CORPORATION,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
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Title: EVP
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VARSITY SPIRIT CORPORATION,
a Tennessee corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: Senior Vice President
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VARSITY SPIRIT FASHIONS & SUPPLIES, INC.
a Minnesota corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: Senior Vice President
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INTERNATIONAL LOGOS, INC.
a Tennessee corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: Senior Vice President
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VARSITY/INTROPA TOURS, INC.
a Tennessee corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: Senior Vice President
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VARSITY USA, INC.
a Tennessee corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: Senior Vice President
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LENDERS:
NBD BANK
individually in its capacity as a
Lender and in its capacity as Administrative Agent and
Collateral Agent
By: /s/ XXX X. XXXX
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Name: Xxx X. Xxxx
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Title: First Vice President
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NATIONSBANK, N.A.,
individually in its capacity as a Lender and in its
capacity as Documentation Agent
By: JE-- X. XXXX
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Name: X. X. Xxxx
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Title: Senior Vice President
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