EXHIBIT 10.33.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as
of September 13, 2000. The parties hereto are SPORT SUPPLY GROUP, INC., a
Delaware corporation ("Borrower"), and COMERICA BANK-TEXAS, a state banking
association ("Bank").
RECITALS:
A. Borrower and Bank are parties to that certain Credit Agreement
dated as of April 26, 1999 (which, as the same has been and may be amended,
modified, supplemented or restated from time to time, is herein called the
"Credit Agreement"), providing for, among other things, the Bank's agreement
to extend credit to Borrower pursuant to a specific advance facility and a
revolving credit facility.
B. The existing indebtedness of Borrower under the specific advance
facility is evidenced by that certain Specific Advance Facility Promissory
Note dated April 26, 1999, executed by Borrower and payable to the order of
Bank in the original principal amount of $10,000,000.00, as the same may be
amended, modified, supplemented or restated from time to time (the "SAF
Note"), and the existing indebtedness of Borrower under the revolving credit
facility is evidenced by that certain Revolving Credit Note dated April 26,
1999, executed by Borrower and payable to the order of Bank in the original
principal amount of $30,000,000.00, as the same may be amended, modified
supplemented or restated from time to time (the "Revolving Credit Note", and
together with the SAF Note, collectively referred to as the "Notes"). The
Credit Agreement, the Notes and all other documents and instruments now or
hereafter governing, evidencing, guaranteeing, securing or otherwise
relating to payment of all or any part of the indebtedness evidenced by the
Notes are herein collectively called the "Loan Documents."
C. Borrower and Bank desire to amend the Credit Agreement (i) to
reduce and extend the commitment under the revolving credit facility,
(ii) to terminate the commitment under the specific advance facility,
(iii) to convert the indebtedness evidenced by the SAF Note into a term
loan, (iv) to change the interest rates for the respective Notes, (v) to
amend certain covenants and provisions of the Credit Agreement, and
(vi) otherwise as provided herein.
D. Bank and Borrower desire to enter into this Amendment to provide
for all of the foregoing and to ratify and confirm the Loan Documents.
AGREEMENTS:
In consideration of the premises and the mutual agreements herein set
forth, Borrower and Bank hereby agree as follows:
Article I
Definitions
Section 1.1 Definitions. Capitalized terms used and not otherwise
defined in this Amendment shall have their respective meanings as set forth
in the Credit Agreement.
Article II
Amendments to Credit Agreement
Section 2.1 Xxxxxx Bros., Inc. Effective as of the date hereof,
Section 4.1 of the Credit Agreement is hereby amended to read in its
entirety as follows:
4.1 Preservation of Existence, Etc. Except as hereinafter
provided, preserve and maintain its existence and except where the
failure to do any of the following would not have a Material
Adverse Effect, preserve and maintain such of its rights,
licenses, and privileges as are material to the business and
operations conducted by it; qualify and remain qualified to do
business in each jurisdiction in which such qualification is
material to its business and operations or ownership of its
properties, continue to conduct and operate its business
substantially as conducted and operated during the present and
preceding calendar year; at all times maintain, preserve and
protect all of its franchises and trade names and preserve all the
remainder of its property and keep the same in good repair,
working order and condition; and from time to time make, or cause
to be made, all needed and proper repairs, renewals, replacements,
betterments and improvements thereto. Notwithstanding the
foregoing, Xxxxxx Bros., Inc may be dissolved, liquidated or
merged into Borrower or Athletic Training Equipment Company, Inc.,
so long as such dissolution, liquidation or merger results in all
assets of Xxxxxx Bros., Inc. being owned by Borrower or Athletic
Training Equipment Company, Inc. Further, in the event such
dissolution, liquidation or merger does not occur by November 15,
2000, Borrower shall cause Xxxxxx Bros., Inc. to execute and
deliver to Bank on or before such date a Guaranty, a Security
Agreement (All Assets), a Security Agreement (Intellectual
Property), and such UCC financing statements as Bank may require,
all in form and substance satisfactory to Bank in its sole
discretion.
Section 2.2 Reporting Requirements. Effective as of the date
hereof, (a) the phrase "one hundred twenty (120) days" appearing in
subsection (b) of Section 4.3 of the Credit Agreement is hereby amended to
read "ninety (90) days", and (b) subsections (d), (e), (f), (g), (h) and (i)
of Section 4.3 of the Credit Agreement are hereby amended to read in their
respective entireties as follows:
(d) as soon as available, and in any event within fifteen
(15) days after and as of each Borrowing Base Reporting
Date, agings and reports of accounts receivable of
Borrower and such of the Borrower Parties as may be
required by the Bank, in form and detail satisfactory to
Bank;
(e) as soon as available, and in any event within thirty
(30) days after and as of the end of each calendar
month, agings and reports of accounts payable of
Borrower and such of the Borrower Parties as may be
required by the Bank, in form and detail satisfactory to
Bank;
(f) as soon as available, and in any event within fifteen
(15) days after and as of each Borrowing Base Reporting
Date, a listing of Inventory of Borrower and such of the
Borrower Parties as may be required by the Bank, in form
and detail satisfactory to Bank;
(g) as soon as available, and in any event within fifteen
(15) days after and as of each Borrowing Base Reporting
Date, a stock status report of Inventory as is presently
prepared by Borrower, and of agings and reports of both
accounts receivable and accounts payable, in the form of
Exhibit F attached to this Agreement;
(h) simultaneously with the Financial Statements to be
delivered to Bank pursuant to subsections (b) and (c)
above, a Compliance Certificate certified as being true
and correct by the chief financial officer or other
officer acceptable to Bank of Borrower and, as
applicable, each Borrower Party;
(i) within fifteen (15) days after and as of each Borrowing
Base Reporting Date, a Borrowing Base Certificate
certified as being true and correct by the chief
financial officer or other officer acceptable to Bank of
Borrower and, as applicable, each Borrower Party;
Section 2.3 Collateral Audits. Effective as of the date hereof,
Section 4.14 of the Credit Agreement is hereby amended to read in its
entirety as follows:
4.14 Collateral Audits. Permit Bank to conduct audits of any
Borrower Party's Accounts and Inventory as often as Bank deems
such audits to be desirable. Upon Bank's request, Borrower shall
reimburse Bank for the reasonable costs and expenses expended by
Bank in connection with such audits, such expenses not to exceed
$5,000.00 per audit. Without limiting Bank's right to conduct
more frequent audits, Bank acknowledges that it currently intends
to conduct two (2) such audits of Accounts and Inventory during
each successive 12 month period beginning on or after September
13, 2000; provided however, so long as no Event of Default has
occurred and is continuing, any additional audit conducted by Bank
shall be at the sole cost and expense of Bank.
Section 2.4 Capital Structure, Business Objects or Purpose.
Effective as of the date hereof, Section 5.1 of the Credit Agreement is
hereby amended to read in its entirety as follows:
5.1 Capital Structure, Business Objects or Purpose. Except
as hereinafter provided, purchase, acquire or redeem any of its
equity ownership interests, or enter into any reorganization or
recapitalization or reclassify its equity ownership interests, or
make any material change in its capital structure or general
business objects or purpose. Notwithstanding the foregoing,
Xxxxxx Bros., Inc may be dissolved, liquidated or merged into
Borrower or Athletic Training Equipment Company, Inc., so long as
such dissolution, liquidation or merger results in all assets of
Xxxxxx Bros., Inc. being owned by Borrower or Athletic Training
Equipment Company, Inc.
Section 2.5 Acquisitions. Effective as of the date hereof,
Section 5.6 of the Credit Agreement is hereby amended to read in its
entirety as follows:
5.6 Acquisitions. Purchase or otherwise acquire or become
obligated for the purchase of all or substantially all of the
assets or business interests of any Person or any shares of stock
or other ownership interests of any Person or in any other manner
effectuate or attempt to effectuate an expansion of present
business by acquisition.
Section 2.6 Dividends. Effective as of the date hereof, Section
5.7 of the Credit Agreement is hereby amended to read in its entirety as
follows:
5.7 Dividends. Declare or pay dividends on, or make any
other distribution (whether by reduction of capital or otherwise)
in respect of any shares of its capital stock or other ownership
interests.
Section 2.7 Investments. Effective as of the date hereof, Section
5.8 of the Credit Agreement is hereby amended to read in its entirety as
follows:
5.8 Investments. Make or allow to remain outstanding any
investment (whether such investment shall be of the character of
investment in shares of stock, evidences of indebtedness or other
securities or otherwise) in, or any loans, advances or extensions
of credit to, any Person, other than:
(a) Borrower's current ownership interests in those
Subsidiaries of Borrower identified on Schedule 3.5
attached hereto; and
(b) any investment in direct obligations of the United
States of America or any agency thereof, or in
certificates of deposit issued by Bank, maintained
consistent with Borrower's or such Subsidiary's business
practices prior to the date hereof; provided, that no
such investment shall mature more than ninety (90) days
after the date when made or the issuance thereof.
Section 2.8 Capital Expenditures. Effective as of the date
hereof, Section 5.16 of the Credit Agreement is hereby amended to read in
its entirety as follows:
5.16 Capital Expenditures. Acquire or expend for, or commit
to acquire or expend for, capital assets by lease (including any
Capitalized Lease Obligations), purchase or otherwise in an
aggregate amount that exceeds $500,000 for the period from and
including June 1, 2000 to and including March 31, 2001 or for any
12 month period ending thereafter.
Section 2.9 Remedies. Effective as of the date hereof, Section
6.2 of the Credit Agreement is hereby amended to read in its entirety as
follows:
6.2. Remedies Upon Event of Default. Upon the occurrence and
at any time during the existence or continuance of any Event of
Default, but without impairing or otherwise limiting the Bank's
right to demand payment of all or any portion of the Indebtedness
which is payable on demand, at Bank's option, Bank may give notice
to Borrower declaring all or any portion of the Indebtedness
remaining unpaid and outstanding, whether under the Notes or
otherwise, to be due and payable in full without presentation,
demand, protest, notice of dishonor, notice of intent to
accelerate, notice of acceleration or other notice of any kind,
all of which are hereby expressly waived, whereupon all such
Indebtedness shall immediately become due and payable.
Furthermore, upon the occurrence of a Default or Event of Default
and at any time during the existence or continuance of any Default
or Event of Default, but without impairing or otherwise limiting
the right of Bank, if reserved under any Loan Document, to make or
withhold financial accommodations at its discretion, to the extent
not yet disbursed, any commitment by Bank to make any further
loans to Borrower, issue any further Letters of Credit or effect
any further Foreign Exchange Transactions for Borrower's account
under this Agreement shall automatically terminate; provided,
should such Default or Event of Default be cured to Bank's
satisfaction, Bank may, but shall be under no obligation to,
reinstate any such commitment by written notice to Borrower.
Notwithstanding the foregoing, in the case of an Event of Default
under Section 6.1(i), and notwithstanding the lack of any notice,
demand or declaration by Bank, the entire Indebtedness remaining
unpaid and outstanding shall become automatically due and payable
in full, and any commitment by Bank to make any further loans to
Borrower, issue any further Letters of Credit or effect any
further Foreign Exchange Transactions for Borrower's account shall
be automatically and immediately terminated, without any
requirement of notice or demand by Bank upon Borrower, each of
which are hereby expressly waived by Borrower. Furthermore, upon
the occurrence of a Default or Event of Default and at any time
during the existence or continuance of any Default or Event of
Default, the Bank may record the Mortgage in the appropriate
records of Xxxxxxx County, Alabama, and Borrower shall pay or
reimburse Bank for any and all filing fees, recording costs,
mortgage tax, stamp tax or other amounts payable in connection
therewith; and upon Bank's request, Borrower shall obtain and
deliver to Bank or pay or reimburse Bank for obtaining an
appraisal, survey, mortgagee title policy, environmental audit and
such other documents and information as Bank may reasonably
request. The foregoing rights and remedies are in addition to any
other rights, remedies and privileges Bank may otherwise have or
which may be available to it, whether under this Agreement, any
other Loan Document, by law, or otherwise.
Section 2.10 Successors and Assigns; Participation. Effective as
of the date hereof, the last sentence of Section 7.7 of the Credit Agreement
is hereby amended to read in its entirety as follows:
Notwithstanding the foregoing, Bank will not assign to any third
party more than forty-nine percent (49%) of its interests in any
of the Loans, Notes or obligations to Bank under the Loan
Documents without the prior written consent of Borrower; provided,
however, that (a) no such consent by Borrower shall be required in
the case of any assignment to any Affiliate of Bank, and (b) no
such consent shall be required if any Default or Event of Default
shall have occurred and be continuing.
Section 2.11 New Definitions. Effective as of the date hereof,
the Defined Terms Addendum to the Credit Agreement is hereby amended to add
the following definitions, which definitions shall read in their respective
entireties as follows:
"Borrowing Base Reporting Date" means each of the 15th
day of each calendar month and the last day of each calendar
month.
"Change in Control" shall mean (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof), other than
the Excluded Persons, of Equity Interests representing more than
51% of either the aggregate ordinary voting power or the aggregate
equity value represented by the issued and outstanding Equity
Interests in Borrower; or (b) occupation of a majority of the
seats (other than vacant seats) on the board of directors of
Borrower by Persons who were not nominated by the board of
directors of Borrower.
"Equity Interests" shall mean shares of capital stock,
partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership
interests in a Person.
"Excluded Persons" means (a) Xxxxxxx Radio Corp., a
Delaware corporation, and its successors, Subsidiaries or other
Affiliates, and (b) Xxxxxxxx X. Xxxxxx.
"Leverage Ratio" shall mean, in respect of any Person
and as of any applicable date of determination thereof, the ratio
of (a) Debt as of such date to (b) EBITDA for the twelve-month
period immediately preceding the date of determination thereof
(excluding EBITDA of any entity acquired by Borrower during such
twelve-month period for any portion of the period preceding the
acquisition).
"Swingline Loan" shall mean an advance made, or to be
made, under the swingline facility to or for the credit of
Borrower by the Bank pursuant to Section 1.3 of the Loan Terms,
Conditions and Procedures Addendum.
"Term Loan" shall mean the renewal, extension and
modification, but not extinguishment or novation, of Indebtedness
under the SAF Loan in the amount of $2,500,000, in accordance with
Section 2.1 of the Loan Terms, Conditions and Procedures Addendum.
"Term Note" shall mean the Variable Rate-Installment
Note dated September 13, 2000, in the original principal amount of
$2,500,000 made by Borrower payable to the order of the Bank, as
the same may be renewed, extended, modified, increased or restated
from time to time, such Term Note being in renewal, extension and
modification, but not extinguishment or novation, of a portion of
the Indebtedness evidenced by the SAF Note.
Section 2.12 Amended Definitions. Effective as of the date
hereof, the following definitions set forth in the Defined Terms Addendum to
the Credit Agreement are hereby amended to read in their respective
entireties as follows:
"Borrowing Base Limitation" shall mean the sum of:
(a) eighty-five percent (85%) of Eligible Accounts; and (b) the
lesser of $20,000,000 or sixty percent (60%) of Eligible
Inventory.
"Current Liabilities" shall mean, in respect of a Person and
as of any applicable date of determination, (a) all liabilities of
such Person that should be classified as current in accordance
with GAAP, but excluding any portion of the principal of the
Indebtedness classified as current at such time, plus (b) to the
extent not otherwise included, all liabilities of the Borrower to
any of its Affiliates whether or not classified as current in
accordance with GAAP.
"Loans" shall mean, collectively, the Revolving Loans and
the Term Loan, and "Loan" shall mean any of them.
"Notes" shall mean, collectively, whether one or more, the
Revolving Credit Note and the Term Note, and "Note" shall mean any
of them.
"Revolving Credit Maturity Date" shall mean October 2, 2002,
or such earlier date on which the entire unpaid principal amount
of all Revolving Loans becomes due and payable whether by the
lapse of time, demand for payment, acceleration or otherwise;
provided, however, if any such date is not a Business Day, then
the Revolving Credit Maturity Date shall be the next succeeding
Business Day.
"Revolving Credit Maximum Amount" shall mean (a) the lesser
of (i) $25,000,000 or (ii) the Borrowing Base Limitation.
"Revolving Credit Note" shall mean the Revolving Credit Note
dated September 13, 2000 in the original principal amount of
$25,000,000 made by Borrower payable to the order of the Bank, as
the same may be renewed, extended, modified, increased or restated
from time to time, such Revolving Credit Note being in renewal,
extension and modification, but not extinguishment or novation, of
that certain Revolving Credit Note dated April 26, 1999, executed
by Borrower and payable to the order of Bank in the original
principal amount of $30,000,000.
"Revolving Loans" shall mean an advance made, or to be
made, under the revolving credit loan facility to or for the
credit of Borrower by the Bank pursuant to the Loan Terms,
Conditions and Procedures Addendum, and shall include Swingline
Loans.
"Unused Commitment Fee Percentage" shall mean the applicable
percentage set forth below, which shall be determined from time to
time in accordance with the following schedule based on the
Leverage Ratio:
Leverage Ratio Unused Commitment Fee Percentage
-------------- --------------------------------
Equal to or greater than 3.5:1.0 0.35%
Less than 3.5:1.0 0.15%
Section 2.13 Financial Covenants. Effective as of the date
hereof the Financial Covenants Addendum is hereby amended to read in its
entirety as set forth on Annex I hereto.
Section 2.14 Deleted Definitions. Effective as of the date
hereof, Section 1.1 of the Defined Terms Addendum to the Credit Agreement is
hereby amended to delete the definitions of "SAF Loan Maximum Amount" and
"SAF Loan Termination Date" in their entireties.
Section 2.15 Swingline Facility. Effective as of the date
hereof, Section 1.3 of the Loan Terms, Conditions and Procedures Addendum to
the Credit Agreement is hereby amended to add the following provisions to
the end thereof:
Subject to the terms and conditions of the Loan Documents,
Borrower may request that Revolving Loans be made as Swingline
Loans from time to time from September 13, 2000 until (but not
including) the Revolving Credit Maturity Date, provided that the
aggregate principal amount of Swingline Loans at any time
outstanding shall not exceed $2,000,000. Borrower may use the
swingline facility provided herein by borrowing, prepaying the
Swingline Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions of the Loan Documents.
The proceeds of each Swingline Loan shall be used by the Borrower
solely for its short-term cash needs for working capital. Each
Swingline Loan shall, from and after the date of such Swingline
Loan, bear interest at a per annum rate equal to the Applicable
Interest Rate provided in the Revolving Credit Note for the Prime
Rate Balance (as defined in the Revolving Credit Note) and during
the existence of an Event of Default at the Default Rate and shall
be due and payable in accordance with the terms of the Revolving
Credit Note. Borrower shall not be entitled to designate any
Swingline Loan as a Eurodollar Balance (as defined in the
Revolving Credit Note) or to convert any Swingline Loan to a
Eurodollar Balance. Borrower may request Swingline Loans by
submitting a Request for Advance in accordance with the foregoing
provisions of this Section 1.3. Borrower and the Bank may enter
into a separate agreement providing for Swingline Loans and
principal reductions of Swingline Loans to occur automatically at
such times as Borrower and the Bank may agree. So long as such an
agreement is in effect, in addition to Borrower's right to request
Swingline Loans by means of a Request for Advance and to make
prepayments of Swingline Loans as provided in the Loan Documents
for Revolving Loans, Swingline Loans and principal reductions of
Swingline Loans will occur automatically in accordance with such
Agreement.
Section 2.16 Use of Proceeds. Effective as of the date hereof,
Section 1.6 of the Loan Terms, Conditions and Procedures Addendum to the
Credit Agreement is hereby amended to read in its entirety as follows:
1.6 Use of Proceeds of Revolving Loans. The proceeds of
Revolving Loans shall be used for working capital needs of
Borrower.
Section 2.17 Fees. Effective as of the date hereof, Section 1.8
of the Loan Terms, Conditions and Procedures Addendum to the Credit
Agreement is hereby amended to read in its entirety as follows:
1.8 Fees. (a) Unused Commitment Fee. Borrower shall pay to
Bank an unused commitment fee in an amount equal to the product of
(i) the Unused Commitment Fee Percentage multiplied by (ii) the
difference between (A) $25,000,000 and (B) sum of the aggregate
outstanding principal balance of all Revolving Loans plus the
Letter of Credit Liabilities plus the Foreign Exchange Transaction
Liabilities. Such fee shall be computed on a quarterly basis and
shall be payable quarterly in arrears as of the end of each of
Borrower's fiscal quarters. Bank shall invoice Borrower for such
fees, which invoice shall be due and payable within fifteen (15)
days after receipt.
(b) Change in Control Fee. Upon the occurrence of any Change
in Control, promptly and in any event within 90 days after such
occurrence, Borrower shall pay to Bank a fee in the amount equal
to (i) 1.00% of the Revolving Credit Maximum Amount if such Change
in Control occurs prior to October 2, 2001, and (ii) 0.75% of the
Revolving Credit Maximum Amount if such Change in Control occurs
on or after October 2, 2001; provided, however, that such fee
shall not be payable if Borrower refinances the Indebtedness with
Bank or one of its direct Affiliates on or before the date such
fee would otherwise be due. Neither Bank nor any of its
Affiliates has any obligation to refinance the Indebtedness.
Section 2.18 Letters of Credit. Effective as of the date hereof,
the amount "5,000,000" appearing in subsection (a) of Section 1.9 of the
Loan Terms, Conditions and Procedures Addendum to the Credit Agreement is
hereby amended to read "$1,500,000".
Section 2.19 Lock Box. Effective as of the date hereof, Section
1 of the Loan Terms, Conditions and Procedures Addendum to the Credit
Agreement is hereby amended to add the following Section 1.11 thereto, which
Section 1.11 shall read in its entirety as follows:
1.11 Lock Box; Crediting Collections. At any time, Bank may
elect to require that Borrower and each other Borrower Party
comply with the terms, provisions and covenants set forth in this
Section 1.11. From and after such election, Borrower and each
other Borrower Party which shall pledge or purport to pledge
Accounts as security for all or any part of the Indebtedness,
shall maintain, at all times during the term of this Agreement, a
depository account ("Depository Account") and lock box ("Lockbox")
arrangement acceptable to Bank. At any time during the term
hereof and for any reason, upon notification to Borrower by Bank,
Borrower and each other Borrower Party shall, in every invoice
issued by Borrower or such other Borrower Party, direct all
Account Debtors to send their payments directly to the post office
box established by the aforesaid Lockbox arrangement. Each
Depository Account shall be in the name of Bank. Borrower
irrevocably authorizes and shall cause each such other Borrower
Party to irrevocably authorize the Bank to transfer to the
Depository Account any funds that have been deposited into any
other accounts or that Bank has otherwise received. Except to the
extent otherwise provided below, if Borrower or any such other
Borrower Party receives any payments from any Account Debtor,
Borrower hereby agrees and shall cause each such other Borrower
Party to agree that all such payments shall be the sole and
exclusive property of Bank, and such Borrower or Borrower Party,
as applicable, shall hold such payments in trust as Bank's trustee
and immediately deliver said payments to the Depository Account.
Bank shall have all right, title and interest in all of the items
from time to time in the Depository Account and their proceeds;
provided, however, that until such time as Bank, in its sole
discretion, delivers to Borrower a notice of activation of cash
control (an "Activation Notice"), Borrower and/or such other
Borrower Parties may withdraw amounts, if any, held in the
Depository Account to pay ordinary and necessary operating
expenses. The receipt of any check, wire transfer or other item
of payment by Bank shall not be considered a payment on account
until the Business Day on which, as of 10:00 A.M., Dallas, Texas
time, the same is honored by Bank's depository bank with respect
thereto and final settlement thereof is reflected by irrevocable
credit to Bank's account in such bank. All payments so received
by Bank shall be applied in payment of the Indebtedness in such
order as Bank, in its sole discretion, may elect which may be, but
shall not be limited to, the following: first, to Bank's costs and
expenses; then, to interest; then, to principal on such Loans as
Bank may elect (in inverse order of their maturities if principal
amounts are due in installments); and then, to other Indebtedness.
Section 2.20 SAF Loans; Term Loan. Effective as of the date
hereof, (a) the commitment of Bank to make SAF Loans is hereby terminated,
and no further SAF Loans will be made; (b) outstanding Indebtedness under
the SAF Loans in the aggregate amount of $5,000,000 shall be renewed,
extended and modified, but not extinguished, as a Revolving Loan under the
Credit Agreement; and (c) the remaining outstanding Indebtedness under the
SAF Loans in the aggregate amount of $2,500,000 shall be renewed, extended
and modified, but not extinguished pursuant to a Term Note in the form of
Annex III hereto (the "Term Note") and shall bear interest and be payable as
provided therein. Accordingly, effective as of the date hereof, Section 2
of the Loan Terms, Conditions and Procedures Addendum to the Credit
Agreement is hereby amended to delete Sections 2.1, 2.2 and 2.3 in their
entireties, and such sections are hereby replaced with the following
Sections 2.1 and 2.2, which sections shall read in their respective
entireties as follows:
Section 2.1. Term Loan. Subject to the terms and
conditions of the Loan Documents, on and as of September 13, 2000,
(a) the commitment of the Bank to make SAF Loans is terminated,
and no further SAF Loans will be made; (b) the outstanding
Indebtedness under the SAF Loans in the aggregate amount of
$5,000,000 shall be renewed, extended and modified, but not
extinguished, as a Revolving Loan, and (c) the remaining
outstanding Indebtedness under the SAF Loans in the aggregate
amount of $2,500,000 shall be renewed, extended and modified, but
not extinguished, pursuant to the Term Note.
Section 2.2. Repayment of and Interest on Term Loan. The
Indebtedness from time to time outstanding under and evidenced by
the Term Note shall bear interest at a rate per annum equal to the
Applicable Interest Rate and during the existence of an Event of
Default at the Default Rate and shall otherwise be repaid in
accordance with the terms of the Term Note. Borrower shall not be
permitted to reborrow any amounts repaid under the Term Note.
Section 2.21 Excess Cash Flow. Effective as of the date hereof,
Section 3 of the Loan Terms, Conditions and Procedures Addendum is hereby
amended to add Section 3.9 to the end thereof, which Section 3.9 shall read
in its entirety as follows:
3.9 Mandatory Prepayment of Excess Cash Flow.
Following the end of each calendar month, commencing with the
month ending August 31, 2000, Borrower shall prepay all or a
portion of the Term Loan in an aggregate amount equal to the
lesser of $100,000 or the amount by which EBITDA of Borrower and
its Subsidiaries on a consolidated basis for such month exceeds
the aggregate amount of all scheduled payments of principal and
interest required or paid during such month in respect of any and
all Debt of Borrower and its Subsidiaries on a consolidated basis,
including without limitation Capitalized Lease Obligations and the
scheduled payment on the Term Loan. Each prepayment pursuant to
this Section shall be made on or before the date on which
financial statements are delivered or required to be delivered,
whichever is the first to occur, pursuant to Section 4.3 with
respect to the month for which such calculation is being made.
Section 2.22 Amendment to Exhibits. Effective as of the date
hereof, (a) Exhibit A (Form of Borrowing Base Certificate) to the Credit
Agreement is hereby amended to read in its entirety as set forth on Annex IV
hereto, and (b) Exhibit B (Form of Compliance Certificate) to the Credit
Agreement is hereby amended to read in its entirety as set forth on Annex V
hereto.
Article III
Conditions Precedent
Section 3.1 Conditions. The effectiveness of this Amendment is
subject to satisfaction of the following conditions precedent, unless waived
in writing by Bank:
(a) Documents. Concurrently with the execution and delivery of
this Amendment, Borrower shall execute (or cause to be executed) and
deliver to Bank, and as appropriate there shall be filed and recorded,
the following:
(i) A Revolving Credit Note in the form of Annex II hereto (the
"Revolving Note"), executed by Borrower, in renewal,
extension and modification, but not extinguishment or
novation, of the Indebtedness evidenced by the existing
Revolving Credit Note and a portion of the Indebtedness
evidenced by the SAF Note;
(ii) The Variable Rate-Installment Note in the form of Annex III
hereto (the "Term Note", and together with the New Revolving
Note, the "Renewal Notes"), executed by Borrower, in partial
renewal, extension and modification, but not extinguishment
or novation, of the existing Indebtedness evidenced by the
SAF Note;
(iii) A Security Agreement (Intellectual Property) executed by
each of Borrower and the Guarantor;
(iv) Financing Statements required or requested by Bank to perfect
all security interests to be conferred on Bank under the Loan
Documents and to accord bank a perfected security position in
the Collateral, subject only to Permitted Encumbrances;
(v) Mortgage on the Property, executed by Borrower, provided that
such Mortgage shall not be recorded unless and until an Event
of Default occurs, as provided in the Credit Agreement;
(vi) the Certificate of Corporate Authority and Incumbency
including the Unanimous Consent of Board of Directors of
Borrower and Guarantor; and
(vii) such other documents and instruments as Bank may reasonably
require.
(b) Authority Documents. Bank shall have received: (i) copies of
resolutions of the board of directors, of each Borrower Party
evidencing approval of the transactions contemplated by the Loan
Documents, and authorizing the execution, delivery and performance by
each Borrower Party of each Loan Document to which it is a party or by
which it is otherwise bound, which resolutions shall have been
certified by a duly authorized officer, of each Borrower Party as of
the date of this Amendment as being complete, accurate and in full
force and effect; (ii) incumbency certifications of a duly authorized
officer, of each Borrower Party, in each case, identifying those
individuals who are authorized to execute the Loan Documents for and on
behalf of such Person(s), respectively, and to otherwise act for and on
behalf of such Person(s); (iii) certified copies of each of such
Person(s)' certificates of incorporation and bylaws, and all amendments
thereto; and (iv) certificates of existence, good standing and
authority to do business, as applicable, certified substantially
contemporaneously with the date of this Agreement, from the state or
other jurisdiction of each of such Person(s)' organization.
(c) Licenses, Permits, Approvals, Etc. To the extent necessary
and applicable, Borrower shall have received any and all necessary
authorizations, approvals and consents from all applicable Governmental
Authorities in respect of the borrowing by Borrower of the Loans, the
Loan Documents and the transactions contemplated by any Loan Document.
(d) UCC Lien Search. Bank shall have received UCC, tax lien and
judgment lien record and copy searches satisfactory to Bank.
(e) Casualty Insurance. Borrower shall have furnished to Bank, or
cause to have been furnished to Bank, in form and content and in
amounts and with companies satisfactory to Bank, casualty insurance
policies, with loss payable and mortgagee clauses in favor of Bank,
relating to the assets and properties (including, but not limited to,
the Collateral) of Borrower any applicable Borrower Party.
(f) Approval of Bank Counsel. All actions, proceedings,
instruments and documents required to carry out the borrowings and
transactions contemplated by this Agreement or any other Loan Document
or incidental thereto, and all other related legal matters, shall have
been reasonably satisfactory to and approved by legal counsel for Bank,
and said counsel shall have been furnished with such certified copies
of actions and proceedings and such other instruments and documents as
they shall have reasonably requested.
(g) Compliance with Certain Documents and Agreements. Each
Borrower Party shall have each performed and complied with all
agreements and conditions contained in the Loan Documents applicable to
it and which are then in effect.
(h) Other Documents and Instruments. Bank shall have received
such other instruments and documents (not inconsistent with the terms
hereof) as Bank may reasonably request in connection with the making of
the Loans hereunder, and all such instruments and documents shall be
reasonably satisfactory in form and substance to Bank.
(i) Representations and Warranties. The representations and
warranties contained herein or in any Loan Documents shall be true and
correct as of the date hereof, as if made on the date hereof.
(j) No Event of Default. No Event of Default shall have occurred
and be continuing and no Default shall exist, unless such Event of
Default or Default has been specifically waived in writing by Bank.
(k) Corporate and Partnership Proceedings. All corporate and
partnership 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 Bank.
(l) Fees, Costs and Expenses. Borrower shall have paid all fees,
costs and expenses (including legal fees) incurred by Bank in
connection with the Credit Agreement, this Amendment, the other Loan
Documents and the transactions contemplated thereby, including without
limitation the preparation, negotiation, execution, administration,
filing and recording thereof, and an amount for payment of estimated
post-closing fees and expenses.
(m) Amendment Fee. Borrower shall have paid to Bank on the date
hereof an amendment fee in the amount of $62,500, and any other fees
payable pursuant to any other agreement between Borrower and Bank.
Article IV
Guarantor Consent
Section 4.1 Guarantor Consent. Guarantor hereby joins in this
Amendment to evidence Guarantor's consent to the execution by Borrower of
this Amendment, to confirm that the Guaranty heretofore executed by
Guarantor (the "Guaranty") applies and shall continue to apply to all
Indebtedness of Borrower including the Renewal Notes, and to acknowledge
that without such consent and confirmation, Bank would not execute this
Amendment. Notwithstanding any payment or payments made by Guarantor under
the Guaranty or any set-off or application of any of Guarantor's funds by
Bank, Guarantor shall never be subrogated in any of Bank's rights against
Borrower or any other person or entity or any Collateral or offset rights
held by Bank for payment of the Indebtedness, nor shall Guarantor have any
right of indemnity, reimbursement or contribution against Borrower or any
other person or entity for Guarantor's payment of any part of the
Indebtedness. Guarantor agrees that it shall never be entitled to be
subrogated to any of Bank's rights against Borrower or any other person or
entity or any Collateral or offset rights held by Bank for payment of the
Indebtedness until complete performance of all of the obligations of
Borrower and other applicable parties under the Loan Documents and final
termination of Bank's obligation--if any--to make any further advances under
the Notes or provide any other financial accommodations to Borrower or any
other applicable party under the Loan Documents. The provisions of this
paragraph shall control over any inconsistent provision set forth in the
Guaranty.
Article V
Ratification, Representations and Warranties
Section 5.1 Ratification. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Credit Agreement and any other Loan Document,
and except as expressly modified and superseded by this Amendment, the terms
and provisions of the Credit Agreement, and the other Loan Documents are
ratified and confirmed and shall continue in full force and effect.
Borrower and Bank agree that the Credit Agreement, as amended hereby and the
other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms. Except as expressly
set forth in this Amendment, nothing herein shall in any manner diminish,
impair or extinguish the Notes, any of the Indebtedness evidenced thereby,
or any of the other Loan Documents. Any and all security agreements,
negative pledge agreements and other security documents heretofore executed
and delivered by Borrower and Guarantor, or either of them, in connection
with the Agreement, and all liens, assignments, security interests and
covenants created, granted or evidenced thereby are hereby ratified,
confirmed, brought forward, renewed and extended and shall continue as
security for all of the Indebtedness, including without limitation the
Renewal Notes, in addition to and cumulative of all other security for the
Indebtedness.
Section 5.2 Representations and Warranties. Borrower and
Guarantor each hereby represent and warrant to Bank that (i) the execution,
delivery and performance of this Amendment and any and all other Loan
Documents executed and/or delivered in connection herewith have been
authorized by all requisite corporate action on the part of Borrower and
each Guarantor and will not violate the Articles of Incorporation or Bylaws
of Borrower or any Guarantor; (ii) the representations and warranties
contained in the Credit Agreement, as amended hereby, and any other Loan
Document are true and correct on and as of the date hereof as though made on
and as of the date hereof, except to the extent such representations and
warranties relate to an earlier date; (iii) Borrower and Guarantor are in
full compliance with all covenants and agreements contained in the Credit
Agreement, as amended hereby; and (iv) all indebtedness, liabilities and
obligations heretofore secured by any Lien on property or assets of Borrower
or Guarantor, including without limitation patents, trademarks and the real
property located in Xxxxxxx County, Alabama, have been paid in full and as a
result such Liens have been discharged. As soon as practicable after the
date hereof, and in any event no later than September 30, 2000, Borrower and
Guarantor shall deliver to Bank appropriate written releases in form and
substance satisfactory to Bank of all such Liens, executed by the respective
Lien holders.
Article VI
Miscellaneous
Section 6.1 Survival of Representations and Warranties. All
representations and warranties made in the Credit Agreement or any other
document or documents relating thereto, including, without limitation, any
Loan Document furnished in connection with this Amendment, shall survive the
execution and delivery of this Amendment and the other Loan Documents, and
no investigation by Bank or any closing shall affect the representations and
warranties or the right of Bank to rely upon them.
Section 6.2 Reference to Agreement. Each of the Loan Documents,
including the Agreement 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 Credit Agreement, as amended hereby,
are hereby amended so that any reference in such Loan Documents to the
Credit Agreement shall mean a reference to the Credit Agreement, as amended
hereby.
Section 6.3 Expenses of Bank. As provided in the Agreement,
Borrower agrees to pay on demand all reasonable costs and expenses incurred
by Bank in connection with the preparation, negotiation and execution of
this Amendment and the other Loan Documents executed pursuant hereto and any
and all amendments, modifications, and supplements thereto, including,
without limitation, the reasonable costs and fees of Bank's legal counsel,
and all reasonable costs and expenses incurred by Bank in connection with
the enforcement or preservation of any rights under the Credit Agreement, as
amended hereby, or any other Loan Document, including, without limitation,
the reasonable costs and fees of Bank's legal counsel.
Section 6.4 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.
Section 6.5 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO
BE PERFORMABLE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 6.6 Successors and Assigns. This Amendment is binding
upon and shall inure to the benefit of Bank and Borrower and their
respective successors and assigns, except Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior
written consent of Bank.
Section 6.7 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.
Section 6.8 Effect of Waiver. No consent or waiver, express or
implied, by Bank to or for any breach of or deviation from any covenant or
condition of the Credit Agreement shall be deemed a consent or waiver to or
of any other breach of the same or any other covenant, condition or duty.
Section 6.9 Headings. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 6.10 RELEASE. EACH OF BORROWER AND GUARANTOR HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES BANK, ITS
PREDECESSORS, 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 OR GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST
BANK, ITS PREDECESSORS, 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
"ADVANCES", 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
AGREEMENT, OR THE OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF
THIS AMENDMENT.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE [S]26.02
THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE
PARTIES BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION
HEREOF, INCLUDING THE GUARANTY, TOGETHER CONSTITUTE A WRITTEN CREDIT
AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
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.
[Remainder of this page intentionally left blank]
EXECUTED effective as of the date first set forth above.
BANK:
----
COMERICA BANK-TEXAS, a
state banking association
By: ___________________
Name: ___________________
Title: ___________________
BORROWER:
--------
SPORT SUPPLY GROUP, INC., a
Delaware corporation
By: ___________________
Name: ___________________
Title: ___________________
GUARANTOR:
---------
ATHLETIC TRAINING EQUIPMENT COMPANY, INC., a
Delaware corporation
By: ___________________
Name: ___________________
Title: ___________________
__________________________
Witness to Guarantor
Signature Page
INDEX TO ANNEXES
----------------
ANNEX I - Financial Covenants Addendum
ANNEX II - Revolving Credit Note
ANNEX III - Term Note
ANNEX IV - Form of Borrowing Base Certificate
ANNEX V - Form of Compliance Certificate
ANNEX I
FINANCIAL COVENANTS ADDENDUM
----------------------------
SECTION 1. FINANCIAL COVENANTS
1.1 Historical Fixed Charge Coverage Ratio. Maintain a Historical Fixed
Charge Coverage Ratio of not less than (a) 1.0:1.0 at all times during the
period from and including March 31, 2000 to and including March 31, 2001,
provided that Borrower shall be permitted to have a Historical Fixed Charge
Coverage Ratio of not less than 0.95 to 1.00 in any two non-consecutive
months, and (b) 1.5:1.0 at all times thereafter.
1.2 Debt-to-Tangible Net Worth Ratio. Maintain a Debt-to-Tangible Net
Worth Ratio at all times of not more than 1.5:1.0.
1.3 Current Ratio. Maintain a Current Ratio at all times of not less
than 1.5:1.0.
ANNEX II
REVOLVING CREDIT NOTE
---------------------
ANNEX III
TERM NOTE
---------
ANNEX IV
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
This Borrowing Base Certificate for the period beginning
_______________________ and ending _______________________ ("Current
Period") is delivered pursuant to that certain Credit Agreement dated to be
effective as of April 26, 1999 by and between COMERICA BANK - TEXAS ("Bank")
and SPORT SUPPLY GROUP, INC. ("Borrower"), as amended by that certain First
Amendment to Credit Agreement dated as of September 13, 2000 (such Credit
Agreement, as the same has been and may be renewed, extended, amended,
modified, supplemented or restated from time to time, the "Credit
Agreement"). Terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement.
Line
----
1. Total Accounts _____________, ____ $_________
2. Ineligible Accounts as of the end of the Current
Period (See Credit Agreement):
(a) All Accounts unpaid more than 90 days (120
days for ATEC Accounts) from the invoice
date $_________
(b) All of the Accounts of Account Debtor(s)
where 50% of the Accounts of such Account
Debtor(s) are unpaid more than 90 days from
invoice date, net of the amount included in
Line 2(a) for Account Debtor(s) $_________
(c) Intercompany and Affiliate Accounts $_________
(d) Foreign Accounts (not secured by letter of
credit) $_________
(e) Accounts subject to any dispute or set off
or contra account $_________
(f) Other Accounts which do not satisfy the
criteria set forth in the Credit Agreement
for "Eligible Accounts" $_________
3. Total ineligible Accounts as of the end of the
Current Period (Add Line 2(a) through Line 2(f) $_________
4. Total Eligible Accounts as of the end of the
Current Period (Line 1 minus Line 3) $_________
5. Accounts Advance Factor is 85% .85
6. Accounts component of Borrowing Base (Line 4
multiplied by Line 5) $_________
7. Total Inventory (good and merchantable condition,
not obsolete or discontinued, and properly
classified as "raw materials" or "finished goods"
under GAAP) as of the end of the Current Period. $_________
8. Ineligible Inventory as of the end of the Current $_________
Period (See Credit Agreement)
(a) Work in process, miscellaneous supplies,
consigned goods, Inventory located outside
U.S. and goods in transit $_________
(b) Inventory subject to repurchase, Lien or
security interest (other than to Bank) $_________
(c) Inventory Bank has designated as ineligible $_________
9. Total ineligible Inventory as of the end of the
Current Period (Add Line 8(a) through Line 8(c) $_________
10. Total Eligible Inventory as of the end of the
current Period (Line 7 minus Line 9) $_________
11. Inventory Advance factor is 60% .60
12. Inventory component of Borrowing Base (Lesser of
$20,000,000, or Line 10 multiplied by Line 11) $_________
13. Borrowing Base (Line 6 plus Line 12) $_________
14. Enter lesser of $25,000,000 or Line 13 $_________
15. Aggregate amount of Revolving Loans outstanding $_________
16. Letter of Credit Liabilities $_________
17. Foreign Exchange Transaction Liabilities $_________
18. Amount available for borrowing, if positive, or
amount to be repaid, if negative (Line 14 minus
the sum of Lines 15, 16 and 17) $_________
The undersigned hereby certifies that the above information and
computations are true and not misleading as of the date hereof, and that no
Default or Event of Default has occurred and is continuing.
BORROWER:
--------
SPORT SUPPLY GROUP, INC., a
Delaware corporation
By: ___________________
Name: ___________________
Title: ___________________
ANNEX V
FORM OF COMPLIANCE CERTIFICATE
------------------------------
This Compliance Certificate is executed and delivered to Comerica Bank-
Texas ("Bank") by Sport Supply Group, Inc. ("Borrower") this ___ day of
____________, 19__. All capitalized terms used but not defined herein,
shall have the meanings given to such terms in that certain Credit
Agreement, dated as of April 26, 1999, between Bank and Borrower, as amended
by that certain First Amendment to Credit Agreement dated as of September
13, 2000 (such Credit Agreement, as the same has been and may be renewed,
extended, amended, modified, supplemented or restated from time to time, the
"Credit Agreement"). The undersigned hereby certifies to Bank as follows:
(1) The undersigned is the duly elected, qualified and acting ________
___________ of Borrower and, as such, is authorized to make and deliver this
Certificate.
(2) The undersigned has reviewed the provisions of the Credit
Agreement and confirms that, as of the date hereof:
(a) the representations and warranties contained in Section 3 of
the Credit Agreement are true and correct in all material respects on and as
of the date hereof with the same force and effect as though made on and as
of the date hereof;
(b) no Default or Event of Default has occurred and is
continuing, and Borrower has complied with all of the terms, covenants and
conditions set forth in the Credit Agreement; and
(c) attached hereto as Schedule A is a report prepared by the
undersigned setting forth information and calculations that demonstrate
compliance (or noncompliance) with each of the covenants set forth in the
Financial Covenants Addendum to the Credit Agreement.
The foregoing certificate is given in my capacity as _______________________
of Borrower, and not in my individual capacity.
SPORT SUPPLY GROUP, INC., a
Delaware corporation
By: ___________________
Name: ___________________
Title: ___________________
SCHEDULE A TO COMPLIANCE CERTIFICATE
------------------------------------
1. Historical Fixed Charge Coverage Ratio
(a) EBITDA for the twelve (12) immediately
preceding months, excluding EBITDA for such
period of any entities acquired during such
period $_________
(b) Aggregate of (i) Current Maturities Under
Capitalized Lease Obligations, (ii) Current
Maturities of Long Term Indebtedness and
(iii) interest payments due for 12-month
period following the date of determination $_________
(c) Historical Fixed Charge Coverage Ratio [(a)
to (b)]: ___ to 1.0
(d) Financial Covenants Addendum presently
requires the Historical Fixed Charge Coverage
Ratio to be not less than: ___ to 1.0
Covenant Satisfied ______________________
Covenant Not Satisfied ______________________
Covenant Not Tested ______________________
2. Debt-to-Tangible Net Worth Ratio
(a) Borrower's Debt (less Subordinated Debt) $_________
(b) Borrower's Tangible Net Worth: $_________
(c) Ratio of (i) Borrower's Debt (less
Subordinated Debt) to (ii) Borrower's
Tangible Net Worth [(a) to (b)]: ___ to 1.0
(d) Financial Covenants Addendum presently
requires the Debt to Tangible Net Worth Ratio
to be not more than: 1.5 to 1.0
Covenant Satisfied ______________________
Covenant Not Satisfied ______________________
Covenant Not Tested ______________________
3. Current Ratio
(a) Borrower's Current Assets $_________
(b) Borrower's Current Liabilities $_________
(c) Ratio of (i) Borrower's Current Assets to
(ii) Borrower's Current Liabilities [(a) to (b)]: ___ to 1.0
(d) Financial Covenants Addendum presently
requires Borrower to maintain a Current Ratio
of not less than: 1.5 to 1.0
Covenant Satisfied ______________________
Covenant Not Satisfied ______________________
Covenant Not Tested ______________________
4. Excess Cash Flow
(a) EBITDA for immediately preceding month $_________
(b) Aggregate of all scheduled payments of
principal and interest required or paid
during such month in respect of all Debt,
including Capitalized Lease Obligations and
the scheduled payment on the Term Loan $_________
(c) Excess Cash Flow [Line (a) minus Line (b)] $_________
1 (a) 1.0:1.0 at all times during the period from and including March 31,
2000, to and including March 31, 2001, provided that Borrower shall be
permitted to have a Historical Fixed Charge Coverage Ratio of not less than
0.95 to 1.00 in any two non-consecutive months, and (b) 1.5:1.0 at all times
thereafter.
