FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT entered into as of February 2,
1999 by and among AJAY SPORTS, INC., a Delaware corporation, LEISURE LIFE, INC.,
a Tennessee corporation, PALM SPRINGS GOLF, INC., a Colorado corporation, and
AJAY LEISURE PRODUCTS, INC., a Delaware corporation, (each individually referred
to as "Borrower" and all collectively referred to as "Borrowers"), and XXXXX
FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
Borrowers and Bank are parties to that certain Credit Agreement dated as
of June 30, 1998 ("Agreement"). Borrowers and Bank desire to revise the
Agreement in the manner set forth herein to provide for a seasonal overadvance
for the period of February through June, 1999.
All capitalized terms used herein and not otherwise defined herein shall
have the meaning attributed to them in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises of
the parties contained herein, Borrowers and Bank agree as follows:
1. Definitions of "Additional Amount" and "Available Credit." Section 1.1
of the Agreement is hereby amended by adding the following definition
of "Additional Amount and revising the definition of "Available
Credit" in its entirety as follows:
"Additional Amount" means, (i) during the months of February through
May, 1999, the lesser of $750,000 or 15% of the Borrowing Base, and (ii)
during June, 1999, the lesser of $375,000 or 7.5% of the Borrowing Base
"Available Credit" means, at any time, the amount by which the
aggregate of the outstanding principal amount of the Revolving Loans at
such time and the Letter of Credit Obligations at such time is less than
the lesser of (i) $9,500,000 or (ii) the Borrowing Base plus the
Additional Amount.
2. Revision of Section 3.1(a). The first sentence of Section 3.1(a) of
the Agreement is hereby amended in its entirety to read as follows:
On the terms and subject to the conditions contained in this
Agreement, Bank agrees to make loans (each a "Revolving Loan") to
Borrowers from time to time until the Maturity Date in an aggregate amount
not to exceed at any time outstanding the lesser of (i) $9,500,000 or (ii)
the Borrowing Base plus the Additional Amount.
3. Revision of Section 3.4(a). Section 3.4(a) of the Agreement is hereby
amended in its entirety to read as follows:
(a) Interest. Except as otherwise provided in the next sentence, the
outstanding principal balance of the Revolving Loans shall bear interest
at a fluctuating rate per annum equal to the aggregate of the Base Rate in
effect from time to time plus 100 basis points, provided, however, upon
the occurrence of a Rate Reduction Event, the number of basis points will
be reduced from 100 to 75 provided, further, upon the occurrence
thereafter of a Loss, the number of basis points will be increased from 75
to 100. The portion of the outstanding principal balance of the Revolving
Loans which is an advance of Additional Amount shall bear interest at a
fluctuating rate per annum equal to the aggregate of the Base Rate in
effect from time to time plus 200 basis points. The outstanding principal
balance of the Term Loan shall bear interest at a fluctuating rate per
annum equal to the aggregate of the Base Rate in effect from time to time
plus 125 basis points. The foregoing notwithstanding, the rate of interest
applicable at all times during the continuation of an Event of Default
shall be the applicable rate set forth above plus an additional 200 basis
points. All fees, expenses and other amounts not paid when due shall bear
interest (from the date due until paid) at a fluctuating rate per annum
equal to the Base Rate in effect from time to time plus 300 basis points.
4. Control Agreement. On or before March 1, 1999, Borrowers shall cause
Ajay Parent and Ajay Parent's securities intermediary to execute and
deliver to Bank a control agreement containing terms acceptable to
Bank for the purpose of perfecting (by control) Bank's security
interest in the 156,719 shares of Xxxxxxxx Controls, Inc.'s common
stock owned by Ajay Parent. Borrowers' failure to cause such agreement
to be delivered to Bank on or before March 1, 1999 shall be an Event
of Default.
5. Accommodation Fee. As consideration for Bank entering into this First
Amendment to Credit Agreement, Borrowers hereby agree to pay Bank an
accommodation fee of $5,000 upon the execution of this First
Amendment.
6. Effective Date. This First Amendment shall be effective upon the
execution of this First Amendment by Borrowers and Bank, and the
payment by Borrowers of the accommodation fee.
7. Ratification. Except as otherwise provided in this First Amendment,
all of the provisions of the Agreement are hereby ratified and
confirmed and shall remain in full force and effect.
8. One Agreement. The Agreement, as modified by the provisions of this
First Amendment, shall be construed as one agreement.
9. Counterparts. This First Amendment may be executed in any number of
counterparts, each of which when executed and delivered shall be
deemed to be an original, and all of which when taken together shall
constitute one and the same agreement.
10. Oregon Statutory Notice.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Credit Agreement as of the date first above written.
AJAY SPORTS, INC. LEISURE LIFE, INC.
By:__________________________ By:_____________________________
Title:_______________________ Title:__________________________
PALM SPRINGS GOLF, INC. AJAY LEISURE PRODUCTS, INC.
By:__________________________ By:_____________________________
Title:_______________________ Title:__________________________
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By:______________________________
Title:___________________________
