SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of December 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
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 amended by that certain First Amendment to Credit
Agreement dated as of March 31, 1998 and 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 certain
terms set forth in the Credit Agreement; and
WHEREAS, the Agents and the Lenders have agreed to amend certain terms
set forth in 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.
1.1 Financial Covenants.
(a) The table set forth in Section 7.2(a) of the Credit
Agreement is amended for the "Fiscal Quarter Ending" December 31, 1998
as follows:
Maximum Maximum Minimum
Adjusted Senior Debt Coverage
Fiscal Quarter Ending Leverage Ratio Leverage Ratio Ratio
--------------------- -------------- -------------- --------
December 31, 1998 8.50 to 1.0 .50 to 1.0 .80 to 1.0
(b) The table set forth in Section 7.2(c) of the Credit
Agreement is amended for the "Date" December 31, 1998 as follows:
Date Amount
---- ------
December 31, 1998 $24,250,000
1.2 Clean Down Period. Notwithstanding anything in Section 7.17 of the
Credit Agreement to the contrary, the Credit Parties shall not be required to
comply with the terms of Section 7.17 of the Credit Agreement for the twelve
month period ending December 31, 1998.
1.3 Payment of Expenses. Section 11.5 of the Credit Agreement is
amended by deleting the words "Documentation Agent" in the second line thereof
and substituting the word "Agents" in replacement therefor.
SECTION 2 CONDITIONS PRECEDENT.
2.1 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.
(b) The Agents shall have received such other documents and
information as either deems reasonably necessary.
SECTION 3 MISCELLANEOUS.
3.1 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.
3.2 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.
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3.3 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; 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.
3.4 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 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.
3.5 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 (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (ii) 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.
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3.6 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.
3.7 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/
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Name:
----------------------------
Title:
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GUARANTORS:
XXXXXXX, INC.,
a Illinois corporation
By: /s/
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Name:
----------------------------
Title:
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EQUILINK LICENSING CORPORATION,
a Delaware corporation
By: /s/
------------------------------
Name:
----------------------------
Title:
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RHC LICENSING CORPORATION,
a Delaware corporation
By: /s/
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Name:
----------------------------
Title:
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RIDMARK CORPORATION,
a Delaware corporation
By: /s/
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Name:
----------------------------
Title:
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ALL AMERICAN SPORTS CORPORATION,
a Delaware corporation
By: /s/
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Name:
----------------------------
Title:
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VARSITY SPIRIT CORPORATION,
a Tennessee corporation
By: /s/
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Name:
----------------------------
Title:
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VARSITY SPIRIT FASHIONS &
SUPPLIES, INC.
a Minnesota corporation
By: /s/
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Name:
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Title:
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INTERNATIONAL LOGOS, INC.
a Tennessee corporation
By: /s/
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Name:
----------------------------
Title:
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VARSITY/INTROPA TOURS, INC.
a Tennessee corporation
By: /s/
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Name:
----------------------------
Title:
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VARSITY USA, INC.
a Tennessee corporation
By: /s/
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Name:
----------------------------
Title:
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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/
------------------------------
Name:
----------------------------
Title:
---------------------------
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as
Documentation Agent
By: /s/
------------------------------
Name:
----------------------------
Title:
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