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EXHIBIT 4(d)
AMENDMENT NUMBER 4 TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
By
SPORT SUPPLY GROUP, INC.,
A Delaware Corporation
Borrower
And
LASALLE BUSINESS CREDIT, INC.,
Formerly Known As StanChart Business Credit, Inc.,
A Delaware Corporation
LaSalle
Dated November 27, 1996,
To Be Effective As Of The EFFECTIVE DATE
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AMENDMENT NUMBER 4 TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER 4 TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT ("Amendment") is executed on November 27, 1996, to be effective as of
the EFFECTIVE DATE (as that term is hereafter defined), by and between SPORT
SUPPLY GROUP, INC., a Delaware corporation ("Borrower"), and LASALLE BUSINESS
CREDIT, INC., formerly known as StanChart Business Credit, Inc., a Delaware
corporation ("LaSalle").
RECITALS
Pursuant to the Amended and Restated Loan and Security Agreement
between the Borrower and LaSalle dated March 23, 1995, as modified by (i) the
Amendment Number 1 to Amended and Restated Loan and Security Agreement dated
December 20, 1995, (ii) a letter agreement dated February 2, 1996, (iii) the
Amendment Number 2 to Amended and Restated Loan and Security Agreement dated
March 12, 1996, and (iv) the Amendment Number 3 to Amended and Restated Loan
and Security Agreement dated September 19, 1996 (collectively, "Agreement"),
LaSalle agreed to extend to the Borrower: (a) revolving loans in the maximum
aggregate principal amount outstanding at any one time of Thirty-Seven Million
Five Hundred Thousand Dollars ($37,500,000.00) (collectively, "Revolving
Loans"); (b) a term loan in the original principal amount of Two Million Five
Hundred Thousand Dollars ($2,500,00.00) ("Term Loan"); and (c) additional term
loans in the aggregate principal amount of up to Ten Million Dollars
($10,000,000.00) (collectively, "Additional Loans").
Pursuant to a Guaranty Agreement dated September 16, 1994, SPORT
SUPPLY GROUP INTERNATIONAL HOLDINGS, INC., a Delaware corporation
("Guarantor"), guaranteed the payment and performance of all of the Borrower's
obligations to LaSalle, including without limitation the Borrower's obligations
under the Agreement. The obligations of the Borrower and the Guarantor under
and in connection with the Revolving Loans, the Term Loan and the Additional
Loans (collectively, the "Loans"), are secured by the liens, assignments,
pledges and security interests described in the Agreement and in various other
documents and instruments (collectively with the Agreement and the Guaranty,
the "Loan Documents"). Unless otherwise defined herein, capitalized terms
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used in this Amendment shall have the meanings given to such terms in the
Agreement.
The Borrower is presently in default under the Agreement as a result
of its failure to equal or exceed the minimum EBITDA required under paragraph
11.2 of the Agreement for the Fiscal Quarter which ended August 2, 1996. The
Borrower has requested that LaSalle, among other things, waive the aforesaid
default and modify the Agreement in certain additional respects.
Pursuant to the terms and conditions set forth in the Modification
Agreement of even date herewith between LaSalle, the Borrower and the Guarantor
("Modification Agreement"), LaSalle has agreed to the Borrower's request. It
is a condition precedent to LaSalle's obligations under the Modification
Agreement that LaSalle and the Borrower enter into this Amendment.
NOW THEREFORE, in consideration of these premises 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:
1. Recitals. The Recitals set forth above are hereby
incorporated into this Amendment by reference, and the Borrower and the
Guarantor acknowledge that the Recitals are accurate in all respects.
2. Amendment. The Agreement is hereby amended as follows:
a. Section 1.1 is amended by replacing the existing
definitions of "Adjusted LIBOR Rate Option," "Loans," "Maximum Facility,"
"Maximum Revolving Credit Facility," "Notes" and "References Rate Option" with
the following:
"ADJUSTED LIBOR RATE OPTION" shall mean a fixed
annual rate which shall equal the rate obtained by
adding to the Adjusted LIBOR Rate: (a) for the
Revolving Loans, two hundred seventy-five (275) Basis
Points; and (b) for the Term Loan, three hundred
(300) Basis Points.
"LOANS"shall mean the Revolving Loans and the Term
Loan.
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"MAXIMUM FACILITY" shall mean Twenty-Five Million
Dollars ($25,000,000.00).
"MAXIMUM REVOLVING CREDIT FACILITY" shall mean
Twenty-Two Million Five Hundred Thousand Dollars
($22,500,000.00).
"NOTES"shall mean the Revolving Loan Note and the
Term Loan Note.
"REFERENCE RATE OPTION"shall mean the fluctuating
annual rate which shall at all times equal the rate
obtained by adding to the Reference Rate: (a) for the
Revolving Loans, three-fourths of one (0.75)
percentage point; and (b) for the Term Loan, one
(1.0) percentage point. Changes to the Reference
Rate Option shall be made effective as of, and
immediately upon the date of any change in the
Reference Rate.
b. Section 1.1 is further amended by adding the
following additional definitions:
"CONTINUING OPERATIONS" shall mean the core
institutional business of Borrower and all other
businesses and activities of Borrower not otherwise
described as Discontinued Operations.
"DISCONTINUED OPERATIONS" shall mean all golf-related
operations or businesses of Borrower and all other
activities of Borrower described in Borrower's
Quarterly Report for the period ended August 2, 1996
filed with the Securities and Exchange Commission on
Form 10-Q as "discontinued operations" or as
Borrower's "retail segment."
"DISCONTINUED OPERATIONS ACCOUNTS" shall mean any
Account owing to Borrower arising out of the sale or
lease of goods as part of the Discontinued
Operations.
c. Section 1.1 is further amended by deleting the
definitions of "Additional Loans," "Additional Loan Notes," "Approved
Acquisition," "Debt Service Coverage Ratio," "Interest
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Coverage Ratio," "Eligible Additional Loan Expenditures," and "Eligible
Equipment."
d. Section 2.1 is amended by replacing the existing
provision, in its entirety, with the following:
2.1. REVOLVING CREDIT FACILITY
Subject to the terms and provisions of this
Agreement, including without limitation, that no
Event of Default or Potential Default has occurred
and all other conditions precedent to lending under
Section 5 hereof have been satisfied, upon the
request of Borrower, made at any time and from time
to time during the term hereof, LaSalle shall make
revolving loans to Borrower (hereinafter individually
referred to as a "Revolving Loan" and collectively as
"Revolving Loans") so long as the aggregate amount of
the Revolving Loans outstanding at any time does not
exceed the lesser of: (a) the Maximum Revolving
Credit Facility minus the sum of the aggregate
undrawn face amount of any Letters of Credit, and (b)
Revolving Loan Availability, at such time. For
purposes hereof, "Revolving Loan Availability" shall
mean, at any time, the sum of the following:
(A) eighty-five percent (85%) multiplied by the
face amount then outstanding on existing
Eligible Accounts other than Government
Accounts and Discontinued Operations
Accounts; plus the lesser of (i) eighty-five
percent (85%) multiplied by the face amount
then outstanding on existing Government
Accounts which constitute Eligible Accounts,
and (ii) One Million Five Hundred Thousand
Dollars ($1,500,000.00); provided that if
Dilution equals or exceeds five percent (5%)
at any time, LaSalle may in its discretion
implement appropriate reserves to reflect
such increased Dilution; plus
(B) the lesser of (i) Twelve Million Five Hundred
Thousand Dollars ($12,500,000.00) or (ii)
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sixty percent (60%) of the value of Eligible
Finished Goods relating to Continuing
Operations at such time plus forty percent
(40%) of the value of Eligible Raw Materials
relating to Continuing Operations at such
time (each valued at the lower of cost or
fair market value, on a FIFO basis, in
accordance with Generally Accepted Accounting
Principles); plus
(C) the lesser of (i) Eight Million Dollars
($8,000,000.00) or (ii) eighty-five percent
(85%) multiplied by the face amount then
outstanding on existing Discontinued
Operations Accounts which constitute Eligible
Accounts, plus sixty percent (60%) of the
value of Eligible Finished Goods relating to
Discontinued Operations at such time plus
forty percent (40%) of the value of Eligible
Raw Materials relating to Discontinued
Operations at such time (each valued at the
lower of cost or fair market value, on a FIFO
basis, in accordance with Generally Accepted
Accounting Principles); minus
(D) forty percent (40%) of the aggregate face
amount of undrawn documentary Letters of
Credit; minus
(E) the aggregate undrawn face amount of any
standby Letters of Credit, provided that the
amount advanced, in the aggregate, for
Eligible Finished Goods and Eligible Raw
Materials which are in transit, including
those relating to both Continuing Operations
and Discontinued Operations, shall not at any
time exceed One Million Five Hundred Thousand
Dollars ($1,500,000.00).
The amount of Borrower's Eligible Accounts and
Eligible Inventory under this Section 2.1 shall be
determined after deduction of reserves consistent
with the definitions of such terms, and such other
reserves, deductions or adjustments deemed
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necessary by LaSalle in its reasonable credit
judgment to reflect Out-of-Pocket Fees and Costs and
other items reimbursable to LaSalle under this
Agreement which have been incurred or are anticipated
but not yet paid, any breaches of the warranties,
representations or covenants of Borrower under this
Agreement, or any Events of Default or Potential
Defaults; provided that LaSalle shall retain all of
its other rights and remedies under this Agreement.
LaSalle also shall impose reserves for slow moving or
potentially slow moving Inventory (i) against the
amount of the Borrower's Eligible Finished Goods
Inventory relating to Continuing Operations in the
amount of One Million Dollars ($1,000,000.00), and
(ii) against the amount of the Borrower's Eligible
Finished Goods Inventory relating to Discontinued
Operations in the following amounts:
Prior to 12/31/96 $208,333
From 1/1/97 through 1/31/97 $416,666
From 2/1/97 through 2/28/97 $624,999
From 3/1/97 through 3/31/97 $833,332
From 4/1/97 through 4/30/97 $1,041,665
From 5/1/97 and thereafter $1,250,000
The Revolving Loans shall be evidenced by, and
repayable in accordance with, a Fourth Amended and
Restated Revolving Loan Promissory Note dated
November 27, 1996 from the Borrower to the order of
LaSalle ("Revolving Loan Note").
LaSalle is hereby authorized to make the Revolving
Loans provided for in this Agreement based upon
telephonic or other instructions received from anyone
purporting to be (and which LaSalle in good faith
believes to be) an authorized representative of
Borrower, or at the discretion of LaSalle, if such
Revolving Loans are necessary to satisfy any
Obligation of Borrower to LaSalle.
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e. Section 2.2 is amended by replacing the existing
provision, in its entirety, with the following:
2.2. TERM LOAN FACILITY
Subject to the terms and provisions of this Agreement, upon
fulfillment of all the conditions precedent to any Loans under
Section 5 hereof, LaSalle shall make a term loan in the
principal amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00), to Borrower ("Term Loan"). The Term Loan
shall be evidenced by, and repayable in accordance with, a
Consolidated, Amended and Restated Term Loan Promissory Note
dated November 27, 1996 in the aforementioned amount, from the
Borrower to the order of LaSalle ("Term Loan Note").
f. Section 2.3 is amended by replacing the reference
therein to "Seven Million Five Hundred Thousand Dollars ($7,500,000.00)" with
"Five Million Dollars ($5,000,000.00)."
g. Section 2.7(E) is amended by replacing the reference
therein to "One Thousand Dollars ($1,000.00)" with "One Thousand Five Hundred
Dollars ($1,500.00)."
h. Section 3.1(a) is amended by replacing the reference
therein to the expiration date of "October 1, 1998" with "October 31, 1997."
i. The Agreement is further amended by deleting in their
entirety Section 2.6(I), Rate, Additional Loans, Section 2.14, Additional Loan
Facility, and Section 3.4, Reduction Of Over Advance Amount/Mandatory
Prepayment Of Additional Loan.
j. Section 8.5 is amended by replacing the existing
provision with the following:
8.5 LOANS AND INVESTMENTS. Make any advance, loan,
investment or material acquisition of assets other
than (i) advances made to employees in the ordinary
course of business so long as the aggregate amount of
such advances do not exceed One Hundred Thousand
Dollars ($100,000.00) in the aggregate outstanding at
any time; (ii)
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investments in marketable securities so long as the
aggregate amount of such investments do not exceed
One Hundred Thousand Dollars ($100,000.00) at any
time; (iii) investments in short-term direct
obligations of the United States government; (iv)
investments in negotiable certificates of deposit
issued by a bank satisfactory to LaSalle, payable to
the order of Borrower or to bearer, and (v)
investments in commercial paper rated A-1 or P-1,
provided, that with respect to clauses (ii), (iii),
(iv), and (v), to the extent that the aggregate
amount of investments made by Borrower exceed One
Hundred Thousand Dollars ($100,000.00) at any time,
Borrower shall pledge all such investments to LaSalle
in form acceptable to LaSalle.
k. Section 8.6 is amended by changing the period at the end
thereof to a comma and adding the following:
and (iii) an unsecured foreign sourcing line of
credit from Xxxxxxx Radio Corp. in an amount not to
exceed Two Million Dollars ($2,000,000.00), upon
terms described to and approved by LaSalle.
l. Article 8 of the Agreement is amended by adding the following
provisions at the end thereof:
8.18 AFFILIATE TRANSACTIONS. Transfer any cash or
property to any direct or indirect shareholder of or
owner of or beneficial owner of any interest in
Borrower or other Affiliate or enter into any
transaction, including without limitation the
purchase, lease, sale or exchange of property or the
rendering of any service to or by any direct or
indirect shareholder of or owner of or beneficial
owner of any interest in Borrower or other Affiliate;
provided that Borrower may (i) sell Inventory to
Affiliates, not to exceed the amount of One Hundred
Thousand Dollars ($100,000.00) in any such sale or in
the aggregate during any Fiscal Year, for cash for
fair value in the ordinary course of business
pursuant to terms that are no less favorable to
Borrower than the
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terms upon which such transactions would have been
made had such transfers or transactions been made at
arm's length to or with a Person that is not an
Affiliate, (ii) pay salaries to employee stockholders
in the ordinary course of business subject to any
limitations on such payments set forth in this
Agreement and (iii) obtain from Xxxxxxx Radio Corp.
an unsecured foreign sourcing line of credit in an
amount up to Two Million Dollars ($2,000,000.00),
upon terms consistent with those represented to
LaSalle.
8.19 DISTRIBUTIONS. Purchase, redeem or retire any of its
capital stock of any class, whether now or hereafter
outstanding, pay, directly or indirectly, any cash,
stock or other securities or property dividends or
distributions to its shareholders.
m. Section 11.1 is amended by replacing the existing
provisions with the following:
11.1 TANGIBLE NET WORTH. Borrower shall maintain at all
times a Tangible Net Worth, calculated based on the
Borrower's divisional balance sheet for Continuing
Operations (net of the intercompany account relating
to Discontinued Operations presently shown on
Borrower's financial statements as "Due from
Subsidiary"), in an amount of not less than
Thirty-Six Million Five Hundred Thousand Dollars
($36,500,000.00).
n. Section 11.2 is amended by replacing the existing
provision with the following:
11.2 EBITDA. Borrower shall equal or exceed an EBITDA for
the fiscal periods set forth below, based solely on
Continuing Operations, in the amounts set forth
opposite such periods:
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Period EBITDA
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Three months ending 1/31/97 ($1,000,000.00)
Six months ending 5/2/97 $0.00
Nine months ending 8/1/97 $1,500,000.00
Twelve months ending 10/31/97 $2,900,000.00
o. The Agreement is further amended by deleting in their
entirety Section 11.3, Debt Service Coverage, and Section 11.4, Interest
Coverage Ratio, and inserting the following provisions in their place:
11.3 ADVANCES TO DISCONTINUED OPERATIONS. Advances by
Borrower to the Discontinued Operations, presently
shown on the balance sheet of Borrower as an
intercompany account entitled "Due From Subsidiary,"
shall not at any time exceed the sum of (i) the
amount reflected on the balance sheet of Borrower as
of the EFFECTIVE DATE (as that term is defined in the
Modification Agreement dated November 27, 1996
between Borrower, Guarantor and LaSalle), plus (ii)
Two Million Dollars ($2,000,000.00). In the event
that Borrower has not sold or liquidated the
Discontinued Operations prior to the end of
Borrower's Fiscal Quarter ending May 2, 1997,
Borrower shall submit to LaSalle prior to the end of
such Fiscal Quarter a plan for liquidation or other
disposition of the Discontinued Operations, which
plan shall be acceptable to LaSalle in its sole
discretion.
11.4 SALE OF DISCONTINUED OPERATIONS. Borrower shall not
without the prior written consent of LaSalle enter
into any agreement providing for the sale of the
Discontinued Operations for a sale price which would
provide net proceeds in an amount less than that
portion of the Borrowing Base attributable to
Discontinued Operations Accounts and Eligible
Inventory relating to Discontinued Operations as of
such date.
3. Effective Date. This Amendment shall not be effective or
enforceable until the "EFFECTIVE DATE," as that term is defined in the
Modification Agreement.
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4. Cost And Expenses. Borrower shall pay, upon demand by
LaSalle, all reasonable costs and expenses incurred by LaSalle in connection
with the transactions described in this Amendment.
5. Warranties And Representations. As an inducement to LaSalle
to enter into this Amendment, Borrower makes the following representations and
warranties to LaSalle and acknowledges LaSalle's justifiable reliance thereon:
a. As of the date of this Amendment, the Borrower is not
in default under the Agreement or any of the other Loan Documents, and Borrower
is in full compliance with all of the terms and conditions thereof;
b. As of the date of this Amendment, no event exists
which is, or which with the passage of time, the giving of notice, or both,
would constitute a default under the Agreement or any of the Loan Documents;
c. All warranties and representations previously made to
LaSalle by Borrower in connection with the Loan Documents remain true, accurate
and complete, in all material aspects as of the date made;
d. Except as previously described in writing to LaSalle,
there have been no material adverse changes in Borrower's finances or
operations; and
e. The Agreement, as modified and amended herein, is the
valid and binding obligation of Borrower and is fully enforceable in accordance
with its terms.
6. Release. Borrower releases, acquits and forever discharges
LaSalle and LaSalle's subsidiaries, affiliates, officers, directors, agents,
employees, servants, attorneys and representatives from any and all claims,
demands, debts, actions, causes of action, suits, contracts, agreements,
obligations, accounts, defenses, offsets against the Borrower's obligation
under the Loan Documents, and liabilities of any kind or character whatsoever,
known or unknown, which Borrower ever had or now has against LaSalle or any of
LaSalle's subsidiaries, affiliates, officers, directors, agents, employees,
servants, attorneys or representatives.
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7. No Novation. The parties to this Amendment specifically
intend that the amendment of the Agreement pursuant to this Amendment shall not
constitute a novation and shall not extinguish, terminate, affect or impair
Borrower's obligations under the Loan Documents.
8. Other Terms. Other than the foregoing, all other terms and
conditions of the Agreement shall remain unchanged and in full force and effect
and are ratified and confirmed in all respects by Borrower.
9. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of Borrower and LaSalle and their respective
successors and assigns.
IN WITNESS WHEREOF, this Amendment is executed under seal, with the
intention that it be effective as of the EFFECTIVE DATE.
WITNESS/ATTEST: BORROWER:
SPORT SUPPLY GROUP, INC.,
A Delaware Corporation
By: (SEAL)
------------------------- --------------------------
Name:
-----------------------
Title:
----------------------
GUARANTOR:
SPORT SUPPLY GROUP INTERNATIONAL
HOLDINGS, INC.,
A Delaware Corporation
By: (SEAL)
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Name:
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Title:
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LASALLE:
LASALLE BUSINESS CREDIT, INC.,
A Delaware Corporation
By: (SEAL)
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Xxxxxxx X. Xxxx, XX,
First Vice President
ACKNOWLEDGEMENTS
STATE OF ______________, CITY/COUNTY OF _________________, TO WIT:
I HEREBY CERTIFY that on this _____ day of November, 1996, before me,
the undersigned Notary Public of the jurisdiction aforesaid, personally
appeared ___________________________, and acknowledged himself to be
_______________________ of SPORT SUPPLY GROUP, INC., a Delaware corporation,
and that he, as such _____________________ being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of SPORT SUPPLY GROUP, INC., by himself as ______________________.
IN WITNESS MY Hand and Notarial Seal.
(SEAL)
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NOTARY PUBLIC
My Commission Expires:
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STATE OF ______________, CITY/COUNTY OF _________________, TO WIT:
I HEREBY CERTIFY that on this _____ day of November, 1996, before
me, the undersigned Notary Public of the jurisdiction aforesaid, personally
appeared ___________________________, and acknowledged himself to be
______________________ of SPORT SUPPLY GROUP INTERNATIONAL HOLDINGS, INC., a
Delaware corporation, and that he, as such _______________________ being
authorized so to do, executed the foregoing instrument for the purposes therein
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contained by signing the name of SPORT SUPPLY GROUP INTERNATIONAL HOLDINGS,
INC., by himself as _______________________.
IN WITNESS MY Hand and Notarial Seal.
(SEAL)
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NOTARY PUBLIC
My Commission Expires:
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XXXXX XX XXXXXXXX, XXXX XX XXXXXXXXX, TO WIT:
I HEREBY CERTIFY, that on this ____ day of November, 1996, before
me, the undersigned a Notary Public of the State of Maryland, personally
appeared Xxxxxxx X. Xxxx, XX, who acknowledged himself to be a First Vice
President of LASALLE BUSINESS CREDIT, INC., a Delaware corporation, and
acknowledged that he, as such First Vice President, being authorized so to do,
executed the foregoing instrument for the purposes therein contained by signing
the name of LASALLE BUSINESS CREDIT, INC. by himself as First Vice President.
IN WITNESS MY Hand and Notarial Seal.
(SEAL)
---------------------------
NOTARY PUBLIC
My Commission Expires:
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