EXHIBIT 10.24.1
FIRST AMENDMENT TO LOAN AGREEMENT
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THIS FIRST AMENDMENT is entered into as of September 1, 1996 by and between
THE FINISH LINE, INC. (the "Borrower") and NBD BANK, N.A. (the "Bank")
WITNESSETH:
1. Standby Fee" originally set forth in the Agreement are replaced in their
entirety as follows:
"Applicable Commitment Fee" means the per annum percentage of the unused
portion of the Commitment to be paid to the Bank pursuant to Section 2.7 hereof,
determined by reference to the WHEREAS, the Borrower and the Bank have entered
into a certain Loan Agreement dated July 20, 1995 (the "Agreement"); and
WHEREAS, the Borrower and the Bank desire to confirm certain modifications
to the Agreement;
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
The definition of the terms "Applicable Commitment Fee", "Applicable Margin" and
"Applicable Borrower's Fixed Charge Coverage Ratio, in accordance with the
following table:
FIXED CHARGE COVERAGE RATIO APPLICABLE COMMITMENT FEE
Greater than 2.5 0.100%
2.25 to 2.5 0.125%
2.0 to 2.24 0.150%
1.75 to 1.99 0.200%
1.5 to 1.74 0.250%
The Applicable Commitment Fee will accrue and be payable with respect to
any fiscal quarter on the basis of the Applicable Commitment Fee determined as
of the end of the immediately preceding quarter, as derived from the Fixed
Charge Coverage Ratio determined from financial statements of the Borrower
delivered by the Bank pursuant to Section 5.4. The Applicable Commitment Fee
shall be adjusted if appropriate, quarterly, within ten (10) days following the
delivery of the financial statements of the Borrower for a fiscal quarter
furnished to the Bank pursuant to the requirements of Section 5.4 which
indicates the Borrower's Fixed Charge Coverage Ratio has changed as of the end
of any fiscal quarter. In the event the Borrower fails to provide the quarterly
financial statements pursuant to the requirements of Section 5.4, the Fixed
Charge Coverage Ratio will be presumed to be the lowest ratio set forth in the
above table.
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"Applicable Margin" means that per annum percentage to be added to each of
the LIBOR Rate or Federal Funds Rate at which interest will accrue on the
Advances, determined by reference to the Borrower's Fixed Charge Coverage Ratio,
as calculated from the Borrower's quarterly financial statements, all in
accordance with the following table:
FIXED CHARGE COVERAGE RATIO LIBOR MARGIN FEDERAL FUNDS MARGIN
Greater than 2.5 0.375% 0.500%
2.25 to 2.5 0.500% 0.625%
2.0 to 2.24 0.750% 0.875%
1.75 to 1.99 1.000% 1.125%
1.5 to 1.74 1.250% 1.375%
The Applicable Margin shall be adjusted if appropriate, quarterly, within
ten (10) days following the delivery of the financial statements of the Borrower
for a fiscal quarter furnished to the Bank pursuant to the requirements of
Section 5.4 which indicates the Borrower's Fixed Charge Coverage Ratio has
changed as of the end of any fiscal quarter. Interest will accrue and be payable
in any fiscal quarter on the basis of the Applicable Margin in effect at the end
of the preceding fiscal quarter unless prior to the commencement of such fiscal
quarter the Borrower has delivered its financial statements for a preceding
fiscal quarter which reflect a change in the calculated Fixed Charge Coverage
Ratio as of the end of a preceding quarter. In the event the Borrower fails to
provide the quarterly financial statements pursuant to the requirements of
Section 5.4, the Fixed Charge Coverage Ratio will be presumed to be the lowest
ratio set forth in the above table.
"Applicable Standby Fee" means the per annum percentage of the amount
of any standby letter of credit issued by Bank for the account of Borrower under
the Commitment to be paid to the Bank pursuant to Section 2.1 (G) hereof,
determined by reference to the Borrower's Fixed Charge Coverage Ratio, in
accordance with the following table:
FIXED CHARGE COVERAGE RATIO APPLICABLE STANDBY FEE
Greater than 2.5 0.375
2.25 to 2.5 0.50%
2.0 to 2.24 0.75%
1.75 to 1.99 1.00%
1.5 to 1.74 1.25%
The standby letter of credit commission will be determined and payable with
respect to any standby letter of credit issued at any time on the basis of the
Fixed Charge Coverage Ratio determined as of the end of the most recently ended
fiscal quarter (the "Determination Quarter"). The Applicable Standby Fee shall
be adjusted if appropriate, quarterly, within ten (10) days following the
delivery of the financial statements of the Borrower for a fiscal quarter
furnished to the Bank pursuant to the requirements of Section 5.4 which
indicates the Borrower's Fixed Charge Coverage Ratio has changed as of the end
of any fiscal quarter. In the event the Borrower fails to provide the
quarterly financial statements pursuant to the requirements of Section 5.4, the
Fixed Charge Coverage Ratio will be presumed to be the lowest ratio set forth in
the above table.
2. A new definition is added to the Agreement as follows:
"Base Minimum Rental Expense" means the base rental expense that Borrower
incurs with respect to operating leases for store locations operated by it, but
excluding any part of such expense that Borrower would not be obligated to pay
if it was not actually operating at such location ( i.e. percentage rent based
on sales).
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3. The original definition of the term "Fixed Charge Coverage Ratio" is replaced
as follows
"Fixed Charge Coverage Ratio" means the ratio of earnings before taxes,
interest expense and Base Minimum Rental Expense to interest expense plus Base
Minimum Rental Expense, as calculated on a rolling four quarter basis as
measured as of the end of the quarter most recently ended on the date of
determination.
4. The parties agree that the Applicable Margin as of the date of this First
Amendment is based on the Borrower's financial statements for the fiscal quarter
ending May 31, 1996, and is based on a Fixed Charge Coverage Ratio of 2.13 as of
the quarter ending May 31, 1996. The next calculation of the Applicable Margin
will be made upon receipt of the Borrower's financial statements for the quarter
ending August 31, 1996.
5. The definitions "CD Advance", "CD Base Rate", "CD Loan", "CD Rate", and "CD
Reserve Percentage" are deleted from the Agreement. The option to procure
Advances with pricing indexed to a CD Base Rate is eliminated from the
Agreement. All future Advances under the Agreement shall either be Prime Rate
Advances, Federal Funds Rate Advances or LIBOR Advances".
6. The parties confirm that the amount of the activated Commitment of the Bank
under Section 2.1 (A) of the Agreement has been increased from $25,000,000 to
$30,000,000. Borrower shall execute and deliver an Amended and Restated
Promissory Note in the amount of the increased Commitment in the form of Exhibit
A attached hereto, which shall then become the "Note" under the Agreement.
7. The maturity date of September 1, 1997 originally set forth in Sections 2.1
(A) and (F) is hereby extended from September 1, 1997 to September 1, 1999.
8. The financial covenant contained in Section 5.3 (A) of the Agreement is
replaced as follows:
(A) Tangible Net Worth. The Borrower, on a consolidated basis, will at
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all times until February 28, 1997, maintain a Tangible Net Worth of not less
than $69,300,000, which minimum amount (1) will increase as of February 28, 1997
and as of the end of each fiscal year thereafter by an amount equal to the sum
of 50% of net income for such fiscal year, rounded upward to the nearest
$100,000 (with no downward adjustment for net losses in any year) and (2) will
increase by an amount equivalent to 80% of net proceeds received by the Borrower
from equity offerings, rounded upward to the nearest $100,000 and effective as
of the date of receipt of such proceeds.
9. The termination date set forth in Section 8.12 of the Agreement is changed
to September 1, 1999.
10. Borrower hereby represents and warrants to Bank that there does not
presently exist any default under the Agreement or any event which with the
notice or lapse of time or both would constitute a default under the Agreement
and that each of the representations and warranties set forth in the Agreement
remain true and correct as of the date hereof, except to the extent said
representations and warranties specifically apply to those items explicitly
modified by or otherwise disclosed in this Modification, and each of said
representations and warranties is hereby incorporated herein by reference and
modified as necessary to apply to and cover the undertakings of the Borrower
evidenced or contemplated by this Modification.
11. All other terms, conditions, provisions, representations and warranties set
forth in the Agreement not specifically relating to those items explicitly
modified by or otherwise disclosed in this Modification shall remain unchanged
and shall continue in full force and effect. This Modification shall, whenever
possible, be construed in a manner consistent with the Agreement; provided,
however, in the event of any irreconcilable inconsistency between the terms of
this Modification and the terms of the Agreement, the terms of this Modification
shall control.
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12. No provision hereof shall constitute a waiver of any of the terms or
conditions of the Agreement other than those terms or otherwise disclosed in
this Modification. Borrower hereby represents, warrants, covenants, and agrees
that there exists no offsets, counterclaims or defenses to payment or
performance of the obligations set forth in the Agreement.
IN WITNESS WHEREOF, Borrower and Bank have executed this First Amendment by
their duly authorized representatives effective as of September 1, 1996.
THE FINISH LINE, INC.
By: _______________________________
_______________________________
Printed Name - Title
NBD BANK, N.A.
By: ______________________________
______________________________
Printed Name - Title
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