AMENDMENT NO. 2 TO CREDIT AGREEMENT
This AMENDMENT NO. 2 TO CREDIT AGREEMENT (this
"AMENDMENT") dated as of May 15, 2000 (the "Effective Date") is
made among RAWLINGS SPORTING GOODS COMPANY, INC., a Delaware
corporation ("BORROWER"); the other Credit Parties signatory to
the hereinafter defined Credit Agreement; GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for
Lenders ("Agent"), and the other Lenders signatory to the
hereinafter defined Credit Agreement.
RECITALS
A. Agent, Lenders and Credit Parties are party to that
certain Credit Agreement dated as of December 28, 1999 (as
amended, restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT").
B. On and subject to the terms and conditions hereof,
Agent, Lenders and Credit Parties wish to amend certain
provisions of the Credit Agreement.
C. This Amendment shall constitute a Loan Document and
these Recitals shall be construed as part of this Amendment;
capitalized terms used herein without definition are so used as
defined in Annex A to the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto agree
as follows:
1. AMENDMENT. Subject to the conditions precedent set
forth in Section 3 hereof, the Credit Agreement is hereby amended
as follows:
(a) Section 1.1 of the Credit Agreement is amended by
adding the following new Section 1.1(d):
"(d) TERM LOAN.
(i) Subject to the terms and conditions hereof, each
Lender agrees to make a term loan on May _, 2000 to Borrower
(the "TERM LOAN") in the original principal amount of its
Term Loan Commitment. The obligations of each Lender
hereunder shall be several and not joint. The Term Loan
shall be evidenced by promissory notes substantially in the
form of EXHIBIT 1.1(d) (each a "TERM NOTE" and collectively
the "TERM NOTES"), and Borrower shall execute and deliver a
Term Note to each Lender. Each Term Note shall represent
the obligation of Borrower to pay the amount of the
applicable Lender's Term Loan Commitment, together with
interest thereon as prescribed in Section 1.5.
(ii) Borrower shall pay the principal amount of the
Term Loan in seventy five (75) consecutive monthly
installments of $33,333.33 on the first day of each calendar
month, commencing June 1, 2000. Notwithstanding the
foregoing, the aggregate outstanding principal balance of
the Term Loan shall be due and payable in full in
immediately available funds on the Commitment Termination
Date, if not sooner paid in full. Each payment of principal
with respect to the Term Loan shall be paid to Agent for the
ratable benefit of each Term Lender, ratably in proportion
to each such Term Lender's respective Term Loan Commitment."
(b) Section 1.3(a) of the Credit Agreement is amended by
inserting the following sentence at the beginning of such Section:
"Borrower may at any time on at least five (5) days'
prior written notice to Agent voluntarily prepay all of the
Term Loan."
(c) Section 1.3(c) of the Credit Agreement is amended by
deleting the Section in its entirety and replacing such Section
with the following new Section 1.3(c):
"(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any
prepayments made by Borrower pursuant to CLAUSES (b)(ii) or
(b)(iii) above shall be applied as follows: FIRST, to Fees
and reimbursable expenses of Agent then due and payable
pursuant to any of the Loan Documents; SECOND, to interest
then due and payable on the Term Loan; THIRD, to prepay the
scheduled installments of the Term Loan in inverse order of
maturity, until such Loan shall have been prepaid in full;
FOURTH, to interest then due and payable on the Swing Line
Loan; FIFTH, to the principal balance of the Swing Line Loan
until the same shall have been repaid in full; SIXTH, to
interest then due and payable on the Revolving Credit
Advances; SEVENTH, to the outstanding principal balance of
Revolving Credit Advances until the same shall have been
paid in full; and EIGHTH, to any Letter of Credit
Obligations, to provide cash collateral therefor in the
manner set forth in ANNEX B, until all such Letter of Credit
Obligations have been fully cash collateralized in the
manner set forth in ANNEX B. Neither the Revolving Loan
Commitment nor the Swing Line Commitment shall be
permanently reduced by the amount of any such prepayments."
(d) Section 1.3(d) of the Credit Agreement is amended by
deleting such Section in its entirety and replacing it with the
following:
"(d) APPLICATION OF PREPAYMENTS FROM INSURANCE
PROCEEDS. Prepayments from insurance proceeds in accordance
with SECTION 5.4(c) shall be applied as follows: insurance
proceeds from casualties or losses to cash or Inventory
shall be applied first, to the Swing Line Loans and, second,
to the Revolving Credit Advances; insurance proceeds from
casualties or losses to Equipment, Fixtures and Real Estate
shall be applied to scheduled installments of the Term Loan
in inverse order of maturity. Neither the Revolving Loan
Commitment nor the Swing Line Loan Commitment shall be
permanently reduced by the amount of any such prepayments.
If the precise amount of insurance proceeds allocable to
Inventory as compared to Equipment, Fixtures and Real Estate
are not otherwise determined, the allocation and application
of those proceeds shall be determined by Agent, subject to
the approval of Requisite Lenders."
(e) Section 1.5(a) of the Credit Agreement is amended by
deleting the word "and" immediately before clause (ii) of such
Section and inserting the following language at the end of such
clause (ii):
"and (iii) with respect to the Term Loan, the Index
Rate plus the Applicable Term Loan Index Margin per annum
or, at the election of the Borrower, the applicable LIBOR
Rate plus the Applicable Term Loan LIBOR Margin per annum."
(f) Section 1.5(a) of the Credit Agreement is further
amended by inserting the following sentence immediately after the
first sentence of the second paragraph thereof:
"The Applicable Term Loan Index Margin and the
Applicable Term Loan LIBOR Margin will be 1.00% and 2.50%
per annum, respectively, as of the date of the Second
Amendment to the Agreement."
(g) Section 1.5(a) of the Credit Agreement is further
amended by deleting the second grid set forth in such Section and
replacing it with the following grid:
"APPLICABLE MARGINS
LEVEL I LEVEL II
Applicable Index Margin 0.75% 0.50%
Applicable LIBOR Margin 2.25% 2.00%
Applicable Term Loan Index Margin 1.00% 0.75%
Applicable Term Loan LIBOR Margin 2.50% 2.25%
Applicable L/C Margin 2.25% 2.00%
Applicable Unused Line Fee Margin 0.50% 0.50%"
(h) Section 1.9(c) of the Credit Agreement is amended by
inserting the words "prepays the Term Loan or" immediately after
the first reference to "Borrower" in the first sentence of such
Section and inserting the words "(i) the principal amount of the
Term Loan prepaid and (ii)" immediately before the words "the
amount of the Revolving Loan Commitment" in the first sentence of
such Section.
(i) Section 1.11(a) of the Credit Agreement is amended by
deleting the words "Revolving Loan" in clause (4) of such Section
and replacing such words with the words "other Loans, ratably in
proportion to the interest accrued as to each Loan" and by
deleting the words "Revolving Loan" in clause (5) of such Section
and replacing such words with the words "other Loans."
(j) Section 1.12 of the Credit Agreement is amended by
inserting the words "and the Term Loan" immediately after the
word "Advances" in the first sentence of such Section.
(k) Section 1.16(d) of the Credit Agreement is amended by
deleting the words "Loan and Revolving Loan Commitment" in such
Section and replacing such words with the words "Loans and
Commitments."
(l) Section 9.1 of the Credit Agreement is amended by
deleting each reference to "Revolving Loan Commitment" contained
in such Section and replacing such reference with a reference to
"Commitments" and by inserting the following sentence immediately
after the first sentence of Section 9.1(a):
"Each assignment shall be of a constant, and not a
varying, ratable percentage of all of the assigning Lender's
rights and obligations under this Agreement."
(m) Sections 9.1, 9.4, 9.9(b), 11.2 and 11.8 of the Credit
Agreement and the definitions of "Interest Payment Date" and "Pro
Rata Share" contained in Annex A to the Credit Agreement are
amended by deleting each reference to "Revolving Loan Commitment"
or "Revolving Loan Commitments" in such Sections and replacing
each such reference with a reference to "Commitments."
(n) The following new definitions are inserted into Annex A
to the Credit Agreement in appropriate alphabetical order:
"APPLICABLE TERM LOAN INDEX MARGIN" shall mean the
per annum interest rate from time to time in effect and
payable in addition to the Index Rate applicable to the Term
Loan, as determined by reference to Section 1.5(a) of the
Agreement.
""APPLICABLE TERM LOAN LIBOR MARGIN" shall mean
the per annum interest rate from time to time in effect and
payable in addition to the LIBOR Rate applicable to the Term
Loan, as determined by reference to SECTION 1.5(a) of the
Agreement.
"COMMITMENTS" shall mean (a) as to any Lender, the
aggregate of such Lender's Revolving Loan Commitment
(including without duplication the Swing Line Lender's Swing
Line Commitment as a subset of its Revolving Loan
Commitment) and Term Loan Commitment as set forth on ANNEX J
to the Agreement or in the most recent Assignment Agreement
executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments
(including without duplication the Swing Line Lender's Swing
Line Commitment as a subset of its Revolving Loan
Commitment) and Term Loan Commitments, which aggregate
commitment shall be Seventy Five Million Dollars
($75,000,000) on the Closing Date, as to each of clauses (a)
and (b), as such Commitments may be reduced, amortized or
adjusted from time to time in accordance with the Agreement.
"TERM LOAN" shall have the meaning assigned to it
in SECTION 1.1(d)(i).
"TERM LOAN COMMITMENT" shall mean (a) as to any
Lender, the commitment of such Lender to make its Pro Rata
Share of the Term Loan as set forth on ANNEX J to the
Agreement or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders, the
aggregate commitment of all Lenders to make the Term Loan,
which aggregate commitment shall be Two Million Five Hundred
Thousand Dollars ($2,500,000) on the date of the Second
Amendment to the Agreement, as to each of clauses (a) and
(b), as such Term Loan Commitments may be reduced, amortized
or adjusted from time to time in accordance with the
Agreement.
"TERM NOTE" shall have the meaning assigned to it
in SECTION 1.1(d)(i)."
(o) The following definitions contained in Annex A to the
Credit Agreement are deleted and replaced in their entirety with
the following definitions:
""APPLICABLE MARGINS" means collectively the
Applicable L/C Margin, the Applicable Unused Line Fee
Margin, the Applicable Index Margin, the Applicable Term
Loan Index Margin, the Applicable LIBOR Margin and the
Applicable Term Loan LIBOR Margin.
"LOANS" shall mean the Revolving Loan, the Swing
Line Loan and the Term Loan.
"NOTES" shall mean the Revolving Notes, the Swing
Line Note and the Term Notes, collectively."
(p) The definition of "Borrowing Base" contained in Annex A
to the Credit Agreement is amended by deleting clause (c) thereof
in its entirety and replacing such clause (c) with the following:
(c) during an Overadvance Period, the amount set forth
below opposite such Overadvance Period:
"OVERADVANCE PERIOD COMMENCING AMOUNT
November 1, 2000 $11,500,000
November 1, 2001 $10,500,000
November 1, 2002 $ 9,500,000
November 1, 2003 $ 8,500,000
November 1, 2004 $ 7,500,000"
(q) The definition of "Requisite Lenders" contained in
Annex A to the Credit Agreement is amended by deleting each
reference to "Revolving Loan Commitments" and "Revolving Loans"
in such Sections and replacing such references with references to
"Commitments" and "Loans," respectively.
(r) Annex J to the Credit Agreement is deleted in its
entirety and replaced by Annex J attached hereto.
(s) Exhibit 1.1(d) is added to the Credit Agreement in the
form of Exhibit 1.1(d) hereto.
2. REPRESENTATIONS AND WARRANTIES. As of the date hereof,
Credit Parties hereby jointly and severally represent and warrant
to Agent and Lenders as follows:
(a) After giving effect to this Amendment and the
transactions contemplated hereby (i) no Default or Event of
Default shall have occurred or be continuing and (ii) the
representations and warranties of Credit Parties contained
in the Loan Documents shall be true, accurate and complete
in all respects on and as of the date hereof to the same
extent as though made on and as of such date, except to the
extent such representations and warranties specifically
relate to an earlier date.
(b) The execution, delivery and performance, as the
case may be, by each Credit Party of this Amendment and the
other documents and transactions contemplated hereby are
within each Credit Party's corporate powers, have been duly
authorized by all necessary corporate action (including,
without limitation, all necessary shareholder approval) of
each Credit Party, have received all necessary governmental
approvals, and do not and will not contravene or conflict
with any provision of law applicable to any Credit Party,
the certificate or articles of incorporation or bylaws of
any Credit Party, or any order, judgment or decree of any
court or other agency of government or any contractual
obligation binding upon any Credit Party.
(c) This Amendment, the Credit Agreement and each
other Loan Document is the legal, valid and binding
obligation of each Credit Party enforceable against each
Credit Party in accordance with its respective terms, except
to the extent enforceability is limited by bankruptcy,
insolvency or similar laws affecting the rights of creditors
generally or by application of general principles of equity.
3. CONDITIONS. This Amendment shall become effective as
of the Effective Date, PROVIDED that as of the Effective Date
(except as otherwise noted) each of the following items shall
have been received by Agent or satisfied, as the case may be, all
in form and substance satisfactory to Agent:
(a) AMENDMENT. This Amendment, duly executed by each
Credit Party, Agent and each Lender.
(b) FEES, COSTS AND EXPENSES. Agent shall have
received (at Agent's option, by payment or as a charge
against the Revolving Loan) reimbursement of the amounts
payable by Agent to its legal counsel for the reasonable
legal fees of such counsel, and the costs and expenses
incurred by such counsel, in respect of the preparation and
negotiation of this Amendment and the other documents
executed in connection herewith.
(c) TERM NOTES. Duly executed originals of the Term
Notes for each Lender, dated as of the Effective Date.
(d) REVOLVING NOTES. Duly executed originals of the
Revolving Notes, reflecting the revised Revolving Loan
Commitment for each Lender, dated as of the Effective Date.
4. EFFECT ON LOAN DOCUMENTS. This Amendment is limited to
the specific purpose for which it is granted and, except as
specifically set forth above (a) shall not be construed as a
consent, waiver, amendment or other modification with respect to
any term, condition or other provision of any Loan Document and
(b) each of the Loan Documents shall remain in full force and
effect and are each hereby ratified and confirmed.
5. SUCCESSORS AND ASSIGNS. This Amendment shall be
binding on and shall inure to the benefit of Credit Parties,
Agent, Lenders and their respective successors and assigns;
PROVIDED that no Credit Party may assign its rights, obligations,
duties or other interests hereunder without the prior written
consent of Agent and Lenders. The terms and provisions of this
Amendment are for the purpose of defining the relative rights and
obligations of Credit Parties, Agent and Lenders with respect to
the transactions contemplated hereby and there shall be no third
party beneficiaries of any of the terms and provisions of this
Amendment.
6. ENTIRE AGREEMENT. This Amendment, including all
documents attached hereto, incorporated by reference herein or
delivered in connection herewith, constitutes the entire
agreement of the parties with respect to the subject matter
hereof and supersedes all other understandings, oral or written,
with respect to the subject matter hereof.
7. INCORPORATION OF CREDIT AGREEMENT. The provisions
contained in Sections 11.9 and 11.13 of the Credit Agreement are
incorporated herein by reference to the same extent as if
reproduced herein in their entirety with respect to this
Amendment.
8. ACKNOWLEDGMENT. Each Credit Party hereby represents
and warrants that there are no liabilities, claims, suits, debts,
liens, losses, causes of action, demands, rights, damages or
costs, or expenses of any kind, character or nature whatsoever,
known or unknown, fixed or contingent (collectively, the
"CLAIMS"), which any Credit Party may have or claim to have
against Agent or any Lender, or any of their respective
affiliates, agents, employees, officers, directors,
representatives, attorneys, successors and assigns (collectively,
the "LENDER RELEASED PARTIES"), which might arise out of or be
connected with any act of commission or omission of the Lender
Released Parties existing or occurring on or prior to the date of
this Amendment, including, without limitation, any Claims arising
with respect to the Obligations or any Loan Documents. In
furtherance of the foregoing, each Credit Party hereby releases,
acquits and forever discharges the Lender Released Parties from
any and all Claims that any Credit Party may have or claim to
have, relating to or arising out of or in connection with the
Obligations or any Loan Documents or any other agreement or
transaction contemplated thereby or any action taken in
connection therewith from the beginning of time up to and
including the date of the execution and delivery of this
Amendment. Each Credit Party further agrees forever to refrain
from commencing, instituting or prosecuting any lawsuit, action
or other proceeding against any Lender Released Parties with
respect to any and all Claims which might arise out of or be
connected with any act of commission or omission of the Lender
Released Parties existing or occurring on or prior to the date of
this Amendment, including, without limitation, any Claims arising
with respect to the Obligations or any Loan Documents.
9. CAPTIONS. Section captions used in this Amendment are
for convenience only, and shall not affect the construction of
this Amendment.
10. SEVERABILITY. Whenever possible each provision of this
Amendment shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Amendment shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Amendment.
11. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument. Delivery of an executed counterpart
of a signature page to this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this
Amendment.
[signature page follows]
IN WITNESS WHEREOF, this Amendment No. 2. to Credit
Agreement has been duly executed and delivered as of the day and
year first above written. above.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By: /s/ Michael Luetkemeyer
Title: CFO
RAWLINGS CANADA,
INCORPORATED
By: /s/ Michael Luetkemeyer
Title: V.P. and Secretary
RAWLINGS de COSTA RICA, S.A.
By: /s/ Howard Keene
Title: Secretary
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Geoffrey K. Hall
Title: Duly Authorized Signatory
LASALLE BANK NATIONAL ASSOCIATION, as
Lender
By: /s/ Andrew K. Dawson
Title: Vice President
Exhibit A to Amendment No. 2 to Credit Agreement
ANNEX J
(FROM ANNEX A -DEFINITIONS OF REVOLVING LOAN
COMMITMENT AND SWING LINE COMMITMENT)
TO
CREDIT AGREEMENT
Revolving Loan Term Loan Total
Lender Commitment Commitment Commitment
General Electric $48,333,333.33 $1,666,666.67 $50,000,000.00
Capital Corporation
LaSalle Bank National $24,166,666.67 $ 833,333.33 $25,000,000.00
Association
Total $72,500,00.000 $2,500,000.00 $75,000,00.00
Exhibit B to Amendment No. 2 to Credit Agreement
EXHIBIT 1.1(d)
TO
CREDIT AGREEMENT
FORM OF TERM NOTE
$___________________ Chicago, Illinois
May 15, 2000
FOR VALUE RECEIVED, the undersigned, RAWLINGS SPORTING
GOODS COMPANY, INC., a Delaware corporation ("BORROWER"), HEREBY
PROMISES TO PAY to the order of ___________________ ("LENDER") at
the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, as Agent for Lenders ("AGENT"), at its address at 10
South LaSalle Street, Suite 2700, Chicago, IL 60603, or at such
other place as Agent may designate from time to time in writing,
in lawful money of the United States of America and in
immediately available funds, the amount of _____________________
DOLLARS AND _____ CENTS ($___,___,___). All capitalized terms
used but not otherwise defined herein have the meanings given to
them in the "Credit Agreement" (as hereinafter defined) or in
Annex A thereto.
This Term Note is one of the Term Notes issued pursuant
to that certain Credit Agreement dated as of December 28, 1999 by
and among Borrower, the other Persons named therein as Credit
Parties, Agent, Lender and the other Persons signatory thereto
from time to time as Lenders (including all annexes, exhibits and
schedules thereto and as from time to time amended, restated,
supplemented or otherwise modified, the "CREDIT AGREEMENT"), and
is entitled to the benefit and security of the Credit Agreement,
the Security Agreement and all of the other Loan Documents
referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions
under which the Loans evidenced hereby are made and are to be
repaid. The principal balance of the Term Loan, the rates of
interest applicable thereto and the date and amount of each
payment made on account of the principal thereof, shall be
recorded by Agent on its books; provided that the failure of
Agent to make any such recordation shall not affect the
obligations of Borrower to make a payment when due of any amount
owing under the Credit Agreement or this Term Note.
The principal amount of the indebtedness evidenced
hereby shall be payable in the amounts and on the dates specified
in the Credit Agreement. Interest thereon shall be paid until
such principal amount is paid in full at such interest rates and
at such times, and pursuant to such calculations, as are
specified in the Credit Agreement. The terms of the Credit
Agreement are hereby incorporated herein by reference.
If any payment on this Term Note becomes due and
payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default,
this Term Note may, as provided in the Credit Agreement, and
without demand, notice or legal process of any kind, be declared,
and immediately shall become, due and payable.
Time is of the essence of this Term Note. Demand,
presentment, protest and notice of nonpayment and protest are
hereby waived by Borrower.
Except as provided in the Credit Agreement, this Term
Note may not be assigned by Lender to any Person.
THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By:
Title: