AMENDMENT NO. 3 TO CREDIT AGREEMENT
This Amendment No. 3 to Credit Agreement (the "Amendment
Agreement") is entered into as of September 23, 1996 by and among
Rawlings Sporting Goods Company, Inc. (the "Borrower"), the
undersigned lenders (the "Lenders") and The First National Bank
of Chicago, as agent (the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lender and the Agent entered into
that certain Credit Agreement dated as of July 8, 1994 and
amended as of March 24, 1995 and August 31, 1995 (the "Credit
Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed
to further amend the Credit Agreement on the terms and conditions
herein set forth.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to
such terms in the Credit Agreement, as amended hereby.
2. AMENDMENTS TO CREDIT AGREEMENT.
2.1 Article I of the Credit Agreement is hereby
amended by (a) deleting the definitions of "Aggregate
Available Commitment", "Borrowing Date" and "Notes" in their
entirety and replacing them with the following:
"Aggregate Available Commitment" means, at any
time, the Aggregate Revolving Credit Commitment at such
time MINUS the Facility Letter of Credit Obligations
outstanding at such time and the aggregate principal
amount of the Swing Line Loans outstanding at such
time.
"Borrowing Date" means a date on which an Advance
or a Swing Line Loan is made or a Facility Letter of
Credit is issued hereunder.
"Notes" means any one or more of the Revolving
Credit Notes or the Swing Line Notes.
and (b) adding the following definitions thereto:
"Swing Line Bank" means First Chicago or any
other Lender as a successor Swing Line Bank.
"Swing Line Commitment" means the obligations of
the Swing Line Bank to make Swing Line Loans up to a
maximum principal amount of $5,000,000 at any one time
outstanding.
"Swing Line Loan" means a swing line loan made
available to the Borrower by the Swing Line Bank
pursuant to Section 2.21 hereof.
"Swing Line Note" means a promissory note, in
substantially the form of Exhibit E hereto, duly
executed by the Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line
Commitment, including any amendment, restatement,
modification, renewal or replacement of such Swing Line
Note.
2.2 Article II of the Credit Agreement is hereby
amended as follows:
(a) Section 2.1(b) is hereby amended by adding
the following after the reference to "Revolving Credit
Loans" on the second line thereof:
", Swing Line Loans"
(b) Section 2.4(b) is hereby amended by adding
the following at the end of the proviso thereto:
PLUS (iii) the aggregate principal amount of
the outstanding Swing Line Loans
(c) Section 2.20.1(b) is hereby amended by
deleting clause (iii) thereof in its entirety and
replacing it with the following:
(iii) the sum at any time of (A) the
aggregate amount of Facility Letter of Credit
Obligations, (B) the aggregate principal balance
of outstanding Revolving Credit Advances and
(C) the aggregate principal balance of Swing Line
Loans exceed the amount of the Aggregate Revolving
Credit Commitment;
(d) Section 2.21 is hereby added as follows:
2.21. SWING LINE LOANS.
2.21.1 AMOUNT OF SWING LINE LOANS.
Subject to the terms and conditions set forth
in this Agreement, at any time prior to the
earlier of (x) the Facility Termination Date
and (y) the termination of the obligation of
the Lenders to make Loans hereunder, the
Swing
Line Bank agrees to make swing line
loans to the Borrower from time to time, in a
minimum amount of $100,000 and in increments
of $25,000 in excess thereof and in an
aggregate amount not to exceed the Swing Line
Commitment (each, individually, a "Swing Line
Loan" and collectively, the "Swing Line
Loans"); provided, however, that at no time
shall the sum of (a) the principal amount of
outstanding Revolving Credit Loans, PLUS
(b) the outstanding Facility Letter of Credit
obligations, PLUS (c) the principal amount of
outstanding Swing Line Loans exceed the
Aggregate Revolving Credit Commitment.
Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Swing
Line Loans at any time prior to the earlier
of (x) the Facility Termination Date and
(y) the termination of the obligation of the
Lenders to make Loans hereunder.
2.21.2 BORROWING NOTICE. The
Borrower shall give the Agent and the Swing
Line Bank telephonic notice, not later than
11:00 a.m. (Chicago Time) on the Borrowing
Date of each Swing Line Loan, specifying
(a) the applicable Borrowing Date (which
shall be a Business Day), and (b) the
aggregate amount of the requested Swing Line
Loan.
2.21.3 MAKING OF SWING LINE LOANS.
Not later than 1:30 p.m. (Chicago time) on
the applicable Borrowing Date, the Swing Line
Bank shall make available its Swing Line
Loan, in funds immediately available in
Chicago, to the Agent at its address
specified on the signature pages to this
Agreement; provided, that each of the
conditions set forth in Section 4.2 shall be
satisfied (with the making of a Swing Line
Loan deemed to be an Advance for the purposes
of such Section 4.2). The Agent will
promptly make the funds so received from the
Swing Line Bank available to the Borrower at
the Agent's aforesaid address.
2.21.4 REPAYMENT OF SWING LINE LOANS.
The Borrower may at any time pay, without
penalty or premium, all outstanding Swing
Line Loans upon notice to the Agent and the
Swing Line Bank. In addition, the Agent
(a) may at any time in its sole discretion
with respect to any outstanding Swing Line
Loan, or (b) shall on the fifth Business Day
after the Borrowing Date of any Swing Line
Loan which, after giving effect thereto,
caused the aggregate principal amount of all
outstanding Swing Line Loans to be greater
than $500,000, require the Lenders (including
the Swing Line Bank) to make Revolving Loans
pursuant to Section 2.1 hereof to repay such
outstanding Swing Line Loans. Not later than
1:30 p.m. (Chicago
time) on the date of any
notice received pursuant to this
Section 2.21.4, each Lender shall make
available its required Revolving Loan in
funds immediately available in Chicago to the
Agent at its address specified on the
signature pages to this Agreement. Unless a
Lender shall have notified the Swing Line
Bank, prior to its making any Swing Line
Loan, that any applicable condition precedent
set forth in Section 4.1 or 4.2 had not then
been satisfied, such Lender's obligation to
make Revolving Loans pursuant to this
Section 2.21.4 to repay Swing Line Loans
shall be unconditional, continuing,
irrevocable and absolute and shall not be
affected by any circumstance, including,
without limitation, (i) any set-off,
counterclaim, recoupment, defense or any
other rights which such Lender may have
against the Agent, the Swing Line Bank or any
other Person, (ii) the occurrence or
continuance of a Default or Unmatured Default
or any termination of the obligation of the
Lenders to make Revolving Loans pursuant to
Section 7.2 hereof or otherwise, (iii) any
adverse change in the condition (financial or
otherwise) of the Borrower, or (iv) any other
circumstances, happening or event whatsoever.
In the event that any Lender fails to make
payment to the Agent of any amount due under
this Section 2.21.4, the Agent shall be
entitled to receive, retain and apply against
such obligation the principal and interest
otherwise payable to such Lender hereunder
until the Agent received such payment from
such Lender or such obligation is otherwise
fully satisfied. In addition to the
foregoing, if for any reason any Lender fails
to make a Revolving Loan required to be made
by it pursuant to this Section 2.21.4, such
Lender shall be deemed, at the option of the
Agent, to have unconditionally and
irrevocably purchased from the Swing Line
Bank, without recourse or warranty, an
undivided interest and participation in the
applicable Swing Line Loan in the amount of
such Revolving Loan, and such interest and
participation may be recovered from such
Lender together with interest thereon at the
Federal Funds Effective Rate for each day
during the period commencing on the date of
demand and ending on the date such amount is
received. On the Facility Termination Date,
the Borrower shall repay in full the
outstanding principal balance of the Swing
Line Loans.
2.21.5 RATE OPTIONS FOR SWING LINE
LOANS. The Swing Line Loans shall at all
times bear interest at the Floating Rate.
2.3 Article V of the Credit Agreement is hereby
amended by deleting Section 5.8 in its entirety and
replacing it with the following:
5.8. LITIGATION AND CONTINGENT OBLIGATIONS. There
is no litigation, arbitration, proceeding, inquiry or
governmental investigation (including, without
limitation, by the Federal Trade Commission) pending
or, to the knowledge of any of their officers,
threatened against or affecting the Rawlings Business,
the Borrower or any Subsidiary or any of their
respective properties (a) as of the date of this
Agreement, except as set forth on Schedule 5.8, and no
such matter set forth herein could reasonably be
expected to have a Material Adverse Effect or to
prevent, enjoin or unduly delay the making of the Loans
or Advances under this Agreement, or (b) after the date
of this Agreement which could reasonably be expected to
have a Material Adverse Effect or to prevent, enjoin or
unduly delay the making of the Loans or Advances under
this Agreement. As of the date of this Agreement,
neither the Borrower nor any Subsidiary has any
material contingent obligations except as set forth on
Schedule 5.8.
2.4 Article VI of the Credit Agreement is hereby
amended as follows:
(a) Section 6.28.2 is hereby amended by deleting
the table set forth therein in its entirety and
replacing it with the following:
PERIOD MAXIMUM RATIO
Each Fiscal Quarter Ending
November 30 or February 28 65%
Each Fiscal Quarter Ending
May 31 or August 31 55%
(b) Section 6.28.3 is hereby amended by deleting
such section in its entirety and replacing it with the
following:
6.28.3. FIXED CHARGE COVERAGE RATIO. As
of the last day of each Fiscal Quarter, maintain a
Fixed Charge Coverage Ratio for the four Fiscal
Quarters then ended of not less than the ratio set
forth below for the corresponding measurement
date:
MEASUREMENT DATE MINIMUM RATIO
8/31/96 1.75:1
11/30/96 1.75:1
2/28/97 1.75:1
5/31/97 2.00:1
and the last day of each
Fiscal Quarter thereafter
2.5 Exhibit E is hereby added in the form of the
Exhibit E attached as Annex 1 hereto.
3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
3.1 The Borrower represents and warrants that the
execution, delivery and performance by the Borrower of this
Amendment Agreement have been duly authorized by all
necessary corporate action and that this Amendment Agreement
is a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its
terms, except as the enforcement thereof may be subject to
(a) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting
creditors' rights generally and (b) general principles of
equity (regardless of whether such enforcement is sought in
a proceeding in equity or at law).
3.2 The Borrower hereby certifies that each of the
representations and warranties contained in the Credit
Agreement is true and correct in all material respects on
and as of the date hereof as if made on the date hereof,
except to the extent that any such representation or
warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall be true and
correct on and as of such earlier date.
4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
4.1 Upon the effectiveness of this Amendment
Agreement, each reference in the Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like
import and each reference to the Credit Agreement in each
Loan Document shall mean and be a reference to the Credit
Agreement as amended hereby.
4.2 Except as specifically amended above, all of the
terms conditions and covenants of the Credit Agreement and
the other Loan Documents shall remain unaltered and in full
force and effect and shall be binding upon the Borrower in
all respects and are hereby ratified and confirmed.
4.3 The execution, delivery and effectiveness of this
Amendment Agreement shall not operate as a waiver of (a) any
right, power or remedy of any Lender or the Agent under the
Credit Agreement or any of the Loan Documents, or (b) any
Default or Unmatured Default under the Credit Agreement.
5. COSTS AND EXPENSES. The Borrower agrees to pay on
demand all reasonable fees and out-of-pocket expenses of counsel
for the Agent in connection with the preparation, execution and
delivery of this Amendment Agreement.
6. CHOICE OF LAW. THIS AMENDMENT AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW
OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
7. EXECUTION IN COUNTERPARTS. This Amendment Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. This
Amendment Agreement shall become effective as of the date first
above written; provided, that the Agent has received
(a) counterparts of this Amendment Agreement duly executed by the
Borrower and each Lender and (b) an executed copy of a Swing Line
Note in favor of the initial Swing Line Bank.
8. HEADINGS. Section headings in this Amendment Agreement
are included herein for convenience of reference only and shall
not constitute a part of this Amendment Agreement for any other
purposes.
[signature pages to follow]
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders
have executed this Amendment Agreement as of the date first above
written.
RAWLINGS SPORTING GOODS COMPANY, INC.
By: ______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: ______________________________
Name:
Title:
THE BANK OF NEW YORK
By: ______________________________
Name:
Title:
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By: ______________________________
Name:
Title:
COMERICA BANK
By: ______________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By: ______________________________
Name:
Title:
ANNEX 1
EXHIBIT E
FORM OF
SWING LINE NOTE
$_________________ Dated: ____________
FOR VALUE RECEIVED, the undersigned (the "Borrower") HEREBY
PROMISES TO PAY to the order of _______________________________
(the "Lender") the principal sum of ___ Million United States
Dollars ($_______) or, if less, the aggregate unpaid principal
amount of the Swing Line Loans made by the Lender to the Borrower
pursuant to Section 2.21 of the Credit Agreement (as hereinafter
defined), on or before the Facility Termination Date; together, in
each case, with interest on any and all principal amounts remaining
unpaid hereunder from time to time outstanding. Interest upon the
unpaid principal amount hereof shall accrue at the rates, shall be
calculated in the manner and shall be payable on the dates set
forth in the Credit Agreement. After maturity, whether by
acceleration or otherwise, accrued interest shall be payable upon
demand. Both principal and accrued interest shall be payable in
accordance with the Credit Agreement to The First National Bank of
Chicago, as Agent (the "Agent") on behalf of the Lender, at its
office set forth in the Credit Agreement in immediately available
funds. The Swing Line Loans made by the Lender to the Borrower
pursuant to the Credit Agreement and all payments on account of
principal hereof shall be recorded by the Lender and, prior to any
transfer thereof, endorsed on Schedule A attached hereto which is
part of this Swing Line Note or otherwise in accordance with its
usual practices; provided, however, that the failure to so record
shall not affect the Borrower's obligations under this Swing Line
Note.
This Swing Line Note is a Note referred to in, and is entitled
to the benefits of, the Credit Agreement dated as of July 8, 1994
and amended as of March 24, 1995, August 31, 1995 and September 23,
1996 by and among the Borrower, the financial institutions
signatory thereto (including the Lender) and the Agent (as further
amended, modified or supplemented from time to time, the "Credit
Agreement") and the other Loan Documents. Capitalized terms used
but not otherwise defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement. The Credit Agreement,
among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and
also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Swing Line Note.
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT
OF LAWS PROVISIONS, OF THE STATE OF ILLINOIS BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
RAWLINGS SPORTING GOODS COMPANY,
INC.
By: __________________________
Name:
Title:
SCHEDULE A
Swing Line Note
dated _________________
payable to the order of
[LENDER]
PRINCIPAL PAYMENTS
AMOUNT OF UNPAID
PRINCIPAL PRINCIPAL NOTATION
DATE REPAID BALANCE MADE BY