AMENDMENT NO. 6 TO AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment No. 6 to Amended and Restated Credit
Agreement (this "Amendment Agreement") is entered into as of
September 30, 1999 by and among Rawlings Sporting Goods Company,
Inc. (the "Borrower"), the undersigned lenders (the "Lenders")
and Bank One, NA (f/k/a The First National Bank of Chicago), as
agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and the Agent entered
into that certain Amended and Restated Credit Agreement dated as
of September 12, 1997, as amended (the "Credit Agreement"); and
WHEREAS, a Default exists under Sections 6.28.3, 6.28.4 and
6.28.5 for the Borrower's fiscal year ending August 31, 1999 (the
"Subject Defaults"), and Borrower has requested that the Lenders
and the Agent waive the Subject Defaults; and
WHEREAS, the Borrower, the Lenders and the Agent have agreed
to the foregoing 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 Notwithstanding any term or provision of the Credit
Agreement to the contrary, on and after the effective date
of this Amendment Agreement, the Aggregate Revolving Credit
Commitment shall be permanently reduced to $70,000,000, and
the Revolving Credit Agreement of each Lender shall be as
set forth on the signature pages hereto.
2.2 The definition of "Facility Termination Date" set forth
in Article I of the Credit Agreement is hereby amended to
read in full as follows:
"Facility Termination Date" means April 30, 2000.
2.3 The definition of "Subsidiary Security Documents" set
forth in Article I of the Credit Agreement is hereby amended
to read in full as follows:
"Subsidiary Security Documents" means, at any time, all
agreements, documents and instruments from time to time
duly executed and delivered to or for the benefit of
the Agent or the Lenders by Rawlings Canada,
Incorporated securing or guaranteeing the Obligations."
2.4 Section 2.1 (a) of the Credit Agreement is amended by
restating the last sentence thereof in full as follows:
"Notwithstanding the foregoing or Section 2.20.1, the
aggregate principal balance of all Loans plus the
aggregate Facility Letter of Credit Obligations
outstanding at any time during any calendar week, after
giving effect to any Advances or Facility Letters of
Credit at the time requested by the Borrower under this
Section 2.1(a) or Section 2.20.1, shall not be
permitted at any time to exceed an amount equal to the
sum of (i) the Borrowing Base as in effect at the end
of the calendar week for which the most recent
borrowing base certificate has been delivered to the
Lenders pursuant to Section 6.1(m)(i), plus (ii) for
the period on or before December 31, 1999,
$10,000,000."
2.5 Section 2.4(a) of the Credit Agreement is amended to
read in full as follows:
"The Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee of thirty basis
points (.30%) per annum on such Lender's pro-rata share
of (i) the Aggregate Revolving Credit Commitment, MINUS
(ii) the sum of the outstanding balance of the
Revolving Credit Loans, calculated on a daily basis
from the date hereof to and including the Facility
Termination Date, payable on each Payment Date
hereafter and on the Facility Termination Date. Until
the Aggregate Revolving Credit Commitment is terminated
and the Obligations paid in full in accordance with the
Credit Agreement, the Borrower further agrees to pay to
the Agent for the account of each Lender on the last
day of each month, commencing December 31, 1999, a
supplemental commitment fee of twenty-five basis points
(.25%) (in each case payable on a gross percentage
basis and not a per annum basis) on the full amount of
the Aggregate Revolving Credit Commitment then in
effect, after giving effect to any Commitment reduction
on such date made in accordance with the Credit
Agreement. All accrued commitment fees shall be
payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder."
2.6 Section 6.1(m) of the Credit Agreement is amended to
read in full as follows:
"(m) not later than (i) Monday of each calendar week,
commencing October 11, 1999, a certificate in the form
of Exhibit A to Amendment No. 6 to the Agreement
signed by the Borrower's chief financial officer
setting forth the calculation of the Borrowing Base as
of the Friday of the preceding calendar week and the
Borrower's compliance with Section 6.32 as of such
Friday, and (ii) as soon as practicable and in any
event not later than 15 days after the end of each
calendar month, a certificate in the form of Exhibit B
to Amendment No. 6 to the Agreement signed by the
Borrower's chief financial officer setting forth the
calculation of the Borrowing Base as of the end of such
month and the Borrower's compliance with Section 6.32."
2.7 Section 6.32 of the Credit Agreement is amended to read
in full as follows:
"6.32 BORROWING BASE. The Borrower will not cause
or permit the aggregate outstanding principal balance
of the Loans plus the aggregate outstanding amount of
all Facility Letter of Credit Obligations at any time
to exceed an amount equal to the sum of (i) the
Borrowing Base as in effect as of the Friday for which
the most recent Borrowing Base certificate has been
delivered to the Lenders pursuant to Section 6.1(m),
plus (ii) for the period on or before December 31,
1999, $10,000,000."
2.8 Section 6.33 of the Credit Agreement is amended by
deleting the date "September 30, 1999" appearing therein and
substituting in lieu thereof the date "October 26, 1999".
3. WAIVER. Upon the effectiveness of this Amendment Agreement,
the Agent and the Lenders hereby waive on a temporary basis
the Subject Defaults through November 30, 1999, provided
that on August 31, 1999, Minimum Tangible Net Worth is at
least $41,500,000 as reflected in the Borrower's audited
financial statements for such fiscal year. Such waiver
shall be deemed extended on a temporary basis through
December 31, 1999 if on or prior to November 30, 1999 the
Borrower shall have entered into a definitive purchase
agreement with a buyer to sell all or substantially all of
the assets of the Borrower and that (i) provides upon
closing for repayment in full in cash of the Obligations and
termination of the Commitments, (ii) is to close not later
than December 31, 1999, and (iii) is without a financing
contingency and is otherwise reasonably satisfactory to the
Required Lenders. Such waiver shall extend solely to the
Subject Defaults, shall not be deemed a waiver of any
subsequent breach of Sections 6.28.3, 6.28.4 or 6.28.5 for
any financial reporting period occurring after August 31,
1999, and, at the time of expiration of such waiver as set
forth herein, the Subject Defaults shall be reinstated in
effect and the Agent and the Lenders shall have all rights
and remedies in connection therewith as if the waiver set
forth herein had not been given.
4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
4.1 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).
4.2 The Borrower hereby certifies that, after giving effect
to this Amendment Agreement, 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, and no
Default or Unmatured Default exists and is continuing.
5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
5.1 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.
5.2 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.
5.3 Except as expressly set forth herein, 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.
6. 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.
7. 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.
8. EXECUTION IN COUNTERPARTS; EFFECTIVENESS. 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 Borrower shall have
delivered to Agent, in form and substance satisfactory to Agent:
(a) counterparts of this Amendment Agreement duly executed
by the Borrower, Rawlings Canada, and the Lenders;
(b) copies of the Borrower's and Rawling's Canada,
Incorporated's board of directors resolutions certified by
the Secretary or Assistant Secretary thereof approving this
Amendment Agreement and the terms and provisions hereof;
(c) a certificate of the Borrower's chief financial officer
stating that, after giving effect to the Amendment
Agreement, no Default or Unmatured Default exists;
(d) a written opinion of counsel to Borrower regarding the
Amendment Agreement; and
(e) the Borrower shall have paid in immediately available
funds (i) an amendment fee of $175,000 to the Agent for the
ratable benefit of the Lenders, and (ii) all legal fees and
expenses of counsel to the Agent (including Canadian
counsel) invoiced to Borrower.
9. 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: /s/ Stephen M. O'Hara
Title: Chairman and Chief Executive Officer
REVOLVING CREDIT COMMITMENTS:
$17,108,000 BANK ONE, NA, (f/k/a The First
National Bank of Chicago),
Individually and as Agent
By: /s/ J. P. Yardley
Title: First Vice President
$14,000,000 THE BANK OF NEW YORK
By: /s/ Edward ___________
Title: Vice President
$12,446,000 COMERICA BANK
By: /s/ Jeffrey E. Peck
Title: Vice President
$12,446,000 MERCANTILE BANK NATIONAL
ASSOCIATION
By: /s/ E. ____________
Title: Vice President
$14,000,000 BANK OF AMERICA, N.A.
(f/k/a Bank of America National
Trust and Savings Association,
successor by merger to Bank of
America, N.A., f/k/a NationsBank,
N.A.)
By: /s/ Keith M. Schroeder
Title: Senior Vice President
REAFFIRMATION
The undersigned acknowledges receipt of a copy of this Amendment
No. 6, consents to the terms and provisions thereof, and ratifies
and confirms each of the Loan Documents to which it is a party.
RAWLINGS CANADA, INCORPORATED
By: /s/ Rexford K. Peterson
Its: Secretary
EXHIBIT A
RAWLINGS SPORTING GOODS COMPANY, INC.
WEEKLY MODIFIED BORROWING BASE CERTIFICATE
FOR WEEK ENDED ______________ (CURRENT WEEK)
(A) Accounts Receivable Balance
as of ______________
(previous week ended) $___________
Plus (+):
(B) New A/R resulting from product sales
in normal course of business
during week ended ________
(current week) $___________
Less (-):
(C) A/R collected during week
ended __________ (current week) $___________
(D) A/R otherwise reduced (e.g.,
written off) during week
ended __________
(current week) $___________
(A) + (B) - (C) - (D) $___________
times 80%
(E) Availability from A/R $___________
(F) Inventory Balance as of ____________
(previous week ended) $___________
Plus (+):
(G) Purchases physically received in hand for
week ended ___________ (current week) $___________
Less (-):
(H) Inventory sold during week of ___________
(current week) $___________
(I) Inventory reduced (e.g., write-down)
during week ended __________
(current week) $___________
(F) + (G) - (H) - (I) $____________
times 60%
(J) Availability from Inventory $___________
(K) Book Value of Net Property,
Plant and Equipment $___________
times 30% $___________
(L) Availability from PPE $___________
(M) Overadvance amount if prior to
January 1, 2000 $10,000,000
(N) Maximum Available to Borrow
(E) + (J) + (L) + (M) $___________
Less:
(O) Loans outstanding $___________
(P) Facility Letter of Credit Obligations
outstanding $___________
(Q) Total Usage: (O) + (P) $___________
(R) Excess or Amount to be repaid ((Q) - (N) $___________
THE RAWLINGS SPORTING GOODS COMPANY, INC.
I certify that the foregoing information is true and correct:
By: ________________________________
Its: Chief Financial Officer
Date: _______________________________
EXHIBIT B
RAWLINGS SPORTING GOODS COMPANY, INC.
BORROWING BASE CERTIFICATE
AS OF ____________, 1999
Borrowing Base:
The sum of:
Book value of Borrower's accounts receivables,
net of allowance $_________
times _________%
(a) Availability from accounts receivable $_________
Book value of Borrower's inventory $_________
times _________%
(b) Availability from inventory $_________
Book value of Borrower's net property,
plant and equipment $_________
times _________%
(c) Availability from property,
plant and equipment $_________
(d) Overadvance amount if prior to
January 1, 2000 $10,000,000
(e) Maximum available to Borrow:
Sum of (a), (b), (c) and (d) $_________
---------
Less:
(f) Loans outstanding $_________
(g) Facility Letter of credit obligations
outstanding $_________
(h) Total Usage: (f)-(g) $_________
(i) Excess or Amount to be repaid (e)-(h) $_________
---------
THE RAWLINGS SPORTING GOODS COMPANY, INC.
I certify that the foregoing information is true and correct:
By: ____________________________
Its: Chief Financial Officer
Date: ___________________________
578691.10