EXHIBIT 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment" or
"Third Amendment") has been executed as of the 3rd day of July, 2002, (the
"Third Amendment Effective Date"), by INDIAN-MARTIN AG, a Swiss corporation,
("Company"), and BANK ONE, INDIANA, NATIONAL ASSOCIATION, a national banking
association ("Bank").
RECITALS
1. Company and Bank (collectively, the "Parties") are parties
to a Credit Agreement, dated as of May 15, 2000, which has been amended by a
First Amendment to Credit Agreement dated as of May 14, 2001, and a Second
Amendment to Credit Agreement dated as of May 13, 2002 (as in effect immediately
prior to the execution of this Amendment, the "Existing Agreement").
2. The Parties have determined that it is in their best
interests to amend the Existing Agreement, effective as of the Third Amendment
Effective Date, as set forth in this Third Amendment, and subject to the terms
and conditions of this Third Amendment.
AGREEMENT
NOW THEREFORE, in consideration of the Recitals and for other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged by each of the Parties to this Third Amendment, it is agreed
as follows:
1. DEFINITIONS. Terms which are defined in the Existing
Agreement shall have the same meanings in this Amendment as are ascribed to them
in the Existing Agreement, as amended hereby, excepting only those terms which
are expressly defined in this Amendment, which shall have the meanings ascribed
to them in this Amendment.
2. AMENDMENTS TO EXISTING AGREEMENT.
(a) AMENDMENTS TO DEFINITIONS. The following definitions,
which are set forth in Section 1.02 of the Existing Agreement, are amended and
restated in their entirety as of the Third Amendment Effective Date to read as
follows:
"BORROWING BASE" means, at any date a determination thereof is
made, an amount equal to the sum of: eighty percent (80%) of
the book value of the Eligible Accounts PLUS one hundred
percent (100%) of the Pledged Cash, LESS the amount of excess,
if any, by which the aggregate Eligible Accounts outstanding
at any time from any account debtor and its Affiliates exceeds
fifteen percent (15%) of aggregate Eligible Accounts on such
date of determination; provided however, that such
concentration
limitation shall not apply to Eligible Accounts owed by Sears
Roebuck, Inc. so long as such account debtor is rated at least
BBB/Baa2, or better on the senior unsecured debt ratings
established from time to time by S&P and Moody's,
respectively. For purposes of the Borrowing Base calculations
provided herein, the Parties acknowledge and agree that from
time to time there may be discrepancies (attributable to
write-offs, incomplete payments, returns, disputes, discounts
and other assorted credit memo balances) as to the amount of
the Eligible Accounts shown by the Company on the Borrowing
Base Certificate and the consolidated total of summary agings
as to all Purchased Accounts Receivable which are prepared by
each of the Escalade Domestic Subsidiaries, as servicing
agents for the Company, both of which reports are submitted to
the Bank as of the same date and are meant to define the same
body of Eligible Accounts at that point in time. The effect of
such discrepancies is such that the amount of Eligible
Accounts shown on the Company's Borrowing Base Certificate is
occasionally and unwittingly shown to be a greater amount than
the amount to which Eligible Accounts then actually total.
From and after the Third Amendment Effective Date, the Parties
agree that the Bank shall be authorized and entitled to
calculate the Company's Borrowing Base as of any given date to
the amount which is the lesser of (i) the amount of Eligible
Accounts shown by the Company on the Borrowing Base
Certificate, and (ii) the aggregate total of Purchased
Accounts Receivable shown on the summary agings prepared and
submitted as of even date by the Escalade Domestic
Subsidiaries. Stated alternatively, to the extent that an
otherwise Eligible Account is subject to any claimed set-off,
offset, credit or other reduction right held by the account
receivable debtor, then for purposes of determining the
Borrowing Base the amount of such Eligible Account shall be
reduced by the sum of all such claimed offsets, credits and
reductions to the extent not covered by the Escalade Domestic
Subsidiary, or Subsidiaries, that sold the Eligible Accounts
to the Company.
"BORROWING BASE CERTIFICATE" means a certificate (in form and
substance substantially the same as EXHIBIT "B" attached to
the Third Amendment) which is required to be delivered to the
Bank in accordance with Section 5.01(c)(6) of this Agreement.
"MAXIMUM AVAILABILITY" means as of the date any determination
thereof is to be made, the lesser of: (i) the Borrowing Base
as of such date, and (ii) the following amounts during the
respective time periods described:
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$15,000,000.00 Third Amendment Effective Date through July 14, 2002
$20,000,000.00 July 15, 2002 through August 31, 2002
$30,000,000.00 September 1, 2002 through December 31 , 2002
$20,000,000.00 January 1, 2003 through January 31, 2003
$10,000,000.00 February 1, 2003 through May 31, 2003
$20,000,000.00 June 1, 2003 through Scheduled Maturity Date
"SCHEDULED MATURITY DATE" means July 15, 2003 and any
subsequent date to which the Commitment may be extended by
Bank pursuant to the terms of Section 2.01(d).
(b) NEW DEFINITIONS. Section 1.02 of the Existing Agreement is
hereby amended, effective as of the Third Amendment Effective Date, by adding
thereto in appropriate alphabetical sequence the following new definitions:
The term "COMMITMENT" has the meaning ascribed to such term in
Section 2.01(a) of this Agreement.
The term "PARTIES" means the Company and the Bank.
The term "THIRD AMENDMENT" means the Third Amendment to Credit
Agreement, dated as of the Third Amendment Effective Date,
executed by and between the Parties.
The term "THIRD AMENDMENT EFFECTIVE DATE" is used as defined
in the Preamble of the Third Amendment.
The term "UNUSED COMMITMENT FEE PERCENTAGE" means twenty-five
(25) B.P. PER ANNUM.
The term "UNUSED LOAN COMMITMENT" has the meaning ascribed to
such term in Section 2.01(h) of this Agreement.
(c) PARTIAL AMENDMENT OF SECTION 2.01(a). Section 2.01(a) of
the Existing Agreement is amended in part as of the Third Amendment Effective
Date by adding to the end of the first sentence thereof immediately before the
period the additional phrase . . . "(the "Commitment")."
(d) PARTIAL AMENDMENT OF SECTION 2.01(b). Section 2.01(b) of
the Existing Agreement is amended in part as the Third Amendment Effective Date
by amending and restating the first sentence thereof to read as follows:
"(b) METHOD OF BORROWING. The Obligation of the Company to
repay the Loan shall be evidenced by a promissory note (the
"NOTE") of the Company (in form and substance substantially
the same as EXHIBIT "I" attached to the Third Amendment)."
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(e) PARTIAL AMENDMENT OF SECTION 2.01. Section 2.01 of the
Existing Agreement is amended in part as of the Third Amendment Effective Date
by adding thereto a new Section 2.01(h) which reads as follows:
"(h) UNUSED COMMITMENT FEE. In addition to interest on the
Loan, the Company shall pay to the Bank an unused commitment
fee for each partial or full fiscal quarter during which
Advances under the Loan are available equal to the Unused
Commitment Fee Percentage in effect at the close of such
partial or full fiscal quarter times the daily average "Unused
Loan Commitment" (as defined in the following sentence) for
such partial or full fiscal quarter multiplied by a fraction,
the numerator of which shall be the number of calendar days in
such partial or full fiscal quarter and the denominator of
which is 360. As used herein, the term "UNUSED LOAN
COMMITMENT" means, as of the close of each calendar day for
which a determination thereof is to be made, the positive
difference, if any, which results from subtracting from the
authorized Maximum Availability under the Commitment the
outstanding principal balance of the Loan at the close of such
calendar day. Unused commitment fees for each fiscal quarter
shall be due and payable within ten (10) days following the
Bank's submission, following the close of such quarter, of a
statement of the amount due. Such fees may be debited by the
Bank when due to any demand deposit account of the Company
carried with the Bank without further authority, notice or
demand.
(f) PARTIAL AMENDMENT OF SECTION 5.01(c). Section 5.01(c) of
the Existing Agreement is amended in part as of the Third Amendment Effective
Date by amending and restating subsections (6), (7), (8) and (9) to read as
follows:
"(6) BORROWING BASE CERTIFICATE. A Borrowing Base
Certificate evidencing the Borrowing Base as of the close of
the last prior Banking Day, on the date of the initial
Advance. For each four (4) week period, the Company shall also
provide a Borrowing Base Certificate as of the last Banking
Day of such four (4) week period by the tenth (10th) Banking
Day of the next successive four (4) week period.
(7) AGINGS. Summary agings as to all Purchased
Accounts Receivable which are outstanding on the books and
records of the Company as of the last Banking Day of each four
(4) week period, which agings shall be provided to the Bank by
the tenth (10th) Banking Day of the next successive four (4)
week period.
(8) TOP TEN LIST. A list of the Company's ten (10)
largest account debtors, determined based upon the balance of
account receivable then owed, as of the last Banking Day of
each
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four (4) week period, which list shall be provided to the Bank
by the tenth (10th) Banking Day of the next successive four
(4) week period.
(9) OTHER INFORMATION. From time to time all such
other information, data and documents concerning the Company
as the Bank may reasonably request."
(g) AMENDMENT OF SECTION 5.01(h)(i). Section 5.01(h)(i) of the
Existing Agreement is amended as of the Third Amendment Effective Date by
restating same to read as follows:
"(i) MINIMUM TANGIBLE CAPITAL BASE. The Company shall
at all times from and after the Third Amendment Effective Date
maintain a Tangible Capital Base of not less than Five Million
Dollars ($5,000,000) through and including the payment and
satisfaction in full of all Obligations and termination of
this Agreement."
3. REPRESENTATIONS AND WARRANTIES. Company represents and
warrants to Bank that:
(a) (i) The execution, delivery and performance of this
Amendment and all agreements and documents delivered pursuant hereto by Company
have been duly authorized by all necessary corporate action and do not and will
not violate any provision of any law, rule, regulation, order, judgment,
injunction or writ presently in effect applying to Company, or its articles of
incorporation, or result in a breach of or constitute a default under any
material agreement, lease or instrument to which Company is a party or by which
it or any of its properties may be bound or affected; (ii) no authorization,
consent, approval, license, exemption or filing of a registration with any court
or governmental authority, department, agency or instrumentality is or will be
necessary to the valid execution, delivery or performance by Company of this
Amendment and all agreements and documents delivered pursuant hereto; and (iii)
this Amendment and all agreements and documents delivered pursuant hereto by
Company are the legal, valid and binding obligations of Company, as a signatory
thereto, and are enforceable against Company in accordance with the terms
thereof.
(b) After giving effect to the amendments contained in this
Amendment, the representations and warranties contained in Article III of the
Agreement are true and correct on and as of the Third Amendment Effective Date
with the same force and effect as if made on and as of the Third Amendment
Effective Date, except that the representation in Section 3.01(d) of the
Agreement shall be deemed to refer to the Financial Statements of Company most
recently delivered to Bank prior to the Third Amendment Effective Date.
(c) No Event of Default has occurred and is continuing or will
exist under the Agreement as of the Third Amendment Effective Date.
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4. CONDITIONS. The obligation of Bank to execute and to
perform this Amendment shall be subject to full satisfaction of the following
conditions precedent on or before the Third Amendment Effective Date:
(a) Copies, certified as of the Third Amendment Effective
Date, of such corporate documents of Company, as Bank may request evidencing
necessary corporate action by Company with respect to this Third Amendment.
(b) This Amendment and the Note dated as of the Third
Amendment Effective Date shall have been duly executed and delivered by Company
to Bank and this Amendment shall have been executed by Bank.
(c) Bank shall have received such additional agreements,
documents and certifications, fully executed by Company as may be reasonably
requested by Bank.
5. CONSENT TO DIVIDEND. Company has requested, and Bank hereby
agrees, that Company may at any time during the ninety (90) day period following
the Third Amendment Effective Date pay a one-time only dividend in an amount not
to exceed $7,000,000 to Escalade, notwithstanding the prohibition otherwise
contained in Section 5.02(a) of the Existing Agreement.
6. WAIVER OF DEFAULT. Bank hereby waives as of the Third
Amendment Effective Date each covenant violation committed by Company and
arising pursuant to the terms and provisions of Section 5.01(c)(7) of the
Existing Agreement from and after the Second Amendment Effective Date and
continuing through the Third Amendment Effective Date in respect of Company's
failed Obligation to provide summary agings of Purchased Accounts Receivable
with the frequency and timeliness as required by such Section 5.01(c)(7).
7. SUPPLEMENTAL DOCUMENTS AND FURTHER ASSURANCES. Company
shall at any time on or after the Third Amendment Effective Date, and upon the
request of Bank, execute and deliver, or cause to be executed and delivered,
such additional documents, agreements and instruments as may be reasonably
required by Bank or appropriate to give full force and effect to the intents and
purposes of this Amendment and the Agreement. Company's failure to comply with
the terms of this Section 7 within thirty (30) days after Bank's request shall
at Bank's sole discretion and election be deemed an Event of Default under
Section 7.01 of the Agreement.
8. BINDING ON SUCCESSORS AND ASSIGNS. All of the terms and
provisions of this Amendment shall be binding upon and inure to the benefit of
the Parties and each of their respective successors, assigns and legal
representatives.
9. GOVERNING LAW/ENTIRE AGREEMENT/SURVIVAL. This Amendment is
a contract made under, and shall be governed by and construed in accordance
with, the laws of the State of Indiana applicable to contracts made and to be
performed entirely within such state and without giving effect to the choice or
conflicts of laws, rules or principles of any foreign or domestic jurisdiction.
This Amendment constitutes and expresses the entire understanding between the
Parties with respect to the subject matter hereof, and supersedes all prior
agreements and understandings, commitments, inducements or conditions, whether
express or implied, oral or written. All covenants, agreements, undertakings,
representations and warranties made in this
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Amendment shall survive the execution and delivery of this Amendment, and shall
not be affected by any investigation made by any Person. Except as expressly
provided otherwise in this Amendment, the Existing Agreement, as amended hereby,
remains in full force and effect in accordance with its terms and provisions.
IN WITNESS WHEREOF, the Parties have caused this Amendment to
be duly executed and delivered by their respective duly authorized signatories
as of the Third Amendment Effective Date.
INDIAN-MARTIN AG, BANK ONE, INDIANA,
a corporation organized and existing NATIONAL ASSOCIATION
under the laws of Switzerland
By: Lars Haussmann By: Steven P. Clemens
------------------------ ---------------------------
Lars Haussmann (Director) Steven P. Clemens, First
Vice President
("Company") ("Bank")
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BORROWING BASE CERTIFICATE
INDIAN-MARTIN AG ("Borrower"), by its duly Authorized officer
and in accordance with the requirements of that certain Credit Agreement, dated
as of May 15, 2000, as amended, restated and/or supplemented from time to time
and at any time (the "Agreement'), between Borrower and BANK ONE, INDIANA,
NATIONAL ASSOCIATION ("Bank") hereby certifies to Bank that: (a) Borrower's
Borrowing Base is $ _______, as of _______, (the "Report Date"); and (b)
attached to this Borrowing Base Certificate is a calculation of Borrower's
Eligible Accounts and Pledged Cash as of the Report Date, together with
supporting information and data showing Borrower's determination of the
Borrowing Base. Terms which are defined in the Agreement shall have the same
meanings herein.
Date: , 200__.
---------------------------
INDIAN-MARTIN AG
By:
---------------------------
Lars Haussmann (Director)
Exhibit "B"
CALCULATION OF BORROWING BASE
Gross Accounts Receivable $ (1)
------------------
Less: (a) 61 or more days Delinquent
-----------------
(b) Account Debtor Bankrupt
-----------------
(c) Account Not Invoiced
-----------------
(d) Unshipped Goods
-----------------
(e) Conditional Obligation
-----------------
(f) No Security Interest
-----------------
(g) Affiliate/Governmental A/R
-----------------
(h) Evidenced by Instrument
-----------------
(i) Charged-off Accounts
-----------------
(j) 10% "Taint" Rule Accounts
-----------------
(less amount included on line (a))
(k) Adjustment due to Escalade Domestic
Subsidiaries' aggregate agings being less than
Gross Receivables above (amount of difference)
-----------------
Subtotal of Exclusions from Eligible Accounts (a though k) - $ (2)
------------------
Eligible Accounts (Line 1, minus Line 2) $ (3)
------------------
Eligible Accounts Component of Borrowing Base (Line 3 X 80%) $ (4)
------------------
Pledged Cash (Valued @ 100%) $ (5)
------------------
Other Account Exclusions from Borrowing Base
(l) Any claimed set-offs, offsets, credits
or other reduction rights held by an
account debtor respecting an Eligible
Account
-----------------
(m) Excess >15% of aggregate Eligible
Accounts of any account debtor (other
than Sears Roebuck, Inc.) -----------------
SUBTOTAL $ (6)
------------------
Borrowing Base (Line 4, plus Line 5, minus Line 6) $ (7)
------------------
Less: Outstanding Loan Balance - $ (8)
------------------
Available Credit, or (repayment required) $ (9)
------------------
(Line 7 minus Line 8)
REVOLVING NOTE
$30,000,000.00 Dated: July 3, 2002
Due: July 15, 2003
FOR VALUE RECEIVED, on or before July 15, 2003, INDIAN-MARTIN
AG, a corporation organized and existing under the laws of Switzerland
("COMPANY"), unconditionally promises to pay to the order of BANK ONE, INDIANA,
NATIONAL ASSOCIATION, a national banking association ("BANK"), at Bank One
Tower, Mail Code IN 1-0046, 111 Monument Circle, Indianapolis, IN 46277, or such
other place as Bank may designate by written notice to Company, the principal
sum of Thirty Million Dollars and 00/100 ($30,000,000.00), or so much of such
amount as may be disbursed by Bank as Advances made on the Loan under the terms
of the Credit Agreement (as hereinafter defined), together with interest thereon
at the rates and calculated as provided in the Credit Agreement. Interest
accruing on the principal balance of this Note outstanding from time to time
shall be due and payable by Company on such dates and in accordance with the
terms of the Credit Agreement. All amounts paid on this Note shall be applied in
accordance with the terms of the Credit Agreement.
This Note is the "Note" referred to in the Credit Agreement,
to which reference is made for the conditions and procedures under which
Advances, payments, readvances and repayments may be made prior to the maturity
of this Note, for the terms upon which Company may make prepayments from time to
time and at any time prior to the maturity of this Note and the terms of any
prepayment premiums, penalties and other charges which may be due and payable in
connection therewith, and for the terms and conditions upon which the maturity
of this Note may be accelerated and the unpaid balance of principal and accrued
interest thereon declared immediately due and payable.
If any installment of principal or interest due under the
terms of this Note prior to maturity is not paid in full within ten (10) days of
the date when due, then Bank at its option and without prior notice to Company,
may assess a late payment fee in an amount equal to the greater of Twenty Five
and 00/100 Dollars ($25.00) or Five Percent (5%) of the amount past due up to
the maximum of $1,500.00 per late charge. Each late payment fee assessed shall
be due and payable on the earlier of the next regularly scheduled interest
payment date or the maturity of this Note. Waiver by Bank of any late payment
fee assessed, or the failure of Bank in any instance to assess a late payment
fee shall not be construed as a waiver by Bank of its right to assess late
payment fees thereafter.
If any installment of interest due under the terms of this
Note falls due on a day which is not a Banking Day, the due date shall be
extended to the next succeeding Banking Day and interest will be payable at the
applicable rate for the period of such extension.
All amounts payable under this Note shall be payable without
relief from valuation and appraisement laws, and with all collection costs and
attorneys' fees.
Exhibit "I"
The holder of this Note, at its option, may make extensions of
time for payment of the indebtedness evidenced by this Note, or approve
reductions of the payments thereon, release any Collateral securing payment of
such indebtedness or accept a renewal Note or Notes therefor, all without notice
to Company or any endorser(s), and Company and all endorsers hereby severally
consent to any such extensions, reductions, releases and renewals, all without
notice, and agree that any such action shall not release or discharge any of
them from any liability hereunder. Company and endorser(s), jointly and
severally, waive demand, presentment for payment, protest, notice of protest and
notice of nonpayment or dishonor of this Note and each of them consents to all
extensions of the time of payment thereof.
As used in this Note, the term "Credit Agreement" means that
certain Credit Agreement, dated as of May 15, 2000, by and between Company and
Bank, as the same hereafter may be amended, modified and/or restated from time
to time and at any time. Terms which are defined in the Credit Agreement and
which are not otherwise defined in this Note shall have the same meanings in
this Note as are ascribed to them in the Credit Agreement. The principal amount
of this Note outstanding from time to time shall be determined by reference to
the books and records of Bank on which shall be recorded each Advance under the
Loan evidenced by this Note, and all payments by Company on account of such
Loan. Such books and records shall be deemed PRIMA FACIE to be correct as to
such matters, absent demonstrative or manifest error.
This Note is made under and will be governed in all cases by
the substantive laws of the State of Indiana without reference to the choice or
conflicts of laws rules or principles of any foreign or domestic jurisdiction.
INDIAN-MARTIN AG, a corporation organized
and existing under the laws of Switzerland
By:
---------------------------------------------
Lars Haussmann (Director)
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