Exhibit 10.1
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FOURTH AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
ESCALADE, INCORPORATED, an Indiana corporation (the "Company"), and
BANK ONE, N.A.., a national banking association (the "Bank"), agree as follows:
1. CONTEXT. This agreement is made in the context of the following
agreed state of facts:
a. The Company and the Bank (then Bank One, Indiana, N.A.) are
parties to an Amended and Restated Credit Agreement effective
October 24, 2001 as modified by a First Amendment to Amended and
Restated Credit Agreement dated August 29, 2002, as further
modified by a Second Amendment to Amended and Restated Credit
Agreement dated April 17, 2003, and as further modified by a
Third Amendment to Amended and Restated Credit Agreement dated
June 1, 2003 (the "Agreement").
b. The Company and the Bank desire to amend the Agreement.
c. The Company and Bank have executed this document (this
"Fourth Amendment") to give effect to their agreement.
2. AMENDMENT.
(a) The pricing matrix appearing in the definition of Applicable
Spread in Section 1 of the Agreement is hereby amended and replaced with the
following:
Unused Applicable Applicable
Level Leverage Ratio LIBOR Prime Fee Commission Issuance Euribor
Rate Fee Rate
V >2.50:1.00 +200bps +0bps +37.5bps +137.5 bps +62.5 bps + 200 bps
IV 2.00 to 2.49:1.00 +175bps -37.5bps +25bps +125 bps +50 bps + 175 bps
III 1.50 to 1.99:1.00 +150bps -75bps +25bps +112.5 bps +37.5 bps + 150 bps
II 1.00 to 1.49:1.00 +125bps -75bps +25bps +100 bps +25 bps + 125 bps
I <1.00:1.00 +100bps -75bps +25bps +87.5 bps +12.5 bps + 100 bps
(b) The following definitions contained in the Agreement are hereby
amended and restated as follows:
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o "Bank" means, collectively, the Bank and the London
Bank, with the exception of Sections 2.a and 2.b of the
Agreement, in which Sections Bank shall refer only to Bank
One, N.A., a national banking association.
o "Loan" means, collectively, the Revolving Loan, the
Euro Revolving Loan and the Uncommitted Overdraft Facility.
(c) The following definitions are hereby added to the Agreement:
o EMU Legislation" means legislative measures of the
Council of the European Union for the introduction of,
changeover to, or operation of, a single or unified European
currency being part of the implementation of the Third Stage
of Economic and Monetary Union as contemplated by the Treaty
on European Union.
o "Euribor" means in relation to each Interest Period
in the case of Advances denominated in Euros, the rate which
is determined by the Banking Federation of the European Union
for that Interest Period or, if there is no such applicable
rate so determined, the arithmetic mean, rounded upward, if
necessary, to the nearest one-sixteenth of one per cent
(1/16%), of the rates quoted by the London Bank to leading
banks in the European Interbank Market at 11.00 am (Brussels
time) on the Quotation Date for (in both cases) the offering
of deposits in Euros for a period comparable to the Interest
Period of the relevant Loan denominated in Euros.
o "Euro" means the single lawful currency for the
time being of the Participating Member States.
o "Euro Revolving Loan" is used as defined in Section
2.c(i).
o "Euro Revolving Loan Maturity Date" means initially
July 15, 2006, and hereafter any subsequent date to which the
Commitment may be extended by the Bank.
o "Euro Revolving Note" is used as defined in Section
2.c(ii).
o "European Interbank Market" means the interbank
market for Euros operating in the Participating Member States.
o "Uncommitted Overdraft Facility" means the working
capital facility granted to the Company by the London Bank as
described in the Overdraft Addendum.
o "Interest Period" means each consecutive 30, 90 or
180 day period effective as of the first day of each Interest
Period and ending on the last day of each Interest Period,
provided that if any interest Period is scheduled to end on a
date for which there is no numerical equivalent to the date on
which the Interest Period commenced, then it shall end instead
of the last day of such calendar month.
o "London Bank" means Bank One, N.A., acting through
its London branch and shall include its successors,
transferees and assigns.
o "Overdraft Addendum" means the Addendum to Fourth
Amendment to Amended and Restated Credit and Security
Agreement (Uncommitted Overdraft Facility) attached hereto and
incorporated herein by reference.
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o "Participating Member State" means each state so
described in any EMU Legislation.
o "Quotation Date" means, in relation to any Interest
Period, or any other period for which an interest rate is to
be determined under any provision of this agreement, the day
on which quotations would ordinarily be given by leading banks
in the European Interbank Market for deposits in Euros, for
delivery on the first day of that Interest Period or other
period, or if quotations would ordinarily be given on more
than one day, the last of such days.
o "Sterling" means the lawful currency, for the time
being, of the United Kingdom.
o "Treaty on European Union" means the Treaty of Rome
of 25 March 1957, as amended by the Single Xxxxxxxx Xxx 0000
and the Maastricht Treaty of 7 February 1992.
(d) A new Section 2.c is hereby added to the Agreement as follows:
c. The Revolving Loan. The London Bank will make a
revolving loan to the Company on the following terms and subject
to the following conditions:
(i) The Commitment -- Use of Proceeds. From
this date and until the Euro Revolving Loan Maturity
Date, the London Bank agrees to make Advances
(collectively, the "Euro Revolving Loan") under a
revolving line of credit from time to time to the
Company of amounts not exceeding in the aggregate at
any time outstanding Two Million Five Hundred
Thousand Euros ((euro)2,500,000.00) (the "Euro
Revolving Loan Commitment"), as decreased from time
to time as hereinafter set forth, provided that all
of the conditions of lending stated in Section 7 of
this Agreement have been fulfilled at the time of
each Advance. Proceeds of the Euro Revolving Loan
shall be used to accommodate overseas operations, and
hereafter may be used by the Company only to fund
working capital requirements. The initial Commitment
shall be available to the Company until July 15,
2006.
(ii) Method of Borrowing. The obligation of
the Company to repay the Euro Revolving Loan shall be
evidenced by a promissory note (the "Euro Revolving
Note") of the Company in the form of Exhibit "E". So
long as no Event of Default or Unmatured Event of
Default shall have occurred and be continuing and
until the Euro Revolving Loan Maturity Date, the
Company may borrow, repay and reborrow (subject to
Section 2.a.(i) above) under the Euro Revolving Note
on any Banking Day, provided that no borrowing may
cause the principal balance of the Euro Revolving
Loan to exceed the Euro Revolving Loan Commitment or
may result in an Event of Default or an Unmatured
Event of Default. Each Advance under the Euro
Revolving Loan shall be conditioned upon receipt by
the London Bank from the Company of an Application
for Euro Revolving Loan Advance and an Officer's
Certificate, provided that the London Bank may, at
its discretion, make a disbursement upon the oral
request of the Company made by an Authorized Officer,
or upon a request transmitted to the London Bank by
telephone facsimile ("fax") machine, or by any other
form of written electronic communication (all such
requests for Advances being hereafter referred to as
"informal requests"). In so doing, the London Bank
may rely on any informal request which shall have
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been received by it in good faith from a person
reasonably believed to be an Authorized Officer. Each
informal request shall be promptly confirmed by a
duly executed Application and Officer's Certificate
if the London Bank so requires and shall in and of
itself constitute the representation of the Company
that no Event of Default or Unmatured Event of
Default has occurred and is continuing or would
result from the making of the requested Advance and
that the making of the requested Advance shall not
cause the principal balance of the Euro Revolving
Loan to exceed the current Euro Revolving Loan
Commitment. All borrowings and reborrowings and all
repayments shall be in amounts of not less than Two
Hundred Fifty Thousand Euros ((euro)250,000), except
for repayment of the entire principal balance of the
Euro Revolving Loan and except for special
prepayments of principal required under the terms of
Section 2.c.(i). Upon receipt of an Application, or
at the London Bank's discretion upon receipt of an
informal request for an Advance and upon compliance
with any other conditions of lending stated in
Section 7 of this Agreement applicable to the Euro
Revolving Loan, the London Bank shall disburse the
amount of the requested Advance to the Company. All
Advances by the London Bank and payments by the
Company shall be recorded by the London Bank on its
books and records, and the principal amount
outstanding from time to time, plus interest payable
thereon, shall be determined by reference to the
books and records of the London Bank. The London
Bank's books and records shall be presumed prima
facie to be correct as to such matters.
(iii) Interest on the Euro Revolving Loan.
The principal amount of the Euro Revolving Loan
outstanding from time to time shall bear interest
until the Euro Revolving Loan Maturity Date at a rate
per annum equal to the Euribor-based Rate for a
period ("Interest Period") of 30, 90 or 180 days;
provided that an election of a Euribor-based Rate for
an Interest Period extending beyond the Euro
Revolving Loan Maturity Date shall be permitted only
at the discretion of the Bank. After maturity,
whether on the Euro Revolving Loan Maturity Date or
on account of acceleration of maturity upon the
occurrence of an Event of Default, and until paid in
full, the Euro Revolving Loan shall bear interest at
a rate equal to the Euribor-based Rate then in effect
plus three percent (3%). Accrued interest shall be
due and payable monthly on the last Banking Day of
each month prior to maturity. After maturity,
interest shall be payable as accrued and without
demand.
(iv) Unused Fee. In addition to interest on
the Euro Revolving Loan, the Company shall pay to the
London Bank a fee (the "Unused Fee") for each partial
or full calendar quarter during which the Euro
Revolving Loan Commitment is outstanding equal to the
Applicable Unused Fee Rate per annum of the amount of
the average daily excess of the Euro Revolving Loan
Commitment over the average daily principal balance
outstanding under the Euro Revolving Loan. Unused
fees for each calendar quarter shall be due and
payable within ten (10) days following the London
Bank's submission of a statement of the amount due.
Such fees may be debited by the London Bank when due
to any demand deposit account of the Company carried
with the London Bank without further authority.
(v) Procedures for Electing Euribor-based
Rates--Certain Effects of Election. Euribor based
Rates may be elected only in accordance with the
following procedures, shall be subject to the
following conditions and the election of an
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Euribor-based Rate shall have the following
consequences in addition to other consequences stated
in this Agreement:
A. The Euribor-based Rate may be
elected only for Euro Revolving Loans or portions of
Euro Revolving Loans in a minimum amount of Two
Hundred Fifty Thousand Euros ((euro)250,000).
B. No Euribor-based Rate may be
elected at any time that an Event of Default or
Unmatured Event of Default has occurred and is
continuing.
C. Voluntary prepayment prior to
scheduled maturity of all or any portion of a Euro
Revolving Loan on which interest is accruing at a
Euribor-based Rate shall be subject to
contemporaneous payment of the Prepayment Premium if,
at the time of prepayment, the Reinvestment Rate is
less than the Euribor-based Rate at which interest
accrues on the Euro Revolving Loan. A Prepayment
Premium shall also be due and payable on prepayment
of all or any portion of the Euro Revolving Loan
prior to scheduled maturity because of acceleration
of maturity on account of an Event of Default if, at
the time of acceleration of maturity, the
Reinvestment Rate is less than the Euribor-based Rate
at which interest is accruing on the Euro Revolving
Loan. If at the time of any voluntary or mandatory
prepayment of any portion of the principal of any
Euro Revolving Loan, interest accrues on the Euro
Revolving Loan at more than one Euribor-based Rate,
such prepayment shall be applied first to that
portion or those portions on which interest accrues
at a Rate or Rates which results in no Prepayment
Premium or the lowest Prepayment Premium or Premiums.
D. On any Quotation Date, the
Company may request a quotation of the Euribor-based
Rate then in effect from the London Bank for an
amount and an Interest Period as the Company may
determine. As soon as possible, and in any event
before the close of business on the next following
Banking Day, the London Bank shall quote such
Euribor-based Rate. The Company shall then have until
the end of the Quotation Day on which such quotation
is given or within such shorter time as the London
Bank may specify, to exercise its option to elect a
Euribor-based Rate quoted, subject to all other
conditions and limitations stated in this Agreement.
The period for which any Euribor-based Rate is
effective shall begin on the second Banking Day
following the day on which the quotation is given.
E. An election of a Euribor-based
Rate may be communicated to the London Bank on behalf
of the Company only by an Authorized Officer. Such
election may be communicated by telephone, or by
telephone facsimile (fax) machine or any other form
of written electronic communication, or by a writing
delivered to the London Bank. At the request of the
London Bank, the Company shall confirm any election
in writing and such written confirmation shall be
signed by an Authorized Officer. The London Bank
shall be entitled to rely on any oral or written
electronic communication of an election of a
Euribor-based Rate which is received by an
appropriate London Bank employee from anyone
reasonably believed in good faith by such employee to
be an Authorized Officer.
F. The London Bank may elect not to
quote a Euribor-based Rate on any day on which the
Bank has determined that it is not practical to quote
such rate because of the unavailability of sufficient
funds to the London Bank for appropriate terms at
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rates approximating the relevant Euribor Rate, or
because of legal or regulatory changes which make it
impractical or burdensome for the London Bank to lend
money at a Euribor-based Rate.
G. If, as a result of any
regulatory change, the basis of taxation of payments
to the London Bank of the principal of or any
interest on any Euro Revolving Loan bearing interest
at a Euribor-based Rate or any other amounts payable
hereunder in respect thereof, other than taxes
imposed on the overall net income of the London Bank,
is changed, or any reserve, special deposit, or
similar requirement relating to any extensions of
credit or other assets of or any deposits with or
other liabilities of the London Bank are imposed,
modified, or deemed applicable, and the London Bank
reasonably determines that, by reason thereof, the
cost to it of making, issuing, or maintaining any
Euro Revolving Loan at a Euribor-based Rate is
increased by an amount deemed by it to be material,
then the Company shall pay promptly upon demand to
the London Bank such additional amounts as the London
Bank reasonably determines will compensate for such
increased costs; provided, however, that the Company
shall not be the only borrower of the London Bank
that is singled out from a group of similarly
situated borrowers of the London Bank subject to this
type of provision that is requested to remit
increased costs. Any determination by the London Bank
of increased costs of maintaining deposits made
pursuant to the provisions of this section shall be
final, absent manifest error.
(vi) Calculation of Interest. Interest on
the Euro Revolving Loan shall be computed by applying
the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the
principal balance is outstanding.
(vii) Manner of Payment - Application.
Unless otherwise agreed to, in writing, or otherwise
required by applicable law, payments will be applied
first to accrued, unpaid interest, then to principal,
and any remaining amount to any unpaid collection
costs, late charges and other charges, provided,
however, upon delinquency or other default, the
London Bank reserves the right to apply payments
among principal, interest, late charges, collection
costs and other charges at its discretion. All
prepayments shall be applied to the indebtedness
owing hereunder in such order and manner as the
London Bank may from time to time determine in its
sole discretion.
(viii) Late Payment. If any payment required
under the Euro Revolving Loan is not paid within ten
(10) days after such payment is due, then, at the
option of London Bank, Company shall pay a late
charge equal to five percent (5.0%) of the amount of
such payment or (euro)______, whichever is greater,
up to the maximum amount of (euro)_______ per late
charge to compensate London Bank for administrative
expenses and other costs of delinquent payments. This
late charge may be assessed without notice, shall be
immediately due and payable and shall be in addition
to all other rights and remedies available to London
Bank.
(ix) Default Rate of Interest. Upon the
occurrence of an Event of Default and during the
continuation thereof, and after maturity, including
maturity upon acceleration, London Bank, at its
option, may, if permitted under applicable law, do
one or both of the following: (i) increase the
interest rate under the Euro Revolving Loan to the
rate that is three percent (3%) above the rate that
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would otherwise be payable thereunder, and (ii) add
any unpaid accrued interest to principal and such sum
will bear interest therefrom until paid at the rate
provided herein or under the Notes (including any
increased rate). The interest rate under the Euro
Revolving Loan will not exceed the maximum rate
permitted by applicable law under any circumstances.
(e) Section 4 of the Agreement is hereby amended by adding the
following sentence:
"In the event the proceeds of any advance under the Euro
Revolving Loan or the Uncommitted Overdraft Facility are directed
to a Subsidiary, Company shall remain primarily liable to the
Bank for such Advance and shall execute a Guaranty in favor of
Bank.
(f) A new Section 19 is hereby added to the Agreement as follows:
19. Cross-Default/Cross-Collateralization. All loans and
advances by Bank and London Bank to Company under this Agreement, the
other loan documents executed in connection herewith, and under all
other agreements constitute one loan, and all indebtedness and
obligations of Company to Bank and London Bank under this and under all
other agreements, present and future, constitute one general obligation
secured by the collateral and security held and to be held by Bank and
London Bank hereunder and by virtue of all other assignments and
security agreements between Bank and Company or London Bank and Company
now and hereafter existing. It is expressly understood and agreed that
all of the rights of Bank and London Bank contained in this Agreement
shall likewise apply insofar as applicable to any modification of or
supplement to this Agreement and to any other agreements, present and
future, between Bank and Company and London Bank and Company.
(g) A new Section 20 is hereby added to the Agreement as follows:
20. Assignment. The Company may not assign or otherwise
transfer the benefits or burden of the Loans. The Bank may at its
discretion assign and/or transfer all or part of its rights and/or
obligations under the Loans. The Bank may disclose to any actual or
proposed assignee, transferee or other person with whom it may enter
into contractual relations in connection herewith any such information
about the Company as the Bank may consider appropriate.
Without prejudice to the generality of the foregoing, the
Bank may transfer by novation all or any of its rights and obligations
under this agreement to any of its affiliates to which it has
transferred or is to transfer all or part of its business by delivering
to the Company a notice signed by the Bank and that affiliate agreeing
to the transfer. With effect from the date specified in that notice,
the Bank shall be released from its obligations under this agreement
and its rights under this agreement shall be cancelled and the
affiliate shall assume obligations and acquire rights under this
agreement as if that affiliate had originally been named in this
agreement as a party in place of the Bank.
For these purposes, "affiliate" means, in relation to the
Bank, any subsidiary or holding company of the Bank or any other
subsidiary of any such holding company (within the meaning of section
736 of the Companies Act 1985).
3. CONDITIONS PRECEDENT. As conditions precedent to the effectiveness of
this Fourth Amendment, the Bank shall have received, each duly executed and in
form and substance satisfactory to the Bank, this Fourth Amendment, the
Promissory Note (Euro Revolving Loan) and the Overdraft Addendum.
4. REIMBURSEMENT OF EXPENSES. All out-of-pocket expenses incurred by the
Bank associated with this Fourth Amendment, including without limitation, filing
fees, recording fees and legal fees and disbursements, are to be reimbursed by
the Company to the Bank promptly upon demand therefor.
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5. REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter into this
Fourth Amendment, the Company represents and warrants, as of the date of this
Fourth Amendment, that no Event of Default or Unmatured Event of Default has
occurred and is continuing and that the representations and warranties contained
in Section 3 of the Agreement are true and correct, except that the
representations contained in Section 3.d refer to the latest financial
statements furnished to the Bank by the Company pursuant to the requirements of
the Agreement.
6. REAFFIRMATION OF THE AGREEMENT. Except as amended by this Fourth
Amendment, all terms and conditions of the Agreement shall continue unchanged
and in full force and effect and the Obligations of the Company shall continue
to be secured and guaranteed as therein provided until payment and performance
in full of all Obligations.
7. COUNTERPARTS. This Fourth Amendment may be signed in counterparts, each
of which shall constitute an original and all of which taken together will
constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company and the Bank, by their duly authorized
officers, have executed this Fourth Amendment to Credit Agreement as of July 15,
2004.
ESCALADE, INCORPORATED
By: /s/ XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx, Vice President and
Chief Financial Officer
BANK ONE, N.A.
By:
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Title:
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