THIRD AMENDMENT TO CREDIT AND
SECURITY AGREEMENT
This Amendment, dated as of March 24, 2000, is made by and between FM
PRECISION GOLF MANUFACTURING CORP., a Delaware corporation, and FM PRECISION
GOLF SALES CORP., a Delaware corporation (collectively, jointly and severally,
the "Borrower"), and XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota corporation,
formerly known as Norwest Business Credit, Inc. (the "Lender").
Recitals
The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of October 9, 1998, as amended by that certain Amendment to
Credit and Security Agreement and Waiver of Defaults dated April 13, 1999, as
amended by that certain Second Amendment to Credit and Security Agreement dated
November 10, 1999 (collectively, the "Credit Agreement"). Capitalized terms used
in these recitals have the meanings given to them in the Credit Agreement unless
otherwise specified.
The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.
2. Amendments. The Credit Agreement is hereby amended as follows:
(a) The definition of "Advance" contained in Section 1.1 of the Credit
Agreement is hereby deleted and replaced as follows:
"Advance" means a Revolving Advance, the Term Advance or the
Capital Expenditures Advance.
(b) The definition of "Borrowing Base" contained in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and replaced as follows:
"Borrowing Base" means, at any time the lesser of:
(a) the Maximum Line; or
(b) subject to change from time to time in the Lender's sole
discretion, the sum of:
(A) the lesser of (x) 85% of Eligible Accounts, or (y)
$5,000,000.00, plus
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(B) the lesser of (x) 60% of Eligible Inventory (exclusive
of Eligible Raw Materials Inventory), or (y) $2,500,000.00
from March 1 through September 30 of each year and
$3,500,000.00 from October 1 of each year through February
28 of each subsequent year, plus
(C) the lesser of (x) 50% of Eligible Raw Materials
Inventory, or (y) $2,500,000.00 from March 1 through
September 30 of each year and $3,500,000.00 from October 1
of each year through February 28 of each subsequent year,
plus
(D) an overadvance in the amount not to exceed $500,000.00
(the "Overadvance Limit), which Overadvance Limit shall be
automatically reduced by $100,000.00 on each of April 1,
2000, May 1, 2000, June 1, 2000, July 1, 2000, and August 1,
2000. On or after August 1, 2000, the Overadvance Limit
shall be equal to $0.00.
(c) The definition of "Debt Service Coverage Ratio" contained in
Section 1.1 of the Credit Agreement is hereby deleted and replaced as follows:
"Debt Service Coverage Ratio" means the ratio of (i) the sum of
(A) Funds from Operations plus (estimated taxes less cash tax
payments) plus (B) Interest Expense minus (C) unfinanced portion
of Capital Expenditures to (ii) the sum of (A) Current Maturities
of Long Term Debt (actually paid during the period) plus (B)
Interest Expense.
(d) The percentage "25%" contained in subsection (xiv) of the
definition of "Eligible Accounts" contained in Section 1.1 of the Credit
Agreement is hereby deleted and replaced with the percentage "50%".
(e) The definition of "Note" contained in Section 1.1 of the Credit
Agreement is hereby deleted and replaced as follows:
"Note" means the Revolving Note, the Term Note or the Capital
Expenditures Note, and "Notes" means the Revolving Note, the Term
Note and the Capital Expenditures Note.
(f) There is hereby added to Section 1.1 of the Credit Agreement a new
definition for "Capital Expenditures Advance" which provides as follows:
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"Capital Expenditures Advance" has the meaning specified in
Section 2.6.2.
(g) There is hereby added to Section 1.1 of the Credit Agreement a new
definition for "Capital Expenditures Note" which provides as follows:
"Capital Expenditures Note" means the Borrower's promissory note,
payable to the order of the Lender in substantially the form of
Exhibit B-2 hereto and any note or notes issued in substitution
therefor, as the same may hereafter be amended, supplemented or
restated from time to time.
(h) Section 2.6 of the Credit Agreement is hereby renumbered as
Section 2.6.1 and each reference to Section 2.6 contained in the Credit
Agreement is hereby deleted and replaced with a reference to Section 2.6.1.
(i) There is hereby added a new Section 2.6.2 to the Credit Agreement
which provides as follows:
Section 2.6.2 Capital Expenditures Advance.
(a) The Lender agrees, on the terms and subject to the
conditions herein set forth (including without limitation Section
4.2 and 4.3 below), to make a one time non-revolving advance to
the Borrower in the amount equal to the lesser of (i)
$400,000.00; or (ii) the Lendable Cost, as hereafter defined (the
"Capital Expenditures Advance").
(b) The Borrower's obligation to pay the Capital
Expenditures Advance shall be evidenced by the Capital
Expenditures Note and shall be secured by the Collateral as
provided in Article III.
(c) The request for the disbursement of the Capital
Expenditures Advance shall be by an individual authorized
pursuant to Section 2.1(a).
(d) Upon fulfillment of the applicable conditions set forth
in Section 4.2 and 4.3, the Lender shall apply the proceeds of
the Capital Expenditures Advance by crediting the same to the
Borrower's demand deposit account specified in Section 2.1(b)
unless the Lender and the Borrower shall agree in writing to
another manner of disbursement. Upon the Lender's request, the
Borrower shall promptly confirm the telephonic request for the
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Capital Expenditures Advance by executing and delivering an
appropriate confirmation certificate to the Lender. The Borrower
shall be obligated to repay the Capital Expenditures Advance
notwithstanding the Lender's failure to receive such confirmation
and notwithstanding the fact that the person requesting the same
was not in fact authorized to do so. The request for the Capital
Expenditures Advance, whether written or telephonic, shall be
deemed to be a representation by the Borrower that the conditions
set forth in Section 4.2 and 4.3 have been satisfied as of the
time of the request.
(j) Section 2.7 of the Credit Agreement is hereby renumbered as
Section 2.7.1 and each reference to Section 2.7 contained in the Credit
Agreement is hereby deleted and replaced with a reference to Section 2.7.1.
(k) There is hereby added a new Section 2.7.2 to the Credit Agreement
which provides as follows:
Section 2.7.2 Payment of Capital Expenditures Note. The
outstanding principal balance of the Capital Expenditures Note
shall be due and payable as follows:
(a) Beginning on the first day of the first full month
following the disbursement of the Capital Expenditures Advance
and on the first day of each month thereafter in equal monthly
installments in an amount sufficient to fully amortize the
Capital Expenditures Advance over an assumed term of 60 months;
(b) On the Termination Date, the entire unpaid principal
balance of the Capital Expenditures Note, and all unpaid interest
accrued thereon, shall in any event be due and payable.
(l) Subsection (b) of Section 2.8 of the Credit Agreement is hereby
deleted and replaced as follows:
(b) TERM NOTE/CAPITAL EXPENDITURES NOTE. Except as set forth in
Sections 2.8(d), 2.8(f) and 2.8(g), the outstanding principal
balance of each of the Term Note and the Capital Expenditures
Note shall bear interest at the Term Floating Rate.
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(m) Section 2.12 of the Credit Agreement is hereby deleted and
replaced as follows:
Section 2.12 VOLUNTARY PREPAYMENT; REDUCTION OF THE MAXIMUM LINE;
TERMINATION OF THE CREDIT FACILITY BY THE BORROWER. Except as
otherwise provided herein, the Borrower may prepay the Revolving
Advances in whole at any time or from time to time in part. The
Borrower may prepay the Term Advance and the Capital Expenditures
Advance (other than in accordance with Section 2.7.1(a) and
2.7.2(a)), and terminate the Credit Facility or reduce the
Maximum Line at any time if it (i) gives the Lender at least 30
days' prior written notice and (ii) pays the Lender the
prepayment, termination or line reduction fees in accordance with
Section 2.13. Any prepayment of the Term Advance and the Capital
Expenditure Advance (other than in accordance with Section
2.7.1(a) and 2.7.2(a)) or reduction in the Maximum Line must be
in an amount not less than $250,000.00 or an integral multiple
thereof. No reduction of the Maximum Line shall in any way affect
the Minimum Interest Charges. If the Borrower reduces the Maximum
Line to zero, all Obligations shall be immediately due and
payable. Any partial prepayments of the Term Note and the Capital
Expenditures Note (other than in accordance with Section 2.7.1(a)
and 2.7.2(a)) shall be applied to principal payments due and
owing in inverse order of their maturities. Upon termination of
the Credit Facility and payment and performance of all
Obligations, the Lender shall release or terminate the Security
Interest and the Security Documents to which the Borrower is
entitled by law.
(n) Section 2.13(b) of the Credit Agreement is hereby deleted and
replaced as follows:
(b) PREPAYMENT FEES. If the Term Note or the Capital Expenditures
Note are prepaid as of a date other than the Maturity Date for
any reason except in accordance with Section 2.7, the Borrower
shall pay to the Lender a fee in an amount equal to a percentage
of the amount prepaid as follows: (i) three percent (3%) if
prepayment occurs on or before September 30, 2000; (ii) two
percent (2%) if prepayment occurs after September 30, 2000 but on
or before September 30, 2001; and (iii) one percent (1%) if
prepayment occurs after September 30, 2001.
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(o) Section 2.14 of the Credit Agreement is hereby deleted and
replaced as follows:
Section 2.14 Mandatory Prepayment. Without notice or demand, if
the sum of the outstanding principal balance of the Revolving
Advances plus the L/C Amount shall at any time exceed the
Borrowing Base, the Borrower shall (i) first, immediately prepay
the Revolving Advances to the extent necessary to eliminate such
excess; and (ii) if prepayment in full of the Revolving Advances
is insufficient to eliminate such excess, pay to the Lender in
immediately available funds for deposit in the Special Account an
amount equal to the remaining excess. Any payment received by the
Lender under this Section 2.14 or under Section 2.12 may be
applied to the Obligations, in such order and in such amounts as
the Lender, in its discretion, may from time to time determine;
provided that any prepayment under Section 2.12 which the
Borrower designates as a partial prepayment of the Term Note or
the Capital Expenditures Note shall be applied to principal
installments of the Term Note or the Capital Expenditures Note,
as applicable, in inverse order of maturity. For each day or
portion thereof that the Revolving Advances shall exceed the
Borrowing Base, the Borrower shall pay to the Lender an
overadvance charge (which charge shall be in addition to and not
in lieu of any other interest, fees or charges payable by
Borrower hereunder) in the amount of $100.00; provided however,
that if such day occurs during a Default Period, the overadvance
charge for such day shall be $200.00.
(p) There is hereby added a new Section 4.3 to the Credit Agreement
which provides as follows:
Section 4.3 CONDITIONS PRECEDENT TO DISBURSEMENT OF THE CAPITAL
EXPENDITURES ADVANCE. The obligation of the Lender to make the
disbursement of the Capital Expenditures Advance shall be subject
to the further conditions precedent:
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(a) The request for the disbursement of the Capital
Expenditure Advance is made on or before the earlier of May 31,
2001 or the Termination Date;
(b) Lender's prior review and approval of the documentation
supporting the Borrower's Capital Expenditures, including but not
limited to invoices and shipping documents, and Lender's
determination (i) that such purchase is made by Borrower in an
arms-length transaction with a reputable dealer, and (ii) that
such purchase is for an item approved by the Lender in its sole
discretion;
(c) The amount of the disbursement is less than or equal to
80% of the invoice cost of Capital Expenditures, exclusive of
cost of installation, set-up costs, taxes, shipping and other
non-purchase price costs (the "Lendable Cost"); and
(d) Lender shall have a first priority perfected security
interest in all equipment purchased with disbursement of the
Capital Expenditures Advance.
(q) Section 6.1(c) of the Credit Agreement is hereby deleted and
replaced as follows:
(c) within 15 days after the end of the month, agings of the
Borrower's accounts receivable and its accounts payable and an
inventory certification report as at the end of such month,
provided however, in the event that Advances are made under the
Overadvance Limit, the Borrower shall submit inventory ineligible
certifications and associated inventory reports on a weekly
basis. The obligation to submit such weekly reports shall cease
at such time as there have been no Advances outstanding under the
Overadvance Limit for 30 consecutive days. The weekly reporting
requirement shall be reinstated in the event that at some point
in the future, Advances are made under the Overadvance Limit.
(r) Section 6.12 of the Credit Agreement is hereby deleted and
replaced as follows:
DEBT SERVICE COVERAGE RATIO. The Borrower covenants that FMM and
FMS and the Covenant Entities shall, as of the last day of each
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fiscal quarter, on and after February 29, 2000, maintain a
consolidated average minimum debt service coverage ratio (based
upon the period set forth below) as follows:
Quarter Ending Debt Service Coverage Ratio
.15 to 1 based upon the immediately
February 29, 2000 preceding nine month period
.50 to 1 based upon the immediately
May 31, 2000 preceding twelve month period
.75 to 1 based upon the immediately
August 31, 2000 preceding three month period
.50 to 1 based upon the immediately
November 30, 2000 preceding six month period
.50 to 1 based upon the immediately
February 28, 2001 preceding nine month period
1.0 to 1 based upon the immediately
May 31, 2001 preceding twelve month period
August 31, 2001 and each 1.0 to 1 based upon the immediately
August 31 thereafter preceding three month period
November 30, 2001 and .75 to 1 based upon the immediately
each November 30 preceding six month period
thereafter
February 28, 2002 and .75 to 1 based upon the immediately
each February 28 preceding nine month period
thereafter
May 31, 2002 and each 1.05 to 1 based upon the immediately
May 31 thereafter preceding twelve month period
(s) Section 7.10 of the Credit Agreement is hereby deleted and
replaced as follows:
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CAPITAL EXPENDITURES. During each fiscal year, FMM, FMS and the
Covenant Entities will not incur or contract to incur Capital
Expenditures in the aggregate of more than $2,000,000.00. In
addition, FMM, FMS and the Covenant Entities will not incur or
contract to incur Capital Expenditures paid with working capital
in the aggregate of more than $1,900,000.00 during Borrower's
2000 fiscal year or $1,250,000.00 during any fiscal year
thereafter.
3. NO OTHER CHANGES. Except as explicitly amended by this Amendment, all of
the terms and conditions of the Credit Agreement shall remain in full force and
effect and shall apply to any advance or letter of credit thereunder.
4. FEES. The Borrower shall pay the Lender the following fees in
consideration of the Lender's execution of this Amendment:
(a) An origination fee equal in amount to 0.5% of the Capital
Expenditures Advance, which fee shall be due and payable upon the disbursement
of the Capital Expenditures Advance.
(b) An accommodation fee in the amount of $2,500.00, which
accommodation fee shall be due and payable upon the Lender's execution of this
Amendment.
(c) Additional accommodation fees shall be charged as follows:
Overadvance
Amount of Fee Threshold Date Due and Payable
------------- --------- --------------------
$250.00 $250,000.00 The date at which the Advances
outstanding under the Overadvance
Limit are in excess of the
Overadvance Threshold.
$250.00 $300,000.00 The date at which the Advances
outstanding under the Overadvance
Limit are in excess of the
Overadvance Threshold.
$250.00 $350,000.00 The date at which the Advances
outstanding under the Overadvance
Limit are in excess of the
Overadvance Threshold.
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Overadvance
Amount of Fee Threshold Date Due and Payable
------------- --------- --------------------
$250.00 $400,000.00 The date at which the Advances
outstanding under the Overadvance
Limit are in excess of the
Overadvance Threshold.
$250.00 $450,000.00 The date at which the Advances
outstanding under the Overadvance
Limit are in excess of the
Overadvance Threshold.
The fees detailed in this Section 4(c) are onetime fees only. By
way of example, in the event that the Advances outstanding under
the Overadvance Limit are $251,000.00, a $250.00 fee would
immediately be due and payable. If thereafter, the Advances under
the Overadvance Limit are reduced below $250,000.00 and then
again rise above $250,000.00, no fee would be owed.
5. CONDITIONS PRECEDENT. This Amendment shall be effective when the Lender
shall have received an executed original hereof, together with each of the
following, each in substance and form acceptable to the Lender in its sole
discretion:
(a) The Capital Expenditures Note substantially in the form of Exhibit
B-2 hereto, duly executed on behalf of the Borrower (the "Capital Expenditures
Note").
(b) The Acknowledgment and Agreement of Guarantor set forth at the end
of this Amendment, duly executed by the Guarantor.
(c) A Certificate of the Secretary of the Borrower certifying as to
(i) the resolutions of the board of directors of the Borrower approving the
execution and delivery of this Amendment, (ii) the fact that the articles of
incorporation and bylaws of the Borrower, which were certified and delivered to
the Lender pursuant to the Certificate of Authority of the Borrower's secretary
or assistant secretary dated as of October 9, 1998 in connection with the
execution and delivery of the Credit Agreement continue in full force and effect
and have not been amended or otherwise modified except as set forth in the
Certificate to be delivered, and (iii) certifying that the officers and agents
of the Borrower who have been certified to the Lender, pursuant to the
Certificate of Authority of the Borrower's secretary or assistant secretary
dated as of October 9, 1998, as being authorized to sign and to act on behalf of
10
the Borrower continue to be so authorized or setting forth the sample signatures
of each of the officers and agents of the Borrower authorized to execute and
deliver this Amendment and all other documents, agreements and certificates on
behalf of the Borrower.
(d) An opinion of the Borrower's counsel as to the matters set forth
in paragraphs 6(a) and 6(b) hereof and as to such other matters as the Lender
shall require.
(e) Payment of the fees as required in Paragraph 4.
(f) Such other matters as the Lender may require.
6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to execute this
Amendment and the Capital Expenditures Note and to perform all of its
obligations hereunder, and this Amendment and the Capital Expenditures Note have
been duly executed and delivered by the Borrower and constitute the legal, valid
and binding obligation of the Borrower, enforceable in accordance with its
terms.
(b) The execution, delivery and performance by the Borrower of this
Amendment and the Capital Expenditures Note have been duly authorized by all
necessary corporate action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any law,
rule or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to the Borrower, or the articles of incorporation
or by-laws of the Borrower, or (iii) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected.
(c) All of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof as though made
on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.
7. REFERENCES. All references in the Credit Agreement to "this Agreement"
shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be deemed
to refer to the Credit Agreement as amended hereby.
8. NO WAIVER. The execution of this Amendment and acceptance of the Capital
Expenditures Note and any documents related hereto shall not be deemed to be a
waiver of any Default or Event of Default or Default Period under the Credit
Agreement or breach, default or event of default under any Security Document or
other document held by the Lender, whether or not known to the Lender and
whether or not existing on the date of this Amendment.
9. RELEASE. The Borrower, and each Guarantor by signing the Acknowledgment
and Agreement of Guarantor set forth below, each hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
11
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrower or such Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.
10. COSTS AND EXPENSES. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Credit Agreement, the
Security Documents and all other documents contemplated thereby, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses and the fees
required under Paragraph 4 hereof.
11. MISCELLANEOUS. This Amendment and the Acknowledgment and Agreement of
Guarantors may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX FARGO BUSINESS CREDIT, INC.
By /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Its Assistant Vice President
FM PRECISION GOLF MANUFACTURING CORP.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Its President
FM PRECISION GOLF SALES CORP.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Its President
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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR
The undersigned, a guarantor of the indebtedness of FM Precision Golf
Manufacturing Corp., and FM Precision Golf Sales Corp., each Delaware
corporations (collectively, jointly and severally, the "Borrowers") to Xxxxx
Fargo Business Credit, Inc., formerly known as Norwest Business Credit, Inc.
(the "Lender") pursuant to a Guaranty dated as of October 9, 1998 (the
"Guaranty"), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
consents to the terms (including without limitation the release set forth in
paragraph 9 of the Amendment) and execution thereof; (iii) reaffirms its
obligations to the Lender pursuant to the terms of its Guaranty; and (iv)
acknowledges that the Lender may amend, restate, extend, renew or otherwise
modify the Credit Agreement and any indebtedness or agreement of the Borrower,
or enter into any agreement or extend additional or other credit accommodations,
without notifying or obtaining the consent of the undersigned and without
impairing the liability of the undersigned under the Guaranty for all of the
Borrowers' present and future indebtedness to the Lender.
ROYAL PRECISION, INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Its President
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EXHIBIT B-2
CAPITAL EXPENDITURES NOTE
$400,000.00 Phoenix, Arizona
____________, 2000
For value received, the undersigned, FM PRECISION GOLF MANUFACTURING CORP.,
a Delaware corporation, and FM PRECISION GOLF SALES CORP., a Delaware
corporation (collectively, jointly and severally, "Borrower"), hereby jointly
and severally promise to pay on the Termination Date under the Credit Agreement
(defined below), to the order of XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota
corporation (the "Lender"), at its main office in Phoenix, Arizona, or at any
other place designated at any time by the holder hereof, in lawful money of the
United States of America and in immediately available funds, the principal sum
of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) or, if less, the aggregate unpaid
principal amount of all Capital Expenditures Advances made by the Lender to the
Borrower under the Credit Agreement (defined below) together with interest on
the principal amount hereunder remaining unpaid from time to time, computed on
the basis of the actual number of days elapsed and a 360-day year, from the date
hereof until this Note is fully paid at the rate from time to time in effect
under the Credit and Security Agreement dated October 9, 1998, as amended from
time to time (as the same may hereafter be further amended, supplemented or
restated from time to time, the "Credit Agreement") by and between the Lender
and the Borrower. The principal hereof and interest accruing thereon shall be
due and payable as provided in the Credit Agreement. This Note may be prepaid
only in accordance with the Credit Agreement.
This Note is issued pursuant, and is subject, to the Credit Agreement,
which provides, among other things, for acceleration hereof. This Note is the
Capital Expenditures Note referred to in the Credit Agreement. This Note is
secured, among other things, pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more
other security agreements, mortgages, deeds of trust, assignments or other
instruments or agreements.
Both entities constituting the Borrower hereby jointly and severally agree
to pay all costs of collection, including attorneys' fees and legal expenses in
the event this Note is not paid when due, whether or not legal proceedings are
commenced.
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Presentment or other demand for payment, notice of dishonor and protest are
expressly waived.
FM PRECISION GOLF MANUFACTURING CORP.,
a Delaware corporation
By
------------------------------------
Its
--------------------------------
FM PRECISION GOLF SALES CORP.,
a Delaware corporation
By
------------------------------------
Its
--------------------------------
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