EXHIBIT 10.21
SIXTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
AND WAIVER AGREEMENT
THIS SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT, made the 13th day
of August, 2001 (this "Amendment"), is by WOMEN'S GOLF UNLIMITED, INC., a New
Jersey corporation, formerly known as S2 Golf Inc., which is the survivor of a
merger with S2 Golf Acquisition Corp., having its principal place of business at
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower") and PNC BANK, NATIONAL
ASSOCIATION (successor in interest to Midlantic Bank, National Association), a
national banking association, having offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender").
W I T N E S S E T H:
WHEREAS, Lender and Borrower are engaged in a commercial lending
relationship pursuant to a certain Loan and Security Agreement as of December
29, 1994, as amended April 9, 1996, as of December 1, 1997, as of September 23,
1998, as of July 31, 2000, and as of January 3, 2001 (collectively referred to
herein as the "Loan Agreement"), pursuant to which Lender has advanced and may
in the future advance certain sums of money to Borrower and Borrower has agreed
to repay same;
WHEREAS, Borrower and Lender have negotiated certain amendments to the
terms and conditions of their commercial lending relationship, including but not
limited to, modifications to the Tangible Net Worth Covenant and the definition
of Fixed Charge Coverage;
WHEREAS, it is both necessary and appropriate to amend certain terms
and conditions of the Loan Agreement in order to memorialize the terms of their
understandings; and
WHEREAS, Borrower and Lender wish to set forth the terms and conditions
of the amendments to the Loan Agreement by this writing.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, it is agreed as follows:
ARTICLE I
DEFINITIONS AND AMENDMENT TO DEFINITION
1.01 PREVIOUSLY DEFINED TERMS. All of the capitalized terms not
expressly defined in this Amendment shall have the meanings ascribed to such
terms in the Loan Agreement.
1.02 AMENDMENTS TO PREVIOUSLY DEFINED TERMS. The Loan Agreement is
hereby amended to delete the definition of Fixed Charge Coverage, in its
entirety, and replace it with the following:
"Fixed Charge Coverage" shall mean the quotient of (a) the
difference between EBITDA and Capital Expenditures; divided by (b)
scheduled principal and interest payments due on all outstanding
principal indebtedness for money borrowed by Borrower, with the
exception of payments due under the promissory note in the
approximate amount of One Million Dollars ($1,000,000.00) the
balance which is due and payable in full to the sellers in the
Lady Fairway transaction during the fiscal year 2001, which
quotient is calculated in accordance with GAAP consistently
applied from period to period on a Rolling Twelve-Month Basis as
of the end of each fiscal quarter."
ARTICLE II
AMENDMENTS TO THE LOAN AGREEMENT
RELATING TO TANGIBLE NET WORTH
NEGATIVE COVENANT REGARDING TANGIBLE NET WORTH. Section 6.19 of the
Loan Agreement is deleted in its entirety and replaced with the following:
6.19 TANGIBLE NET WORTH. Commencing with the quarter ending June
30, 2001, cause or permit Tangible Net Worth, as of the time of
any determination thereof, to be or become less than One Million
Four Hundred Thousand Dollars ($1,400,000.00); the term "Tangible
Net Worth" meaning the difference between (a) the sum of (i) the
par value (or value stated on the books of Borrower) of the
capital stock of all classes of Borrower, plus (or minus in the
case of a deficit) (ii) the amount of Borrower's surplus, whether
capital or earned, less (b) the sum of treasury stock, unamortized
debt discount and expense, good will, trademarks, trade names,
patents, deferred charges (exclusive of deferred taxes), leasehold
improvements and other intangible assets, and any write-up of the
value of any assets, all determined on a consolidated basis, in
accordance with generally accepted accounting principles, applied
on a consistent basis.
ARTICLE III
WAIVER AGREEMENT
3.01 Borrower hereby acknowledges that Borrower failed to comply with
Section 6.19 "Tangible Net Worth" of the Loan Agreement. Section 6.19 of the
Loan Agreement requires that Borrower's Tangible Net Worth be not less than
$2,200,000 at any time from and after Janu-
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ary 1, 2001. As of March 31, 2001 however, the Borrower's Tangible Net Worth was
less than required. This failure to comply constitutes an Event of Default under
the Loan Agreement.
3.02 Borrower has requested that Lender waive the rights and remedies
available to it as the result of the existence of the Event of Default
enumerated in section 3.01 above.
3.03 Lender hereby waives the right to exercise the rights and remedies
which are available to Lender pursuant to the Loan Agreement, at law and in
equity as a result of the existence of the Events of Default enumerated in
section 3.01 above. This waiver is specific to the Event of Default described in
section 3.01 above. This waiver is not intended and shall not be deemed to
extend to any other Event of Default whether known or unknown which may
presently exist under the Loan Agreement or which may occur hereafter.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender, knowing and intending that
Lender will rely thereon in entering into this Amendment, that the following
statements are true and accurate:
4.01 AFFIRMATION OF REPRESENTATIONS. All of the representations and
warranties contained in Section 4 of the Loan Agreement are, immediately after
the execution and delivery of this Amendment, true and accurate as of the date
hereof with the same force and effect as though such representations and
warranties had been more fully set forth herein and made on the date hereof.
4.02 DUE AUTHORIZATION: NO DEFAULT.
(a) The execution, delivery and performance by Borrower of this
Amendment are within Borrower's powers, have been duly authorized by all
necessary action on the part of the Borrower and (i) do not and will not (A)
require any consent or approval of the stockholders of the Borrower, or (B)
constitute or result in a breach of, or default under (with due notice or
passage of time or both) any agreement, undertaking, or instrument to which
Borrower is a party or by which it may be affected, or (C) result in the
creation or imposition of any lien or restriction on any assets of Borrower,
other than liens in favor of Lender, and (ii) are not and will not be prevented
or limited by, or violate, conflict with or breach either Borrower's Certificate
of Incorporation or By-laws, or any applicable law or regulations, or any
judgment, order, award or decree of any judicial body or other governmental
authority or arbitrator applicable to Borrower or any of Borrower's assets.
(b) This Amendment upon its delivery will have been duly executed
and delivered by the Borrower and the Loan Agreement, as amended by this
Amendment, will be legal, valid and binding obligations of Borrower, enforceable
against Borrower in accordance with its terms and provisions except as may be
limited by applicable bankruptcy, insolvency,
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moratorium, reorganization or similar laws from time to time in effect that
affect creditors' rights generally.
4.03 NO GOVERNMENTAL CONSENT NECESSARY. No authorization, approval or
other action by, and no notice to or filing with, any Person or governmental
authority or regulatory body is required for the due execution, delivery and
performance by Borrower of this Amendment or any of the Relevant Documents.
4.04 PROCEEDINGS. There is no claim, action, suit, proceeding, inquiry,
hearing or investigation pending or (to the knowledge of Borrower) threatened
against Borrower or any of its assets, in any court of law or equity, or before
or by any federal, state or local governmental authority or before any
arbitrator. There are no unsatisfied judgments or awards against Borrower or any
of its assets.
4.05 BROKERAGE COMMISSIONS. No Person is entitled to receive from
Borrower any brokerage commission, finder's fee or similar fee or payment in
connection with the consummation of the transactions contemplated by this
Amendment. No brokerage or other fee, commission or compensation is to be paid
by Lender by reason of any act, alleged act or omission of Borrower with respect
to the transactions contemplated hereby.
4.06 NO DEFENSES TO PAYMENT. Borrower has no defenses to the repayment
of the Obligations and has no claims or rights of set-off against Lender in
connection with the Obligations.
ARTICLE V
MISCELLANEOUS
5.01 ENTIRE AGREEMENT; AMENDMENTS; LENDER'S CONSENT. This Amendment
supersedes, with respect to its subject matter, all prior and contemporaneous
agreements, understandings, inducements or conditions between the respective
parties, whether expressed or implied, oral or written. No amendment or waiver
of any provision of this Amendment, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Lender, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
5.02 GENDER. Throughout this Amendment, the masculine shall include the
feminine and vice versa and the singular shall include the plural and vice
versa, unless the context of this Amendment indicates otherwise.
5.03 BINDING EFFECT; GOVERNING LAW. This Amendment shall be binding
upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
Lender. This Amendment and the other documents delivered in connection with this
Amendment shall be governed by, and construed in accordance with, the
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laws (both substantive and procedural, and without reference to conflicts of
laws) of the State of New Jersey.
5.04 SEVERABILITY OF PROVISIONS. Any provision of this Amendment that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Amendment
or affecting the validity or enforceability of such provision in any other
jurisdiction.
5.05 HEADINGS. The headings preceding the text of this Amendment are
inserted solely for convenience of reference and shall not constitute a part of
this Amendment nor affect its meaning, construction or effect.
5.06 LOAN AGREEMENT; FULL FORCE AND EFFECT. Except, and solely to the
extent, that the same has been specifically modified, amended or supplemented
herein, all of the terms and conditions of the Loan Agreement shall remain in
full force and effect.
5.07 NO WAIVER OF DEFAULT. Borrower hereby acknowledges and agrees that
the execution, delivery and performance of this Amendment by Lender is not
intended, and shall not be deemed, to be a waiver or release of any Event of
Default as defined under the Loan Agreement, and that Lender reserves all of its
rights and remedies to which it may be entitled, whether an Event of Default
occurred at, before or after the date of this Amendment.
5.08 WAIVER OF TRIAL BY JURY. TO THE FULL EXTENT PERMITTED BY LAW,
BORROWER AND LENDER HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY LITIGATION
RELATING TO THE LOAN AGREEMENT OR THE RELEVANT DOCUMENTS.
5.09 CONFLICTS WITH LOAN AGREEMENT. If any term, condition or provision
of this Amendment is inconsistent or conflicts with any term, condition or
provision of the Loan Agreement, the term, condition or provision of this
Amendment shall govern to the extent of such inconsistency or conflict.
5.10 CONDITIONS PRECEDENT. The effectiveness and enforceability of this
Amendment are conditioned on the consummation of the following conditions
precedent:
(i) The execution by Borrower, and delivery to Lender, of this
Amendment and such other documents as Lender shall deem to be required,
necessary or desirable in its reasonable judgment;
(ii) Receipt by Lender of such other documents, reports and evidence as
Lender shall require in its sole and absolute discretion.
(iii) Payment by Borrower of all fees and expenses incurred by Lender's
counsel in the preparation and closing of this Amendment.
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IN WITNESS WHEREOF, the undersigned have set their hands and seals or
caused these presents to be executed by duly authorized corporate officers and
sealed with their seal the day and year first above written.
WOMEN'S GOLF UNLIMITED, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
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STATE OF :
: SS.
COUNTY OF :
On the ______ day of August, 2001, before me personally came ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, who, being duly sworn by me, stated that he is the President of
WOMEN'S GOLF UNLIMITED, INC., a New Jersey corporation, and that he, as the said
President, and with the authority of the board of directors of said corporation,
executed the instrument set forth above on behalf of said corporation as its
voluntary act and deed.
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Name:
Notary Public of the State of
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My commission expires:
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