This MODIFICATION AND REAFFIRMATION OF GUARANTY (this "Reaffirmation") is
made and entered into effective as of December 15, 2004, by and between Big 5
Sporting Goods Corporation, a Delaware corporation (the "Guarantor"), and The
CIT Group/Business Credit, Inc., a New York corporation, as agent for the
Lenders described below (in its capacity as agent, the "Agent"). All initially
capitalized terms used but not defined herein have the meaning given to them in
that certain Second Amended and Restated Financing Agreement dated as of even
date herewith (as amended, restated, supplemented, or otherwise modified from
time to time, the "Second Restated Financing Agreement") by and among Big 5
Corp., a Delaware corporation, Big 5 Services Corp., a Virginia corporation
(collectively, the "Borrowers"), the Agent, and the lenders party thereto from
time to time (the "Lenders").
RECITALS:
A. The Borrowers, the Agent, and the Lenders have previously entered into
that certain Amended and Restated Financing Agreement, dated as of March 20,
2003 (as amended and modified, from time to time, the "First Restated Financing
Agreement").
B. In connection with and in consideration of the First Restated Financing
Agreement, the Guarantor executed and delivered to the Agent, for the benefit of
the Lenders, that certain Modification and Reaffirmation of Guaranty dated as of
March 20, 2003, whereby the Guarantor reaffirmed that certain Guaranty dated
March 8, 1996 (as amended, modified or supplemented, the "Guaranty") executed
and delivered in connection with that certain Financing Agreement dated March 8,
1996.
C. In connection with and in consideration of the Second Restated
Financing Agreement, and in order to induce the Agent and Lenders to enter into
the Second Restated Financing Agreement, the Guarantor desires to: (i) reaffirm
all of its representations, warranties, covenants, agreements, waivers,
indebtedness, liabilities, and obligations under the Guaranty; and (ii)
acknowledge and agree that the Guaranty remains in full force and effect,
including without limitation, with respect to the payment and performance of the
Obligations.
D. The Guaranty and any other documents or instrument executed in favor of
the Agent or the Lenders in connection with the Guaranty are collectively
referred to herein as the "Guaranty Agreements".
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other valuable consideration, the adequacy, receipt,
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Reaffirmation. The Guarantor hereby: (a) consents to and approves all
of the terms of the Second Restated Financing Agreement, including without
limitation, the extension of the Term Loan; (b) ratifies and confirms all of its
indebtedness, liabilities, and obligations under the Guaranty Agreements; (c)
reaffirms that all of its representations and warranties made in the
Guaranty Agreements remain true and correct as of the date of this Reaffirmation
(except to the extent that such representations or warranties are expressly made
only as of another specific date); (d) reaffirms all of its covenants,
agreements, indebtedness, liabilities, and obligations under the Guaranty
Agreements, which include without limitation, the payment and performance of the
Obligations; (e) reaffirms all waivers, including without limitation, all
suretyship waivers, under the Guaranty Agreements; (f) agrees that the Guaranty
Agreements remain in full force and effect; (g) agrees that the Guaranty
Agreements continue to constitute the legal, valid, and binding obligations of
the Guarantor enforceable against it in accordance with the terms of the
Guaranty Agreements and that such obligations shall not be discharged or
affected by any modification, extension, renewal, or amendment of the terms of
the Second Restated Financing Agreement or the Financing Documents; and (h)
agrees and acknowledges that there are no defenses, counterclaims, or set-offs
to the Guaranty Agreements or the covenants, agreements, indebtedness,
liabilities, and obligations of the Guarantor under the Guaranty Agreements, and
agrees that any (if any) such defenses, counterclaims, or set-offs are hereby
expressly waived. All references to the "Agreement" contained in the Guaranty
Agreements shall be deemed to be references to the Second Restated Financing
Agreement.
2. Effectiveness. The Guarantor acknowledges and agrees that,
notwithstanding anything to the contrary in the Guaranty Agreements or any other
agreement or document in connection therewith, the Guaranty Agreements shall
apply with full force and effect to all of the obligations of the Borrowers
arising under the Second Restated Financing Agreement.
3. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS REAFFIRMATION SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA AND APPLICABLE LAWS OF THE U.S. THE GUARANTOR IRREVOCABLY WAIVES ANY
AND ALL RIGHT THE GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR CLAIM OF ANY NATURE RELATING TO THIS REAFFIRMATION, ANY DOCUMENTS
EXECUTED IN CONNECTION WITH THIS REAFFIRMATION, AND ANY TRANSACTION CONTEMPLATED
BY ANY OF SUCH DOCUMENTS.
4. Counterparts. This Reaffirmation may be executed in any number of
counterparts, and by telecopy, all of which when taken together shall constitute
one agreement, and any of the parties hereto may execute this Reaffirmation by
signing any such counterpart.
5. Severability. Any provision of this Reaffirmation held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Reaffirmation and the effect of invalidation or
unenforceability shall be confined to the provision held to be invalid or
unenforceable.
6. Successors and Assigns. This Reaffirmation shall inure to the benefit
of the Agent and the Lenders and their respective successors and assigns and is
binding upon the Guarantor and its successors and assigns; provided, however,
that the Guarantor may not assign or transfer any of its obligations hereunder
without the prior written consent of the Agent.
7. Headings. The headings, captions, and arrangements used in this
Reaffirmation are for convenience only, are not a part of this Reaffirmation,
and shall not affect its interpretation.
8. ENTIRE AGREEMENT. THIS REAFFIRMATION REPRESENTS THE FINAL AGREEMENT
BETWEEN THE GUARANTOR AND THE AGENT RELATING TO THE SUBJECT MATTER OF THIS
REAFFIRMATION AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN ANY OF THE GUARANTOR, THE AGENT, OR THE LENDERS. THIS
REAFFIRMATION SUPERSEDES ALL PRIOR (IF ANY) ORAL AGREEMENTS, ARRANGEMENTS, OR
UNDERSTANDINGS RELATING TO THE SUBJECT MATTER OF THIS REAFFIRMATION.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Reaffirmation to
be executed and delivered by their duly authorized officers effective as of the
day and year first above written.
Agreed and accepted, as of the date first written above, with the intent
to be legally bound.
GUARANTOR:
BIG 5 SPORTING GOODS CORPORATION
By: /s/ STEPHEN G. MILLER
-------------------------------
Name: Stephen G. Miller
-------------------------------
Title: President and Chief Executive
Officer
-------------------------------
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ADRIAN AVALOS
-------------------------------
Name: Adrian Avalos
-------------------------------
Title: Vice President
-------------------------------
Exhibit 99.3
REAFFIRMATION OF CO-OBLIGOR AGREEMENT
This REAFFIRMATION OF CO-OBLIGOR AGREEMENT (this "Reaffirmation") is made
and entered into effective as of December 15, 2004, by and among Big 5 Corp., a
Delaware corporation and Big 5 Services Corp., a Virginia corporation
(collectively, the "Co-Obligors"), and The CIT Group/Business Credit, Inc., a
New York corporation, as agent for the Lenders described below (in its capacity
as agent, the "Agent"). All initially capitalized terms used but not defined
herein have the meaning given to them in that certain Second Amended and
Restated Financing Agreement dated as of even date herewith (as amended,
restated, supplemented, or otherwise modified from time to time, the "Financing
Agreement") by and among the Co-Obligors, the Agent, and the lenders party
thereto from time to time (the "Lenders"). All references to the "Agreement"
contained in the Co-Obligor Agreement (as defined below) shall be deemed to be
references to the Financing Agreement and all references to the "Loan Documents"
contained in the Co-Obligor Agreement shall be deemed to be references to the
Financing Documents.
RECITALS:
A. The Co-Obligors, the Agent, and the Lenders have previously entered
into that certain Amended and Restated Financing Agreement, dated as of March
20, 2003 (as amended and modified, from time to time, the "Prior Financing
Agreement").
B. In connection with and in consideration of the Prior Financing
Agreement, the Co-Obligors executed and delivered to the Agent, for the benefit
of the Lenders, that certain Co-Obligor Agreement dated as of January 28, 2004
(the "Co-Obligor Agreement").
C. In connection with and in consideration of the Financing Agreement, and
in order to induce the Agent and Lenders to enter into the Financing Agreement,
the Co-Obligors desire to: (i) reaffirm all of their representations,
warranties, covenants, agreements, waivers, indebtedness, liabilities, and
obligations under the Co-Obligor Agreement; and (ii) acknowledge and agree that
the Co-Obligor Agreement remains in full force and effect, including without
limitation, with respect to the payment and performance of the Obligations (as
defined in the Co-Obligor Agreement, the "Obligations").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other valuable consideration, the adequacy, receipt,
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Reaffirmation. Each Co-Obligor hereby: (a) consents to and approves all
of the terms of the Financing Agreement; (b) ratifies and confirms all of its
indebtedness, liabilities, and obligations under the Co-Obligor Agreement; (c)
reaffirms that all of its representations and warranties made in the Co-Obligor
Agreement remain true and correct as of the date of this Reaffirmation (except
to the extent that such representations or warranties are expressly made only as
of another specific date); (d) reaffirms all of its covenants, agreements,
indebtedness, liabilities, and obligations under the Co-Obligor Agreement, which
include without limitation, the payment and performance of the Obligations; (e)
reaffirms all waivers, including without limitation, all suretyship
waivers, under the Co-Obligor Agreement; (f) agrees that the Co-Obligor
Agreement remains in full force and effect; (g) agrees that the Co-Obligor
Agreement continues to constitute the legal, valid, and binding obligations of
the Co-Obligor enforceable against it in accordance with the terms of the
Co-Obligor Agreement and that such obligations shall not be discharged or
affected by any modification, extension, renewal, or amendment of the terms of
the Financing Agreement or the Financing Documents; and (h) agrees and
acknowledges that there are no defenses, counterclaims, or set-offs to the
Co-Obligor Agreement or the covenants, agreements, indebtedness, liabilities,
and obligations of the Co-Obligor under the Co-Obligor Agreement, and agrees
that any (if any) such defenses, counterclaims, or set-offs are hereby expressly
waived.
2. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS REAFFIRMATION SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA AND APPLICABLE LAWS OF THE U.S. EACH CO-OBLIGOR IRREVOCABLY WAIVES
ANY AND ALL RIGHT THE CO-OBLIGOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR CLAIM OF ANY NATURE RELATING TO THIS REAFFIRMATION, ANY DOCUMENTS
EXECUTED IN CONNECTION WITH THIS REAFFIRMATION, AND ANY TRANSACTION CONTEMPLATED
BY ANY OF SUCH DOCUMENTS.
3. Counterparts. This Reaffirmation may be executed in any number of
counterparts, and by telecopy, all of which when taken together shall constitute
one agreement, and any of the parties hereto may execute this Reaffirmation by
signing any such counterpart.
4. Severability. Any provision of this Reaffirmation held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Reaffirmation and the effect of invalidation or
unenforceability shall be confined to the provision held to be invalid or
unenforceable.
5. Successors and Assigns. This Reaffirmation shall inure to the benefit
of the Agent and the Lenders and their respective successors and assigns and is
binding upon the Co-Obligors and their successors and assigns; provided,
however, that the Co-Obligors may not assign or transfer any of their respective
obligations hereunder without the prior written consent of the Agent.
6. Headings. The headings, captions, and arrangements used in this
Reaffirmation are for convenience only, are not a part of this Reaffirmation,
and shall not affect its interpretation.
7. ENTIRE AGREEMENT. THIS REAFFIRMATION REPRESENTS THE FINAL AGREEMENT
BETWEEN THE CO-OBLIGORS AND THE AGENT RELATING TO THE SUBJECT MATTER OF THIS
REAFFIRMATION AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN ANY OF THE CO-OBLIGORS, THE AGENT, OR THE LENDERS. THIS
REAFFIRMATION SUPERSEDES ALL PRIOR (IF ANY) ORAL AGREEMENTS, ARRANGEMENTS, OR
UNDERSTANDINGS RELATING TO THE SUBJECT MATTER OF THIS REAFFIRMATION.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Reaffirmation to
be executed and delivered by their duly authorized officers effective as of the
day and year first above written.
Agreed and accepted, as of the date first written above, with the intent
to be legally bound.
CO-OBLIGORS:
BIG 5 CORP.
By: /s/ CHARLES P. KIRK
-------------------------------
Name: Charles P. Kirk
-------------------------------
Title: Senior Vice President and
Chief Financial Officer
-------------------------------
BIG 5 SERVICES CORP.
By: /s/ GARY S. MEADE
-------------------------------
Name: Gary S. Meade
-------------------------------
Title: Senior Vice President and
General Counsel
-------------------------------
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ADRIAN AVALOS
-------------------------------
Name: Adrian Avalos
-------------------------------
Title: Vice President
-------------------------------
EXHIBIT 99.4
Contacts:
Big 5 Sporting Goods Corporation
Charles Kirk
Sr. Vice President and Chief Financial Officer
(310) 536-0611
John Mills
Integrated Corporate Relations, Inc.
(310) 395-0259
BIG 5 SPORTING GOODS CORPORATION ANNOUNCES PENDING REDEMPTION OF REMAINING
SENIOR NOTES AND COMPLETION OF AMENDED CREDIT FACILITY
EL SEGUNDO, CA -- DECEMBER 17, 2004 -- Big 5 Sporting Goods Corporation
(Nasdaq: BGFV) today announced that its wholly owned subsidiary, Big 5 Corp.,
will redeem on December 22 the remaining $23.1 million of principal amount of
its 10.875% senior notes due 2007 by using funds available under an amended
credit facility which was finalized on December 15. The amended credit facility
provides for a new $20 million term loan facility and a $140 million revolving
credit facility. In addition to the $23.1 million redemption, the Company
previously reported that it had issued a notice to redeem $10.0 million
aggregate principal amount of its 10.875% senior notes on November 30, 2004, and
this redemption was completed as planned. The completion of these two
transactions will result in the redemption of all of the Company's remaining
senior notes, consistent with the Company's previously announced plans. The
notes had an original face amount of $131 million when issued in November 1997.
As previously announced, the Company estimates that the two redemptions will
result in annualized interest expense savings of approximately $1.4 million, or
$0.05 per diluted share, on an after-tax basis, based on current interest rates.
The notes will be redeemed at 101.825% of their face value, and taking into
account the write-off of unamortized financing fees and original issue discount,
the Company will recognize a resulting after-tax charge associated with both
redemptions of approximately $650,000, or $0.03 per diluted share, in the 2004
fourth fiscal quarter.
"After completion of this transaction, we will have redeemed all of our
senior notes, including over $103 million since our initial public offering in
June 2002," said Steven G. Miller, Big 5's Chairman, President and Chief
Executive Officer. "The use of cash generated from our strong operating results
and borrowings under lower-cost credit facilities to redeem our high cost senior
notes significantly adds to our earnings and reflects our continuing commitment
to bottom-line performance."
ABOUT BIG 5 SPORTING GOODS CORPORATION
Big 5 is a leading sporting goods retailer in the western United States,
operating 309 stores in 10 states under the "Big 5 Sporting Goods" name. Big 5
provides a full-line product offering in a traditional sporting goods store
format that averages 11,000 square feet. Big 5's product mix includes athletic
shoes, apparel and accessories, as well as a broad selection of outdoor and
athletic equipment for team sports, fitness, camping, hunting, fishing, tennis,
golf, snowboarding and in-line skating.
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties, which may cause Big 5's
actual results in future periods to differ materially from forecasted results.
Those risks and uncertainties include, among other things, the competitive
environment in the sporting goods industry in general and in Big 5's specific
market areas, inflation, product availability and growth opportunities, seasonal
fluctuations, weather conditions, changes in costs of goods sold, changes in
interest rates and economic conditions in general. Those and other risks are
more fully described in Big 5's filings with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for fiscal year 2003, as
amended. Big 5 disclaims any obligation to update any such factors or to
publicly announce results of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.
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