EXHIBIT 10.2
 
EXECUTION COPY
 
AMENDMENT NO. 3 TO SUPERPRIORITY DEBTOR-IN-POSSESSION ABL CREDIT AGREEMENT
AMENDMENT NO. 3 TO SUPERPRIORITY DEBTOR-IN-POSSESSION ABL CREDIT AGREEMENT (this
“Amendment”) dated as of December 7, 2016 to the Superpriority
Debtor-In-Possession ABL Credit Agreement dated as of October 31, 2016 (as
amended, amended and restated, supplemented or otherwise modified and in effect
from time to time, the “Credit Agreement”) among Performance Sports Group Ltd.,
the other Credit Parties (as defined therein) from time to time party thereto,
the financial institutions from time to time party thereto as Lenders (the
“Lenders” , and each, a “Lender”), and Bank of America, N.A. as administrative
agent and collateral agent (in such capacities, together with its successors and
assigns in such capacities, the “Administrative Agent”) for the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to Section 12.10 of the Credit Agreement, the Credit Parties,
the Administrative Agent and the Lenders identified on the signature pages
attached hereto (the “Consenting Lenders”) desire to amend the Credit Agreement
as set forth herein,
NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties signatory hereto agree
as follows:
SECTION 1.  Defined Terms; References.  This Amendment is a Credit Document. 
This Amendment and the Credit Agreement shall be construed collectively and in
the event that any term, provision or condition of any of such documents is
inconsistent with or contradictory to any term, provision or condition of any
other such document, the terms, provisions and conditions of this Amendment
shall supersede and control the terms, provisions and conditions of the Credit
Agreement.  Unless otherwise specifically defined herein, each term used herein
that is defined in the Credit Agreement has the meaning assigned to such term in
the Credit Agreement.  Each reference to “hereof”, “hereunder”, “herein” and
“hereby” and each other similar reference and each reference to “this Agreement”
and each other similar reference contained in the Credit Agreement, and each
reference to “the Credit Agreement”, “thereunder”, “therein” and “thereof” and
each other similar reference contained in the other Credit Documents, shall,
after this Amendment becomes effective, refer to the Credit Agreement as amended
hereby.
SECTION 2.  Amendment.  Subject to the satisfaction of the conditions precedent
set forth in Section 4 below:
(a)          Definition of “Covenant Borrowing Base”.  The following definition
shall be added to Section 1.01 of the Credit Agreement in alphabetical order:
““Covenant Borrowing Base” shall mean the Borrowing Base plus the Carve-Out
Reserve, plus the Indemnity Reserve.”
(b)          Definition of “Initial Budget”.  The definition of “Initial Budget”
in Section 1.01 of the Credit Agreement shall be amended and restated in its
entirety as follows:
““Initial Budget” shall mean the budget in form and substance reasonably
satisfactory to the Lenders dated on or around one day prior to the Final
Financing Order Date and attached as an exhibit to the Final Financing Order.”
 

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(c)          Definition of “Permitted Liquidity Variance”.  The definition of
“Permitted Liquidity Variance” in Section 1.01 of the Credit Agreement shall be
amended by replacing “December 23, 2016” where it appears therein with “January
27, 2017” and removing “and (c) a $12,500,000 cushion for each week, applicable
thereafter” so that the definition reads in its entirety as follows:
““Permitted Liquidity Variance” means, for the Parent and its Subsidiaries, a
negative variance in Liquidity compared to the forecasted Liquidity for the
applicable week as set forth in the Initial Budget calculated with (a) a
$7,500,000 cushion for each week, applicable during the period commencing from
the Petition Date through week ending November 25, 2016 and (b) a
$10,000,000 cushion for each week, applicable during the period commencing from
the week ending November 25, 2016 through week ending January 27, 2017.”
(d)          Letter of Credit Sublimit.  Section 2.13(b) of the Credit Agreement
is hereby amended by replacing “$1,500,000” where it appears therein with
“$3,500,000” so that Section 2.13(b) reads in its entirety as follows:
“(b)          Request for Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit or the amendment,
renewal or extension of an outstanding Letter of Credit, the applicable Lead
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) a LC Request to the Issuing Bank and the Administrative Agent not later
than 1:00 p.m. on the second Business Day preceding the requested date of
issuance, amendment, renewal or extension (or such later date and time as is
reasonably acceptable to the Issuing Bank).  A request for an initial issuance
of a Letter of Credit shall specify in form and detail reasonably satisfactory
to the Issuing Bank: (i) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (ii) the amount thereof; (iii) the
expiry date thereof; (iv) the name and address of the beneficiary thereof; (v)
the documents to be presented by such beneficiary in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder, and (vii) such other matters as
the Issuing Bank may reasonably require.  A request for an amendment, renewal or
extension of any outstanding Letter of Credit shall specify in form and detail
reasonably satisfactory to the Issuing Bank (w) the Letter of Credit to be
amended, renewed or extended; (x) the proposed date of amendment, renewal or
extension thereof (which shall be a Business Day), (y) the nature of the
proposed amendment, renewal or extension, and (z) such other matters as the
Issuing Bank may reasonably require.  If requested by the Issuing Bank, the
applicable Lead Borrower also shall submit a letter of credit application
substantially on the Issuing Bank’s standard form in connection with any request
for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the applicable Lead Borrower shall be deemed to represent and
warrant (solely in the case of (w) and (x)) that, after giving effect to such
issuance, amendment, renewal or extension (A) the LC Exposure shall not exceed
$3,500,000, (B) the sum of the Aggregate Exposures plus the Prepetition
Exposures shall not exceed the Line Cap and (C) if a Defaulting Lender exists,
either such Lender or the applicable Lead Borrower has entered into arrangements
satisfactory to the Administrative Agent and Issuing Bank to eliminate any
Fronting Exposure associated with such Lender.  Unless the Issuing Bank shall
otherwise agree, no Letter of Credit shall be denominated in a currency other
than U.S. Dollars.”
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(e)          Budget.  Section 5.07 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
“Section 5.07          Budget.  The Administrative Agent and the Lenders shall
have received a cash flow forecast depicting on a weekly basis receipts and
disbursements, unrestricted and restricted cash balance, the outstanding amount
of Loans hereunder and under the Prepetition ABL Credit Agreement and the
Delayed Draw Term Loans (as defined in the Term Loan DIP Credit Agreement), net
cash flow, Availability, Liquidity and the Borrowing Base for each weekly period
through the Scheduled Maturity Date (including the week in which the Petition
Date occurred) dated as of the Petition Date and delivered to the Administrative
Agent as the “Final Budget” prior to the Closing Date, together with a good
faith estimate of all borrowings of Loans to be made within the first week
following the Closing Date.”
(f)          Sale Transaction.  Section 8.15(a) of the Credit Agreement is
hereby amended by inserting “, including in respect of any individual Permitted
Asset Group (as defined in the Bidding Procedures Motion)” after the reference
to “the CCAA Cases” therein so that Section 8.15(a) of the Credit Agreement
reads in its entirety as follows:
“(a)          on the Petition Date, the Credit Parties shall file a motion to
approve bidding procedures and stalking horse protections (including any
break-up fee or expense reimbursement, the “Bid Protections”) for the Acquiror
(the “Bidding Procedures Motion”) in respect of any 363 sale transaction under
the U.S. Cases and/or an asset sale transaction under the CCAA Cases, including
in respect of any individual Permitted Asset Group (as defined in the Bidding
Procedures Motion) (any of the foregoing, a “Sale Transaction” and a Sale
Transaction with the Acquiror, the “Acquiror Sale Transaction”), in form and
substance reasonably acceptable to the Required Lenders and as soon as
reasonably possible, whether before or as part of the Bid Procedure Order (as
defined below), the Credit Parties shall obtain from each Bankruptcy Court
approval of cross-border protocols, in form and substance reasonably acceptable
to the Required Lenders;”
(g)          Milestones.  Section 8.14(e), (f), (g) and (h) of the Credit
Agreement are hereby amended by (w) replacing “January 4, 2017” where it appears
therein with “January 25, 2017”, (x) replacing “January 9, 2017” where it
appears therein with “January 30, 2017”, (y) replacing “January 16, 2017” where
it appears therein with “February 6, 2017” and (z) (A) replacing “February 16,
2017” where it appears therein with “February 23, 2017” and (B) replacing
“February 28, 2017” where it appears therein with “February 27, 2017” so that
each of Section 8.15(e), (f), (g) and (h) of the Credit Agreement read as
follows:
“(e)          on or prior to January 25, 2017, the bid deadline set forth in the
Bid Procedures Order shall occur;
(f)          on or prior to January 30, 2017, if qualifying bids are received in
accordance with the Bid Procedures Order, the Credit Parties shall hold an
auction with respect to the Sale Transaction;
(g)          on or prior to February 6, 2017, the Credit Parties shall obtain
entry of court orders of the Bankruptcy Courts authorizing the Sale Transaction
to the successful bidder in accordance with the Bid Procedures Order, in each
case in form and substance reasonably acceptable to the Required Lenders; and
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(h)          on or prior to February 23, 2017, the Sale Transaction shall close
and all Prepetition Obligations and Obligations hereunder shall be Paid In Full;
provided that, such February 23, 2017 date shall be extended until February 27,
2017 (and in any event no later than one (1) Business Day prior to the Scheduled
Maturity Date) to the extent necessary for the Sale Transaction to obtain
regulatory approval.”
(h)          Records and Schedules of Accounts and Inventory.  Section 8.18(b)
of the Credit Agreement is hereby amended so that Section 8.18(b) reads in its
entirety as follows:
“(b)          Records and Schedules of Accounts and Inventory.  Each Lead
Borrower shall keep accurate and complete records of its Accounts, including all
payments and collections thereon, and shall submit to the Administrative Agent
sales, collection, reconciliation and other reports in form reasonably
satisfactory to the Administrative Agent on a periodic basis (but not more
frequently than at the time of delivery of each of the financials required
pursuant to Section 8.01(a) and (b)).  Each Lead Borrower shall also provide to
the Administrative Agent, on or before the 20th day of each month (i) a detailed
aged trial balance of all Accounts as of the end of the preceding month,
specifying each Account’s Account Debtor name and the amount, invoice date and
due date as the Administrative Agent may reasonably request, and (ii) a report
identifying all locations where the Borrowers store any Inventory and including
details of the quantity and value of Inventory stored at each such location.  If
Accounts owing from any single Account Debtor in an aggregate face amount of
$1,000,000 or more cease to be Eligible Accounts, the Borrowers shall notify the
Administrative Agent of such occurrence promptly (and in any event within three
(3) Business Days) after any Responsible Officer of the Parent has actual
knowledge thereof.”
(i)          Liquidity Covenant.  Section 9.13(d) of the Credit Agreement is
hereby amended by inserting the word “Covenant” before each of the two
references to “Borrowing Base” therein so that Section 9.13(d) of the Credit
Agreement reads in its entirety as follows:
“(d)          To the extent actual Liquidity is less than (A) as of the last day
of any week through the week ending January 27, 2017, the Liquidity in the
Budget less the Permitted Liquidity Variance or (B) commencing with the week
ending February 3, 2017, $5,000,000, permit the Covenant Borrowing Base as
determined as of any applicable date of determination, to be less than 90% of
the Covenant Borrowing Base for such date as set forth in the Initial Budget.”
SECTION 3.  Representations and Warranties.  Each Credit Party hereby represents
and warrants that each of the representations and warranties made by any Credit
Party set forth in Article 7 of the Credit Agreement or in any other Credit
Document are true and correct in all material respects (without duplication of
any materiality standard set forth in any such representation or warranty) on
and as of the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties were true and correct in all material respects as
of such date (without duplication of any materiality standard set forth in any
such representation or warranty).
SECTION 4.  Conditions Precedent.  The amendment to the Credit Agreement set
forth in Section 2 hereof shall become effective, as of the date hereof, upon
satisfaction of the following conditions precedent:
(a)          The Credit Parties shall have delivered to the Administrative Agent
counterparts of this Amendment executed by the Credit Parties;
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(b)          The Credit Parties shall have delivered to the Administrative Agent
a fully-executed amendment to the Term Loan DIP Credit Agreement, in form and
substance satisfactory to the Administrative Agent; and
(c)          The Consenting Lenders constituting the Required Lenders shall have
indicated their consent and agreement by executing this Amendment.
SECTION 5.  Effect on Credit Documents.  The Credit Agreement (as amended
hereby) and the other Credit Documents (as amended on the date hereof) shall be
and remain in full force and effect in accordance with their terms and hereby
are ratified and confirmed in all respects.  Except as expressly set forth
herein or in any amendment to any other Credit Document executed or delivered on
the date hereof, the execution, delivery, and performance of this Amendment
shall not operate as a waiver or an amendment of any right, power, or remedy of
the Administrative Agent or any Lender under the Credit Agreement or any other
Credit Document, as in effect prior to the date hereof.  Each Credit Party
hereby ratifies and confirms in all respects all of its obligations under the
Credit Agreement (as amended hereby) and the other Credit Documents to which it
is a party.
SECTION 6.  No Novation; Entire Agreement.  This Amendment evidences solely the
amendment of the terms and provisions of the obligations of Credit Parties under
the Credit Documents and is not a novation or discharge thereof.  There are no
other understandings, express or implied, among Credit Parties, the
Administrative Agent and the Lenders regarding the subject matter hereof or
thereof.
SECTION 7.          Ratification of Obligations, Etc. Each Credit Party hereby
ratifies and confirms all of its Obligations to the Administrative Agent and the
Lenders and other Secured Parties, including, without limitation, the Loans, and
each Credit Party hereby affirms its absolute and unconditional promise to pay
to the Lenders the Loans, the other Obligations, and all other amounts due under
the Credit Documents. Each Credit Party hereby confirms that the Obligations are
and remain secured pursuant to the Credit Documents and pursuant to all other
instruments and documents executed and delivered by the Credit Parties as
security for the Obligations.  In furtherance of the foregoing, each of the
Credit Parties hereby reaffirms the security interests of the Administrative
Agent and the other Secured Parties in the Collateral.
SECTION 8.          Release of Claims, Etc.  Each Credit Party, for itself and
on behalf of any of its Subsidiaries, hereby agrees that (a) no Credit Party has
any claim or cause of action against the Administrative Agent, any Lender or any
other Secured Party (or any of their respective directors, officers, employees,
agents assignees, participants, funding sources, predecessors, attorneys,
Affiliates and Related Parties) (each individually, a “Released Party”, and
collectively, the “Released Parties”) under, in connection with, or related to,
the Credit Documents; (b) no Credit Party has any offset right, counterclaim or
defense of any kind against any of its respective Obligations, obligations,
indebtedness or liabilities to Released Parties under, in connection with, or
related to, the Credit Documents; and (c) each Released Party has heretofore
properly performed and satisfied in a timely manner all of its obligations to
the Credit Parties under, in connection with, or related to, the Credit
Documents.  Each Credit Party wishes to eliminate any possibility that any past
conditions, acts, omissions, events, circumstances or matters would impair or
otherwise adversely affect any Released Party’s rights, interests, contracts,
collateral security or remedies under, in connection with, or related to, the
Credit Documents.  Therefore, each Credit Party unconditionally releases, waives
and forever discharges (x) any and all liabilities, obligations, duties,
promises or indebtedness of any kind of any Released Party to any Credit Party
and (y) all claims, offsets, causes of action, suits or defenses of any kind
whatsoever (if any), whether arising at law or in equity, whether known or
unknown, which any Credit Party might otherwise have against the Administrative
Agent or any of the other Released Parties, in either case under clause (x) or
(y) above, on account of any past or presently existing condition, act,
omission, event, contract, liability, obligation,
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indebtedness, claim, cause of action, defense, circumstance or matter of any
kind under, in connection with, or related to, the Credit Documents.
SECTION 9.  Governing Law.  Except to the extent governed by the Bankruptcy
Code, this Amendment shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of laws principles,
but including Section 5-1401 of the New York General Obligations Law.
SECTION 10.  Counterparts; Facsimile Transmission.  This Amendment may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument. 
Delivery of an executed counterpart of a signature page to this Amendment by
facsimile, pdf or electronic signature shall be as effective as delivery of a
manually executed counterpart of this Amendment.
SECTION 11.  Payment of Costs and Expenses.  The Credit Parties agree, pursuant
to the terms of Section 12.01 of the Credit Agreement, to pay on demand all
reasonable invoiced out-of-pocket costs and expenses of the Lenders and the
Administrative Agent incurred in connection with the transactions contemplated
hereby to the extent not previously paid or paid on the date hereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
CREDIT PARTIES:
PERFORMANCE SPORTS GROUP LTD.
         
BAUER HOCKEY, INC.
         
BAUER HOCKEY CORP.
         
BAUER HOCKEY RETAIL INC.
         
BAUER HOCKEY RETAIL CORP.
         
BAUER PERFORMANCE SPORTS UNIFORMS INC.
         
BAUER PERFORMANCE SPORTS UNIFORMS CORP.
           
BPS DIAMOND SPORTS INC.
         
BPS DIAMOND SPORTS CORP.
         
BPS US HOLDINGS INC.
         
BPS CANADA INTERMEDIATE CORP.
         
EASTON BASEBALL / SOFTBALL INC.
         
EASTON BASEBALL / SOFTBALL CORP.
         
KBAU HOLDINGS CANADA, INC.
         
PERFORMANCE LACROSSE GROUP INC.
         
PERFORMANCE LACROSSE GROUP CORP.
         
PSG INNOVATION INC.
           
PSG INNOVATION CORP.
           
By:
/s/ Michael J. Wall
   
Name:
Michael J. Wall
   
Title:
Corporate Secretary or Secretary,
as applicable
 

 
[Signature Page to Amendment No. 3 to ABL DIP Credit Agreement]
 

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BANK OF AMERICA, N.A.,
   
as Administrative Agent, Collateral Agent,
Swingline Lender, Issuing Bank
and a Lender
                 
By:
/s/ Gregory Kress
   
Name:
Gregory Kress
   
Title:
Senior Vice President
 

 
[Signature Page to Amendment No. 3 to ABL DIP Credit Agreement]

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BANK OF AMERICA, N.A. (acting through its Canada Branch),
 
as a Lender
                   
By:
/s/ Sylwia Durkiewicz
   
Name:
Sylwia Durkiewicz
   
Title:
Vice President
         

 
[Signature Page to Amendment No. 3 to ABL DIP Credit Agreement]

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JPMORGAN CHASE BANK, N.A.,
   
as a Lender
                   
By:
/s/ Thomas G. Williams
   
Name:
Thomas G. Williams
   
Title:
Authorized Officer
         

 
[Signature Page to Amendment No. 3 to ABL DIP Credit Agreement]

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JPMORGAN CHASE BANK, N.A.,
(acting through its Toronto Branch),
 
as a Lender
                   
By:
/s/ M.N. Tam
   
Name:
M.N. Tam
   
Title:
Senior Vice President
         

 
[Signature Page to Amendment No. 3 to ABL DIP Credit Agreement]

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ROYAL BANK OF CANADA,
   
as a Lender
                   
By:
/s/ Richard Hall
   
Name:
Richard Hall
   
Title:
Senior Director
         

 
[Signature Page to Amendment No. 3 to ABL DIP Credit Agreement]
 

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