Amended And Restated Revolving Credit Agreement

AMENDMENT TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT


THIS AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this "AMENDMENT") is entered into to be effective as of August 13, 1999, between ADAMS GOLF DIRECT RESPONSE, LTD., a Texas limited partnership, and ADAMS GOLF, LTD., a Texas limited partnership (individually, a "BORROWER" and collectively, "BORROWERS"), and BANK OF AMERICA, N.A., a national banking association, formerly NationsBank, N.A., successor by merger to NationsBank of Texas, N.A. ("LENDER").


R E C I T A L S
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1. Borrowers and Lender are parties to that certain Amended and Restated Revolving Credit Agreement dated as of February 26, 1999 (as modified, amended, renewed, extended, and restated from time to time, the "CREDIT AGREEMENT").


2. The parties hereto desire to amend the Credit Agreement subject to the terms and conditions set forth herein.


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers and Lender agree as follows:


1. TERMS AND REFERENCES. Unless otherwise stated in this Amendment (a) terms defined in the Credit Agreement have the same meanings when used in this Amendment, and (b) references to "SECTIONS" are to the Credit Agreement's sections.


2. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows:


(a) SECTION 1.1 is hereby amended to add the following definitions:


"CAPITAL EXPENDITURE" means any expenditure by a Person for an asset which is properly classifiable in relevant financial statements of such Person prepared in accordance with GAAP as a capital asset.


"CONSOLIDATED TANGIBLE NET WORTH" means, for any Person as of any date, the total shareholder's equity of such Person LESS the aggregate book value of Intangible Assets of such Person.


"ELIGIBLE BONDS" means corporate and municipal debt instruments and corporate preferred stock which are (a) rated at least AA or the equivalent thereof by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., a New York corporation or at least Aa or the equivalent thereof by Moody's Investors Service, Inc., (b) regularly traded on a Public Market, and (c) not subject to any federal or state securities laws or other laws which restrict or limit their sale or transfer.


"ELIGIBLE GOVERNMENT SECURITIES" means obligations which are (a) issued or guaranteed by the United States of America or any instrumentality thereof, (b) regularly traded on a Public Market, and (c) not subject to any federal or state securities laws or other laws which restrict or limit their sale or transfer.


"ELIGIBLE SECURITIES" means common stock equity securities that are (a) regularly traded on a Public Market, and (b) not subject to any federal or state securities laws or other laws which restrict or limit their sale or transfer.


"INTANGIBLE ASSETS" of any Person means those assets of such Person which are (a) deferred assets, OTHER THAN prepaid insurance and prepaid taxes, (b) patents, copyrights, trademarks, tradenames, franchises, goodwill, experimental expenses, and other similar assets which would be classified as intangible assets on a balance sheet of such Person, (c) unamortized debt discount and expense, and (d) assets located, and notes and receivables due from obligors domiciled, outside of the United States of America.


"PUBLIC MARKET" means a nationally recognized United States public exchange or market acceptable to Lender on which securities, debt instruments, and/or mutual funds are regularly traded.


(b) SECTION 7.14 is hereby deleted in its entirety and replaced with the following:


7.14 MINIMUM TANGIBLE NET WORTH. Borrowers shall not permit, as
of any date, the Consolidated Tangible Net Worth of the Companies, on a
consolidated basis, to be less than $67,500,000.00.


(c) The following SECTION is hereby added as SECTION 7.17:


7.17. LIMITATION ON CAPITAL EXPENDITURES. Borrowers shall not
permit the aggregate amount of all Capital Expenditures made by the
Companies during any fiscal year ending after the date hereof to exceed
$10,000,000.00.


(d) The following SECTION is hereby added as SECTION 7.18:


7.18 LIQUID ASSETS. Borrowers shall not, as of any date, permit
the ratio of (a) THE SUM OF (i) cash, (ii) Temporary Cash Investments,
and (iii) the fair market value of Eligible Bonds, Eligible Government
Securities, and Eligible Securities of the Companies, to (b) THE SUM OF
(i) all Indebtedness of the Companies, PLUS (ii) the Unused Commitment,
in each case as of such date, to be less 3.0 to 1.0.


(e) SECTION 8.1(c) is hereby deleted in its entirety and replaced with the following:


(c) default shall occur in the performance of (i) any of the
covenants or agreements of any Company contained in SECTION 6.1 and
SECTION 7, or (ii) any other covenants or agreements of any Company
contained herein or in any of the other Loan Documents and, in the case
of (II), such failure shall continue for ten (10) days after written
notice thereof from Lender to Borrower; or


(f) EXHIBIT A is hereby deleted in its entirety and replaced with EXHIBIT A attached hereto.


(g) SCHEDULE 5.10 is hereby deleted in its entirety and replaced with SCHEDULE 5.10 attached hereto.


3. WAIVERS.


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(a) Lender hereby waives any Potential Default or Event of Default arising from Borrowers' failure to comply with the fixed charges ratio set forth in SECTION 7.14 of the Credit Agreement as of the fiscal quarter ended June 30, 1999.


(b) The waiver hereby granted by Lender (i) is limited expressly as written, (ii) does not impair Lender's rights to insist upon strict compliance with the Credit Agreement and the other Loan Documents, and (iii) do not extend to any other Loan Document.


4. AMENDMENTS TO OTHER LOAN DOCUMENTS.


(a) All references in the Loan Documents to the Credit Agreement shall henceforth include references to the Credit Agreement, as modified and amended hereby, and as may, from time to time, be further amended, modified, extended, renewed, and/or increased.


(b) Any and all of the terms and provisions of the Loan Documents are hereby amended and modified wherever necessary, even though not specifically addressed herein, so as to conform to the amendments and modifications set forth herein.


5. RATIFICATIONS. Each Borrower (a) ratifies and confirms all provisions of the Loan Documents as amended by this Amendment, (b) ratifies and confirms that all guaranties, assurances, and liens granted, conveyed, or assigned to Lender under the Loan Documents are not released, reduced, or otherwise adversely affected by this Amendment and continue to guarantee, assure, and secure full payment and performance of the present and future Loans, and (c) agrees to perform such acts and duly authorize, execute, acknowledge, deliver, file, and record such additional documents, and certificates as Lender may request in order to create, perfect, preserve, and protect those guaranties, assurances, and liens.


6. REPRESENTATIONS. Each Borrower represents and warrants to Lender that as of the date of this Amendment: (a) this Amendment and the other Loan Documents to be delivered under this Amendment have been duly authorized, executed, and delivered by Borrowers; (b) no action of, or filing with, any governmental authority is required to authorize, or is otherwise required in connection with, the execution, delivery, and performance by Borrowers of this Amendment; (c) the Loan Documents, as amended by this Amendment, are valid and binding upon Borrowers and are enforceable against Borrowers in accordance with their respective terms; (d) the execution, delivery, and performance by Borrowers of this Amendment do not require the consent of any other person and do not and will not constitute a violation of any laws, agreements, or understandings to which any Borrower is a party or by which any Borrower is bound; (e) all representations and warranties in the Loan Documents (as amended hereby) are true and correct in all material respects except to the extent that (i) any of them speak to a different specific date, or (ii) the facts on which any of them were based have been changed by transactions contemplated or permitted by the Credit Agreement; and (f) after giving effect to this Amendment, no Potential Default or Event of Default exists.


7. CONTINUED EFFECT. Except to the extent amended hereby, all terms, provisions and conditions of the Credit Agreement and the other Loan Documents, and all documents executed in connection therewith, shall continue in full force and effect and shall remain enforceable and binding in accordance with their respective terms.


8. CONDITIONS PRECEDENT. This Amendment shall not be effective unless and until: (a) Lender receives a fully-executed copy of this Amendment, and (b) the representations and warranties in the Loan


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