MATURITY

TearDrop Golf (TDRP:NASDAQ Small Cap) may have an expensive week ahead of itself in more ways than one. The company has been in violation of various financial covenants, as well as certain reporting and repayment obligations on it's $30 million line of credit with First Union National Bank. As a result of the Company's defaults under the loan agreement, it and the Bank entered into a Forbearance and Overadvance Agreement effective as of July 20, 1999, which was amended as of November 10, 1999. In connection with the Forbearance Agreement and an amendment to the agreement the loan was extended to December 10, 1999. The interest rate under the line of credit was increased to prime rate plus 1 percent and the principal amount available under the credit facility was reduced to $18.5 million on November 10, 1999.

If TearDrop does not pay the loan in full by Friday December 10, 1999, the interest rate under the line of credit increases to prime rate plus 2 percent and is retroactive to November 10, 1999. In addition, the Bank has agreed to forbear from exercising its rights of enforcement under the loan agreement with respect to certain covenant defaults until December 10, 1999, or until "certain defined events occur." The line of credit matures on December 10, 1999.

TearDrop has been seeking alternative sources of financing and has been approved for a $30 million credit facility by Textron Financial, first reported by the company on October 4, 1999. However, the deal is still subject to the signing of a definitive loan agreement. TearDrop has stated "there can be no assurances given the financing with Textron Financial Corp will close."

Should the agreement not be signed and subsequently closed this week as some sources has indicated to Web Street, one if left to wonder where TearDrop will be doing it's banking? Consider also that TearDrop has entered into endorsement agreements with touring professionals for periods up to three years. Minimum compensation requirements for the years ending December 31, 1999, is approximately $4.2 million, in 2000 approximately $3.1million and in 2001 approximately $1.9 million.