EXHIBIT 4
THE DERBY CYCLE CORPORATION AND OTHERS
as Borrowers and/or Guarantors
CHASE MANHATTAN plc
as Arranger
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Banks
CHASE MANHATTAN INTERNATIONAL LIMITED
as Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
as Security Agent
______________________________________________
THIRD AMENDMENT AGREEMENT
relating to
a facility agreement dated 12 May 1998
______________________________________________
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CONTENTS
1. Interpretation.................................................. 1
2. Amendments...................................................... 1
3. General......................................................... 1
SCHEDULE 1......................................................... 3
The Borrowers................................................. 3
SCHEDULE 2......................................................... 4
The Guarantors................................................ 4
SCHEDULE 3......................................................... 6
The Banks..................................................... 6
SCHEDULE 4......................................................... 7
Conditions Precedent Documentation............................ 7
SCHEDULE 5......................................................... 8
Further Amendments to the Facility Agreement.................. 8
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THIS AMENDMENT AGREEMENT is made on the [ ] day of [ ] 1999
BETWEEN:
(1) THE DERBY CYCLE CORPORATION on behalf of itself and each of THE COMPANIES
NAMED IN SCHEDULE 1 (the "Borrowers");
(2) THE DERBY CYCLE CORPORATION on behalf of itself and each of THE COMPANIES
NAMED IN SCHEDULE 2 (the "Guarantors");
(3) CHASE MANHATTAN plc (the "Arranger");
(4) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Facility Agent");
(5) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Security Agent"); and
(6) THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE 3 (the "Banks").
WHEREAS:
(A) By a facility agreement dated 12 May 1998 as amended and restated pursuant
to an amendment and restatement agreement dated 3 February 1999 and as
further amended pursuant to an amendment agreement dated 30 April 1999 and
as further amended by the terms of this Amendment Agreement (collectively
the "Facility Agreement") entered into between the parties hereto, the
Banks have agreed to make certain credit facilities available to the
Borrowers.
(B) The Parties hereto, with effect from the date hereof, have agreed to amend
the Facility Agreement in the manner set out in Schedule 54.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
Unless the context otherwise requires, words and expressions defined in the
Facility Agreement shall have the same meaning herein.
In this Amendment and Restatement Agreement, "Effective Date" means the
date that each of the parties hereto have become party to this Agreement
and the Facility Agent has confirmed to the Company and the Banks that the
documents listed in Schedule 4 have been delivered to it in a form and
substance satisfactory to it.
2. Amendments
Each of the parties agrees that, as from the date of this Agreement, the
amendments referred to at Schedule 4 shall become effective.
3. General
3.1 The Facility Agreement and this Agreement shall be read and construed
as a single document.
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3.2 References in the Facility Agreement to the Facility Agreement
howsoever characterised shall with effect from the date hereof be
references to the Facility Agreement as amended by this Agreement.
3.3 On the date hereof, the Obligors represent and warrant that no Event
of Default or Potential Event of Default (save in respect of the
Potential Event of Default resulting from the potential breach of some
of the financial covenants for the period ending 31 March 2000 as more
particularly set out in the Information Memorandum dated 4 August 1999
but subject always to the provisions of Clause 0 hereof) has occurred
which has not been remedied or otherwise waived by the Banks and no
Event of Default or Potential Event of Default would occur as a result
of the Obligors entering into this Agreement.
3.4 The Company shall reimburse the Agents and the Banks for reasonable
costs and expenses (including reasonable legal fees) incurred by them
and their professional advisers in connection with the negotiation,
preparation and execution of this Agreement and any related
documentation.
3.5 Upon execution of this Agreement the Company shall pay an amendment
fee of US$10,000 (the "Amendment Fee") to each of the Banks in
consideration of the Banks entering into this Agreement.
3.6 This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
when executed and delivered together shall constitute one and the same
instrument.
3.7 The Facility Agreement shall continue in full force and effect as
amended by this Agreement and, for the avoidance of doubt, each of the
Guarantors reaffirms the Guarantee contained in Clause 23 of the
Facility Agreement and agrees that such Guarantee continues in full
force and effect notwithstanding this Agreement..
3.8 Nothing contained herein, including the matters set out in Clause 0
hereof, shall constitute a waiver of any Event of Default or Potential
Event of Default and the Banks expressly reserve all or any rights and
remedies they may have in relation to the same.
3.9 This Agreement shall be governed by and construed in accordance with
English law.
3.10 Clause 38 (Jurisdiction) of the Facility Agreement shall be deemed to
apply as if it had been set out in full in this Agreement.
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SCHEDULE 1
The Borrowers
Raleigh Industries Limited
Sturmey-Xxxxxx Limited
Derby Holding (Deutschland) GmbH
Koninklijke Gazelle BV
The Derby Cycle Corporation
Raleigh Industries of Canada Limited
Raleigh Europe B.V.
Raleigh B.V.
Xxxxxxxxx Xxxxxx Bike Parts GmbH
Xxxxxx-Xxxxxxx GmbH
Derby Holding Limited
Raleigh Fahrrader GmbH
Derby Cycle Werke GmbH
Raleigh International Limited
Curragh Finance Company
Raleigh Ireland Limited
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SCHEDULE 2
The Guarantors
Derby Holding Limited
Raleigh Industries Limited
Raleigh International Limited
Sturmey-Xxxxxx Limited
Raleigh Industries of Canada Limited
The Derby Cycle Corporation
Raleigh BV
Raleigh Europe BV
Koninklijke Gazelle BV
Derby Nederland BV
Derby Holding BV
Sturmey-Xxxxxx Europa BV
Lyon Investments BV
Derby Holding (Deutschland) GmbH
Raleigh Fahrrader GmbH
NW Sportgerate GmbH
Derby Cycle Werke GmbH
Xxxxxxxxx Xxxxxx Bike Parts GmbH
Univega Worldwide Licence GmbH
Univega Beteiligungen GmbH
Univega Bikes & Sports Europe GmbH
Derby Fahrrader GmbH
Derby WS Vermogenswerwaltungs GmbH
Xxxxxx-Xxxxxxx GmbH
Curragh Finance Company
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Raleigh Ireland Limited
InterDerby Group Finance N.V.
The British Cycle Corporation Limited
BSA Cycles Limited
Triumph Cycle Co. Limited
Raleigh (Services) Limited
Derby Sweden AB
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SCHEDULE 3
The Banks
Name
The Chase Manhattan Bank
ABN Amro Bank N.V.
Bank of Scotland
BHF - Bank XX
Xxxxxxxx Bank AG, New York and Grand Cayman
Branches
Lloyds TSB Bank Plc
Midland Bank plc
Scotia Bank Europe plc
The Bank of Nova Scotia
The Sumitomo Bank, Limited
Banque Nationale de Paris
San Paolo IMI SPA
Kredietbank (Nederland) N.V.
Oldenburgische Landesbank AG
The Governor and Company of the Bank of Ireland
The Industrial Bank of Japan, Limited
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SCHEDULE 4
Conditions Precedent Documentation
Resolutions
A copy of the minutes of the resolution of the Board of each Obligor certified
by the signatory thereof (or appropriately authorised period of such Obligor)
approving this Agreement and authorising the execution and delivery of this
Agreement and any other communications or documents to be delivered by the
Obligors hereunder and thereunder, by the Company, as Obligors' Agent.
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SCHEDULE 5
Further Amendments to the Facility Agreement
1. The definition of "Consolidated Adjusted EBITDA" at Clause 1.2 of the
Facility Agreement shall be deleted and replaced with the following:
"Consolidated Adjusted EBITDA" means for any period comprising an annual
Accounting Period of the Company or four consecutive quarterly Accounting
Periods of the Company (taken together as one period) means the operating
income of the Group for such period:
before taking into account all Extraordinary Items (whether positive or
negative) and one-off expenses not exceeding, in aggregate, $2,900,000
insured in the Annual Accounting Period ending 31 December 1999 and in
aggregate $9,600,000 incurred in the annual Accounting Period ending 31
December 1999 as detailed in the Information Memorandum dated 4 August
1999;
before taking into account any Transaction Costs required to be expensed
through the income statement up to a maximum aggregate amount of $6,200,000
in the annual Accounting Period ending 31 December 1998 whether an
Extraordinary Item or otherwise and any one-off payments of premia or
otherwise made by any Group Member in connection with Hedging Protection
Agreements entered into in accordance with the Approved Hedging Programme
within 30 days of the date of this Agreement;
before taking into account to the extent deducted from operating income any
amounts expended that relate solely to Year 2000 Expenditure to the extent
that such expenditure, when aggregated with any other Year 2000 Expenditure
incurred since the date of this Agreement and prior to 31 December 1999
does not exceed $2,700,000 (or the equivalent in other currencies);
before deducting income tax expense;
before deducting charges to depreciation and amortisation excluding
amortisation attributable to a prepaid cash item arising in the ordinary
course of business, the amortisation of any goodwill and amortisation of
Transaction Costs in an amount not exceeding $8,800,000 in aggregate in all
Accounting Periods post Closing;
before deducting Interest (whether accrued, paid, deferred or capitalised)
as an obligation of any Group Member or Interest accrued in favour of, or
paid to, any Group Member;
after deducting (to the extent otherwise included in operating income) any
gain over book value arising in favour of the Group on the sale, lease or
other disposal of any fixed or intangible asset during such period and any
gain arising on any revaluation of any fixed or tangible asset during such
period;
after adding back (to the extent otherwise deducted in operating income)
any loss against book value incurred by the Group on the sale, lease or
other disposal of any fixed or intangible asset during such period and any
loss arising on any revaluation of any fixed or intangible assets during
such period;
after deducting (to the extent otherwise included) the amount of retained
profit (or adding back the retained loss) of any Group Member (other than
the Company) which is attributable to the
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interest of any shareholder of or, as the case may be, partner in such
Group Member which is not a Group Member other than the amount of retained
profit or the amount of the retained loss of RIC which is attributable to
such non-Group Member's interest in RIC Preference Shares for so long as
such shares may be exchanged solely for B Common Stock of the Company and
carry no rights greater than as at the date of this Agreement and RIC is
prohibited from redeeming such RIC Preference Shares pursuant to the
provisions of this Agreement;
after deducting items which have not, or are not due to be paid in cash,
including any amortisation, credit, income or provision release (where such
provision was not originally increased by reducing operating income) or
other credit where cash was received in an earlier period. For the
avoidance of doubt, any income related to the defined benefit pensions
plans of the Group recognised in accordance with FAS 87 and FAS 132 shall
be deducted when calculating Consolidated Adjusted EBITDA and any
unrealised income or loss in respect of the change in the xxxx to market
value of foreign exchange contracts recognised in accordance with FAS 52
and FAS 133 where such contracts are in accordance with the Approved
Hedging Programme, shall not be included when calculating Consolidated
Adjusted EBITDA;
and for the purposes of the foregoing no item shall be effectively taken
into account more than once in this calculation and all items shall be
determined on a consolidated basis and subject only as may be required in
order to reflect the express inclusion or exclusion of items as specified
in this definition) in accordance with the Applicable Accounting Principles
and as determined from the consolidated Financial Accounts of the Group for
such annual Accounting Period or for the quarterly Accounting Periods
falling within such period or, to the extent that such period, or part
thereof, relates to the period prior to Closing, from the Pre-Closing
Accounts relating to such period;
2. The financial undertakings listed in Clause 20 (Financial Undertakings)
shall be amended as follows:-
2.1 The ratios specified in Column 2 of the table in Clause Clause
20.2(a) (Interest Cover) for the following Accounting Periods ending
on the Accounting Dates specified below only shall be deleted and
replaced with the following:
Accounting Date Ratio
26 September 1999 1.10 : 1
31 December 1999 1.40 : 1
2.2 The amounts specified in Column 2 of the table in Clause 20.2(b)
(Consolidated Net Worth) for the following Accounting Periods only
shall be deleted and replaced with the following:
Period Consolidated Net Worth ($)
28 June 1999 - 26 September 1999 103,000,000
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Period Consolidated Net Worth ($)
27 September 1999 - 31 December 1999 103,000,000
1 January 2000 - 31 January 2000 101,000,000
1 February 2000 - 2 April 2000 110,000,000
2.3 The amounts specified in Column 2 of the table in Clause 20.2(d)
(Consolidated Adjusted EBITDA) for the following periods ending on
the Accounting Dates set out below only shall be deleted and
replaced with the following:
Accounting Date Amount ($)
27 September 1999 21,000,000
31 December 1999 27,500,000
2.4 The Accounting Periods set out in Column 1 of the table in Clause
20.2(g) (Aggregate Group Financial Indebtedness) for the following
periods only shall be deleted and replaced with the following:
Column 1 Column 2 ($)
28 June 1999 to (and including) 50,000,000
26 September 1999
27 September 1999 to (and including) 75,000,000
31 December 1999
3. The parties agree that the sub-limit of $2,750,000 referred to at Clause
19.5(c)(iii) (as amended) of the Facility Agreement shall be increased to
$3,750,000 so that the revised sub-clause shall read:
"(iii) (in addition to paragraphs (i) and (ii) Financial Indebtedness in an
aggregate principal amount) for the Group as a whole not exceeding
$3,750,000 (or the equivalent in other currencies) at any time where
the aggregate of all Financial Indebtedness in excess of $250,000
are loans by the Company for the purchase by management of shares in
the Company and provided that such sub-limit shall be reduced by the
amount by which loans made by the Company to management to enable
the purchase of shares in the Company are repaid in cash. For the
avoidance of doubt the aggregate of all loans in cash to any person
may not exceed $250,000."
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5. With effect from the first Drawdown Date following the date of this
Amendment Agreement, the definition of "Margin" at Clause 1.1 of the
Facility Agreement shall be amended as follows:
"Margin" means two and one half per cent (2.50%) per annum provided that if
any time any consolidated Financial Accounts of the Group delivered to the
Facility Agent pursuant to Clause 19.13(a)(i) for an annual Accounting
Period or Clause 19.13(a)(ii) for a quarterly Accounting Period, disclose
that:
(a) Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly
basis is more than $40,000,000 and the ratio of Consolidated Adjusted
EBITDA to Consolidated Net Interest Payable calculated on a Rolling 4
Quarterly basis is greater than 2:00:1, the Margin shall be two per
cent (2.00%) per annum.
Sub-clauses (a), (b) and (c) shall be renumbered as (b), (c) and (d)
respectively.
6. Clause 26.2 (Utilisation Fee) shall be deleted and replaced by the
following:-
"Save at any time where the applicable Margin is 2.50% per annum in which
case no such utilisation fee will be payable, the Company will pay (or will
procure that there is paid) to the Facility Agent for distribution among
the Banks pro rata to the aggregate of their respective Revolving
Commitments in respect of each Utilisation Period (as defined below) a
utilisation fee calculated at the rate per annum determined pursuant to
Clause 26.3 on an amount equal to the sum of the average daily Deutschmark
Amount of the Ancillary Facilities during such Utilisation Period and the
average daily utilisation of the Revolving Facility and the Standby L/C
Facility during such Utilisation Period (without double counting)."
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THE DERBY CYCLE CORPORATION )
for itself and on behalf of each of the )
Borrowers and Guarantors as Obligors' Agent )
By:
CHASE MANHATTAN INTERNATIONAL )
LIMITED for itself and as the Facility )
Agent and Security Agent for and on behalf )
of the Arranger and each of the Banks (other )
than Lloyds TSB Bank Plc, Scotia Bank Europe
plc and The Bank of Nova Scotia)
By:
LLOYDS TSB BANK PLC )
)
)
)
By:
SCOTIA BANK EUROPE PLC )
)
)
)
By:
THE BANK OF NOVA SCOTIA )
)
)
)
By:
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