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CML GROUP, INC.
AND ITS UNDERSIGNED SUBSIDIARIES
000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxxx 00000
AMENDMENT NO. 1 TO CREDIT AGREEMENT AND LIMITED WAIVER
Dated as of March 11, 1998
BankBoston, N.A.
(f/k/a The First National Bank of Boston)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Rothschild Recovery Fund, L.P.
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement, dated as of April 17, 1996 and
amended and restated as of August 28, 1997 (the "CREDIT AGREEMENT"), among (i)
CML Group, Inc. ("CML"), (ii) NordicTrack, Inc., Nordic Advantage, Inc. and
Xxxxx & Xxxxxx, Ltd. (collectively, the "BORROWERS"), (iii) BankBoston, N.A.
(f/k/a The First National Bank of Boston) ("BANKBOSTON"), Rothschild Recovery
Fund, L.P. ("ROTHSCHILD"), and the other financial institutions from time to
time listed on SCHEDULE 1 thereto (collectively, the "LENDERS") and (iv)
BankBoston, N.A., as administrative, collateral and documentation agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT") and as Issuing Bank.
Capitalized terms used and not otherwise defined in this letter agreement (this
"AMENDMENT AGREEMENT") shall have the meanings assigned to such terms in the
Credit Agreement, as amended hereby. CML and the Borrowers are sometimes
referred to herein collectively as the "OBLIGORS".
We are not in compliance with the mandatory repayment provisions of
Section 3.2 of the Credit Agreement because the outstanding amount of the
NordicTrack Loans PLUS NordickTrack's Letter of Credit Exposure exceeds the
NordicTrack Borrowing Base, because the outstanding amount of S&H Loans PLUS
S&H's Letter of Credit Exposure exceeds the S&H Borrowing Base and because
Overadvances are not currently permitted under the Credit Agreement. Such
noncompliance has resulted in an Event of Default under Section 14.1(a) of the
Credit Agreement (the "SPECIFIED BORROWING BASE EVENT OF DEFAULT"). We are also
not in compliance with the financial covenants set forth in Sections 11.1, 11.2,
11.3 and 11.5 of the Credit Agreement for the fiscal quarter ending January 31,
1998 and are not now, and have not been since sometime after October 31, 1997,
in compliance with the financial covenant set forth in Section 11.4 of the
Credit Agreement. Such noncompliance has resulted in Events of Default under
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Section 14.1(c) of the Credit Agreement (the "SPECIFIED FINANCIAL COVENANT
EVENTS OF DEFAULT" and together with the Specified Borrowing Base Event of
Default, the "SPECIFIED EVENTS OF DEFAULT"). In addition, our representation in
the first sentence of Section 8.5.1 of the Credit Agreement is not now true
because there has been a materially adverse change in the financial condition,
business and/or operations of CML, the Borrowers and their Subsidiaries since
May 3, 1997 (the "MATERIALLY ADVERSE CHANGE").
The continuation of the unremedied Specified Events of Default, together
with the continuation of the Materially Adverse Change, has had, and continues
to have, the following consequences under the Credit Agreement:
(a) The Lenders have no obligation to make any Loans and the
Issuing Bank has no obligation to issue any Letters of Credit under the
Credit Agreement;
(b) The Lenders may terminate the Commitments and declare the
entire unpaid principal of and interest on the Notes and all other
Obligations under the Loan Documents to be immediately due and payable;
and
(c) The Administrative Agent and the Lenders are entitled to
exercise their other rights and remedies under the Loan Documents and
applicable law.
We have requested that the Administrative Agent and each of the Lenders
agree, on the terms and subject to the conditions contained herein, (i) to
permanently waive the Specified Borrowing Base Event of Default resulting from
noncompliance with Sections 3.2 of the Credit Agreement as in effect prior to
giving effect to this Amendment Agreement solely for periods ended prior to the
date hereof, (ii) to permanently waive the Specified Financial Covenant Events
of Default resulting from noncompliance with Sections 11.1, 11.2, 11.3, 11.4 and
11.5 of the Credit Agreement as in effect prior to giving effect to this
Amendment Agreement solely for periods ended prior to the date hereof, and (iii)
to amend the first sentence of Section 8.5.1 of the Credit Agreement.
In addition, we have requested that the Administrative Agent and each of
the Lenders agree, on the terms and subject to the conditions contained herein,
to amend the Credit Agreement to, among other things, (i) increase the Total
Commitment from $40,000,000 to $50,000,000, (ii) increase the Maximum
Overadvance Amount from $15,000,000 to up to $35,000,000, (iii) extend the
period during which Overadvances are permitted to be outstanding, and (iv)
eliminate the Overadvance Borrowing Base limitation on Overadvances.
The Administrative Agent and the Lenders have advised us that they are
prepared to grant such waivers and to so amend the Credit Agreement, on the
terms and subject to the conditions and in reliance on our representations
contained herein.
Accordingly, CML, the Borrowers, the Lenders, the Administrative Agent and
the Issuing Bank hereby agree as follows:
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Section 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended as set forth below.
(a) DEFINITIONS. Section 1.1 of the Credit Agreement is amended as
follows:
(i) the definition of "BORROWING BASE" set forth in such
Section is amended and restated in its entirety as follows:
BORROWING BASE. The NordicTrack Borrowing Base and the
S&H Borrowing Base.
(ii) the definition of "ELIGIBLE ASSIGNEE" set forth in such
Section is amended and restated in its entirety as follows:
ELIGIBLE ASSIGNEE. Any of (i) a commercial bank or
finance company organized under the laws of the United States,
or any State thereof or the District of Columbia, and having
total assets in excess of $1,000,000,000; (ii) a savings and
loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of
Columbia, and having a net worth of at least $100,000,000,
calculated in accordance with generally accepted accounting
principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total
assets in excess of $1,000,000,000, PROVIDED that such bank is
acting through a branch or agency located in the country in
which it is organized or another country which is also a
member of the OECD; (iv) the central bank of any country which
is a member of the OECD; (v) Rothschild Recovery Fund, L.P.;
and (vi) any other bank, insurance company, commercial finance
company or other financial institution or other Person
approved by the Administrative Agent, such approval not to be
unreasonably withheld.
(iii) the definition of "FEE LETTER" set forth in such Section
is amended and restated in its entirety as follows:
FEE LETTER. The letter agreement dated as of March 6,
1996, as amended and restated as of the Original Closing Date
and as further amended and restated as of the Amendment No. 1
Effective Date among CML, the Borrowers, the Administrative
Agent and Rothschild Recovery Fund, L.P.
(iv) the definition of "MATURITY DATE" set forth in such
Section is amended and restated in its entirety as follows:
MATURITY DATE. July 10, 1998.
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(v) the definition of "MAXIMUM OVERADVANCE AMOUNT" set forth
in such Section is amended and restated in its entirety as follows:
MAXIMUM OVERADVANCE AMOUNT. $35,000,000.
(vi) the definition of "MORTGAGES" set forth in such Section
is amended by inserting before the period at the end of such
definition the following text: "or Amendment No. 1 to Credit
Agreement".
(vii) the definition of "SECURITY DOCUMENTS" set forth in such
Section is amended by inserting after the words "the Mortgages," the
words "the Life Insurance Collateral Assignments, the Aircraft
Security Agreement,".
(viii) the definition of "SETTLEMENT DATE" set forth in such
Section is amended and restated in its entirety as follows:
SETTLEMENT DATE. (a) In connection with the Settlement
to be made with respect to the Loans outstanding on the
Amendment No. 1 Effective Date, the relevant Settlement Date
shall be March 12, 1998, and (b) in connection with any other
Settlement, the relevant Settlement Date shall be the date
which shall be six (6) Business Days following the giving of
notice (including the date of such notice) by the
Administrative Agent to the Lenders of the Administrative
Agent's intention to effect a Settlement and of each Lender's
Settlement Amount in connection therewith, in each case in
accordance with the provisions of ss.2.8; PROVIDED, HOWEVER
that except during the continuance of a Frequent Settlement
Period, the Administrative Agent shall not give more than one
such notice of its intention to effect a Settlement during any
one calendar week (such limitation not to be applicable during
the continuance of any Frequent Settlement Period).
(ix) the definition of "SUB-OVERADVANCE AMOUNT" set forth in
such Section is amended by replacing the reference to "ss.2.1.6(b)"
appearing therein with a reference to "ss.2.1.5(b)".
(x) the following new definitions are inserted in the
appropriate alphabetical sequence in such Section:
ACCOUNTS PAYABLE. At any time with respect to any
Person, the aggregate accounts payable of such Person and
its Subsidiaries determined in accordance with generally
accepted accounting principles.
ACCRUED EXPENSES. At any time with respect to any
Person, the aggregate accrued expenses of such Person and
its Subsidiaries determined in accordance with generally
accepted accounting principles.
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AIRCRAFT SECURITY AGREEMENT. The Aircraft Security
Agreement, dated as of the Amendment No. 1 Effective
Date, between CML and the Administrative Agent and in
form and substance satisfactory to the Lenders and the
Administrative Agent.
AMENDMENT NO. 1 EFFECTIVE DATE. The date on which
all of the conditions to effectiveness set forth in
Section 4 of Amendment No. 1 to Credit Agreement are
satisfied or waived and Amendment No. 1 to Credit
Agreement becomes effective.
AMENDMENT NO. 1 TO CREDIT AGREEMENT. Amendment No.
1 to Credit Agreement and Limited Waiver, dated as of
March 11, 1998, among CML, the Borrowers, the Lenders,
the Issuing Bank and the Administrative Agent.
APPROVED BUDGETED EXPENSES. Expenses incurred by
CML in the ordinary course of business for itself or for
the benefit of any of the Borrowers or their
Subsidiaries, in each case which were previously
included in the applicable CML Budget or, in the case of
expenses incurred for the benefit of any of the
Borrowers or their Subsidiaries, in the Monthly Budget,
prepared in each case by CML and submitted to and
approved by the Majority Lenders.
BORROWER EXPOSURE. At any time with respect to any
Borrower, the sum of (a) the outstanding amount of Loans
made to such Borrower PLUS (b) the aggregate Letter of
Credit Exposure of such Borrower.
CML BUDGETS. Each of (a) the monthly operating
budget of CML for the months of March 1998 and April
1998 delivered to the Administrative Agent and the
Lenders pursuant to, and satisfying the requirements of,
ss.9.4(p), and (b) the monthly operating budget of CML
for the months of May 1998 through July 1998 delivered
to the Administrative Agent and the Lenders pursuant to,
and satisfying the requirements of, ss.9.4(p).
FREQUENT SETTLEMENT PERIOD. Any period during
which (a) a Default or an Event of Default shall have
occurred and be continuing or (b) the amount of Loans
outstanding from BKB PLUS BKB's Commitment Percentage of
the aggregate Letter of Credit Exposure of the Borrowers
is equal to or greater than BKB's Commitment Percentage
of the Total Commitment.
INSURANCE LOANS. Any and all loans borrowed by CML
against the loan value of the Key Man Life Insurance
Policies.
KEY MAN LIFE INSURANCE POLICIES. Collectively, (i)
the life insurance policy issued on the life of Xxxxxxx
X. Xxxxxxxx for the benefit of CML in the face amount of
$400,000 by The New England Mutual Life Insurance
Company, Life Policy number 8698540, (ii)
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the life insurance policy issued on the life of Xxxxxxx
X. Xxxxxxxx for the benefit of CML in the face amount of
$800,000 by The New England Mutual Life Insurance
Company, Life Policy number 8672183, (iii) the life
insurance policy issued on the life of G. Xxxxxx Xxx for
the benefit of CML in the face amount of $408,000 by The
New England Mutual Life Insurance Company, Life Policy
number 8698541, and (iv) the life insurance policy
issued on the life of G. Xxxxxx Xxx for the benefit of
CML in the face amount of $800,000 by The New England
Mutual Life Insurance Company, Life Policy number
8672184.
LIFE INSURANCE COLLATERAL ASSIGNMENTS. The
collateral assignments of the Key Man Life Insurance
Polices executed and delivered by CML to the
Administrative Agent and in form and substance
satisfactory to the Lenders and the Administrative
Agent.
MONTHLY BUDGET. The monthly operating budget of
CML and its Subsidiaries for the period from March 1,
1998 through July 31, 1998 delivered to the
Administrative Agent and the Lenders on or prior to the
Amendment No. 1 Effective Date and attached as ANNEX A
to Amendment No. 1 to Credit Agreement, such Monthly
Budget including a report of each Borrower's projected
monthly outstandings (including Loans and Letter of
Credit Exposure), Overadvances, Borrowing Base
availability, Accounts Payable and Accrued Expenses.
TRUST. The Trust, as such term is defined in the
Trust Agreement.
TRUST AGREEMENT. The Trust Agreement dated as of
June 28, 1989, between CML and Indian Head National
Bank, pursuant to which CML has established a "rabbi
trust" for the benefit of certain executive employees of
CML.
TRUST ASSETS. Any assets or properties from time
to time heretofore or hereafter transferred to the Trust
pursuant to the terms of the Trust Agreement and
constituting assets held in trust for the benefit of
certain executive employees of CML.
WARRANT DOCUMENTS. Collectively, (a) the Warrant
Purchase Agreement dated as of the Amendment No. 1
Effective Date among CML and the Lenders and (b) the
Common Stock Purchase Warrants of CML issued to each of
the Lenders pursuant to the terms of such Warrant
Purchase Agreement, each in form and substance
satisfactory to the Lenders.
WEEKLY BUDGETS. Each of (a) the weekly operating
budget of CML and its Subsidiaries for the period from
March 1, 1998 through April 30, 1998 delivered to the
Administrative Agent and the Lenders on or prior to the
Amendment No. 1 Effective Date and
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attached as ANNEX B to Amendment No. 1 to Credit
Agreement and (b) the weekly operating budget of CML and
its Subsidiaries for the period from May 1, 1998 through
July 10, 1998 delivered to the Administrative Agent and
the Lenders pursuant to, and satisfying the requirements
of, ss.9.4(p), in the case of each of the foregoing
clauses (a) and (b), including a report of each
Borrower's projected weekly outstandings (including
Loans and Letter of Credit Exposure), Overadvances and
Borrowing Base availability.
(xi) the definitions of "DETERMINED VALUE", "ELIGIBLE
MACHINERY AND EQUIPMENT", "ELIGIBLE REAL ESTATE", "OVERADVANCE
BORROWING BASE", "OVERADVANCE REALLOCATION DATE", "OVERADVANCE
REALLOCATION REQUEST" and "PERMITTED OVERADVANCE AMOUNT" are each
hereby deleted in their respective entireties.
(b) COMMITMENT TO LEND NORDICTRACK LOANS. Section 2.1.1 of the
Credit Agreement is amended and restated in its entirety as follows:
2.1.1. COMMITMENT TO LEND NORDICTRACK LOANS. Subject to the
terms and conditions set forth in this Credit Agreement (including
without limitation, the provisions of ss.11.4), the Administrative
Agent on behalf of the Lenders and in reliance upon the agreement of
the Lenders set forth in ss.2.8 and upon the representations and
warranties of NordicTrack contained herein agrees to lend to
NordicTrack and NordicTrack may borrow, repay, and reborrow from
time to time between the Restatement Effective Date and the Maturity
Date upon notice by NordicTrack to the Administrative Agent given in
accordance with ss.2.6, such sums as are requested by NordicTrack,
PROVIDED that the sum of the outstanding amount of the NordicTrack
Loans (after giving effect to all amounts requested) PLUS
NordicTrack's Letter of Credit Exposure shall not at any time exceed
the lesser of (a) NordicTrack's Sub-Commitment and (b) the
NordicTrack Borrowing Base PLUS NordicTrack's Sub-Overadvance Amount
in effect at such time. The NordicTrack Loans shall be participated
in by, and subject to Settlements among, the Lenders on a PRO RATA
basis in accordance with the provisions of ss.2.8 and each Lender's
Commitment Percentage. Prior to a Settlement with respect to any
NordicTrack Loans, all interest accruing on such NordicTrack Loans
shall be solely for the account of the Administrative Agent. Each
request for a NordicTrack Loan hereunder shall constitute a
representation and warranty by NordicTrack that the conditions set
forth in ss.12 and ss.13, in the case of the initial NordicTrack
Loans to be made on the Restatement Effective Date, and ss.13, in
the case of all other NordicTrack Loans, have been satisfied on the
date of such request.
(c) COMMITMENT TO LEND S&H LOANS. Section 2.1.3 of the Credit
Agreement is amended and restated in its entirety as follows:
2.1.3. COMMITMENT TO LEND S&H LOANS. Subject to the terms and
conditions set forth in this Credit Agreement (including without
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limitation, the provisions of ss.11.4), the Administrative Agent on
behalf of the Lenders and in reliance upon the agreement of the
Lenders set forth in ss.2.8 and upon the representations and
warranties of S&H contained herein agrees to lend to S&H and S&H may
borrow, repay, and reborrow from time to time between the
Restatement Effective Date and the Maturity Date upon notice by S&H
to the Administrative Agent given in accordance with ss.2.6, such
sums as are requested by S&H, PROVIDED that the sum of the
outstanding amount of the S&H Loans (after giving effect to all
amounts requested) PLUS S&H's Letter of Credit Exposure shall not at
any time exceed the lesser of (a) S&H's Sub-Commitment and (b) the
S&H Borrowing Base PLUS S&H's Sub-Overadvance Amount in effect at
such time. The S&H Loans shall be participated in by, and subject to
Settlements among, the Lenders on a PRO RATA basis in accordance
with the provisions of ss.2.8 and each Lender's Commitment
Percentage. Prior to a Settlement with respect to any S&H Loans, all
interest accruing on such S&H Loans shall be solely for the account
of the Administrative Agent. Each request for a S&H Loan hereunder
shall constitute a representation and warranty by S&H that the
conditions set forth in ss.12 and ss.13, in the case of the initial
S&H Loans to be made on the Restatement Effective Date, and ss.13,
in the case of all other S&H Loans, have been satisfied on the date
of such request.
(d) OVERADVANCE FACILITY. Section 2.1.5 of the Credit Agreement is
amended and restated in its entirety as follows:
2.1.5. OVERADVANCE FACILITY.
2.1.5(a). MAXIMUM OVERADVANCE AMOUNT. As of any date of
determination, the sum of the Overadvances shall not exceed
the Maximum Overadvance Amount then in effect. Each
Overadvance outstanding from time to time shall bear interest
calculated by reference to the Base Rate pursuant to ss.2.5.
2.1.5(b). SUB-OVERADVANCE AMOUNTS. The sum of the
Overadvances made to any Borrower shall not exceed, during any
given period described in SCHEDULE 2.1.5 hereto, the amount
for such Borrower set forth opposite such period in such
SCHEDULE 2.1.5 (such amount being referred to herein as a
"Sub-Overadvance Amount" for such Borrower and such period)
(in each case, as such schedule shall be amended in accordance
with the provisions set forth below in this paragraph). The
Administrative Agent shall keep a record of the
Sub-Overadvance Amount of each Borrower as in effect on each
date and such record shall be conclusive, in the absence of
manifest error. The sum of the Borrowers' Sub-Overadvance
Amounts shall not at any time exceed the Maximum Overadvance
Amount. SCHEDULE 2.1.5 shall be amended prior to April 30,
1998 to reflect, in a manner reasonably satisfactory to the
Lenders, the amount of Overadvances projected for each of the
Borrowers in
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the Weekly Budget for the period from May 1, 1998 through
July 10, 1998 delivered to the Administrative Agent and the
Lenders pursuant to, and satisfying the requirements of,
ss.9.4(p).
(e) INTEREST ON LOANS.
(i) EURODOLLAR RATE LOANS. From and after the date hereof,
the Borrowers shall not be permitted to request Eurodollar Rate
Loans and shall not be permitted to convert Base Rate Loans into
Eurodollar Rate Loans. All Eurodollar Rate Loans outstanding on the
date hereof shall continue as such until the termination of the
Interest Period thereof, at which time they will automatically
convert to Base Rate Loans. The Credit Agreement is hereby amended
in all appropriate respects to reflect the foregoing agreements.
(ii) INTEREST RATES. Sections 2.5(a) and (c) of the Credit
Agreement are amended and restated to read, respectively, as
follows:
(a) Each Base Rate Loan which does not constitute an
Overadvance shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate of three
percent (3.00%) per annum above the Base Rate.
(c) Each Base Rate Loan which constitutes an
Overadvance shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate of four
percent (4.00%) per annum above the Base Rate.
(f) SETTLEMENT AND FUNDING PROCEDURES. Section 2.8.1 of the Credit
Agreement is amended and restated in its entirety to read as follows:
2.8.1. SETTLEMENT AND FUNDING PROCEDURES. No later than
(a) 10:00 a.m. (Boston time) on the Amendment No. 1 Effective Date
with respect to the Settlement to be effected on March 12, 1998 with
respect to the Loans outstanding on the Amendment No. 1 Effective
Date or (b) 10:00 a.m. (Boston time) on the date which is six (6)
Business Days (including the date of any notice given by the
Administrative Agent as described below) prior to each other
Settlement Date occurring after the Amendment No. 1 Effective Date,
the Administrative Agent shall give telephonic or facsimile notice
(i) to the Lenders and the Borrowers of the respective outstanding
amount of Loans made by the Agent on behalf of the Lenders from the
immediately preceding Settlement Date through the close of business
on the prior day and (ii) to the Lenders of the amount (a
"Settlement Amount") that each Lender (the "Settling Lender") shall
pay to effect a Settlement of any Loan. A statement of the
Administrative Agent submitted to the Lenders and the applicable
Borrower or to the Lenders with respect to any amounts owing under
this ss.2.8.1 shall be PRIMA FACIE evidence of the amount due and
owing. The
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Settling Lender shall, not later than 3:00 p.m. (Boston time) on
such Settlement Date, effect a wire transfer of immediately
available funds to the Administrative Agent in the amount of such
Lender's Settlement Amount. All funds advanced by any Lender as a
Settling Lender pursuant to this ss.2.8.1 shall for all purposes be
treated as a Loan made by such Settling Lender to the applicable
Borrower and all funds received by any Lender pursuant to this
ss.2.8.1 shall for all purposes be treated as repayment of amounts
owed with respect to Loans made by such Lender. In the event that
any bankruptcy, reorganization, liquidation, receivership or similar
cases or proceedings in which any of the Borrowers is a debtor
prevent a Settling Lender from making any Loan to effect a
Settlement as contemplated hereby, such Settling Lender will make
such disposition and arrangements with the other Lenders with
respect to such Loans, either by way of purchase of participations,
distribution, PRO TANTO assignment of claims, subrogation or
otherwise as shall result in each Lender's share of the outstanding
Loans being equal, as nearly as may be, to such Lender's Commitment
Percentage of the outstanding amount of the Loans. Each Lender's
obligation to fund its Settlement Amount in connection with any
Settlement pursuant to this ss.2.8.1 shall be absolute and
unconditional and shall not be affected by any circumstance,
including (v) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Administrative
Agent, any Borrower or any other Person for any reason whatsoever;
(w) the occurrence and continuation of any Default or Event of
Default; (x) any adverse change in the condition (financial or
otherwise) of any of CML or its Subsidiaries or any other Lender;
(y) any breach of any of the Loan Documents by any of CML or its
Subsidiaries or any other Lender; or (z) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
(g) CHANGES IN BORROWING BASES. The final sentence of Section 2.9
of the Credit Agreement is amended and restated in its entirety to read as
follows:
For purposes of this Credit Agreement and the other Loan Documents,
the Administrative Agent may assume, subject to adjustment based
upon the provisions of this Credit Agreement, that each Borrower's
Borrowing Base in effect on any given date is such Borrower's
Borrowing Base as indicated on the most recent Borrowing Base Report
delivered on a timely basis to the Lenders and the Administrative
Agent in accordance with the provisions of ss.9.4(f) hereof.
(h) MANDATORY REPAYMENT OF LOANS. Section 3.2 of the Credit
Agreement is amended and restated in its entirety to read as follows:
3.2. MANDATORY REPAYMENTS OF LOANS.
3.2.1. NORDICTRACK LOANS. If at any time the sum of the
outstanding amount of the NordicTrack Loans and NordicTrack's
Letter
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of Credit Exposure exceeds the lesser of (i) NordicTrack's
Sub-Commitment in effect at such time and (ii) the NordicTrack
Borrowing Base PLUS NordicTrack's Sub-Overadvance Amount in
effect at such time, then NordicTrack shall immediately pay
the amount of such excess to the Administrative Agent for the
respective accounts of the Lenders for application: FIRST, to
any Unpaid Reimbursement Obligations in respect of Letters of
Credit issued at the request of NordicTrack; SECOND, to the
NordicTrack Loans; and THIRD, to provide to the Administrative
Agent cash collateral for Reimbursement Obligations in respect
of Letters of Credit issued at the request of NordicTrack as
contemplated by ss.4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of NordicTrack Loans
shall be allocated among the Lenders, in proportion, as nearly
as practicable, to each Unpaid Reimbursement Obligation or (as
the case may be) the respective unpaid principal amount of
each Lender's NordicTrack Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not
exactly in proportion.
3.2.2. INTENTIONALLY OMITTED.
3.2.3. S&H LOANS. If at any time the sum of the
outstanding amount of the S&H Loans and S&H's Letter of Credit
Exposure exceeds the lesser of (i) S&H's Sub-Commitment in
effect at such time and (ii) the S&H Borrowing Base PLUS S&H's
Sub-Overadvance Amount in effect at such time, then S&H shall
immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the
Lenders for application: FIRST, to any Unpaid Reimbursement
Obligations in respect of Letters of Credit issued at the
request of S&H; SECOND, to the S&H Loans; and THIRD, to
provide to the Administrative Agent cash collateral for
Reimbursement Obligations in respect of Letters of Credit
issued at the request of S&H as contemplated by ss.4.2(b) and
(c). Each payment of any Unpaid Reimbursement Obligations or
prepayment of S&H Loans shall be allocated among the Lenders,
in proportion, as nearly as practicable, to each Unpaid
Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Lender's S&H Note,
with adjustments to the extent practicable to equalize any
prior payments or repayments not exactly in proportion.
3.2.4. INTENTIONALLY OMITTED.
3.2.5. ANNUAL CLEAN-UP - INTENTIONALLY OMITTED.
(i) COMMITMENT TO ISSUE LETTERS OF CREDIT. Section 4.1.1 of
the Credit Agreement is amended and restated in its entirety to read as
follows:
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to
the terms and conditions hereof and the execution and delivery
by any of the Borrowers and CML of a letter of credit
application on the Issuing Bank's customary form (a "Letter of
Credit Application"), the Issuing Bank on behalf of the
Lenders and in reliance upon the agreement of the
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Lenders set forth in ss.4.1.4 and upon the representations and
warranties of the applicable Borrower and CML contained
herein, agrees, in its individual capacity, to issue, extend
and renew for the account of such Borrower and CML one or more
standby or documentary letters of credit (individually, a
"Letter of Credit"), in such form as may be requested from
time to time by the applicable Borrower and agreed to by the
Issuing Bank; PROVIDED, HOWEVER, that, after giving effect to
such request, (a) the sum of the aggregate Letter of Credit
Exposure of the Borrowers shall not exceed $40,000,000 at any
one time and (b) the sum of (i) each Borrower's Letter of
Credit Exposure and (ii) the amount of all Loans of such
Borrower outstanding shall not exceed the lesser of (A) such
Borrower's Sub-Commitment and (B) such Borrower's Borrowing
Base PLUS such Borrower's Sub-Overadvance Amount.
(j) TERMS OF LETTERS OF CREDIT. Clause (iii) of Section
4.1.3 of the Credit Agreement is amended and restated in its entirety to
read as follows:
(iii) have an expiry date no later than the Maturity Date
(k) REIMBURSEMENT OBLIGATIONS OF CML AND THE BORROWERS.
Subsections (b) and (c) of Section 4.2 of the Credit Agreement are amended
and restated in their entirety to read as follows:
(b) upon the reduction (but not termination) of such
Borrower's Sub-Commitment to an amount less than the Maximum
Drawing Amount with respect to Letters of Credit issued at the
request of such Borrower, an amount equal to 105% of such
difference, which amount shall be held by the Issuing Bank for
the benefit of the Lenders, the Issuing Bank and the
Administrative Agent as cash collateral for all Reimbursement
Obligations with respect to Letters of Credit issued at the
request of such Borrower, and
(c) upon the termination of the such Borrower's
Sub-Commitment, or the acceleration of the Reimbursement
Obligations with respect to Letters of Credit issued at the
request of such Borrower in accordance with ss.14, an amount
equal tO 105% of the then Maximum Drawing Amount with respect
to Letters of Credit issued at the request of such Borrower,
which amount shall be held by the Issuing Bank for the benefit
of the Lenders, the Issuing Bank and the Administrative Agent
as cash collateral for all Reimbursement Obligations with
respect to Letters of Credit issued at the request of such
Borrower.
(l) LETTER OF CREDIT FEE. Section 4.6 of the Credit
Agreement is amended and restated in its entirety to read as follows:
4.6. LETTER OF CREDIT FEE. Each Borrower shall, on the
date of issuance, or any extension or renewal of any Letter of
Credit, pay a fee (in each case, a "Letter of Credit Fee") to
the Issuing Bank (i) in respect of each standby Letter of
Credit issued at the request of such Borrower equal to four
percent (4.00%) per annum of the face amount of such
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standby Letter of Credit, and (ii) in respect of each
documentary Letter of Credit issued at the request of such
Borrower equal to three percent (3.00%) per annum of the face
amount of such documentary Letter of Credit. The Issuing Bank
shall, in turn, remit to each Lender its PRO RATA portion of
such Letter of Credit Fee. In addition, the applicable
Borrower shall pay to the Issuing Bank, for its own account,
on the date of issuance, or any extension or renewal of any
Letter of Credit and at such other time or times as such
charges are customarily made by the Issuing Bank, a fronting
fee equal to one-half percent (0.50%) per annum of the face
amount of such Letter of Credit and the Issuing Bank's
standard issuance, processing, negotiation, amendment and
administrative fees, determined in accordance with customary
fees and charges for similar facilities. For all Letters of
Credit issued prior to the Amendment No. 1 Effective Date, the
provisions contained in ss.4.6 prior to the Amendment No. 1
Effective Date shall govern.
(m) CLOSING AND OTHER FEES. Section 5.1 of the Credit
Agreement is amended and restated in its entirety to read as
follows:
5.1. CLOSING AND OTHER FEES. The Borrowers jointly and
severally agree to pay to the Administrative Agent the closing
and other fees described in the Fee Letter as and when due and
payable under the Fee Letter.
(n) CHANGES. The first sentence of Section 8.5.1 of the
Credit Agreement is amended and restated in its entirety to read as
follows:
"Since November 1, 1997 there has occurred no materially
adverse change in the condition (financial or otherwise),
operations, assets, liabilities and/or prospects of CML, the
Borrowers and their Subsidiaries other than as disclosed to
the Administrative Agent and the Lenders in writing (including
the Monthly Budget and the Weekly Budget attached as ANNEX A
and ANNEX B, respectively, to Amendment No. 1 to Credit
Agreement) on or prior to the Amendment No. 1 Effective Date."
(o) AFFIRMATIVE COVENANTS OF CML AND THE BORROWERS. The
first paragraph of Section 9 of the Credit Agreement is amended and
restated in its entirety to read as follows:
Each of CML and each of the Borrowers covenants and
agrees that, so long as any Loan, Unpaid Reimbursement
Obligation, Letter of Credit, Note or any other Obligation is
outstanding or any Lender has any obligation to make any Loans
or the Issuing Bank has any obligation to issue, extend or
renew any Letters of Credit:
(p) FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.
Section 9.4 of the Credit Agreement is amended as follows:
(i) by replacing the reference to "thirty (30) days"
appearing in subsection (c) thereof with a reference to
"twenty (20) days";
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(ii) by replacing the reference to "subsections (a) and
(b)" appearing in subsection (d) thereof with a reference to
"subsections (a), (b) and (c)"; and
(iii) by replacing subsection (k) thereof with the
following new subsections (k) through (w):
(k) when completed, copies of final or
substantially final drafts of any offering memorandum or
prospectus prepared by or for CML or any Borrower and
relating to any proposed sale of stock or assets of CML or
any Borrower or any other Subsidiary of CML;
(l) from time to time at the request of any Agent
or any Lender, any current list of prospective purchasers
of any stock or assets of CML or any Borrower or any other
Subsidiary of CML;
(m) any proposal letter or letter of intent or
purchase agreement or similar writing received or signed by
CML or any Borrower or any other Subsidiary of CML relating
to the proposed sale of any stock or assets of CML or any
Borrower or any other Subsidiary of CML;
(n) from time to time at the request of the
Administrative Agent or any Lender, periodic updates on the
status of any efforts to sell the stock or assets of CML or
any Borrower or any other Subsidiary of CML;
(o) (i) not later than March 31, 1998, an
appraisal with respect to the Real Estate owned by CML or
any of its Subsidiaries, as applicable, in Acton,
Massachusetts, such appraisal to be in form and substance
satisfactory to the Lenders, (ii) not later than April 15,
1998, appraisals with respect to the Real Estate owned by
CML or any of its Subsidiaries, as applicable, in Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx xxx Xxxx Xxxxxx, Xxxxxxxxxx, such
appraisals to be in form and substance satisfactory to the
Lenders, (iii) not later than March 20, 1998, lenders'
title insurance policies with respect to the Real Estate
owned by CML or any of its Subsidiaries, as applicable, in
Acton, Massachusetts, Xxxx Xxxxxxxx, Xxxxxxxxxxxxx xxx Xxxx
Xxxxxx, Xxxxxxxxxx, such title insurance policies to be in
form and substance satisfactory to the Lenders, and (iv)
not later than March 13, 1998, environmental site
assessments with respect to the Real Estate owned by CML or
any of its Subsidiaries, as applicable, in Acton,
Massachusetts and West Yarmouth, Massachusetts, such
environmental site assessments to be in form and substance
satisfactory to the Lenders;
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(p) (i) not later than April 24, 1998, the Weekly
Budget for the period from May 1, 1998 through July 10,
1998, such Weekly Budget to be in form and substance
completely satisfactory to the Administrative Agent and the
Lenders, (ii) not later than March 20, 1998, the CML Budget
for months of March 1998 and April 1998, such CML Budget in
form and substance completely satisfactory to the
Administrative Agent and the Lenders, and (iii) not later
than April 24, 1998, the CML Budget for months of May 1998
through July 1998, such CML Budget in form and substance
completely satisfactory to the Administrative Agent and the
Lenders;
(q) as soon as practicable, but in any event
within twenty (20) days after the end of each month
(commencing on March 20, 1998), reports of the total
Accrued Expenses for CML and each of the Borrowers,
detailed by category and amount, as of the end of the
immediately preceding month;
(r) within three (3) Business Days after the end
of each calendar week, a summary of aged Accounts Payable
balances of each of the Borrowers, including an aged
listing of the top 25 vendors of each of the Borrowers by
account balance, as of the end of the immediately preceding
calendar week;
(s) within three (3) Business Day after the end
of each calendar week, a report of the sales of each of the
Borrowers for the immediately preceding calendar week;
(t) as soon as practicable, but in any event
within twenty (20) days after the end of each month
(commencing on March 20, 1998), a report of the Capital
Expenditures of each of the Borrowers for the immediately
preceding month;
(u) not later than April 15, 1998, an
acknowledgment of the insurer under each of the Key Man
Life Insurance Policies with respect to the collateral
assignment of each such Key Man Life Insurance Policy in
favor of the Administrative Agent pursuant to the terms of
the Life Insurance Collateral Assignments, such
acknowledgments of the insurer to be in form and substance
satisfactory to the Administrative Agent, with each of CML
and the Borrowers hereby agreeing to take all such further
actions in connection with the obtaining of such
acknowledgements as the Administrative Agent may require,
including, without limitation, obtaining and executing any
additional forms of acknowledgement or assignment as the
applicable insurers may separately require;
(v) not later than April 10, 1998, on a verbal
basis, and April 24, 1998, on a final written basis,
updated appraisals, performed by Xxxxxxxx & Xxxxxxx, of
NordicTrack's trade names and
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trademarks, such appraisals to be in form and substance
satisfactory to the Administrative Agent and the Lenders;
and
(w) from time to time such other financial data
and information (including accountants' management letters)
as the Administrative Agent or any Lender may reasonably
request.
(q) INSPECTION OF PROPERTIES AND BOOKS, ETC. Section 9.9 of the
Credit Agreement is amended as follows:
(i) by replacing the phrase "No more frequently than
twice each calendar year, or more frequently as determined by the
Administrative Agent if an Event of Default shall have occurred
and be continuing," appearing in the first sentence of ss.9.9.2
with the phrase "From time to time";
(ii) by replacing the phrase "No more frequently than
thrice each calendar year, or more frequently as determined by the
Administrative Agent if an Event of Default shall have occurred
and be continuing," appearing in the first sentence of ss.9.9.3
with the phrase "From time to time";
(iii) by replacing the phrase "No more frequently than
once each calendar year, or more frequently as determined by the
Administrative Agent if an Event of Default shall have occurred
and be continuing," appearing in the first sentence of ss.9.9.4
with the phrase "From time to time";
(iv) by deleting the phrase "if an Event of Default shall
have occurred and be continuing," appearing in the second sentence
of ss.9.9.4; and
(v) by inserting the following new ss.9.9.7 immediately
following ss.9.9.6:
9.9.7. COMMUNICATIONS WITH OTHER REPRESENTATIVES.
CML and each of the Borrowers hereby irrevocably authorizes
each Lender and its representatives, agents and counsel
(each referred to in this ss.9.9.7 as a "Lender
Representative") to have discussions directly with any
representatives or agents (including Xxxxxx Brothers)
engaged by CML or any Borrower to assist in selling any of
the stock or assets of CML or any Borrower or any other
Subsidiary of CML, and has authorized and directed and will
continue to authorize and direct such representatives and
agents to have such discussions with the Lenders and their
Lender Representatives. Any such discussions between any
Lender or its Lender Representative and any such
representative or agent engaged by CML or any Borrower
shall be subject to prior notice given by such Lender or
its Lender Representative to CML or such
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Borrower, and an opportunity given to CML or such Borrower
to participate in such discussions.
(r) LIFE INSURANCE LOANS. The following new Section 9.20 is
hereby inserted immediately following Section 9.19:
9.20. LIFE INSURANCE LOANS. not later than March 30, 1998,
CML shall have borrowed the maximum amount available to be
borrowed under the Key Man Life Insurance Policies and the entire
proceeds of such Life Insurance Loans shall have been applied to
prepay the outstanding Loans; PROVIDED that CML shall be permitted
to pay with such proceeds, promptly after receipt of such
proceeds, any expenses (and CML shall be permitted to reduce the
amount of such proceeds which are required to be applied to prepay
the outstanding Loans by the amount of any such expenses so paid
by CML), which would otherwise be permitted to be funded by
Restricted Payments in accordance with the provisions of
ss.10.4.1. In satisfaction of the foregoing requirements, not
later than March 30, 1998 CML shall have delivered to the
Administrative Agent a check from the insurer constituting such
proceeds of the Life Insurance Loans, together with a certificate
of a duly authorized officer of CML certifying as to the cash
value of each Key Man Life Insurance Policy as well as the maximum
amount available to be borrowed under each such Key Man Life
Insurance Policy.
(s) FURTHER ASSURANCES AS TO TRUST. The following new Section
9.21 is hereby inserted immediately following Section 9.20:
9.21. FURTHER ASSURANCES AS TO TRUST. CML will take all
steps reasonably requested by the Administrative Agent or any of
the Lenders which are necessary to grant in favor of the
Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, a security interest in all of CML's right,
title and interest in and to the Trust and the Trust Assets, and
all proceeds thereof, to the extent that such grant of a security
interest by CML would not breach any of CML's obligations under
the Trust Agreement or limit CML's performance of its obligations
under the Trust.
(t) CERTAIN NEGATIVE COVENANTS OF CML AND THE BORROWERS. The
first paragraph of Section 10 of the Credit Agreement is amended and
restated in its entirety to read as follows:
Each of CML and each of the Borrowers covenants and agrees
that, so long as any Loan, Unpaid Reimbursement Obligation, Letter
of Credit, Note or any other Obligation is outstanding or any
Lender has any obligation to make any Loans or the Issuing Bank
has any obligations to issue, extend or renew any Letters of
Credit:
(u) RESTRICTIONS ON INDEBTEDNESS. Section 10.1 of the Credit
Agreement is amended as follows:
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(i) by amending and restating subsection (g) thereof to
read in its entirety as follows:
(g) obligations under Capitalized Leases and
purchase money Indebtedness incurred in connection with the
acquisition of any real or personal property by CML, such
Borrower or such Subsidiary, in each case which were
outstanding as of March 6, 1998;
(ii) by replacing the reference to "ss.10.3(j)" appearing
in subsection (m) thereof with a reference to "ss.10.3(k)"; and
(v) DISTRIBUTIONS AND RESTRICTED PAYMENTS. Section 10.4 of the
Credit Agreement is amended and restated in its entirety to read as
follows:
10.4. DISTRIBUTIONS AND RESTRICTED PAYMENTS.
10.4.1. INTERCOMPANY DISTRIBUTIONS AND RESTRICTED PAYMENTS.
The Borrowers will not make any Restricted Payments, PROVIDED
HOWEVER, that the Borrowers may make Restricted Payments to CML
(a) in amounts required to pay income and other taxes and
governmental levies owed or payable by CML, and (b) in amounts
required to pay Approved Budgeted Expenses, in the case of each of
the foregoing clauses (a) and (b), such amounts to be paid by CML
not later than five (5) Business Days after the date on which the
relevant Restricted Payment to CML in respect thereof is made. CML
will not incur any payment obligations or expenses except for (x)
those permitted to be funded by Restricted Payments in accordance
with the provisions of the immediately foregoing sentence, (y)
those permitted to be funded with the proceeds of any Insurance
Loans in accordance with the provisions of ss.9.20 or (z) those
permitted to be funded with the net proceeds from the sale of any
of the assets described on SCHEDULE 10.5.2 hereto in accordance
with the provisions of ss.10.5.2(b); PROVIDED that in the case of
any such payment obligations or expenses of CML incurred in
accordance with the foregoing clauses (y) or (z), the amount of
payment obligations or expenses permitted to be funded by
Restricted Payments in accordance with the provisions of the
immediately foregoing sentence shall be reduced dollar for dollar
by the amount of such payment obligations or expenses incurred in
accordance with the foregoing clauses (y) or (z).
10.4.2. CML DISTRIBUTIONS. CML will not make any
Distributions other than purchases or redemptions by CML of the
stock of CML resulting solely from any holder of any stock option
issued by CML paying (a) all or a portion of the exercise price of
such stock option or (b) any taxes due from such holder as a
result of the exercise of such stock option, by such holder's
relinquishment of rights under such stock option.
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(w) MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS. Section
10.5 of the Credit Agreement is amended and restated in its entirety to
read as follows:
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
10.5.1. MERGERS AND ACQUISITIONS. Neither CML nor
any of the Borrowers will, and none will permit any of
their Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition
or stock acquisition (other than the acquisition of assets
in the ordinary course of business consistent with past
practices).
10.5.2. DISPOSITION OF ASSETS. Neither CML nor any
of the Borrowers will, and none will permit any of their
Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than (a) the disposition
of assets in the ordinary course of business, consistent
with past practices, (b) the disposition of any of the
assets listed and described on SCHEDULE 10.5.2 hereto so
long as such assets are sold on terms consented to by the
Administrative Agent and the Majority Lenders and so long
as the net proceeds from the sale of such assets are
deposited in the applicable Concentration Account and
applied to the Obligations in accordance with the
applicable provisions of ss.3.3 hereof; PROVIDED that CML
shall be permitted to pay with such net proceeds, promptly
after receipt of such net proceeds, any expenses (and CML
shall be permitted to reduce the amount of such net
proceeds which are required to be applied to the
Obligations by the amount of any such expenses so paid by
CML), which would otherwise be permitted to be funded by
Restricted Payments in accordance with the provisions of
ss.10.4.1, (c) the termination or assignment of store
leases of any Borrower or its Subsidiaries; PROVIDED that
all Net Cash Proceeds from any such termination or
assignment referred to in this clause (c) shall be applied,
concurrently with receipt of such proceeds by CML or any of
its Subsidiaries, to prepay the Loans of the applicable
Borrower, or, in the case of CML, any of the Borrowers, and
(d) the sale of accounts receivable of NordicTrack to
General Electric Capital Corporation in accordance with the
GE Capital Credit Card Program Agreement.
(x) SALE AND LEASEBACK. Section 10.6 of the Credit Agreement is
amended and restated in its entirety to read as follows:
10.6. SALE AND LEASEBACK. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby CML,
any of the Borrowers or any of their Subsidiaries shall sell or
transfer any property owned by it in order then or thereafter to
lease such property or lease other property that CML, any of the
Borrowers or any of their Subsidiaries intends to use for
substantially the same purpose as the property being sold or
transferred.
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(y) FINANCIAL COVENANTS OF CML AND THE BORROWERS. Section 11 of
the Credit Agreement is amended and restated in its entirety to read as
follows:
11. FINANCIAL COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees
that, so long as any Loan, Unpaid Reimbursement Obligation, Letter
of Credit, Note or any other Obligation is outstanding or any
Lender has any obligation to make any Loans or the Issuing Bank
has any obligation to issue, extend or renew any Letters of
Credit:
11.1. CAPITAL EXPENDITURES. Neither CML nor any of the
Borrowers will make, nor will they permit any of their
Subsidiaries to make, Capital Expenditures, except that (a) S&H
may make Capital Expenditures during the period from the Amendment
No. 1 Effective Date through July 10, 1998 not to exceed
$2,928,000 in the aggregate and (b) NordicTrack may make Capital
Expenditures during the period from the Amendment No. 1 Effective
Date through July 10, 1998 not to exceed $800,000 in the
aggregate. During the period from January 1, 1998 through July 10,
1998, S&H shall have earned an aggregate amount of not less than
$736,000 in landlord allowances in connection with S&H's leasehold
improvement projects and shall have collected such amounts in
respect of such landlord allowances as are reflected in the
Monthly Budget.
11.2. ACCOUNTS PAYABLE.
11.2.1 S&H ACCOUNTS PAYABLE. CML and the Borrowers
will not permit (a) the aggregate amount of Accounts
Payable of S&H as of Saturday of any of the first three
fiscal weeks of March 1998 to exceed the lesser of (i) the
amount of projected Accounts Payable of S&H as of the last
day of the immediately prior calendar month set forth in
the Monthly Budget or (ii) the actual aggregate amount of
Accounts Payable of S&H as of the last day of the
immediately prior calendar month, (b) the aggregate amount
of Accounts Payable of S&H as of Saturday of the fourth
fiscal week of March 1998 to exceed the amount projected
for such day in the Monthly Budget, or (c) the aggregate
amount of Accounts Payable of S&H as of Saturday of any
fiscal week of April 1998, May 1998, June 1998 or July 1998
to exceed the amount of projected Accounts Payable of S&H
as of the last day of the then current calendar month set
forth in the Monthly Budget.
11.2.2 NORDICTRACK ACCOUNTS PAYABLE. CML and the
Borrowers will not permit (a) the aggregate amount of
Accounts Payable of NordicTrack as of Saturday of any of
the first three fiscal weeks of either of March 1998 or
April 1998 (or, if either of such months is a five week
month, the first four fiscal weeks of such month) to exceed
the lesser of (i) the amount of projected Accounts
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Payable of NordicTrack as of the last day of the
immediately prior calendar month set forth in the Monthly
Budget or (ii) the actual aggregate amount of Accounts
Payable of NordicTrack as of the last day of the
immediately prior calendar month, (b) the aggregate amount
of Accounts Payable of NordicTrack as of Saturday of the
fourth fiscal week of either of March 1998 or April 1998
(or, if either of such months is a five week month, as of
Saturday of the fifth fiscal week of such month) to exceed
the amount projected for such day in the Monthly Budget, or
(c) the aggregate amount of Accounts Payable of
NordickTrack as of Saturday of any fiscal week of May 1998,
June 1998 or July 1998 to exceed the amount of projected
Accounts Payable of NordicTrack as of the last day of the
then current calendar month set forth in the Monthly
Budget.
11.3. ACCRUED EXPENSES. CML and the Borrowers will not
permit (a) the aggregate amount of Accrued Expenses of S&H at any
time during any month to exceed the amount of projected Accrued
Expenses of S&H as of the end of such month set forth in the
Monthly Budget, or (b) the aggregate amount of Accrued Expenses of
NordicTrack at any time during any month to exceed the amount of
projected Accrued Expenses of NordicTrack as of the end of such
month set forth in the Monthly Budget.
11.4. MAXIMUM WEEKLY BORROWER EXPOSURE. Notwithstanding
any provision to the contrary contained herein, CML and the
Borrowers will not permit (a) the aggregate Borrower Exposure of
any Borrower at any time during any week set forth in SCHEDULE
11.4 hereto to exceed the amount for such Borrower set forth
opposite such week in such SCHEDULE 11.4 (in each case, as such
schedule shall be amended in accordance with the provisions set
forth below in this paragraph) or (b) the aggregate outstanding
Loans of any Borrower at any time during any week set forth in
SCHEDULE 11.4 hereto to exceed the amount for such Borrower set
forth opposite such week in such SCHEDULE 11.4 (in each case, as
such schedule shall be amended in accordance with the provisions
set forth below in this paragraph). SCHEDULE 11.4 shall be amended
prior to April 30, 1998 to reflect, in a manner reasonably
satisfactory to the Lenders, the projected Borrower Exposure and
Loans, respectively, for each Borrower set forth in the Weekly
Budget for the period from May 1, 1998 through July 10, 1998
delivered to the Administrative Agent and the Lenders pursuant to,
and satisfying the requirements of, ss.9.4(p).
(z) REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Section 13.1 of
the Credit Agreement is amended and restated in its entirety to read as
follows:
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of
the representations and warranties of any of CML, the Borrowers
and their Subsidiaries contained in this Credit Agreement, the
other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be
true as of the date as of which they were made and shall also be
true at and as of the time of the
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making of such Loan or the issuance, extension or renewal of such
Letter of Credit, with the same effect as if made at and as of
that time (except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or
Event of Default shall have occurred and be continuing.
(aa) EVENTS OF DEFAULT AND ACCELERATION. Section 14.1 of the
Credit Agreement is amended by inserting the following new subsections
(r), (s) and (t) immediately following subsection (q) thereof:
(r) there shall have occurred any materially adverse
change in the condition (financial or otherwise), operations,
assets, liabilities and/or prospects of CML and its Subsidiaries
since November 1, 1997 other than as disclosed to the
Administrative Agent and the Lenders in writing (including the
Monthly Budget and the Weekly Budget attached as ANNEX A and ANNEX
B, respectively, to Amendment No. 1 to Credit Agreement) on or
prior to the Amendment No. 1 Effective Date;
(s) CML or any of its Subsidiaries shall repay, prepay,
redeem or repurchase any principal of any of the Insurance Loans;
(t) CML shall fail to perform any term, covenant or
agreement contained in any of the Warrant Documents;
(bb) CONDITIONS TO ASSIGNMENT BY LENDERS. Section 20.1 of the
Credit Agreement is amended by amending and restating clause (i) of the
proviso appearing in the first sentence thereof to read in its entirety
as follows:
(i) the Administrative Agent shall have given its prior written
consent to such assignment,
(cc) SCHEDULE 1 TO THE CREDIT AGREEMENT. SCHEDULE 1 to the
Credit Agreement is hereby amended and restated in its entirety to read
as set forth on SCHEDULE 1 to this Amendment Agreement.
(dd) SCHEDULE 2.1.5 TO THE CREDIT AGREEMENT. SCHEDULE 2.1.5 to
this Amendment Agreement is hereby added to the Credit Agreement as
SCHEDULE 2.1.5 thereto.
(ee) SCHEDULE 10.5.2. TO THE CREDIT AGREEMENT. SCHEDULE 10.5.2
to this Amendment Agreement is hereby added to the Credit Agreement as
SCHEDULE 10.5.2 thereto.
(ff) SCHEDULE 10.6 TO THE CREDIT AGREEMENT. SCHEDULE 10.6 to the
Credit Agreement is hereby deleted in its entirety.
(gg) SCHEDULE 11.4 TO THE CREDIT AGREEMENT. SCHEDULE 11.4 to
this Amendment Agreement is hereby added to the Credit Agreement as
SCHEDULE 11.4 thereto.
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(hh) EXHIBIT D TO THE CREDIT AGREEMENT. EXHIBIT D to the Credit
Agreement is hereby amended and restated in its entirety to read as set
forth on EXHIBIT D to this Amendment Agreement.
(ii) EXHIBIT H-1 TO THE CREDIT AGREEMENT. EXHIBIT H-1 to the
Credit Agreement is hereby deleted in its entirety.
Section 2. LIMITED WAIVERS.
(a) Each of the Administrative Agent and the Lenders hereby (i)
waives the Specified Borrowing Base Event of Default resulting from
noncompliance with Sections 3.2 of the Credit Agreement as in effect
prior to giving effect to this Amendment Agreement, and (ii) waives the
Specified Financial Covenant Events of Default resulting from
noncompliance with Sections 11.1, 11.2, 11.3, 11.4 and 11.5 of the Credit
Agreement as in effect prior to giving effect to this Amendment
Agreement.
(b) Except to the extent expressly provided herein, this
Amendment Agreement shall not, by implication or otherwise, limit,
impair, constitute a waiver of or otherwise affect the rights and
remedies of the Administrative Agent, the Issuing Bank or any of the
Lenders under the Credit Agreement or any other Loan Document, or waive,
modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or
any other Loan Document, all of which are ratified and affirmed in all
respects and shall continue in full force and effect. Nothing herein
shall be deemed to entitle any Obligor to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or
any other Loan Documents in any circumstance.
(c) The Administrative Agent and the Lenders have not waived,
have no intention of waiving and expressly reserve all of their rights to
exercise and to enforce, at any time and from time to time, any and all
of their respective rights and remedies under and in respect of the
subordination provisions contained in the Subordinated Debentures and the
indenture pursuant to which such Subordinated Debentures were issued.
Section 3. REPRESENTATIONS AND WARRANTIES. Each of the Obligors hereby
jointly and severally agrees, represents and warrants to the Lenders and the
Administrative Agent as follows:
(a) RATIFICATION OF OBLIGATIONS.
(i) As of March 11, 1998, (A) the outstanding principal
balance of the NordicTrack Loans is $17,358,679, (B) the
outstanding accrued and unpaid interest on the NordicTrack Loans
is $75,279.48, (C) the outstanding principal balance of the S&H
Loans is $9,108,575, (D) the outstanding accrued and unpaid
interest on the S&H Loans is $55,134.93, (E) the Maximum Drawing
Amount under outstanding Letters of Credit is $3,744,966 and (F)
the outstanding Unpaid
24
-24-
Reimbursement Obligations are $0 (it being understood that the
Obligors also are obligated under Section 17 of the Credit
Agreement and under other provisions of the Loan Documents for
items such as reimbursement of fees and expenses of counsel to the
Administrative Agent and the Lenders).
(ii) All the Obligations are secured by a perfected first
priority security interest in the Collateral. All the Obligations
and all of the obligations of the Guarantors under the Guaranty
and the Foreign Guarantors under the Foreign Guaranties are hereby
ratified and confirmed in all respects.
(iii) There are no understandings or agreements relating
to the Loans other than the Loan Documents.
(iv) Neither the Administrative Agent nor any of the
Lenders is in default under any of the Loan Documents or otherwise
has breached any obligations to the Obligors.
(v) There are not now any offsets, counterclaims or
defenses to the Obligations, to any of the obligations of any
Guarantor under the Guaranty or of any Foreign Guarantor under the
Foreign Guaranties, or to the rights, remedies or powers of the
Administrative Agent or any of the Lenders in respect of any of
the Obligations or any of the Loan Documents, and each Obligor,
each Guarantor and each Foreign Guarantor agrees not to interpose
(and hereby waives and releases) any such defense, set-off or
counterclaim in any action brought by any of the Administrative
Agent or the Lenders with respect thereto.
(vi) Each Obligor has been represented by counsel of each
of its choice in connection with this Amendment Agreement and the
transactions contemplated hereby. Each Obligor has executed this
Amendment Agreement and the other Amendment Documents to which it
is a party freely and without coercion or duress.
(b) BINDING EFFECT OF DOCUMENTS, ETC. Each of this Amendment
Agreement, the Notes executed pursuant to this Amendment Agreement, the
Mortgages executed pursuant to this Amendment Agreement, the Fee Letter,
the Warrants (as hereinafter defined), the Warrant Purchase Agreement (as
hereinafter defined), the Life Insurance Collateral Assignments, the
Aircraft Security Agreement, the amendments to the Patent Assignment, the
Copyright Mortgage and the Trademark Assignment executed pursuant to this
Amendment Agreement, and each Agency Account Agreement executed pursuant
to this Amendment Agreement (together with each other Loan Document as
amended hereby, the "AMENDMENT DOCUMENTS") has been duly executed and
delivered by each Obligor, each Guarantor and each Foreign Guarantor
which is a party thereto. The execution, delivery and performance by each
Obligor, each Guarantor and each Foreign Guarantor of each Amendment
Document to which such Person is a party, have been duly authorized by
proper corporate proceedings by such Person, and each Amendment Document
to which any
25
-25-
Obligor, any Guarantor or any Foreign Guarantor is a party constitutes
the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with the terms of such Amendment
Document.
(c) POWER, AUTHORITY, NO CONFLICTS, ETC. The execution,
delivery and performance of each Amendment Document by each Obligor, each
Guarantor and each Foreign Guarantor (i) are within the corporate
authority of such Person, (ii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or
regulation to which such Person is subject or any judgment, order, writ,
injunction, license or permit applicable to such Person, (iii) do not
conflict with any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, such Person, and (iv) do not
require any consents under, result in a breach of or constitute (along or
with notice or lapse of time or both) a default under any such agreement
or other instrument binding upon such Person.
(d) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties of any Obligor contained in the Credit Agreement, the
other Loan Documents or in any document or instrument delivered pursuant
to or in connection with the Credit Agreement (in each case, as amended
or modified hereby or in connection herewith) are true as of the date as
of which they were made and are true as of the date of this Amendment
Agreement, except to the extent that such representations and warranties
relate expressly to any earlier date.
(e) NO OTHER DEFAULTS. No Defaults or Events of Default exist
on the date hereof after giving effect to the waivers of the Specified
Events of Default as provided in Section 2(a) above and the amendments to
the Credit Agreement effected by Section 1 above.
(f) PROPERTIES AND ASSETS. Each of the Obligors has disclosed
to the Administrative Agent and the Lenders all material assets owned by
such Obligor and its Subsidiaries, and all actions have been taken that
are necessary or advisable, under applicable law, to establish and
perfect in favor of the Administrative Agent, for the benefit of the
Lenders and the Administrative Agent, security interests in all of such
material assets of such Obligor and its Subsidiaries.
(g) CONDITIONS TO EFFECTIVENESS. All conditions to the
effectiveness of this Amendment Agreement set forth in Section 4 below,
other than those which are subject to the discretion of the
Administrative Agent, the Issuing Bank or any Lender, have been satisfied
in all respects.
(h) BANK ACCOUNTS. CML has no funds in any bank accounts other
than depository, disbursement and payroll accounts maintained with
BankBoston.
Section 4. CONDITIONS. This Amendment Agreement and all of the provisions
hereof shall become effective upon the date hereof (the "AMENDMENT NO. 1
EFFECTIVE
26
-26-
DATE"), but only if each of the following conditions precedent are satisfied on
or prior to such date:
(a) ASSIGNMENT AND ACCEPTANCE. Rothschild shall have become a
Lender party to the Credit Agreement having a Commitment Percentage of
50% pursuant to an Assignment and Acceptance entered into between
BankBoston and Rothschild in form and substance satisfactory to each of
Rothschild and BankBoston.
(b) DELIVERY OF AMENDMENT AGREEMENT. This Amendment Agreement
shall have been duly authorized, executed and delivered to the
Administrative Agent by CML, the Borrowers and the Lenders.
(c) GUARANTIES. Each of the Guarantors and the Foreign
Guarantors shall have duly authorized, executed and delivered to the
Administrative Agent its consent to this Amendment Agreement, in form and
substance satisfactory to the Administrative Agent.
(d) NOTES. Each of NT and NA shall have duly authorized,
executed and delivered to the Administrative Agent a new NordicTrack Note
in favor of each of the Lenders in the maximum aggregate principal amount
equal to such Lender's Commitment and otherwise in form and substance
satisfactory to the Administrative Agent and the Lenders. S&H shall have
duly authorized, executed and delivered to the Administrative Agent a new
S&H Note in favor of each of the Lenders in the maximum aggregate
principal amount equal to such Lender's Commitment and otherwise in form
and substance satisfactory to the Administrative Agent and the Lenders.
(e) WARRANTS. CML shall have duly authorized, executed and
delivered to each of the Lenders a Warrant Purchase Agreement in form and
substance satisfactory to the Administrative Agent and the Lenders (the
"WARRANT PURCHASE AGREEMENT") in connection with the issuance by CML to
the Lenders of its Common Stock Purchase Warrants (the "WARRANTS") for
the purchase of CML's common equity. CML shall have duly authorized,
executed and delivered to the Administrative Agent Warrants issued to
each of the Lenders in form and substance satisfactory to the Lenders
pursuant to the terms of the Warrant Purchase Agreement.
(f) MORTGAGES. CML and its Subsidiaries, as applicable, shall
have delivered to the Administrative Agent fully executed fee mortgages,
in form and substance satisfactory to the Administrative Agent, as to the
Real Estate owned by CML or any of its Subsidiaries, as applicable, in
Acton, Massachusetts, Xxxx Xxxxxxxx, Xxxxxxxxxxxxx xxx Xxxx Xxxxxx,
Xxxxxxxxxx, together with UCC-1 financing statements and such other
documents and certificates with respect to such Real Estate as the
Administrative Agent may request, including without limitation, copies of
any environmental site assessments with respect to the Real Estate in
Mill Valley, California.
(g) LIFE INSURANCE COLLATERAL ASSIGNMENTS. CML shall have
executed and delivered to the Administrative Agent Life Insurance
Collateral
27
-27-
Assignments in form and substance satisfactory to the Administrative
Agent assigning to the Administrative Agent, for the benefit of the
Lenders and the Administrative Agent, all of CML's right, title and
interest in the Key Man Life Insurance Policies to secure the
Obligations.
(h) AGENCY ACCOUNT AGREEMENTS. The Administrative Agent shall
have received additional Agency Account Agreements, in form and substance
satisfactory to the Administrative Agent, from each depository
institution with which any of the Obligors has an account which the
Administrative Agent has identified as a key concentration account,
including, without limitation, Bank of America and NationsBank.
(i) SECURITY INTEREST IN AIRCRAFT. CML shall have executed and
delivered to the Administrative Agent the Aircraft Security Agreement in
form and substance satisfactory to the Administrative Agent granting in
favor of the Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, a security interest in and mortgage over all of
CML's right, title and interest in and to the 1983 Cessna single-engine
aircraft (model #R182, serial #R192 01952) to secure the Obligations. The
Administrative Agent shall have made all filings and taken all such other
steps necessary or advisable in order to perfect or protect such security
interest and mortgage, including without limitation, the filing of the
Aircraft Security Agreement with the Federal Aviation Administration.
(j) PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The
Administrative Agent shall have received from each of the Obligors
updated Perfection Certificates and the results of UCC, patent, trademark
and copyright searches with respect to the Collateral, indicating no
liens other than Permitted Liens and otherwise in form and substance
satisfactory to the Administrative Agent.
(k) INTELLECTUAL PROPERTY. CML and each of its Subsidiaries
shall have executed and delivered to the Administrative Agent amendments
to each of the Trademark Assignment, the Patent Assignment and the
Copyright Mortgage in form and substance satisfactory to the
Administrative Agent supplementing the lists of patents, trademarks and
copyrights previously assigned and pledged to the Administrative Agent,
for the benefit of the Lenders and the Administrative Agent. Each such
amendment shall have been properly filed with the United States Patent
and Trademark Office or the United States Office of Copyrights, as
applicable.
(l) FINANCING STATEMENTS. Financing statements (including
fixture financing statements and including any necessary UCC-3 amendment
financing statements with respect to existing filings) executed and
delivered by CML and each of its Subsidiaries, as applicable, shall have
been filed with all appropriate jurisdictions as may be requested by the
Administrative Agent to perfect, preserve or protect the Administrative
Agent's security interest in the Collateral.
28
-28-
(m) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of CML and the Borrowers contained in Section 3 of this
Amendment Agreement shall be true and correct.
(n) FEES AND EXPENSES. The Obligors shall have paid to the
Administrative Agent, for its own account and for the accounts of the
Lenders, as applicable, all fees required to be paid on or prior to the
Amendment No. 1 Effective Date pursuant to the terms of the Fee Letter.
The Obligors shall have paid to each Lender upon demand all out-of-pocket
costs and expenses (including, without limitation, all fees and
disbursements of legal counsel, the costs of intellectual property
searches, UCC searches and filings, mortgage recording fees, intellectual
property security interest filing fees, fees of title insurers, tax lien
searches, commercial financial exams, collateral audits and other fees
and expenses) incurred or sustained by such Lender in connection with
this Amendment Agreement and the other transactions contemplated hereby.
(o) COLLATERAL REPORTS. The Lenders shall have received and
reviewed and shall be satisfied with BankBoston Retail Finance's
commercial finance examinations of the Borrowers. The Lenders shall have
received and reviewed and shall be satisfied with Xxxxxx Xxxxxxxx' report
as to the net recovery of cost inventory valuation of the Borrowers.
(p) LEGAL OPINION. The Administrative Agent shall have received
a favorable legal opinion addressed to the Administrative Agent and the
Lenders, dated as of the Amendment No. 1 Effective Date and in form and
substance satisfactory to the Administrative Agent, from Xxxx and Xxxx,
counsel to the Obligors, the Guarantors and the Foreign Guarantors. The
Obligors, the Guarantors and the Foreign Guarantors shall have instructed
such counsel to deliver its opinion to the Administrative Agent.
(q) CERTIFIED COPIES OF CHARTER DOCUMENTS. The Administrative
Agent shall have received from each of the Obligors a copy, certified by
a duly authorized officer of such Person to be true and complete on the
Amendment No. 1 Effective Date, of each of (i) its charter or other
incorporation documents as in effect on such date of certification, and
(ii) its by-laws as in effect on such date. Such certified copies shall
be in form and substance reasonably satisfactory to the Administrative
Agent.
(r) PROOF OF CORPORATE ACTION. The Administrative Agent shall
have received from each of the Obligors copies, certified by a duly
authorized officer of such Person to be true and complete on and as of
the Amendment No. 1 Effective Date, of the records of all corporate
action taken by such Person to authorize (i) such Person's execution and
delivery of the Amendment Documents, and (ii) such Person's performance
of all of its agreements and obligations under the Amendment Documents.
Such certified copies shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(s) INCUMBENCY CERTIFICATE. The Administrative Agent shall have
received incumbency certificates, dated the Amendment No. 1 Effective
Date,
29
-29-
signed respectively by a duly authorized officer of each of the Obligors,
and giving the name and bearing a specimen signature of each individual
who shall be authorized (i) to sign, in the name and on behalf of such
Person the Amendment Documents, and (ii) to give notices and to take
other action on behalf of such Person under the Amendment Documents.
(t) CLOSING CERTIFICATE. The Administrative Agent shall have
received a certificate, dated the Amendment No. 1 Effective Date, signed
by the Chief Financial Officer and the Secretary of CML, to the effect
that (i) each of the representations and warranties of any Obligor
contained in the Credit Agreement, this Amendment Agreement and the other
Loan Documents or in any document or instrument delivered pursuant to or
in connection with the Credit Agreement was true as of the date as of
which it was made and is true as of the Amendment No. 1 Effective Date,
except to the extent that such representations and warranties relate
expressly to any earlier date, (ii) no Default or Event of Default exists
on the Amendment No. 1 Effective Date after giving effect to the waivers
of the Specified Events of Default as provided in Section 2(a) above and
the amendments to the Credit Agreement effected by Section 1 above and
(iii) all conditions to the effectiveness of this Amendment Agreement set
forth in this Section 4, other than those which are subject to the
discretion of the Administrative Agent, the Issuing Bank or any Lender,
have been satisfied in all respects.
(u) LEGAL FEES AND EXPENSES. The Obligors shall have paid or
reimbursed (i) the Administrative Agent for all of the fees and
disbursements of Xxxxxxx Xxxx LLP, the Administrative Agent's special
counsel, and (ii) Rothschild for all of the fees and disbursements of
Debevoise & Xxxxxxxx, Xxxxxxxxxx'x special counsel, in each such case
which shall have been incurred by the Administrative Agent or, as the
case may be, Rothschild, in connection with the preparation, negotiation,
execution and delivery of the Amendment Documents and the implementation
of the transactions contemplated thereby, or which otherwise are required
to be paid under the Credit Agreement.
(v) CERTIFICATES OF INSURANCE. The Administrative Agent shall
have received (i) a certificate of insurance from an independent
insurance broker dated as of the Amendment No. 1 Effective Date,
identifying insurers, types of insurance, insurance limits, and policy
terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreement and (ii) certified copies of all
policies evidencing such insurance (or certificates therefore signed by
the insurer or an agent authorized to bind the insurer) and the
Administrative Agent shall be satisfied with the adequacy of all such
insurance.
(w) NO MATERIALLY ADVERSE CHANGE. There shall not have occurred
any materially adverse change in the condition (financial or otherwise),
operations, assets, liabilities and/or prospects of CML and its
Subsidiaries since November 1, 1997 other than as disclosed to the
Administrative Agent and the Lenders in writing (including the Monthly
Budget and the Weekly Budget attached as ANNEX A and ANNEX B,
respectively, hereto) on or prior to the Amendment No. 1 Effective Date.
30
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(x) LETTERS OF CREDIT. The Administrative Agent shall have
received a list of all Letters of Credit which are issued and outstanding
under the Credit Agreement as of the Amendment No. 1 Effective Date,
including the undrawn face amount, beneficiary, number and expiry date of
each such Letter of Credit.
(y) MONTHLY BUDGET AND WEEKLY BUDGET. The Lenders shall have
received and reviewed and shall be satisfied with (i) the Monthly Budget
of CML and its Subsidiaries for the period from March 1, 1998 through
July 31, 1998 such Monthly Budget being attached as ANNEX A hereto, and
(ii) the Weekly Budget for the period from March 1, 1998 through
April 30, 1998, such Weekly Budget being attached as ANNEX B hereto.
(z) CONSENTS AND APPROVALS, ETC. All consents, approvals and
agreements necessary or advisable, in the judgment of any Lender, in
connection with the execution, delivery and performance by the Obligors
or any of their Subsidiaries of the Amendment Documents shall have been
obtained and shall be in full force and effect. There shall not be any
action pending which, in the judgment of any Lender, is likely to
restrain, prevent or impose materially adverse conditions upon
performance by the Obligors or any of their Subsidiaries or any of its or
their respective obligations under the Amendment Documents or any of the
other Loan Documents. No judgment, order or decree shall be outstanding,
and no action shall have been taken by any governmental authority, that,
in the judgment of any Lender or its counsel, has or is likely to have
the effect of restraining, preventing or imposing materially adverse
conditions upon (i) the performance by any of the Obligors or their
respective Subsidiaries of their obligations under the Amendment
Documents or any of the other Loan Documents, (ii) the extension of
credit under the Credit Agreement or (iii) the security arrangements
contemplated by the Security Documents.
Section 5. PROVISIONS OF GENERAL APPLICATION.
(a) RELEASE. Each Obligor and its respective successors,
assigns and Subsidiaries (collectively, the "RELEASORS"), as applicable,
release and forever discharge the Administrative Agent, the Issuing Bank,
each of the Lenders, and their respective parents, subsidiaries,
affiliates, officers, directors, employees, agents, attorneys,
predecessors, successors and assigns, both present and former
(collectively together with the Administrative Agent, the Issuing Bank
and the Lenders, the "BANK AFFILIATES"), of and from any and all manner
of action and actions, causes of action, suits, debts, controversies,
damages, judgments, executions, claims and demands whatsoever, asserted
or unasserted, in law or in equity, against any of the Bank Affiliates
which any Releasor ever had or now has on the date hereof, upon or by
reason of any manner, cause, causes or thing whatsoever, whether
presently existing, suspected, known, unknown, contemplated or
anticipated.
(b) NO WAIVERS, ETC. None of the Administrative Agent, the
Issuing Bank, or the Lenders has waived, is by this Amendment Agreement
waiving, or has any intention of waiving, any Defaults or Events of
Default which may be continuing on the date hereof or any Defaults or
Events of Default which may
31
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occur after the date hereof (other than the limited waivers provided in
ss.2(a) with respect to the Specified Events of Default). Each of the
Administrative Agent, the Issuing Bank and each of the Lenders reserves
the right to exercise all of its rights and remedies under the Loan
Documents or otherwise, subject only to the limitations expressly set
forth in this Amendment Agreement. No delay on their part in exercising
any of such rights or remedies shall be construed as a waiver of any of
such rights or remedies.
(c) BANKRUPTCY. In the event that S&H shall: (i) file with any
bankruptcy court of competent jurisdiction or be the subject of any
petition under the federal Bankruptcy Code; (ii) be the subject of any
order for relief issued under the federal Bankruptcy Code; (iii) file or
be the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any present or future federal or state act or law relating to
bankruptcy, insolvency or other relief for debtors; (iv) have sought or
consented to or acquiesced in the appointment of any trustee, receiver,
conservator or liquidator; or (v) be the subject of any order, judgment
or decree entered by any court of competent jurisdiction approving a
petition filed against S&H for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any present or future federal or state act or law relating to
bankruptcy, insolvency or other relief for debtors, then, subject to
court approval, the Administrative Agent and the Lenders shall thereupon
be entitled, and each of S&H and, in so far as it relates to the capital
stock of S&H held by it, CML, irrevocably consents to, and irrevocably
waives its right to object to, relief from the automatic stay imposed by
Section 362 of the federal Bankruptcy Code, or otherwise, on or against
the exercise of the rights and remedies otherwise available to the
Administrative Agent and the Lenders as provided in the Loan Documents
and this Amendment Agreement and as otherwise provided by law.
(d) REIMBURSEMENT OF EXPENSES. Each Obligor acknowledges that
all reasonable out of pocket costs and expenses incurred by the
Administrative Agent and each of the Lenders in connection with (i) the
preparation, negotiation, execution, delivery and monitoring of this
Amendment Agreement and the transactions contemplated thereby, and (ii)
the discussions and meetings that preceded this Amendment Agreement
(including, without limitation, legal and other professional and
consultant's fees and disbursements), shall be paid by CML and the
Borrowers and shall constitute a portion of the Obligations secured by
the Collateral and guaranteed by the Guaranty and the Foreign Guaranties.
(e) LOAN DOCUMENTS. From and after the date hereof, this
Amendment Agreement shall be deemed a Loan Document for all purposes of
the Credit Agreement, and each reference to Loan Documents in the Credit
Agreement shall be deemed to include this Amendment Agreement.
(f) APPLICABLE LAW. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
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(g) COUNTERPARTS. This Amendment Agreement may be executed in
any number of counterparts, each of which shall constitute an original
but all of which when taken together shall constitute but one agreement.
Delivery of an executed counterpart of a signature page by facsimile
transmission shall be effective as delivery of a manually executed
counterpart of this Amendment Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
date first above written.
Very truly yours,
CML GROUP, INC.
By:
----------------------------------------
Xxxxx X. Xxxxx, Vice President -
Finance
NORDICTRACK, INC.
NORDIC ADVANTAGE, INC.
XXXXX & HAWKEN, LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx, Vice President
Agreed to and Accepted By:
BANKBOSTON, N.A.
(f/k/a The First National Bank of Boston),
individually and as Administrative Agent
and Issuing Bank
By:
------------------------------------
Name:
Title:
ROTHSCHILD RECOVERY FUND, L.P.
By:
------------------------------------
Name:
Title:
34
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CONSENT OF GUARANTORS AND FOREIGN GUARANTORS
Each of the undersigned hereby acknowledges and consents to Amendment
No. 1 to Credit Agreement, dated as of March 11, 1998, and agrees that the
Guaranty dated as of April 17, 1996 and amended and restated as of August 28,
1997 executed by such Person in favor of the Administrative Agent and the
Lenders or, as the case may be, the Foreign Guaranty dated in April 1996
executed by such Person in favor of the Administrative Agent and the Lenders,
and all of the other Loan Documents to which such Person is a party remain in
full force and effect, and such Person confirms and ratifies all of its
obligations thereunder.
OCR, INC.
OBW, INC.
WFH GROUP, INC.
CML INTERNATIONAL (FSC), LTD.
NORDICTRACK (U.K.) LTD.
NORDIC ADVANTAGE OF
ONTARIO, INC.
NORDICTRACK GmbH
OTNC, INC.
BFPI, INC.
By:
-----------------------------------
Xxxxx X. Xxxxx, Vice President
35
SCHEDULE 2.1.5
to Amendment Agreement
and to Credit Agreement
SUB-OVERADVANCE AMOUNTS
Nordictrack:
------------
Sub-Overadvance
Week Ended Amount
---------- --------------
3/7/98 $ 8,564,000
3/14/98 $ 12,784,000
3/21/98 $ 13,653,000
3/28/98 $ 17,726,000
4/4/98 $ 20,499,000
4/11/98 $ 21,232,000
4/18/98 $ 23,716,000
4/25/98 $ 24,688,000
5/2/98 $ 25,003,000
thereafter $0 until reset
S&H:
----
Sub-Overadvance
Week Ended Amount
---------- --------------
3/7/98 $ 1,844,000
3/14/98 $ 1,951,000
3/21/98 $ 2,766,000
3/28/98 $ 3,862,000
4/4/98 $ 4,723,000
4/11/98 $ 4,065,000
4/18/98 $ 3,923,000
4/25/98 $ 3,705,000
5/2/98 $ 2,786,000
thereafter $0 until reset
36
SCHEDULE 10.5.2
TO AMENDMENT AGREEMENT AND TO
CREDIT AGREEMENT
ASSETS TO BE SOLD
A. NordicTrack, Inc:
1. 000 Xxxxxx Xxxx
Xxxxxx, Xxxxxx Xxxxxx, XX 00000
A purchase agreement for the sale of this building and certain personal
property located therein was executed as of March 6, 1998. The
approximate cash sale price for the building and personal property is
$1,750,000 (assessed value for real property tax purposes for 1998 is
$1,422,100). The closing date for this transaction is expected to be no
later than June 1998.
2. 000 Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx Xxxxxx, XX 00000
A purchase agreement for the sale of this building and certain personal
property located therein was executed as of February 25, 1998. The
approximate cash sale price for the building and personal property is
$565,000 (assessed value for real property tax purposes for 1998 is
$289,500). The closing date for this transaction is expected to be no
later than June 1998.
3. 00 Xxxxxx Xxxx
Xxxxxx, Xxxxxx Xxxxxx, XX 00000
An offer to purchase this building and land related thereto was received
on March 2, 1998. The cash sale price for the building and land per the
March 2, 1998 offer is $2,000,000, which has not been accepted. The
parties are continuing to negotiate although a potential closing date for
this transaction cannot be ascertained at this time.
B. CML, Group, Inc.:
1. 000 Xxxxxxx Xxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000
This property was listed with a real estate broker in December 1997 for
the purpose of selling such property. A date when such a sale would be
consummated cannot be ascertained at this time.
2. Corporate Headquarters Property
000 Xxxx Xxxxxx
Xxxxx, XX 00000
CML intends to sell this property, and the property shall be listed for
sale promptly.
3. The aircraft that is the subject of the Aircraft Security Agreement.
37
SCHEDULE 11.4
to Amendment Agreement
and to Credit Agreement
MAXIMUM WEEKLY BORROWER EXPOSURE
Nordictrack:
------------
Maximum Maximum
Week Ended Borrower Exposure Loans
---------- ----------------- -------
3/7/98 $ 20,001,000 $ 18,317,000
3/14/98 $ 24,217,000 $ 22,530,000
3/21/98 $ 25,530,000 $ 23,843,000
3/28/98 $ 28,834,000 $ 27,147,000
4/4/98 $ 31,816,000 $ 30,129,000
4/11/98 $ 32,753,000 $ 31,070,000
4/18/98 $ 35,015,000 $ 33,332,000
4/25/98 $ 35,953,000 $ 34,270,000
5/2/98 $ 36,747,000 $ 35,064,000
thereafter $0 until reset $0 until reset
S&H:
----
Maximum Maximum
Week Ended Borrower Exposure Loans
---------- ----------------- -------
3/7/98 $ 11,169,000 $ 9,108,000
3/14/98 $ 11,025,000 $ 9,307,000
3/21/98 $ 11,757,000 $ 10,209,000
3/28/98 $ 12,749,000 $ 11,415,000
4/4/98 $ 13,930,000 $ 12,297,000
4/11/98 $ 13,705,000 $ 12,078,000
4/18/98 $ 13,552,000 $ 12,275,000
4/25/98 $ 13,431,000 $ 12,275,000
5/2/98 $ 12,973,000 $ 11,342,000
thereafter $0 until reset $0 until reset
38
EXHIBIT D
to Amendment Agreement
and to Credit Agreement
COMPLIANCE CERTIFICATE
39
ANNEX A
to Amendment Agreement
MONTHLY BUDGET
40
ANNEX B
to Amendment Agreement
WEEKLY BUDGET
