EXHIBIT 5
WAIVER REGARDING THE DERBY CYCLE CORPORATION AND OTHERS
DM214,000,000 REVOLVING MULTI-CURRENCY CREDIT FACILITY
This waiver ("Waiver") is dated August 1999 and entered into by and among:-
1. THE DERBY CYCLE CORPORATION, a company incorporated in Delaware, United
States of America, having its principal office at 00000, 00xx Xxxxxx Xxxxx,
Xxxx, Xxxxxxxxxx, 00000 ("the Company");
2. THE COMPANIES identified as Borrowers in Schedule 1 of the Facility
Agreement ("the Borrowers");
3. THE COMPANIES identified as Guarantors in Schedule 2 of the Facility
Agreement ("the Guarantors");
4. CHASE MANHATTAN PLC as arranger ("the Arranger");
5. THE FINANCIAL INSTITUTIONS identified as banks in Schedule 3 of the
Facility Agreement ("the Banks");
6. CHASE MANHATTAN INTERNATIONAL LIMITED as facility agent ("the Facility
Agent");
7. CHASE MANHATTAN INTERNATIONAL LIMITED as security agent ("the Security
Agent")
and is made with reference to a DM214,000,000 Revolving Multi-Currency Credit
Facility Agreement dated 12 May 1998, as amended and restated pursuant to an
Amendment and Restatement Agreement dated 3 February 1999 and as further amended
pursuant to an Amendment Agreement dated 30 April 1999 and as further amended
pursuant to a further Amendment Agreement dated on or about the date hereof
(collectively "the Facility Agreement") by and among the Company, Borrowers,
Guarantors, Arranger, the Banks, Facility Agent and Security Agent. Words and
expressions used herein without definition shall have the same meanings as set
forth in the Facility Agreement.
RECITALS
WHEREAS the Banks have agreed to waive compliance with certain provisions of the
Facility Agreement as more particularly set out herein.
NOW, THEREFORE IN CONSIDERATION of these premises and the agreements, provisions
and covenants herein contained, the parties agree as follows:
1. Permanent Waiver
1.1 Subject to Clause 1.2 below and the other terms and conditions set
forth herein and in reliance on the representations and warranties of
the Obligors herein contained, the Banks hereby waive any Event of
Default under clause 21 of the Facility Agreement resulting solely
from the Group's failure to maintain the following financial
covenants:
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1.1.1 the ratio of Consolidated Adjusted EBITDA to Consolidated Net
Interest payable for the Accounting Period ending on 27 June
1999 of 1.25:1;
1.1.2 the amount of Consolidated Adjusted EBITDA calculated on a
Rolling 4 Quarterly basis for the Accounting Period ending on
27 June 1999 in the sum of $26,000,000;
1.1.3 the breach of the sub-limit of US$2,750,000 contained in Clause
19.5(c)(iii) of the Facility Agreement by US$ 196000.
1.2 Without limiting the generality of the provisions of Clause 32 and 35
of the Facility Agreement the Waiver set forth above in Clause 1.1
shall be limited precisely as written and nothing in this clause 1.2
shall be deemed to:
1.2.1 constitute a Waiver of any other term, provision or condition
of the Facility Agreement or any other Finance Documents or
Agreement referred to therein or otherwise; or
1.2.2 prejudice any rights or remedy that the Agents or Banks may now
have or may have in the future under or in connection with the
Facility Agreement or any other Finance Documents referred to
therein (other than the rights and remedies which they
otherwise would have had as a consequence of the breaches set
out in Clause 1.1 above);
Except as expressly set forth therein, the terms, provisions and
conditions of the Facility Agreement and the other Finance Documents
shall remain in full force and effect and in all other respects are
hereby ratified and confirmed.
2. Representations and Warranties
In order to induce the Banks to enter into this Waiver, the Obligors hereby
each represents and warrants to the Agents and the Banks that:
2.1 as at the date hereof, there exists no Event of Default (save the
Events of Default outlined at Clause 1.1) or Potential Event of
Default (save in respect of the Potential Event of Default resulting
from the potential breach of some of the financial covenants for the
period ending 31 March 2000 as more particularly set out in the
Information Memorandum dated 4 August 1999 but subject always to the
provisions of Clause 6 hereof) under the Facility Agreement, and after
giving effect to this Waiver there will exist no Event of Default or
Potential Event of Default under the Facility Agreement;
2.2 all representations and warranties contained in the Facility Agreement
and the other Finance Documents are true, correct and complete in all
material respects on and as at the date hereof except to the extent
such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all
material respects on and as at such earlier date;
2.3 as at the date hereof, each Obligor has performed all agreements to be
performed on its part as set forth in the Facility Agreement;
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2.4 each Obligor is duly organised and validly existing under the laws of
the jurisdiction of its organisation and has all necessary power and
authority to execute and delivery this Waiver and to consummate the
transactions contemplated hereby;
2.5 neither the execution and delivery of this Waiver, nor the
consummation of the transactions contemplated hereby, violates (i) any
law, regulation, decree or other legal restriction applicable to any
Obligor; (ii) the charter, by-laws or other constitutional documents
of any Obligor; or (iii) any instrument or agreement to which any
Obligor or any of its assets is subject or by which it is bound;
2.6 there is no legal requirement of any governmental authority (including
any requirement to make any declaration, filing or registration or to
obtain any consent, approval, licence or order) which is necessary to
be met by the Company or any other Obligor in connection with its
execution, delivery or performance of this Waiver; and
2.7 this Waiver has been duly authorised, executed and delivered by the
Company on behalf of each Obligor and this Waiver, the Facility
Agreement as modified by this Waiver and the other Finance Documents
to which any Obligor is a party, constitute the legal, valid and
binding obligations of such Obligor, enforceable against it in
accordance with their terms.
2.8 All information provided to the Facility Agent in connection with this
Waiver was as at the time it was given, true, complete and accurate in
all respects and each Obligor represents that no circumstances have
arisen, or any event has occurred between the date when such
information was provided to the Facility Agent and the date hereof
which would render such information to be untrue, inaccurate or
incomplete in any respect.
3. Counterparts; Effectiveness
3.1 This Waiver may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate
counterparts and attached to a single document so that all signature
pages are physically attached to the same document; this Waiver shall
become effective as of the date hereof upon the execution of the
counterparts hereof by the Company, and the Facility Agent and receipt
by the Company and Facility Agent of written notification of such
execution and authorisation of delivery hereof.
4. Governing Law
This Waiver and the rights and obligations of the parties hereunder shall
be governed by, and shall be construed and enforced in accordance with the
laws of England.
5. Acknowledgement and Consent by Guarantors
Each of the Guarantors hereby acknowledges that it has read this Waiver and
consents to the terms thereof and further hereby confirms and agrees that,
notwithstanding the effectiveness of this Waiver, the obligations of such
Guarantors under their respective Guarantee shall not
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be impaired or affected and such Guarantee is and shall continue to be in
full force and effect and is hereby confirmed and ratified in all respects.
6. Nothing contained herein, including the matters set out in Clause 2.1 shall
constitute a waiver of any Event of Default (save as provided for in Clause
1.1 hereof) and the Banks expressly reserve all or any rights and remedies
they may have in relation to the same.
IN WITNESS WHEREOF the parties hereto have caused this Waiver to be duly
executed and delivered by their respective officers thereunto duly authorised as
of the date first written above.
THE DERBY CYCLE CORPORATION )
for itself and on behalf of each of the )
Borrowers and Guarantors as Obligors' Agent )
By:
CHASE MANHATTAN INTERNATIONAL )
LIMITED for itself and as the Facility )
Agent and Security Agent for and on behalf )
of the Arranger and each of the Banks (other )
than Lloyds TSB Bank Plc, Scotia Bank Europe
plc and The Bank of Nova Scotia)
By:
LLOYDS TSB BANK PLC )
)
)
)
By:
SCOTIA BANK EUROPE PLC )
)
)
)
By:
THE BANK OF NOVA SCOTIA )
)
)
)
By:
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